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Independent Auditor's Report on Compliance <br />Page 2 <br />FINDING: One broker certification form was not updated for 1997 <br />CONDITION: The State statutes covering investment broker certification forms changed <br />effective January 1, 1997. The revised statutes now require that these <br />forms be obtained annually. A 1997 broker certification form was not <br />received from one of the City's investment brokers. <br />CRITERIA: Minnesota Statute 118A.04 Subd. 9 reads in part as follows: <br />(b) Prior to completing an initial transaction with a broker, a <br />government entity shall provide annually to the broker a written <br />statement of investment restrictions which shall include a provision <br />that all future investments are to be made in accordance with <br />Minnesota Statutes governing the investment of public funds. <br />(c) A broker must acknowledge annually receipt of the statement <br />of investment restrictions in writing and agree to handle the <br />government entity's account in accordance with these restrictions. A <br />government entity may not enter into a transaction with a broker <br />until the broker has provided this written agreement to the <br />government entity. <br />RECOMMENDATION: <br />We recommend the City review this statutory section and apply <br />procedures to ensure that broker certification forms are obtained in <br />accordance with Statute 118A.04. <br />