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City Council City of Roseville, Minnesota Page Two Because of inherent limitations in any system of iaternal accounting and administrative controis used in administering fed- eral financial assistance orograms, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the systems to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Our study included all of the applicable control categories list- ed above. During the year ended December 31, 1988, the City of Roseville, Minnesota, had no major federal financial assistance programs aad expended 100 percent of its total federal financial assistance under the following nonmajor federal financial assis- tance programs: Housing Rehabilitation and Social and Economic Development. With respect to internal control systems used in administering these nonmajor federal financial assistance pro- grams, our study and evaluation included considering the types of errors and irregularities that could occur, determining the in- ternal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary oro- cedures are prescribed and are being followed satisfactorily, and evaluating any weakness2s. With respect to the internal control systems used solely in ad- ministering the other nonmajor federal financial assistance pro- grams of the City of Roseville, Minnesota, our study and evalua- tion was limited to a preliminary review of the system to obtain and understanding of the ccntrol environment and the flow of transactions through the accounting system. Our study and evalu- ation of the internal control systems used solely in administer- ing these nonmajor financial assistance nrograms of the City of Roseville, Minnesota, did not extend beyond this oreliminary review phase. Our study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in ad- ministering the federal financial assistance orograms of the City of Roseville, Minnesota. Accordingly, we do not express an onin- ion on the internal control systems used in administering the federai financial assistance nrograms of the City of Roseville, Minzesota. Also, our examination, made in accordance with the standards men- tioned above, would not necessarily disclose material weaknesses in the internal control systems, for which our study and evalua- tion was limited to a oreliminary review of the systems, as dis- cussed in the fifth paragraoh of this report. However, our study and evaluation and our examination 3isclosed no condition tnat we believe to be a material wealcness in rela- tion to a federal financial assistance program of the City of Roseville, Minnesota. 94