06-10-2020 Council Packet - Laserfiche WebLink

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Honorable Mayor and Members of the City Council City of Little Canada Little Canada, Minnesota We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Little Canada (the City) as of and for the year ended December 31, 2019, and have issued our report thereon dated May 26, 2020. We have previously communicated to you information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. Professional standards also require that we communicate to you the following information related to our audit. Significant audit findings Qualitative aspects of accounting practices Accounting policies Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. During the year ended December 31, 2019, the City changed accounting policies related to its accounting for fiduciary activities by adopting Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities. The statement provides guidance regarding the identification of fiduciary activities for accounting and reporting purposes and how those activities should be reported. As a result the City’s Developer Deposit Fund was reported in the General Fund in 2019. In 2018 it was reported as an agency fund. This change did not impact beginning fund balance or net position. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were:  Management’s estimate of the valuation of investments is based on published market values as of December 31, 2019. We evaluated the key factors and assumptions used to develop the value of investments in determining that it is reasonable in relation to the financial statements taken as a whole.