Centerville 2010 Management letter

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City of Centerville March 24, 2011 Page 17 GASB Statement No. 59 –Financial Instruments Omnibus Summary The objective of this Statement is to update and improve existing standards regarding financial reporting and disclosure requirements of certain financial instruments and external investment pools for which significant issues have been identified in practice. This Statement provides for the following amendments: Statement 31 is clarified to indicate that a 2a7-like pool, as described in Statement 31, is an external investment pool that operates in conformity with theSecurities and Exchange Commission's (SEC) Rule 2a7 as promulgated under the Investment Company Act of 1940, as amended. Statement No. 40, Deposit and Investment Risk Disclosures, is amended to indicate that interest rate risk information should be disclosed only for debt investment pools—such as bond mutual funds and external bond investment pools—that do not meet the requirements to be reported as a 2a7-like pool. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2010. Earlier application is encouraged. How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will improve financial reporting by providing more complete information, by improving consistency of measurements, and by providing clarifications of existing standards. Emphasizing the applicability of SEC requirements to 2a7-like external investment pools provides practitioners with improved guidance. Finally, limiting interest rate risk disclosures for investments in mutual funds, external investment pools, and other pooled investments to debt investment pools provides better guidance regarding the applicability of interest rate risk disclosures. * * * * * * This report is intended solely for the information and use of Council, management,others within the City, and the Minnesota Office of the State Auditor,and is not intended to be and should not be used by anyone other than these specified parties. The comments and recommendation in this report are purely constructive in nature, and should be read in this context. Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting records and related data. If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your convenience.We wish to thank you for the opportunity to be of service and for the courtesy and cooperation extended to us by your staff. March 24, 2011ABDO, EICK & MEYERS, LLP Certified Public Accountants Minneapolis, Minnesota