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CITY OF GEM LAKE, MINNESOTA SCHEDULE OF FINDINGS AND RESPONSES (CONTINUED) YEAR ENDED DECEMBER 31, 2018 (40) OTHER ITEM FOR CONSIDERATION – MINNESOTA LEGAL COMPLIANCE 2018-006: Prompt Payment of Local Government Bills Criteria: Minnesota Statute §471.425, Subd. 2, requires Cities to pay each vendor obligation according to terms of the contract or, if no contract terms apply, within the standard payment period unless the municipality in good faith disputes the obligation. For municipalities who have governing boards which have regularly scheduled meetings at least once a month, the standard payment period is defined as within 35 days of the date of receipt. Condition: The City paid one invoice outside of the 35 days as defined by the Minnesota Statue. The invoice was paid approximately 5 days after it was due. Effect: The City is not in compliance with the Minnesota Statute requiring prompt payment of local government bills. Cause: The City paid the invoice outside of the due date as required by the Minnesota Statue. Recommendation: We recommend City management closely monitor payment of invoices to ensure that they are paid in a timely manner. Management Response: City management is aware of this requirement and will continue to monitor the requirement to ensure that payment continue to be made as required. 2018-007: Broker Certification Criteria: Minnesota Statute §356A.06, requires the City to obtain annually an acknowledgement from each investment broker, that they agree to handle the City’s account in accordance with Minnesota statues relating to investment restrictions. Condition: The Broker signed one broker certification in November of 2017 and the next one in January of 2019, with activity in December of 2018 not being covered by the certification. Effect: The City is not in compliance with the Minnesota Statute requiring the annual broker certification to be received. Cause: The City was late in sending the broker certifications to the broker. Recommendation: We recommend the City ensure that it sends the broker certification on an annual basis. Management Response: City management is aware of this requirement and will continue to monitor the requirement to ensure the broker certifications are updated.