1989 CAFR - Laserfiche WebLink

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1 Because of inherent limitations in any system of internal accounting and admin- istrative controls used in administering federal financial assistance programs, errors or irregularities may nevertheless occur and not be detected. Also, pro- jection of any evaluation of the systems to future periods is subject to the ' risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Our study included all of the applicable control categories listed above. During the year ended December 31, 1989, the City had no major federal financial assistance programs and expended 100% of its total federal financial assistance under the following nonmajor federal financial assistance program: Community Development Block Grant. With respect to internal control systems used in administering this nonmajor federal financial assistance program, our study and evaluation included considering the types of errors and irregularities that could occur, determining the internal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary proce- dures are prescribed and are being followed satisfactorily, and evaluating any weaknesses. Our study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in administering the federal finan- cial assistance programs of the City. Accordingly, we do not express an opinion on the internal control systems used in administering the federal financial assistance programs of the City. However, our study and evaluation and our audit disclosed that 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 impor- tant, however, that you be aware of this condition. In our letter 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. These conditions were considered in determining the nature, timing, and extent of the audit tests to be applied in (1) our audit of the 1989 general purpose financial statements and (2) our audit and review of the City's compliance with laws and regulations noncompliance with which we believe could have a material effect on the allowability of program expenditures -for nonmajor federal finan- cial assistance programs. This report does not affect our reports on the general purpose financial statements and on the City's compliance with laws and regulations dated July 2, 1990. This report is intended solely for the use of the City Council and management of the City of Ramsey, the cognizant audit agency, and other federal agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report, which, upon acceptance by the City Council, is a matter of public record. July 2, 1990 -93-