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AUDIT SUMMARY The following is a summary of our audit work, key conclusions, and other information that we consider important or that is required to be communicated to the City Council, administration, or those charged with governance of the City. OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA AND GovERNMENT AUDITING STANDARDS We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended December 31, 2023. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information to you verbally and in our audit engagement letter. Professional standards also require that we communicate the following information related to our audit. PLANNED SCOPE AND TIMING OF THE AUDIT We performed the audit according to the planned scope and timing previously discussed and coordinated in order to obtain sufficient audit evidence and complete an effective audit. AUDIT OPINIONS AND FINDINGS Based on our audit of the City's financial statements for the year ended December 31, 2023: 0 We have issued unmodified opinions on the City's basic financial statements. • We reported one matter involving the City's internal control over financial reporting that we consider to be a significant deficiency, as detailed in the Special Purpose Audit Reports. Due to the limited size of the City's office staff, the City has limited segregation of duties in certain areas. • The results of our testing disclosed no instances of noncompliance required to be reported under Government Auditing Standards. We reported no findings based on our testing of the City's compliance with Minnesota laws and regulations. FUND BALANCE/NET POSITION DEFICITS As reported in the City's Annual Comprehensive Financial Report (ACFR), the EDA TIF District No. 5 Special Revenue Fund and the TCAAP Capital Project Fund had year-end deficit equity balances of $24,701 and $194,879, respectively. Management has disclosed that these deficits will be eliminated with future contributions, grants, and internal fund transfers, if needed. -1-