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<br />I <br />I Al?IX) <br />I- <br />I <br /> CERTIFIED PUBLIC ACCOUNTANTS <br />I April 12, 1996 AND CONSULTANTS <br />. Members of the City Council <br /> City of Arden Hills <br /> Arden Hills, Minnesota <br />I In planning and performing our audit of the general purpose financial statements <br /> of the City of Arden Hills for the year ended December 31, 1995, we considered <br />I its internal control structure in order to determine our auditing procedures for <br /> the purpose of expressing our opinion on the financial statements and not to <br /> provide assurance on the internal control structure. Howeverr we noted certain <br /> matters involving the internal control structure and its operations that we <br />I consider to be reportable conditions under standards established by the American <br /> Institute of Certified Public Accountants. Reportable conditions involve matters <br /> coming to our attention relating to significant deficiencies in the design or <br /> operation of the internal control structure that_ in our judgment, could <br />-. adversely affect the City's ability to record_ process, summarize and report <br /> financial data consistent with the assertions of management in the financial <br /> statements. <br />I A material weakness is a reportable condition in which the design or operation of <br /> one or more of the internal control structure elements does not reduce to a <br /> relatively low level the risk that errors or irregularities in amounts that would <br /> be material in relation to the financial statements being audited may occur and <br />- not be detected within a timely period by employees in the normal course of <br /> performing their assigned functions. <br />I Our consideration of the internal control structure would not necessarily <br /> disclose all matters in the internal control structure that might be reportable <br /> conditions and, accordingly_ would not necessarily disclose all reportable <br /> conditions that are also considered to be material weaknesses as defined above. <br />- However, we noted the following reportable condition that we believe to be a <br /> material weaknesses. <br /> Seqreqation of Duties <br />I Our study and evaluation disclosed that because of the limited size of your <br /> office staff, your organization has limited segregation of duties. A good <br /> internal control structure contemplates an adequate segregation of duties so that <br />I no one individual handles a transaction from inception to completion. While we <br /> recognize that your organization is not large enough to permit an adequate <br /> segregation of duties in all respects, it is important, however, that you be <br /> aware of this condition. <br />I <br />.- <br /> Member of American Institute of Certified Public Accountants Private Companies Practice Section <br />. 115 cA~T HICKORY STREET, SUITE )(12 W+EASTf'CARL STREET 1iJ(i(J NORTHLAND PLAZA <br /> I'OI',()Xll66 P.O BOX H, >OO.lWEST80THSTREET <br /> lvL~NKATO, MfI-,:NESOlA S6OO1_1i66 OWAIDNNA, M1NNESOfA S5O&'-DH5 MINNEAPOUS, MINNESOTA S;411 <br /> (,O)lm-.!w (>Ol)4,1-9D6 (6U)8lS.1I(l'K' <br /> FAX(507)J~9119 FAX(507)4S!.()i9<! FAX (61l)896-J6W <br />