5.2. SR 06-19-2006 - Laserfiche WebLink

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r knt 51 ~ . rffanduu- tp!/q ({)(; '" , March 17, 2006 Grandview Square 5201 Eden Avenue Suite 370 Edina, MN 55436 Board of Trustees and Plan Participants Elk River Fire Department Relief Association Elk River, Minnesota We have audited the fInancial statements of the Elk River Fire Department Relief Association (the Association) for the year ended December 31, 2005 and have issued our report thereon dated March 17, 2006. Professional standards require that we provide you with the following information related to our audit. Our Responsibility Under Auditing Standards Generally Accepted in the United States of America As stated in our engagement letter, our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance that the fInancial statements are free of material misstatement and are fairly presented in accordance with accounting principles generally accepted in the United States of America. Because of the concept of reasonable assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, fraud, or other illegal acts may exist and not be detected by us. As part of our audit, we considered the internal control of the Association. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. However, we noted certain matters involving internal control and its operation that we consider to be reportable conditions under standards established by the American Institute of CertifIed Public Accountants. Reportable conditions involve matters coming to our attention relating to signifIcant defIciencies in the design or operation of internal control that, in our judgment, could adversely affect the Association's ability to record, process, summarize and report fmancial data consistent with the assertions of management in the fmancial statements. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that errors or irregularities in a amounts that would be material in relation to the fInancial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of internal control would not necessarily disclose all matters in internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be a material weakness, as defIned above. However, we noted the following reportable condition that we believe is not a material weakness. Segregation of Duties Our study and evaluation disclosed that because of the limited size of your office staff, the Association has limited segregation of duties. Good internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from inception to completion. While we recognize that the Association is not large enough to permit an adequate segregation of duties in all respects, it is important that you be aware of this condition. 952.835.9090 . Fax 952.835.3261 www.aemcpas.com