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HomeMy WebLinkAboutOther Auditor Reports 12/31/1999CITY OF LINO LAKES, MINNESOTA OTHER AUDITOR REPORTS FOR THE YEAR ENDED DECEMBER 31, 1999 CITY OF LINO LAKES, MINNESOTA TABLE OF CONTENTS DECEMBER 31, 1999 Independent Auditor's Report on Compliance and on Internal Control over Financial Reporting Independent Auditor's Report on Legal Compliance Other Required Auditor Communications Page 1 -2 3 -4 5 -7 Nam LarsonAllens" Weishair & Co., LLP Business Consultants • Certified Public Accountants REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and 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, 1999 and have issued our report thereon dated June 14, 2000. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the City of Lino Lakes, Minnesota's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and 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 Govemment Auditing Standards. However, we noted certain immaterial instances of noncompliance that we have reported to management of the City of Lino Lakes in a separate letter dated June 14, 2000. Internal Control over Financial Reporting In planning and performing our audit, we considered the City of Lino Lakes, Minnesota's intemal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the intemal control structure over financial reporting. Our consideration of the intemal control over financial reporting would not necessarily disclose all matters in the intemal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the intemal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the 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. We noted no matters involving the intemal control over financial reporting and its operation that we consider to be material weaknesses. However, we noted other matters involving the internal control over financial reporting, which we have reported to management in a separate letter dated June 14, 2000. (1) This report is intended solely for the use of the City of Lino Lakes, Minnesota, the Office of the State Auditor, and other state and federal awarding agencies, and is not intended to be and should not be used by anyone other than these specified parties. St. Paul, Minnesota June 14, 2000 Imm (2) x, agt, Y.,./...,c6.ser LARSON, ALLEN, WEISHAIR & CO., LLP Was Lars nAllens- W e i s h a i r & Co., L L P .1C" DE i! PF D EFFECT Business Consultants • Certified Public Accountants INDEPENDENT AUDITOR'S REPORT ON LEGAL COMPLIANCE To the Honorable Mayor and 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, 1999, and have issued our report thereon dated June 14, 2000. We conducted our audit in accordance with generally accepted auditing standards and the provisions of the Minnesota Legal Compliance Audit Guide for Local Govemment, promulgated by the Legal Compliance Task Force pursuant to Minn. Stat. §6.65. Accordingly, the audit included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The Minnesota Legal Compliance Audit Guide for Local Govemment 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 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, except as noted below. Finding: Minnesota Statute 471.345 subdivision 3 requires that for contracts issued over $25,000 the City retain all the bids received on file. For two of the contract items selected for testing, the bids received were not retained on file. Response: The City will retain bids received on file. Finding: Minnesota Statute 412.311 requires that for contracts over $25,000 a request for bids be published at least once in the official newspaper at least ten days in advance of the date for submission of bids. The request for bids for the Behm's Century Park playground equipment were not advertised in the official newspaper. Response: — The City will follow advertising requirements for all contracts. (3) NNW This report is intended solely for the use of the City of Lino Lakes, Minnesota, the Office of the State Auditor, and other state agencies, and is not intended to be and should not be used by anyone other than these specified parties. St.Paul, Minnesota June 14, 2000 (4) pYkt.4.9is aakt Yeg,44, P&I ez.49 LARSON, ALLEN, WEISHAIR & CO., LLP OMNI Nam low LarsvnAllen- Weishair & Co., LLP Business Consultants • Certified Public Accountants OTHER REQUIRED AUDITOR COMMUNICATIONS June 14, 2000 To the Honorable Mayor and Members of the City Council City of Lino Lakes, Minnesota Dear Committee Members: We have audited the general purpose financial statements of the City of Lino Lakes for the year ended December 31, 1999, and have issued our report thereon dated June 14, 2000. Professional standards require that we provide you with the following information related to our audit. Our Responsibility Under Generally Accepted Auditing Standards As stated in our engagement letter dated December 15, 1999, our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance about whether the general purpose financial statements are free of material misstatement. Because of the concept of reasonable assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud and defalcations, may exist and not be detected by us. As part of our audit, we considered the intemal control structure of the City of Lino Lakes. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such intemal control structure. Other Information in Documents Containing Audited Financial Statements Our responsibility for other information in documents containing the City of Lino Lakes financial statements, including the supplementary information, does not extend beyond the information identified in our report on the financial statements, and we have no professional responsibility to perform audit procedures on such other information. (5) Significant Accounting Policies Management has the responsibility for selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by the City of Lino Lakes are described in Note 1 to the general purpose financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 1999. We noted no transactions entered into by the City during the year that were both significant and unusual, and of which, under professional standards, we are required to inform you, or transactions for which there is a lack of authoritative guidance or consensus. Management Judgments and Accounting Estimates Accounting estimates are an integral part of the general purpose financial statements prepared by management and are based on management's current judgments. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from management's current — judgments. Significant accounting estimates include the following: Annual depreciation is provided in the proprietary funds using rates sufficient to fully depreciate the related fixed assets over their useful lives based on past experiences. The year end valuation of investments at fair value. The City records allowances for uncollectible receivables based upon an analysis of the collectibility of individual accounts and notes, taking into account delinquencies and payment histories. The City has recognized sick leave payable in the general long -term debt account group. The amount recorded includes amounts eamed through December 31, 1999 by employees eligible for retirement at that date. In addition, an amount is recorded for those individuals not eligible for retirement at December 31, 1999, but for whom pay- out of the amount eamed to that date is reasonably expected. This estimate is derived by an analysis of the pay -out history and current and anticipated future employment conditions. Significant Audit Adjustments For purposes of this letter, professional standards define a significant audit adjustment as a proposed correction of the general purpose financial statements that, in our judgment, may not have been detected except through our auditing procedures. Those adjustments may include those proposed by us but not recorded by the City that could potentially cause future financial statements to be materially misstated, even though we have concluded that such adjustments are not material to the current _ financial statements. As part of our audit we made year end adjustments to fixed assets, accounts receivable, special assessments and interest payable. (6) Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, conceming a financial accounting, reporting, or auditing matter that could be significant to the general purpose financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Consultations with Other Independent Accountants To the best of our knowledge, management has not consulted with or obtained opinions from other independent accountants during the past year that are subject to the requirements of Statement on Auditing Standards No. 50, "Reports on the Application of Accounting Principles." Issues Discussed Prior to Retention of Independent Auditors We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Difficulties Encountered in Performing the Audit Because of staff tumover, the City had difficulty preparing all of the workpapers needed for the audit on a timely basis. We had to delay the start of audit fieldwork to allow the City time to complete year end records. We also had to pull out of fieldwork to give the City time to complete the fixed asset records. The City also asked us to prepare the Comprehensive Annual Financial Report. Personnel of the City were cooperative and helpful throughout the audit. This information is intended solely for the use of the Finance Committee, Board of Directors, and management of the City of Lino Lakes and is not intended to be, and should not be used for any other purpose. Sincerely, x‘441644,ess LARSON, ALLEN, WEISHAIR & CO., LLP gam (7)