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HomeMy WebLinkAboutFederal Financial Assistance 12/31/1996CITY OF LINO LAKES, MINNESOTA FEDERAL FINANCIAL ASSISTANCE FOR THE YEAR ENDED DECEMBER 31, 1996 AND REPORTS OF INDEPENDENT CER1'11,1ED PUBLIC ACCOUNTANT 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 Independent Auditor's Report on Compliance 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 9 Independent Auditor's Report on Compliance With Specific Requirements Applicable to Nonmajor Federal Financial Assistance Programs 10 Independent Auditor's Report on Supplementary Schedule of Federal Financial Assistance 11 Schedule of Federal Financial Assistance 12 Schedule of Findings and Questioned Costs 13 TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUPJTA %,75 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, 1996, and have issued our report thereon dated February 28, 1997. 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, 1996, 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 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 IMMO IMMO IMPlw 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, Nfinnesota We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota, as of and for the year ended December 31, 1996, and have issued our report thereon dated February 28, 1997. 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, 1996, 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 February 28, 1997. 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. -3- 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX /426 -5004 • Member of HLB International Vow 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, 1996, the City of Lino Lakes, Minnesota had no major federal financial assistance programs and expended 96.79% of its total federal financial assistance under the following nonmajor programs: Community Development Block Grant Program, COPS FAST. 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. Our consideration of the internal control policies and procedures used in administering federal financial assistance programs, would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a 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. We noted no matters involving the internal control structure and its operations that we consider to be material weaknesses as defined above. two 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. /.0;---;-.4.6- 41,04- i e4 Litz. TAUTGES, REDPATH & CO., LTD. Certified Public Accountants February 28, 1997 TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCDL ,- -, s Independent Auditor's Report on Compliance 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 We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota, as of and for the year ended December 31, 1996 and have issued our report thereon dated February 28, 1997. 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 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. WNW 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, except as described in this report. 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. -6- 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International Vow 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, TAUTGES, REDPATH & CO., LTD. Certified Public Accountants February 28, 1997 FINDING: CONDITION: CRITERIA: Untimely preparation of Council minutes. To be in compliance with Minnesota Statutes 412.191 Subd. 3 the City must publish Council proceedings within 30 days of a meeting. As of February 28, 1997 twelve 1996 Council meetings minutes were not typed and approved by Council. Minnesota Statutes 412.191 reads in part as follows: 412.191 MEMBERS; POWERS, DUTIES Subd. 3. Publication of proceedings. The council after every regular or special meeting shall publish the official council proceedings, a summary conforming to section 331A.01, subdivision 10, or a condensed version of the official minutes which shall include action on motions, resolutions, ordinances, and other official proceedings. As an alternative to publication, the city may mail, at city expense, a copy of the proceedings to any resident upon request. The publication shall occur within 30 days of the meeting to which the proceedings relate. Cities with a population of less than 1,000 according to the latest federal census are not required to comply with this section, but may do so at their discretion. RECOMMENDATION: We recommend the City prepare Council minutes in a timely manner in accordance with Minnesota Statutes 412.191 Subd. 3. CITY RESPONSE: The City has hired an independent service to process Council minutes. TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUNTH 1, l S Independent Auditor's Report on Compliance 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, 1996, and have issued our report thereon dated February 28, 1997. 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, 1996: Political Activity Federal Financial Reports Civil Rights Allowable Costs/Cost Principles Cash Management 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. 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. Za„r`a"'., RIL0910014. tG TAUTGES, REDPATH & CO., LTD. Certified Public Accountants February 28, 1997 -9- 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 ACCOUNTAN %S 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, 1996, and have issued our report thereon dated February 28, 1997. 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 financial 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, 1996. MEM 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,MVrnnesota'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 February 28, 1997 -10- 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 ACCO OF V `y'.,; ,'c 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, 1996, and have issued our report thereon dated February 28, 1997. These general purpose financial 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial 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. 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. TAUTGES, REDPATH & CO., LTD. -- Certified Public Accountants February 28, 1997 - 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International CITY OF LINO LAKES , MINNESOTA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE For The Year Ended December 31, 1996 Accrued/ Accrued / Catalog 1 (Deferred) (Deferred) Federal Funding Source/ Federal Revenue at Revenue at Pass Through Agency/ Domestic January 1, Revenue December 31, Program Title Assistance 1996 Recognized Expenditures 1996 U.S. Department of Justice: Direct: COPS FAST 16.726 310,362 358,047 358,047 $21,185 U.S. Department of Agriculture: State of Minnesota: Oak Wilt Cooperative Suppression Program 10.664 3,300 3,300 U.S. Department of Housing and Urban Development: Anoka County: Community Development Block Grant - Small Cities Program 14.219 16 603 41 445 41 445 3 938 Total Federal Assistance 326,965 3102,792 3102,792 $25,123 — CITY OF LINO LAKES, MINNESOTA Schedule of Findings and Questioned Costs Year Ended December 31, 1996 Current Year Findings None Prior Year Findings Finding: The City did not formally approve the drug -free workplace policy. Response: During 1996 the City Council through resolution formally adopted a drug - free workplace policy.