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Management <br />City of Gem Lake <br />Little Canada, Minnesota <br />Received <br />AUG 1 2 2Q19 <br />City, >f Gem Lake <br />C€IftcnLarscnAl.€en LLP <br />CLAconnec:.com <br />In planning and performing our audit of the financial statements of the City of Gem Lake (the City) as of <br />and for the year ended December 31, 2018, in accordance with auditing standards generally accepted <br />in the United States of America, we considered the City's internal control over financial reporting <br />(internal control) as a basis for designing audit procedures that are appropriate in the circumstances for <br />the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing <br />an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion <br />on the effectiveness of the City's internal control. <br />However, during our audit we became aware of matters that are opportunities to strengthen your <br />internal control and improve the efficiency of your operations. Our comments and suggestions <br />regarding those matters are summarized below. A separate communication dated July 31, 2019, <br />contains our written communication of any significant deficiencies and material weaknesses in the <br />City's internal control. This letter does not affect our communication dated July 31, 2019. <br />Council Approval of Disbursement Claims <br />During our audit procedures we noted that EFTIACH payments are not approved by the City Council <br />which is because most of the payments are related to debt and payroll, which aren't statutorily required <br />to be approved by the city council. However, there are some payments by EFT for general <br />disbursements which are statutorily required to have city council approval so should be included in the <br />approved listing. We also noted that there was a check that wasn't included on the approval listing due <br />to it being the same day as the council meeting so it was missed. We recommend that the City reviews <br />EFT payments monthly to ensure that any general disbursements should be approved by the Council, <br />and that each month all checks are included as of the last approved check by the council. <br />Contract for Financial Services <br />During our audit procedures we noted that the City's contract with White Bear Township specifies rates <br />on a per person basis. However, this creates opportunities for Township employees at a higher rate of <br />pay to perform duties that do not match the proper rate of pay for a variety of reasons such as staff <br />turnover, causing the contracted fees to be higher. We recommend that the city should include <br />language clarifying which positions are to perform what duties or to eliminate the varying rates and <br />agree on one standard rate. <br />We will review the status of these comments during our next audit engagement. We have already <br />discussed many of these comments and suggestions with various City personnel, and we will be <br />pleased to discuss them in further detail at your convenience, to perform any additional study of these <br />matters, or to assist you in implementing the recommendations. <br />This communication is intended solely for the information and use of management and others within the <br />City, and is not intended to be, and should not be, used by anyone other than these specified parties. <br />CliftonLarsonAllen LLP <br />Minneapolis, Minnesota <br />July 31, 2019 <br />A member of <br />IQNexia <br />International <br />