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33 Honorable Mayor and City Council • City of St. Anthony AUDIT PROCEDURES - INTERNAL CONTROL In planning and performing the audit, I will consider the internal .control suffi- cient to plan the audit in' order to determine the nature, timing, and extent of the auditing procedures for the purpose of expressing my opinion on the City of St. Anthony, Minnesota's general purpose financial statements. I will obtain an understanding of the design of the relevant controls and whether they have been placed in operation, and I will assess control risk. Tests of controls may be performed to test the effectiveness of certain controls that I consider relevant to prevernLing and detecting errors and fraud that are material to the general purpose financial statements and to preventing and detecting mis- statements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the general purpose financial statements. Tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed. An audit is not designed to provide assurance on internal control or to identify- reportable conditions. However, I will inform the governing body of any matters involving internal control and its operation that I consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to my attention relating to significant deficiencies in the.. design or operation of the internal con • trol that, in my judgment, could adversely affect the City's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. AUDIT ADMINISTRATION AND OTHER I understand that your personnel will prepare all cash and other confirmations I request and will locate any invoices selected for testing. workpapers for this engagement are the property of Stuart J. Bonniwell, C.P.A., and constitute confidential information. However, I may be requested to make cer- tain workpapers available to various cognizant or grantor agencies pursuant to authority given to them by law or regulation. If requested, access to such work- papers will be provided under my supervision. Furthermore, upon request, I may provide photocopies of selected workpapers to these agencies. These agencies may intend, or decide to distribute the photocopies or information contained therein to others, including other governmental agencies. Fees for services are based on the time required to complete the engagement, plus out-of-pocket expenses such as report production, typing, etc. Professional rates vary according to the degree of responsibility involved and the level of expertise and experience of personnel assigned to the audit. In addition, fees are based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit which would cause a mate- rial extension of time required to complete the audit. If significant additional • time is necessary, you will be consulted with before commencing such additional work.