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Item No. 11 <br />Type of Business: WK <br />WK: Work Session; PH: Public Hearing; <br />CA: Consent Agenda; CB: Council Business City of Mounds View Staff Report <br />To: Honorable Mayor and City Council <br />From: Charles Hansen, Finance Director <br />Item Title/Subject: Discussion of Comprehensive Annual Financial <br />Report for the Year 2000 <br />Date of Report: January 10, 2002 <br /> <br />Attached are three documents: <br /> Comprehensive Annual Financial Report for the Year 2000 (CAFR) <br /> Auditor’s Management Letter <br /> Auditor’s Reports on Compliance <br /> <br />These reports together constitute the annual financial report to the City Council. <br /> <br />The Comprehensive Annual Financial Report is difficult to summarize. It is best <br />used as a reference. Once a person becomes familiar with it, it is possible to <br />quickly find answers to various questions regarding the City’s finances. <br /> <br />The Auditor’s Management Letter is perhaps of the most immediate interest to the <br />City Council. An introductory letter appears on pages 2 & 3. This is followed on <br />pages 4 through 13 by a financial analysis of selected highlights of the financial <br />report. Pages 13 through 17 contain Reportable Conditions and Management <br />Suggestions. The letter ends with a discussion of the requirement for the city to <br />implement GASB 34 in the financial report for the year 2003. <br /> <br />The Auditor’s Reports on Compliance is the most difficult to understand of the <br />three reports. It makes two statements of importance to the City Council. <br /> <br />First is that while testing for compliance with laws, regulations, grant, and contract <br />provisions wasn’t a main objective of the audit, no important instances of non- <br />compliance were found during the audit. <br /> <br />Second is a statement regarding internal controls. These are the checks and <br />balances built into city procedures to insure that financial transactions are properly <br />carried out and laws, regulations, contracts, etc. are complied with. The auditors <br />found several weaknesses in the internal controls. These weaknesses are more <br />thoroughly discussed on pages 13 through 17 of the Management Letter. <br /> <br />On January 10, 2002, Kathleen Miller and I met with the new auditors, MMKR. We <br />discussed changes and improvements to be made in the city’s procedures and