CCP 05-17-2004 - Laserfiche WebLink

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April 1,2004 Gramlview Square 5201 Eden A~eIlUC Suile 370 Edina. MN 554.36 Honorable Mayer and City Council City of Arden Hills, Minnesota We have audited the general PUI]>ose financial statements of the City ()f!i\.rcten !Jjl~s\f"t the year ended 31, 2003 and have issued our report thereon dated Aprill~ 2004. Professional standards;~qq:~"that we provide you with the following information related to our audit. . Our Responsibility Under Auditing Standards Ge"eral!yAe"epted in tbe UiilieMi,tates of America ,.-, As stated in our engagement letter, our responsibility, as:4~scribed hYPf&~;~.ipnal sttil~~~ is to plan and perform OUf audit to obtain reasonable. but not absolute. assurance that the finap.~ial statef!1~~tsta.r~4r~p_f maten~l misstatement and are fairly presented in accordance with acco:tTPt)~,})til)~iples generaIlY'ac_cept~jn.the Urti.t~:'~~tes of America. Because an audit is designed to provide reasonabk,:fj~tnot'abS(,)I~~elassurance andbecallse we did notperfonn a detailed examination of all transactions~ there is a risk *3-9i1aferial errors, fraud or illegal 'acts' may exist and not be detected by us. In planning and performing~~\ldit of the gell:~r;al purpose finaitc.i~l_statements of the City, for the year ended December 31, 2003, we considereq,its internal<c:prtt.rol in order to detcl1Iline our auditing procedures for the purpose of expressing our opini,~~,C)~ the generaJ,pl1:rp,qsefih~i1cialstatemeJlt~:~nd''[lot to provide assurance on the internal control. However, we:!'~tt::,~:;~:ettai~:::Il"l:~tters iiiv~lving the intemal'controland its operation that we consider to be reportable conditions under S~~[f~;'~tablished,:~Y;L~~fAmerica.rtInstitute of Certified Public Accountants. Reportable conditions involve matters coming-"_~';1>_w.a'ttention relating:~p.$i~nificant-d~ficiencies in the design or operation of internal control that, in our judgment, coul<J,,~~~tSely affect the City's li9:il~to recorc:t:px~cess, summarize, and report financial data consistent with the assertions of manage--ii1~~iin the general purpose'fllillpcial staten:i~tits. We noted the following reportable condition: segre~~ti~j;Qf Duties ','-c-"',::',. Our study an&ey~r~tion disclo~:e~jl1at because of the limited size of your office staff, the City has limited segregation of duties. Good intdtI~~;:~,ontroI5~~~inplates an adequate segregation of duties so that no one individual handles a transaction from inception to conm.~~t~(:lJl'7\\yhile we recognize that the City is not large enough to permit an adequate segregation of duties in all respects, i(,-is,j~~rtant, however, that you be aware of this condition. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively tow level the risk that errors OT fraud in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the nonnal course of performing their assigned functions. OUT consideration of internal control would not necessarily disclose all matters in internal control 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, the reportable condition described above is not believed to be a material weakness. 952.835.9090 . Fil~ 952.&153261 www.aemcpas.com . . .