1994 CAFR - Laserfiche WebLink

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For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories: cash receipts /revenue, cash disbursements /expenditures, payroll, and external financial reporting. For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. We noted one matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. Because of the limited size of your office staff, your organization has limited segregation of duties. A good system of internal accounting control contemplates an adequate segregation of duties so that no one individual handles a transaction from inception to completion. While we recognize that your organization is not large enough to permit an adequate segregation of duties in all respects, it is important that you be aware of this condition. A material weakness is a reportable condition in which the design or operation of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition described above is a material weakness. This condition was considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the City of Ramsey's general purpose financial statements for the year ended December 31, 1994, and this report does not affect our reports thereon dated March 29, 1995. In our management report dated March 29, 1995 to the City Council, issued in connection with our audit of the City's general purpose financial statements, we have separately communicated our observations and recommendations regarding other matters. This report is intended for the information of the City Council and management of the City of Ramsey, the cognizant audit agency, and other federal agencies. However, this report is a matter of public record and its distribution is not limited. March 29, 1995 ‘,# -102-