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<br /> I AP[X) <br /> '. Page Two ~ <br /> CemAEO PtIRIC AO::OUNTANTIi <br /> I ANI1OlNSULTAN'ni <br /> I We noted certain matters involving the internal control strocture and its operation that we consider to be reportable <br /> conditions under standards established by the American Institute of Certified Public Accountants. Reportable <br /> conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of <br /> I the internal control strocture that, in our judgment, could adversely affect the City's' ability to record, process, <br /> summarize and report financial data consistent with the assertions of management in the general purpose financial <br /> statements. <br /> I Our study and evaluation disclosed that because of the limited size of your office staff; your organization has <br /> limited segregation of duties. A good internal control structure contemplates an adequate segregation of duties so <br /> I that no one individual handles a transaction from inception to completion. While we recognize that your <br /> organization is not large enough to permit an adequate segregation of duties in all respects, it is important, however, <br /> that you be aware of this reportable condition. <br /> I A material weakness is a reportable condition in which the design or operation of one or more of the internal control <br /> strocture elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would <br /> be material in relation to the general purpose fmancial statements being audited may occur and not be detected <br /> I within a timely period by employees in the normal course of performing their assigned functions. <br /> Our consideration of the internal control strocture would not necessarily disclose all matters in the internal control <br /> I- strocture that might be reportable conditions and, accordingly, would not necessarily disclose all reportable <br /> conditions that are also considered to be material weaknesses as dermed above. However, we believe the reportable <br /> condition described above is not a material weakness. <br /> I This report is intended for the information of the Council, management and the Office of the State Auditor. <br /> However, this report is a matter of public record and its distribution is not limited <br /> I ad, ad f , <br /> ~ fuL <br /> April 10, 1997 ABDO, ABDO & RICK <br /> I Minneapolis, Minnesota Certified Public Accountants <br /> I <br /> I <br /> I <br /> I <br /> I . <br /> I -42- <br />