2002-05-22 WS Packet - Laserfiche WebLink

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. .f 7241 Ohms Lane Suite 200 Edina, MN 55439 REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and City Council City of Centerville. Minnesota We have audited the general purpose financial statements of the City of Centerville, Minnesota as of and for the year ended December 31. 2001 and have issued our report thereon dated March 29, 2002. In our report. our opinion was qualified because the general fixed assets account group was not audited. Except as discussed in the preceding sentence, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the City's general purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws. regulations. contracts and grants, noncompliance with which could have a direct and material effect on the deteanination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance that is required to be reported under Government Auditing Standards. It is identified on page 49. Internal Control Over Financial Reporting In planning and perfoaning our audit, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters conting to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting 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 general purpose financial statements. Our study and evaluation disclosed that because of the lintited size of your office staff, your City has lintited segregation of duties. A good internal control structure contemplates an adequate segregation of duties so that no one individual handles a transaction from inception to completion. While we recognize that your City is not large enough to permit an adequate segregation of duties in all respects, it is important, however, that you be aware of this reportable condition. 952.835.9090 Fax 952.835.3261 -50- www.aemcpas.com