HomeMy WebLinkAboutFederal Financial Assistance 12/31/1995CITY OF LINO LAKES, MINNESOTA
FEDERAL FINANCIAL ASSISTANCE
FOR THE YEAR ENDED
DECEMBER 31, 1995
AND REPORTS OF
INDEPENDENT CER'I1 ED PUBLIC ACCOUNTANT
Vow
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page No.
Independent Auditor's Report on the Internal Control Structure
in Accordance With Government Auditing Standards 1
Independent Auditor's Report on the Internal Control Structure
Used in Administering Federal Financial Assistance Programs 3
Compliance Report Based on an Audit of General Purpose
Financial Statements Performed in Accordance With
Government Auditing Standards 6
Independent Auditor's Report on Compliance With General
Requirements Applicable to Federal Financial Assistance Programs 8
Independent Auditor's Report on Compliance With Specific Requirements
Applicable to Nonmajor Federal Financial Assistance Programs 9
Independent Auditor's Report on Supplementary
Schedule of Federal Financial Assistance 10
Schedule of Federal Financial Assistance 11
Schedule of Findings and Questioned Costs 12
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TAUTGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditor's Report on the Internal Control Structure
in Accordance with Government Auditing Standards
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota,
as of and for the year ended December 31, 1995, and have issued our report thereon dated May
23, 1996.
We conducted our audit in accordance with generally accepted auditing standards and
Government Auditing Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the general purpose financial statements are free of material misstatement.
The management of the City of Lino Lakes, Minnesota, is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related costs of
internal control structure policies and procedures. The objectives of an internal control structure
are to provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, and that transactions are executed
in accordance with management's authorization and recorded properly to permit the preparation
of general purpose financial statements in accordance with generally accepted accounting
principles. Because of inherent limitations in any internal control structure, errors or
irregularities may nevertheless occur and not be detected. Also, projections of any evaluation of
the structure to future periods is subject to the risk that procedures may become inadequate
— because of changes in conditions or that the effectiveness of the design and operation of policies
and procedures may deteriorate.
In planning and performing our audit of the general purpose financial statements of the City of
Lino Lakes, Minnesota, for the year ended December 31, 1995, we obtained an understanding of
the internal control structure. With respect to the internal control structure, we obtained an
understanding of the design of relevant policies and procedures and whether they have been
placed in operation, and we assessed control risk in order to determine our auditing procedures
for the purpose of expressing our opinion on the general purpose financial statements and not to
provide an opinion on the internal control structure. Accordingly, we do not express such an
opinion.
4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International
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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 fmancial data consistent with the assertions of management in the general purpose
financial statements.
The reportable conditions noted are as follows:
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.
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.
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4
TAUTGES, REDPATH & CO., LTD.
Certified Public Accountants
May 23, 1996
TAUTGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditor's Report on the Internal Control
Structure Used in Administering Federal Financial Assistance Programs
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose fmancial statements of the City of Lino Lakes, Minnesota,
as of and for the year ended December 31, 1995, and have issued our report thereon dated May
23, 1996.
We conducted our audits in accordance with generally accepted auditing standards; Government
Auditing Standards, issued by the Comptroller General of the United States; and Office of
Management and Budget Circular A -128, Audits of State and Local Governments. Those
standards and OMB Circular A -128 require that we plan and perform the audit to obtain
reasonable assurance about whether the general purpose financial statements are free of material
misstatement.
In planning and performing our audits for the year ended December 31, 1995, we considered the
internal control structure of the City of Lino Lakes, Minnesota in order to determine our auditing
procedures for the purpose of expressing our opinions on the general purpose financial
statements of the City of Lino Lakes, Minnesota, and to report on the internal control structure in
accordance with OMB Circular A -128. This report addresses our consideration of internal
control structure policies and procedures relevant to compliance with requirements applicable to
federal financial assistance programs. We have addressed internal control structure policies and
... procedures relevant to our audit of the general purpose financial statements in a separate report
dated May 23, 1996.
The management of the City of Lino Lakes, Minnesota is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related costs of
internal control structure policies and procedures. The objectives of an internal control structure
are to provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, that transactions are executed in
accordance with management's authorization and recorded properly to permit the preparation of
general purpose financial statements in accordance with generally accepted accounting
principles, and that federal financial assistance programs are managed in compliance with
applicable laws and regulations. Because of inherent limitations in any internal control structure,
errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected.
Also, projection of any evaluation of the structure to future periods is subject to the risk that
procedures may become inadequate because of changes in conditions or that the effectiveness of
the design and operation of policies and procedures may deteriorate.
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4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International
For the purpose of this report, we have classified the significant internal control structure policies
and procedures used in administering federal financial assistance programs in the following
categories:
Federal Assistance Programs. Accounting Applications:
General Requirements: Specific Requirements: Cash Disbursements
Political Activity Types of Service Payroll
Civil Rights Allowed or Unallowed
Cash Management
Federal Financial Reports
Allowable Costs/Cost Principles
Drug -Free Workplace
Administrative Requirements
For all of the internal control structure categories listed in the preceding paragraph, we obtained
an understanding of the design of relevant policies and procedures and determined whether they
have been placed in operation, and we assessed control risk.
During the year ended December 31, 1995, the City of Lino Lakes, Minnesota had no major
federal financial assistance programs and expended 60.53% of its total federal financial
assistance under the following nonmajor program: Community Development Block Grant
Program.
We performed tests of controls, as required by OMB Circular A -128, to evaluate the
effectiveness of the design and operation of internal control structure policies and procedures that
we considered relevant to preventing or detecting material noncompliance with specific
requirements, general requirements, and requirements governing claims for advances and
reimbursements and amounts claimed or used for matching that are applicable to the
aforementioned nonmajor programs. Our procedures were less in scope than would be necessary
�- to render an opinion on these internal control structure policies and procedures. Accordingly, we
do not express such an opinion.
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 City of Lino Lakes, Minnesota's ability to administer
federal financial assistance programs in accordance with applicable laws and regulations.
_ The Lino Lakes Police Department has a drug testing program and has a written policy and
procedures for a drug -free workplace. These policies however, have not been formally adopted
by the Lino Lakes City Council and were not effective until January 1, 1996, the Federal grant
period started March 1, 1995.
Wmpr A material weakness is a reportable condition in which the design or operation of one or more of
the internal control structure elements does not reduce to a relatively low level the risk that
noncompliance with laws and regulations that would be material to a federal financial assistance
program may occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions.
Our considerations of the internal control policy and procedures used in administering federal
financial assistance, 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 and the Federal
Cognizant Audit Agency. However, this report is a matter of public record and its distribution is
not limited.
TAUTGES, REDPATH & CO., LTD.
Certified Public Accountants
May 23, 1996
TAUTGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
Compliance Report Based on an Audit of
General Purpose Financial Statements Performed
in Accordance with Government Auditing Standards
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
MEW
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota,
as of and for the year ended December 31, 1995 and have issued our report thereon dated May
— 23, 1996.
We conducted our audit in accordance with generally accepted auditing standards; Government
Auditing Standards, issued by the Comptroller General of the United States; and the provisions
of the Minnesota Legal Compliance Audit Guide for Local Government promulgated by the
Legal Compliance Task Force pursuant to Minnesota Statutes Section 6.65. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
general purpose financial statements are free of material misstatement.
General Purpose Financial Statements. Compliance with laws, regulations, contracts, and grants
applicable to the City of Lino Lakes, Minnesota, is the responsibility of the City's management.
As part of obtaining reasonable assurance about whether the general purpose financial statements
WNW
are free of material misstatement, we performed tests of the City of Lino Lakes, Minnesota's
compliance with certain provisions of laws, regulations, contracts, and grants. However, the
objective of our audit of the general purpose financial statements was not to provide an opinion
on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported
under Government Auditing Standards.
Legal Compliance. The Minnesota Legal Compliance Audit Guide for Local Government covers
five main categories of compliance to be tested: contracting and bidding, deposits and
investments, conflicts of interest, public indebtedness, and claims and disbursements. Our study
included all of the above listed categories.
The results of our tests indicate that for the items tested, the City of Lino Lakes, Minnesota
complied with the material terms and conditions of applicable legal provisions. Further, for the
items not tested, based on our audit and the procedures referred to above, nothing came to our
attention to indicate that the City of Lino Lakes, Minnesota had not complied with such legal
provisions.
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4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International
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.
Respectfully submitted,
,goefoolz-. 4 tea.
TAUTGES, REDPATH & CO., LTD.
Certified Public Accountants
May 23, 1996
TAUTGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditor's Report on Comp1ice
With General Requirements Applicable to Federal
Financial Assistance Programs
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota,
as of and for the year ended December 31, 1995, and have issued our report thereon dated May
23, 1996.
We have applied procedures to test the City of Lino Lakes, Minnesota's compliance with the
following requirements applicable to its federal financial assistance programs, which are
identified in the Schedule of Federal Financial Assistance, for the year ended December 31,
1995:
Political Activity
Civil Rights
Cash Management
Federal Financial Reports
Allowable Costs/Cost Principles
Drug -Free Workplace
Administrative Requirements
Our procedures were limited to the applicable procedures described in the Office of Management
and Budget's Compliance Supplement for Single Audits of State and Local Governments. Our
procedures were substantially less in scope than an audit, the objective of which is the expression
of an opinion on the City of Lino Lakes, Minnesota's compliance with the requirements listed in
the preceding paragraph. Accordingly, we do not express such an opinion.
With respect to the items tested, the results of those procedures disclosed no material instances of
noncompliance with the requirements listed in the second paragraph of this report. With respect
to items not tested, nothing came to our attention that caused us to believe the City of Lino
Lakes, Minnesota had not complied, in all material respects, with those requirements. However,
the results of our procedures disclosed immaterial instances of noncompliance with those
Imo requirements which are described in the accompanying Schedule of Findings and Questioned
Costs.
MIMF 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.
VINO
TAUTGES, REDPATH & CO., LTD.
Certified Public Accountants
May 23, 1996
-8-
4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International
TAUTGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditor's Report on Compliance With
Specific Requirements Applicable to Nonmajor Federal
Financial Assistance Program Transactions
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota
as of and for the year ended December 31, 1995, and have issued our report thereon dated May
23, 1996.
In connection with our audit of the general purpose financial statements of the City of Lino
Lakes, Minnesota, and with our consideration of the City of Lino Lakes, Minnesota's control
structure used to administer federal fmancial assistance programs, as required by Office of
Management and Budget Circular A -128, Audits of State and Local Governments, we selected
certain transactions applicable to certain nonmajor federal financial assistance programs for the
year ended December 31, 1995.
Imw
As required by OMB Circular A -128, we have performed auditing procedures to test compliance
with the requirements governing the types of services allowed or unallowed, that are applicable
to those transactions. Our procedures were substantially less in scope than an audit, the objective
of which is the expression of an opinion on the City of Lino Lakes, Minnesota's compliance with
these requirements. Accordingly, we do not express such an opinion.
With respect to the items tested, the results of those procedures disclosed no material instances of
noncompliance with the requirements listed in the preceding paragraph. With respect to items
not tested, nothing came to our attention that caused us to believe that the City of Lino Lakes,
Minnesota had not complied, in all material respects, with those requirements. Also, the results
of our procedures did not disclose any immaterial instances of noncompliance with those
requirements.
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.
TAUTGES, REDPATH & CO., LTD.
Certified Public Accountants
May 23, 1996
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4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International
TAUTGES, REDPATH & CO., LTD.
CERTIFIED. PUBLIC ACCOUNTANTS
Independent Auditor's Report on Supplementary
Schedule of Federal Financial Assistance
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota,
as of and for the year ended December 31, 1995, and have issued our report thereon dated May
23, 1996. These general purpose fmancial statements are the responsibility of the City of Lino
Lakes, Minnesota's management. Our responsibility is to express an opinion on these general
purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government
Auditing Standards issued by the Comptroller General of the United States and the provisions of
Office of Management and Budget Circular A -128, Audits of State and Local Governments.
Those standards and OMB Circular A -128 require that we plan and perform the audit to obtain
reasonable assurance about whether the general purpose fmancial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the general purpose fmancial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating
the overall general purpose financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
MINN
Our audit was conducted for the purpose of forming an opinion on the general purpose financial
statements of the City of Lino Lakes, Minnesota, taken as a whole. The accompanying Schedule
of Federal Financial Assistance is presented for purposes of additional analysis and is not a
required part of the general purpose financial statements. The information in that schedule has
been subjected to the auditing procedures applied in the audit of the general purpose financial
statements and, in our opinion, is fairly presented in all material respects in relation to the general
purpose financial statements taken as a whole.
tre+leldi (-0 •&ig
TAUTGES, REDPATH & CO., LTD.
Certified Public Accountants
May 23, 1996
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4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International
Now
CITY OF LINO LAKES , MINNESOTA
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
For The Year Ended December 31, 1995
Accrued/ Accrued /
Catalog # (Deferred) (Deferred)
Federal Funding Source/ Federal Revenue at Revenue at
Pass Through Agency / Domestic January 1, Revenue December 31,
Program Title Assistance 1995 Recognized Expenditures 1995
U.S. Department of Justice:
Direct:
COPS FAST 16.726 $ - $19,892 $19,892 $10,362
U.S. Department of Transportation:
National Highway Traffic Safety Administration:
Minnesota Department of Public Safety:
Community Highway Safety Program:
Highway Safety Project Grant
Safe and Sober Campaign - Communities 20.600 4,696 4,696
Operation Buckle Down 20.600 630 630
U.S. Department of Agriculture:
State of Minnesota:
Oak Wilt Cooperative Suppression Program 10.664 (3,380) 3,380 3,380
U.S. Department of Housing and Urban Development:
Anoka County:
Community Development Block Grant -
Small Cities Program 14.219 7,638 43,854 43,854 16,603
Total Federal Assistance $4,258 $72,452 $72,452 $26,965
CITY OF LINO LAKES, MINNESOTA
Schedule of Findings and Questioned Costs
Year Ended December 31, 1995
Current Year Findings
Condition and Criteria: The Lino Lakes Police Department has a drug testing program
and has a written policy and procedures for a drug -free workplace. These policies,
however, have not been formally adopted by the Lino Lakes City Council and were not
effective until January 1, 1996, the Federal grant period started March 1, 1995.
Cause: The City was not aware that its existing policy and procedure did not meet all the
specific requirements of the Drug -Free Workplace Act of 1988.
Recommendation: Submit the City's Drug -Free policy to the City Council for formal
approval.
Grantee Response: The City will submit the policy to the City Council for formal
approval in 1996.
Prior Year Findings
Finding: The City did not report the activity for the Oak Wilt Suppression Program
grant to the State of Minnesota on a timely basis.
Response: The Finance Department now oversees the administration of grants and has
corrected the reporting in 1995.
Finding: The City did not report accurately the activity for the Oak Wilt Cooperative
Suppression Program to the State of Minnesota.
Response: The 1994 grant allocation was carried into 1995, where all expenditures
were reported accurately and the grant was closed for the 1995 and prior years
allocations.
Finding: The City did not report accurately the activity for the ReLeaf Grant to the
State of Minnesota.
Response: Authorized changes were made with the State of Minnesota and they concur
with the City's amounts.
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