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I.K�7�7u�7.] � f � F sse � t�. -� � ' I,. _ � ��.-: � , z : � � � . �' _ � • INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STROCTURE RELA'PED TO DIATTERS NOTED IN A FINANCIAL STATEMENT AUDIT CONDOCTED IN ACCORDANCE WITH GOVERNb1ENT AODITING STANDARDS City Council City of Roseville, Minnesota We have audited the general purpose financial statements of the City of Roseville, Minnesota, for the year ended December 31, 1989, and have issued our report thereon dated Apri1 5, 1990. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comntroller General of the United States. Those standards require that we plan and perform the audit �o obtain reasonable assurance about whether tne financial statements are tree of ma- terial misstatement. In planning and performing our aud�t of the tinancial scatemer,ts of the City of Roseville, Minnesota, for th� year ended Decembe: 31, 1989, we considered its internai control structure in order to determine our auditing procedures for tne nurpose of exoress- ing our opinion on the financial statements and not to arovide assurance on the int�rnal control structure. The management of the City of Roseville, Minnesota is responsible for establishing and maintaining an internal,control strcucure. In fulfilling this resoonsibility, estimates and judgments by management are required to assess the expected ben�fits and related costs of internal control structure__ policies and ' procedures. The objectives of an internal controi structure are to provide manaqement with reasonable, but nnt absolute, assurance that assets are safeguarded against loss from unauthor- ' ized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of in- herent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectivAness of the desian and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policizs and procedures in the following cateyories: cash and inves�ments, receivables, inventory, �ixed assets, payables and accrued liabilities, debt and fund equity. 112