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Honorable Mayor and Members <br /> of the City Council <br />City of Little Canada <br />Little Canada, Minnesota <br />We have audited the financial statements of the governmental activities, the business-type activities, <br />each major fund, and the aggregate remaining fund information of City of Little Canada as of and for the <br />year ended December 31, 2021, and have issued our report thereon dated April 27, 2022. We have <br />previously communicated to you information about our responsibilities under auditing standards generally <br />accepted in the United States of America, as well as certain information related to the planned scope and <br />timing of our audit in our engagement letter dated November 6, 2021. Professional standards also require <br />that we communicate to you the following information related to our audit. <br />Significant audit findings or issues <br />Qualitative aspects of accounting practices <br />Accounting policies <br />Management is responsible for the selection and use of appropriate accounting policies. The significant <br />accounting policies used by City of Little Canada are described in Note 1 to the financial statements. <br />No new accounting policies were adopted and the application of existing policies was not changed during <br />2021. <br />We noted no transactions entered into by the entity during the year for which there is a lack of authoritative <br />guidance or consensus. All significant transactions have been recognized in the financial statements in <br />the proper period. <br />Accounting estimates <br />Accounting estimates are an integral part of the financial statements prepared by management and are <br />based on management’s knowledge and experience about past and current events and assumptions <br />about future events. Certain accounting estimates are particularly sensitive because of their significance <br />to the financial statements and because of the possibility that future events affecting them may differ <br />significantly from those expected. The most sensitive estimates affecting the financial statements were: <br />Management’s estimate of the valuation of investments is based on published market values as <br />of December 31, 2021. We evaluated the key factors and assumptions used to develop the value <br />of investments in determining that it is reasonable in relation to the financial statements taken as <br />a whole. <br />Management’s estimate of the depreciation expense on capital assets is based on management’s <br />estimated useful lives of those assets. We evaluated the key factors and assumptions used to <br />develop the allowance in determining that it is reasonable in relation to the financial statements <br />taken as a whole.