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<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />515 Little Canada Road, Little Canada, MN 55117-1600 <br />(651) 766-4029 / FAX: (651) 766-4048 <br />www.littlecanadamn.org <br />MAYOR <br />Tom Fischer <br /> <br />COUNCIL <br />Teresa Miller <br />Amanda Gutierrez <br />Dave Miller <br />Chris Kwapick <br /> <br /> <br /> <br />TO: Mayor Fischer and Members of the City Council <br /> <br />FROM: Sam Magureanu, Finance Director <br /> <br />DATE: May 22, 2024 <br /> <br />RE: 2023 Annual Comprehensive Financial Report <br /> <br />ACTION REQUESTED <br /> <br />Receive and accept the 2023 Annual Comprehensive Financial Report (ACFR). <br /> <br />BACKGROUND <br /> <br />The City is required by Minnesota law to have an external audit completed annually. The annual audit <br />provides reasonable assurance to the City Council and stakeholders that the financial statements are <br />free of material misstatement and that the financial statements are complete and reliable. <br /> <br />Brad Falteysek and Tyler See from ABDO will present the 2023 audit at the City Council meeting. <br />The auditors from ABDO have provided an unmodified opinion on the financial statements, which is <br />the highest opinion that can be given. The Transmittal Letter (pages 9-15) and the Management’s <br />Discussion and Analysis (pages 25-37) provide an overview of the City’s financial operations. <br /> <br />Audit Findings: <br /> <br />Audit findings are not always a sign of lack of departmental strength. In spite of the findings noted <br />below, the Finance department performed very well during the 2023 fiscal year and has the ability to <br />continue strong performance in the years to come. We take all audit findings seriously and always take <br />measures to correct in future as applicable. Additionally, some audit findings become opportunities for <br />improvement and strengthening our processes and develop staff knowledge and growth. <br /> <br />As noted above the City received the highest opinion that can be given, however one finding was noted <br />during the audit and is presented in the attached Internal Control and Legal Compliance Letters. <br /> <br />• Limited Segregation of Duties –The finding was noted since the City has limited staff in the <br />Finance Department (1.8 FTE’s) and is unable to maintain strong segregation of duties due to <br />one individual having a high concentration of duties and responsibilities. Example: Finance <br />director has access to City assets (cash) and performs the bank reconciliation. This issue was <br />brought up by the Finance Director during the 2022 audit as well as during the 2023 audit and it <br />was concluded that this audit finding is necessary to bring awareness to City Council about the <br />risk surrounding existing limited segregation of duties.