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CITY OF AOS�'V'�L,�� <br />Schedule of Findings and Questioned Costs (continued) <br />Year Ended December 31,2005 <br />This schedule summarizes findings and questioned costs relating to compliance with Minnesota Statutes, <br />federal regulations, internal controls, and compliance findings. The auditor, Mallay, Montague, <br />I�arnowski, Radosevich & Co., P.A. (NIlV�CR), is responsible for providing the information under the <br />headings "Finding" and "Recommendation." The City of �toseville (the City) is responsiblefor providing <br />the information under the heading "Management's Response." <br />B. FINDINGS — FINANCIAL STATEMENT AUDIT <br />None. <br />C. FINDINGS AND QUESTIONED COSTS— MAJOR FEDERAL AWARD PROGRAMS <br />AUDIT <br />None. <br />D. FINDINGS — M�NNES4TA LEGAL COMPLIANCE AUDIT <br />2005-1 IIVIPLOYEE RECOGN1TlON EV�1V"T'SIPURCZIA3�S <br />1. Finding <br />A statement of position issued by the Office of the State Auditor on employee <br />recognition events indicates that "authority for expenditure may be specifically stated in <br />statute or charter, or it may be implied as necessary to do what an express power <br />authorizes. The Minnesota Attorney General's Office has considered the issue several <br />times and has consistently said that local governments do not have implied authority to <br />sponsor employee social events simply because they have the express power to <br />compensate employees. Instead, the Attorney General's position is that non-monetary <br />benefits must be specifically authorized by law or charter." <br />Since Minnesota Statutes do not provide specific authority for employee recognition <br />events or purchases, these type of events and purchases at a statutory city lilce the City <br />are considered to be unauthorized. <br />2. Recommendation <br />We recommend the City determine if the City should discontinue the sponsorship of <br />employee recognition events and purchases. <br />3. Management's Response <br />The City is aware of the State Auditor's position on employee recognition events, and the <br />matter has been brought to the City Council's attention in previous years. The City <br />Council continues to support the event by their attendance and through an annual <br />appropriation of funds. <br />� <br />����'�'��'� � <br />