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<br />-31- <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />INDEPENDENT AUDITOR’S REPORT <br /> <br />ON MINNESOTA LEGAL COMPLIANCE <br /> <br /> <br /> <br />To the City Council and Management <br />City of Gem Lake, Minnesota <br /> <br /> <br />We have audited, in accordance with 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, Minnesota (the City) <br />as of and for the year ended December 31, 2020, and the related notes to the financial statements, which <br />collectively comprise the City’s basic financial statements, and have issued our report thereon dated <br />June 22, 2021. <br /> <br />MINNESOTA LEGAL COMPLIANCE <br /> <br />In connection with our audit, we noted that the City failed to comply with provisions of the claims and <br />disbursements and miscellaneous provisions sections of the Minnesota Legal Compliance Audit Guide for <br />Cities, promulgated by the State Auditor pursuant to Minnesota Statutes § 6.65, insofar as they relate to <br />accounting matters as described in the Schedule of Findings and Responses as findings 2020-002, <br />2020-003, and 2020-004. Also, in connection with our audit, nothing came to our attention that caused us <br />to believe that the City failed to comply with the provisions of the contracting and bidding, deposits and <br />investments, conflicts of interest, public indebtedness, and tax increment financing sections of the <br />Minnesota Legal Compliance Audit Guide for Cities, insofar as they relate to accounting matters. <br />However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. <br />Accordingly, had we performed additional procedures, other matters may have come to our attention <br />regarding the City’s noncompliance with the above-referenced provisions, insofar as they relate to <br />accounting matters. <br /> <br />CITY’S RESPONSES TO FINDINGS <br /> <br />The City’s responses to the findings identified in our audit are described in the accompanying Schedule of <br />Findings and Responses. The City’s responses were not subjected to the auditing procedures applied in <br />the audit of the financial statements and, accordingly, we express no opinion on them. <br /> <br />PURPOSE OF THIS REPORT <br /> <br />The purpose of this report is solely to describe the scope of our testing of compliance and the results of <br />that testing, and not to provide an opinion on compliance. Accordingly, this report is not suitable for any <br />other purpose. <br /> <br /> <br /> <br /> <br />Minneapolis, Minnesota <br />June 22, 2021 <br />C E R T I F I E D <br />A C C O U N T A N T S <br />P UBLIC <br />PRINCIPALS <br />Thomas A. Karnowski, CPA <br />Paul A. Radosevich, CPA <br />William J. Lauer, CPA <br />James H. Eichten, CPA <br />Aaron J. Nielsen, CPA <br />Victoria L. Holinka, CPA/CMA <br />Jaclyn M. Huegel, CPA <br />Kalen T. Karnowski, CPA <br />Malloy, Montague, Karnowski, Radosevich & Co., P.A. <br />5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com <br />Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1