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<br />(31) <br /> <br />INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL <br />REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN <br />AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE <br />WITH GOVERNMENT AUDITING STANDARDS <br /> <br /> <br /> <br />Honorable Mayor and <br />Members of the City Council <br />City of Gem Lake, Minnesota <br /> <br /> <br />We have audited, in accordance with the auditing standards generally accepted in the United States of <br />America and the standards applicable to financial audits contained in Government Auditing Standards <br />issued by the Comptroller General of the United States, the financial statements of the governmental <br />activities, the business-type activities and each major fund of the City of Gem Lake, as of and for the <br />year ended December 31, 2019, and the related notes to the financial statements, which collectively <br />comprise the City of Gem Lake’s basic financial statements, and have issued our report thereon dated <br />August 28, 2020. <br /> <br />Internal Control Over Financial Reporting <br />In planning and performing our audit of the financial statements, we considered City of Gem Lake’s <br />internal control over financial reporting (internal control) to determine the audit procedures that are <br />appropriate in the circumstances for the purpose of expressing our opinions on the financial <br />statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal <br />control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. <br /> <br />A deficiency in internal control exists when the design or operation of a control does not allow <br />management or employees, in the normal course of performing their assigned functions, to prevent, or <br />detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a <br />combination of deficiencies, in internal control, such that there is a reasonable possibility that a material <br />misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a <br />timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control <br />that is less severe than a material weakness, yet important enough to merit attention by those charged <br />with governance. <br /> <br />Our consideration of internal control was for the limited purpose described in the first paragraph of this <br />section and was not designed to identify all deficiencies in internal control that might be material <br />weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies <br />may exist that were not identified. We did identify certain deficiencies in internal control, described in <br />the accompanying schedule of findings and responses as items 2019-001, 2019-002, and 2019-003, <br />that we consider to be material weaknesses.