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Regular City Council Meeting Monday,May 16,2011 Page 6 Mr. Eichten reviewed the Auditor's Role; providing an opinion on financial statements; testing of internal controls and compliance; and federal award pro- gram audit tested this year. Mr. Eichten advised that the audit report was orga- nized in sections: Audit Summary; Funding Cities in MN; Government Funds Overview; Financial Trends and Conditions of Selected Funds; and accounting and Auditing Updates, with each section addressed in more detail in the above- referenced reports and documents. Management Report Mr. Eichten noted three (3) findings during the audit on the City's compliance with federal laws and regulations, as detailed on page 1 of the Management Re- port's Audit Summary; and City management staff's response to each of those findings. Discussion included how tracking systems can be integrated into the City's ac- counting system in the future; and correction of findings through documented res- ponses or elimination of those findings to address future funding requirements. Mr. Eichten advised that his firm did a lot of municipal audits, and due to current budget constraints, those local governments were all receiving more federal aid and receiving subsequent audit findings similar to the City of Roseville; and opined that these type of findings were not unusual when put in their proper pers- pective. MN Legal Compliance Audit Findings Mr. Eichten noted four(4) findings during the audit on the City's compliance with Minnesota laws and regulations, as detailed on page 2 of the Management Re- port's Audit Summary and City management staff's response to each of those findings. Discussion included only two (2) out of forty (40) tested invoices being delin- quent slightly over the thirty-five (35) day terms; needed legislation to bring the state law up to current electronic payment standards for the requirement to obtain required claims declarations from vendors on electronic fund transfer payments. Finance Director Miller advised that the City had received a similar finding in its previous audit; and due to the cumbersome compliance burden and expense for the City as well as its smaller vendors, management staff had chosen to take this audit hit for a number of years as the lesser of two evils. Mr. Eichten concurred that it was an onerous task for a City to track every time they sent out an electronic payment. Mr. Miller noted that this only impacted smaller vendors, many of whom were not equipped to do so, putting the onus back on the City to call them to verify their