CCP 05-27-1997 - Laserfiche WebLink

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I . f,tt I AIIX) .. I April 10, 1m CERTIFIED PUBLIC ACCOUNTANTS I AND Q)NSULTANTS Members of the City Council City of Arden Hills . Arden Hills, Minnesota I In planning and performing our audit of the general purpose fmancial statements of the City of Arden Hills for the year ended December 31, 1996, we considered its internal control structure in order to detennine our auditing procedures for the purpose of expressing our opinion on the fmancial statements and not to provide assurance on the internal control structure. However, we noted certain matters involving the internal control structure and its operations that we consider I to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the City's ability to record, process, summarize and report financial data consistent with the assertions of management in the fmancial statements. I A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregnlarities in amounts that would be I' material in relation to the fmancial statements being audited may occur and nOl be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control I structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we noted the following reportable condition that we believe to be a material weaknesses. I Sefrre~ation of Duties Our study and evaluation disclosed that because of the limited size of your office staff, your organization has limited segregation of duties. A good internal control structure contemplates an adequate segregation of duties so that no one I individual handles a transaction from inception to completion. While we recognize that your organization is not large enough to permit an adequate segregation of duties in all respects, it is important, however, that you be aware of this condition. I Other Matters The following are areas that came to our attention during the audit that we feel should be reviewed: I General Fund Actual revenue was greater than budget by $433,521. The tota1 variance represents 19% of budget. The two areas I with the greatest variances were property taxes and nonbusiness licenses and permits with variances of $208,603 and $145,320, respectively. Expenditures were very close to budget, finishing $27,579 above a budget of $2,094,521. The large increase in revenue allowed for more transfers out than what had been budgeted. Total transfers out totaled $528,550, $317,500 more than budget I I. Member of American Institure of Certified Public Accounrants Private Companies Practice Section I III EAST HICKORY ST1\EET. SUITE 101 M4EASTPEAIllSTREfT 1060 NClKllIUND PLAZA 1'O,1lOX1166 1'0 BOX J4~ lbXI WEST MnI STREET MANKAlO;MINNEliOr.'.'I6OO1.1166 O\t'ATONNA. MlNNESOrA ~S06(\.()l1~ MINNEAI'OUS,MINNESOTA ~'HJl 1'i07lli1o;.21Z7 \'il.\714SI.'lIl6 \6InSJs.9090 fAX('i07)l$'lllQ fAX non ~~I.om FAXI611lt\%.J6.20