VLAWMO Annual Financial Report 2018

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CliftonLarsonAllen LLP CLAconnect.com Board of Directors Vadnais Lake Area Water Management Organization Vadnais Heights, Minnesota We have audited the financial statements of the governmental activities and the major fund of Vadnais Lake Area Water Management Organization (the Organization) as of and for the year ended December 31, 2018, and have issued our report thereon dated April 24, 2019. We have previously communicated to you information about our responsibilities under auditing standards generally accepted in the United States of America, 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 Organization are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2018. We noted no transactions entered into by the Organization 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 useful lives of capital assets is based on authoritative guidance and past experience. We evaluated the key factors and assumptions used to develop the useful lives of capital assets in determining that it is reasonable in relation to the financial statements taken as a whole. • Management's estimate of the amount of the year-end compensated absences payable to employees is based on historical trends and anticipated leave time activity. • Management's estimate of the City's proportionate share of Public Employees' Retirement Association of Minnesota net pension liabilities as well as the related deferred inflows and outflows of resources is based on guidance from GASB Statement No. 68, GASB Statement No. 71, and the plans' allocation tables. The plans' allocation tables allocate a portion of the plans' net pension liabilities based on the City's contributions during the plans' fiscal years as a percentage of total contributions received for the related fiscal year by the plans. 13 A member of QInternational Nexia