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INDEPENDENT AUDITORS' REPORT
<br />Honorable Mayor and
<br />Members of the City Council
<br />City of Lino Lakes, Minnesota
<br />Report on the Financial Statements
<br />We have audited the accompanying financial statements of the govemmental activities, the business
<br />type activities, each major fund, and the aggregate remaining fund information of the City of Lino
<br />Lakes, as of and for the year ended December 31, 2013, and the related notes to the financial
<br />statements, which collectively comprise the City's basic financial statements as listed in the table of
<br />contents.
<br />Management's Responsibility for the Financial Statements
<br />Management is responsible for the preparation and fair presentation of these financial statements in
<br />accordance with accounting principles generally accepted in the United States of America; this includes
<br />the design, implementation, and maintenance of intemal control relevant to the preparation and fair
<br />presentation of financial statements that are free from material misstatement, whether due to fraud or
<br />error.
<br />Auditors' Responsibility
<br />Our responsibility is to express opinions on these financial statements based on our audit. We
<br />conducted our audit in accordance with auditing standards generally accepted in the United States of
<br />America and the standards applicable to financial audits contained in Govemment Auditing Standards,
<br />issued by the Comptroller General of the United States. Those standards require that we plan and
<br />perform the audit to obtain reasonable assurance about whether the financial statements are free from
<br />material misstatement.
<br />An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
<br />the financial statements. The procedures selected depend on the auditors' judgment, including the
<br />assessment of the risks of material misstatement of the financial statements, whether due to fraud or
<br />error. In making those risk assessments, the auditor considers intemal control relevant to the entity's
<br />preparation and fair presentation of the financial statements in order to design audit procedures that are
<br />appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
<br />of the entity's intemal control. Accordingly, we express no such opinion. An audit also includes
<br />evaluating the appropriateness of accounting policies used and the reasonableness of significant
<br />accounting estimates made by management, as well as evaluating the overall presentation of the
<br />financial statements.
<br />We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
<br />our audit opinions.
<br />Opinions
<br />In our opinion, the financial statements referred to above present fairly, in at material respects, the
<br />respective financial position of the govemmental activities, the business -type activities, each major
<br />fund, and the aggregate remaining fund information of the City of Lino Lakes as of December 31, 2013,
<br />and the respective changes in financial position and, where applicable, cash flows thereof for the year
<br />then ended in accordance with accounting principles generally accepted in the United States of
<br />America.
<br />Other Matters
<br />Required Supplementary Information
<br />Accounting principles generally accepted in the United States of America require that the
<br />management's discussion and analysis, budgetary comparison information, and schedule of funding
<br />progress to postemployment benefit plan, as listed in the table of contents be presented to supplement
<br />the basic financial statements. Such information, although not a part of the basic financial statements,
<br />is required by the Govemmental Accounting Standards Board who considers it to be an essential part
<br />of financial reporting for placing the basic financial statements in an appropriate operational, economic,
<br />or historical context. We have applied certain limited procedures to the required supplementary
<br />information in accordance with auditing standards generally accepted in the United States of America,
<br />which consisted of inquiries of management about the methods of preparing the information and
<br />comparing the information for consistency with management's responses to our inquiries, the basic
<br />financial statements, and other knowledge we obtained during our audit of the basic financial
<br />statements. We do not express an opinion or provide any assurance on the information because the
<br />limited procedures do not provide us with sufficient evidence to express an opinion or provide any
<br />assurance.
<br />Other Information
<br />Our audit was conducted for the purpose of forming opinions on the financial statements that
<br />collectively comprise the City of Lino Lakes' basic financial statements. The combining fund financial
<br />statements and other supplementary financial and other information, the introductory section, and
<br />statistical section are presented for purposes of additional analysis and are not a required part of the
<br />basic financial statements.
<br />The combining fund statements, the combining schedule of indebtedness, and the debt service
<br />payments to maturity - all bonds schedule are the responsibility of management and were derived from
<br />and relate directly to the underlying accounting and other records used to prepare the basic financial
<br />statements. Such information has been subjected to the auditing procedures applied in the audit of the
<br />basic financial statements and certain additional procedures, including comparing and reconciling such
<br />information directly to the underlying accounting and other records used to prepare the basic financial
<br />statements or to the basic financial statements themselves, and other additional procedures in
<br />accordance with auditing standards generally accepted in the United States of America. In our opinion,
<br />the combining fund statements, the combining schedule of indebtedness, and the debt service
<br />payments to maturity - all bonds schedule are fairly stated, in all material respects, in relation to the
<br />basic financial statements as a whole.
<br />The introductory section, schedule of deferred tax levies, schedule of insurance in force, schedule of
<br />taxable valuations, tax levies, and tax rates, and statistical section have not been subjected to the
<br />auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not
<br />express an opinion or provide any assurance on it.
<br />Other Reporting Required by Govemment Auditing Standards
<br />In accordance with Govemment Auditing Standards, we have also issued our report dated May 28,
<br />2014, on our consideration of the City of Lino Lakes' internal control over financial reporting and on our
<br />tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
<br />other matters. The purpose of that report is to describe the scope of our testing of internal control over
<br />financial reporting and compliance and the result of that testing, and not to provide an opinion on
<br />internal control over financial reporting or on compliance. That report is an integral part of an audit
<br />performed in accordance with Govemment Auditing Standards in considering City of Lino Lakes'
<br />internal control over financial reporting and compliance.
<br />ClikonLarsonAllen LLP
<br />Minneapolis, Minnesota
<br />May 28, 2014
<br />IV -3
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