HomeMy WebLinkAbout#14 - 2018 Audit Presentation
STAFF REPORT
DATE: September 17, 2019
REGULAR
TO: City Council
FROM: Sue Iverson – Finance Director
AGENDA ITEM: Presentation & Acceptance of the 2018 Comprehensive Annual Financial
Report (CAFR)
BACKGROUND:
Annually, the City engages the services of an independent outside audit firm to audit and assist with the
preparation of the financial statements. The auditors are asked to assure that the financial statements are
free from material misstatement in accordance with U.S. Generally Accepted Accounting Principles
(GAAP). The firm also performs testing and makes inquiries to help ensure that proper internal controls
are in place. This is the sixth year that the City of Lake Elmo has presented the report in the Comprehensive
Annual Financial Report (CAFR) layout.
As such, the City has retained the services of Redpath and Company, to perform the City of Lake Elmo’s
audit for 2018. The 2018 Comprehensive Annual Financial Report and Management Reports will be
presented to the City Council by Mr. Andy Hering – Director Audit and Attest Services, from Redpath and
Company with the opportunity to ask questions of both Mr. Hering and City Staff.
ISSUE BEFORE THE CITY COUNCIL:
1) Does the City Council have any questions regarding the 2018 CAFR?
DISCUSSION:
Mr. Andy Hering, CPA, will present information regarding the 2018 Audit, answer any questions the City
Council may have pertaining to the 2018 Audit and the 2018 CAFR.
The City received an Unmodified audit opinion, meaning the Financial Statements are fairly stated in all
material respects. One exception was noted during the audit for Minnesota Legal Compliance related to
the timing of the deposit of State Fire Aid, the details of this finding and the City’s response are outlined in
the Minnesota Legal Compliance Report attached. The City’s Net Position increased by $5,598,113 during
2018, this includes assets and infrastructure less outstanding debt obligations. The governmental funds
reported a combined ending fund balances of $9,075,498 which is a decrease of $298,849 from 2017. The
unassigned general fund balance of $4,756,695 is 85% of the next year’s general fund expenditures and
other financing uses.
FISCAL IMPACT:
Overall sound policies, fiscal management, effective operational, capital, and long range planning are all
integral parts of City business leading up to the audit and completion of the CAFR. As such, continued
investment in the aforementioned items will help position the City to continue to provide quality, efficient,
timely and cost effective services to the constituents of the community.
RECOMMENDATION:
1) No formal recommendation is required, but the City Council at its discretion may accept the results
of the 2018 Audit and 2018 CAFR.
ATTACHMENTS:
1) 2018 Comprehensive Annual Financial Report (CAFR)
2) Redpath and Company Letter, Communication With Those Charged With Governance
3) Redpath and Company Report, Independent Auditor’s Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
4) Redpath and Company Report, Minnesota Legal Compliance Report