2016-04-27 CC Packet - Laserfiche WebLink

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Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit. While our audit provides a reasonable basis for our opinion, it does not provide a legal determination on the City's compliance with those requirements. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported in accordance with Minnesota statutes. Summary Prior Year Findings 2014-001 Public purpose expenditure Condition: Our audit procedures include certain tests of the City's compliance with specific statutes and rules. During our tests we noted that the City Council approved a purchase for a painting costing $296 and presented it as a gift to the retiring City Administrator. Criteria: According to Minnesota statutes section 15.46, in order for an expenditure of public funds to be lawful it should meet two standards: 1.) There must be a public purpose for the expenditure and 2.) There must be specific or implied authority for the expenditure in statute or in the City's charter. Minnesota statutes do not provide the authority for employee recognition. Current year status: The Mayor and City Council members have, subsequently, reimbursed the City for the entire cost of the painting. 2014-002 Financing plan Condition: During our audit, it was noted that a payment was made to the City of Lino Lakes for the City's share of a joint project totaling $310,961. The project included a street, sewer and water component but the entire project was paid from the water fund. Typically, project costs should be funded by the benefitted fund. Furthermore, when reviewing support for this payment it appeared that a documented financing plan was not in place. Upon further review, a draft special assessment agreement was found in the project file. However, it was not signed or approved by City Council. Criteria: Without a signed agreement or other supporting documentation, the City cannot establish evidence that a commitment for payment from the benefitted party has been agreed to. Current year status: The City has located the signed assessment agreement and presented it to the City Council for official approval in 2015. The agreement was revised to include updated costs and new financing terms. -2- People + Process, Cuing; lieuolultl. V1616 -r"