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AUDIT SUMMARY <br /> The following is a summary of our audit work, key conclusions, and other information that we consider <br /> important or that is required to be communicated to the City Council, administration, or those charged <br /> with governance of the City. <br /> OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED <br /> STATES OF AMERICA AND GOVERNMENTAUDITING STANDARDS <br /> We have audited the financial statements of the governmental activities,the business-type activities, each <br /> major fund, and the aggregate remaining fund information of the City as of and for the year ended <br /> December 31, 2015, and the related notes to the financial statements. Professional standards require that <br /> we provide you with information about our responsibilities under auditing standards generally accepted in <br /> the United States of America and Government Auditing Standards, as well as certain information related <br /> to the planned scope and timing of our audit. We have communicated such information to you verbally <br /> and in our audit engagement letter. Professional standards also require that we communicate the following <br /> information related to our audit. <br /> PLANNED SCOPE AND TIMING OF THE AUDIT <br /> We performed the audit according to the planned scope and timing previously discussed and coordinated <br /> in order to obtain sufficient audit evidence and complete an effective audit. <br /> AUDIT OPINION AND FINDINGS <br /> Based on our audit of the City's financial statements for the year ended December 31, 2015: <br /> • We have issued an unmodified opinion on the City's basic financial statements. Our report <br /> included a paragraph emphasizing that the City implemented Governmental Accounting <br /> Standards Board (GASB) Statement No. 68,Accounting and Financial Reporting for Pensions— <br /> an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for <br /> Contributions Made Subsequent to the Measurement Date—an amendment of GASB Statement <br /> No. 68, during the year ended December 31, 2015. Our opinion was not modified with respect to <br /> this matter. <br /> • We reported no deficiencies involving the City's internal control over financial reporting that we <br /> consider to be material weaknesses. <br /> • The results of our testing disclosed no instances of noncompliance required to be reported under <br /> Government Auditing Standards. <br /> • We reported one finding based on our testing of the City's compliance with Minnesota laws and <br /> regulations. We noted that one of three bids tested was not in compliance with the statute for <br /> responsible contractor requirements. <br /> AUDIT COMMENTS <br /> Land Held for Resale – The City currently holds a material amount of land for resale, which <br /> management reports at the lower of cost or net realizable value. City staff has also prepared a schedule <br /> comparing the current carrying value of these properties to estimated market values provided by Anoka <br /> County to support these values. We recognize the City is working on an ongoing basis to utilize these <br /> assets in the best interest of the City. We recommend that the City continue to review these property <br /> values and related internal loans on an ongoing basis to ensure a proper reporting of city assets and <br /> financial activity between funds is accurately presented. <br /> -1- <br />