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C E R T I F I E D <br />A C C O U N T A N T S <br />P UBLIC <br />PRINCIPALS <br />Thomas A. Karnowski, CPA <br />Paul A. Radosevich, CPA <br />William J. Lauer, CPA <br />James H. Eichten, CPA <br />Aaron J. Nielsen, CPA <br />Victoria L. Holinka, CPA/CMA <br />Jaclyn M. Huegel, CPA <br />Malloy, Montague, Karnowski, Radosevich & Co., P.A. <br />5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com <br /> <br />-1- <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER <br /> <br />FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS <br /> <br />BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED <br /> <br />IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS <br /> <br /> <br /> <br />To the City Council and Management <br />City of Arden Hills, Minnesota <br /> <br /> <br />We have audited, in accordance with auditing standards generally accepted in the United States of <br />America and the standards applicable to financial audits contained in Government Auditing Standards, <br />issued by the Comptroller General of the United States, the financial statements of the governmental <br />activities, the business-type activities, each major fund, and the aggregate remaining fund information of <br />the City of Arden Hills, Minnesota (the City) as of and for the year ended December 31, 2018, and the <br />related notes to the financial statements, which collectively comprise the City’s basic financial statements, <br />and have issued our report thereon dated May 2, 2019. <br /> <br />INTERNAL CONTROL OVER FINANCIAL REPORTING <br /> <br />In planning and performing our audit of the financial statements, we considered the City’s internal control <br />over financial reporting (internal control) to determine the audit procedures that are appropriate in the <br />circumstances for the purpose of expressing our opinions on the financial statements, but not for the <br />purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do <br />not express an opinion on the effectiveness of the City’s internal control. <br /> <br />A deficiency in internal control exists when the design or operation of a control does not allow <br />management or employees, in the normal course of performing their assigned functions, to prevent, or <br />detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination <br />of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement <br />of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. A <br />significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less <br />severe than a material weakness, yet important enough to merit attention by those charged with <br />governance. <br /> <br />Our consideration of internal control was for the limited purpose described in the first paragraph of this <br />section and was not designed to identify all deficiencies in internal control that might be material <br />weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may <br />exist that have not been identified. We did identify one deficiency in internal control, described in the <br />accompanying Schedule of Findings and Responses as item 2018-001, which we consider to be a material <br />weakness. <br /> <br />(continued)