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City of Lino Lakes, Minnesota <br />Schedule of Findings and Responses <br />For The Year Ended December 31, 2016 <br /> <br /> <br /> <br /> <br />2016-001 Financial Statement Corrections <br /> <br />Criteria: Audit adjustments are considered to be a deficiency in internal control as defined <br />by auditing standards. <br /> <br />Condition: While reviewing the 2015 allocation of the net pension liability, it was <br />determined the allocation between governmental activities and business-type activities was <br />not calculated correctly. <br /> <br />Cause: In order to implement GASB Statement No. 68 relating to pension plans, complex <br />calculations were required to allocate the net pension liability and related pension expense. <br />An oversight occurred during the allocation process. <br /> <br />Effect: Pension expense of governmental activities was overstated and pension expense of <br />business-type activities (water and sewer funds) was understated. The net effect of the total <br />misstatement was $0. <br /> <br />Recommendation: We recommend the City continue efforts to assure that all adjustments are <br />identified during the year-end closing process. <br /> <br />Views of Responsible Officials and Corrective Action Plan: It is the intent of the City’s staff <br />to minimize the number of audit adjustments needed each year. Staff has added procedures <br />to ensure similar allocations are performed correctly. <br />