6.1. SR 06-03-2013 - Laserfiche WebLink

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City of Elk River May 17,2013 Page 2 I Compliance and Other Matters As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement,we performed tests of compliance with certain provisions of Minnesota statutes.However,the objective of our tests was not to provide an opinion on compliance with such provisions.While our audit provides a reasonable basis for our opinion,it does not provide a legal determination on the City's compliance with those requirements. We noted no instances of noncompliance with Minnesota statues. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated to you. Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies.The significant accounting policies used by the City are described in Note 1 to the financial statements. The requirements of GASB statements No. 63 and 65 were adopted for the year ended December 31,2012.The application of existing policies was not changed during the year.We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus.All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements include depreciation on capital assets as well as the liability for the City's Other Post Employment Benefits(OPEB). Management's estimate of depreciation is based on estimated useful lives of the assets.Depreciation is calculated using the straight- line method. Management's estimate of its OPEB liability is based on several factors including,but not limited to,anticipated retirement age for active employees,life expectancy,turnover,and healthcare cost trend rate. We evaluated the key factors and assumptions used to develop depreciation and the OPEB liability in determining that it is reasonable in relation to the financial statements taken as a whole. The disclosures in the financial statements are neutral,consistent,and clear. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit,other than those that are trivial,and communicate them to the appropriate level of management. Management has corrected all such misstatements. Disagreements with Management For purposes of this letter,professional standards define a disagreement with management as a financial accounting,reporting,or auditing matter,whether or not resolved to our satisfaction,that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representations letter dated May 17,2013. 952.835.9090 • Fax 952.835.3261 www.aemcpas.com