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May 20, 2022 To the City Council and Management of the City of Gem Lake 4200 Otter Lake Road Gem Lake, MN 55110 Dear Councilmembers and Management: We are engaged to audit the financial statements of the governmental activities, the business-type activities, and each major fund, which collectively comprise the basic financial statements of the City of Gem Lake (the City) as of and for the year ended December 31, 2021. Professional standards require that we provide you with certain information related to our audit. We have communicated such information in our audit engagement letter prior to the start of the audit. However, recent changes to audit standards require additional communication with those charged with governance of the City during audit planning, which will be communicated to you verbally and in this letter. OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA AND GOVERNMENT AUDITING STANDARDS As stated in our engagement letter dated March 14, 2022, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. We have not been engaged to report on the introductory section, which accompanies the financial statements, but is not RSI. Our responsibility with respect to this other information in documents containing the audited financial statements and auditor’s report does not extend beyond the financial information identified in the report. We have no responsibility for determining whether this other information is properly stated. This other information will not be audited and we will not express an opinion or provide any assurance on it. We expect the City to provide the final version of all documents comprising the annual report, including other information, prior to the date of the auditor’s report so that required audit procedures can be completed prior to the issuance of the auditor’s report. If obtaining the final version of these documents is not possible prior to the date of the auditor’s report, we expect that the documents will be provided as soon as practicable, and that the City will not issue the annual report prior to providing them to us. If we become aware that the final version of all documents determined to be part of the annual report were not provided to us prior to the issuance of those documents to third parties, we will be required to take additional action, which may include: obtaining those documents from city management and performing the required audit procedures on them as soon as practical; communicating the matter to those charged with governance of the City, if applicable; and other actions deemed appropriate in the circumstance. C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1