Federal Financial Assistance 12/31/1996

Home Search

Vona We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. The reportable conditions noted are as follows: Segregation of Duties. A substantial portion of certain accounting payroll processes are performed by a single employee. Ideal conditions call for segregation of duties to establish a system of internal testing of procedures performed. This condition is common to cities of this size. Any modification of internal controls in these areas must be viewed from a cost/benefit perspective. Minutes of Council Meetings. The City has not prepared council minutes on a timely basis. As of February 28, 1997 there were twelve 1996 council meetings that were not formally typed and approved by the City Council at a subsequent Council meeting. Minnesota Statutes 412.191 Subd. 3. require minutes to be published within 30 days of the meeting. A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe none of the reportable conditions described above is a material weakness. This report is intended for the information of the City of Lino Lakes, Minnesota's management, the federal cognizant audit agency and other federal agencies. However, this report is a matter of public record and its distribution is not limited. 7:0-€4 4 �;. TAUTGES, & CO., LTD. Certified Public Accountants February 28, 1997