ERMUSR FINIANCIALS 04-17-2008 - Laserfiche WebLink

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ABDO EICK ~, ~ ~~1 W LLP Certified Public Account¢nts & Consultants Grandview Square 5201 Eden Avenue Suite 370 Edina, MN 55436 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS Public Utilities Commission Elk River Municipal Utilities Elk River, Minnesota In planning and performing our audit, we considered Elk River Municipal Utilities (the Utilities) of the City of Elk River, Minnesota, (the City) internal control over financial reporting (internal control) as a basis of designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Utilities' internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Utilities' internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Utilities' ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Utilities' financial statements that is more than. inconsequential will not be prevented or detected by the Utilities' internal control. We consider findings 2007-1 and 2007-2 to be significant deficiencies in internal control over financial reporting. A material weakness is a significant deficiency, or combination of significant deficiencies, that result in more than a remote likelihood that a material misstatement of the fmancial statements will not be prevented or detected by the Utilities' internal control. We do not considered the findings to be material weaknesses. The Utilities' response to the findings identified in our audit is described in the accompanying Schedule of Findings and Responses. We did not audit the Utilities' responses and, accordingly, we express no opinion. on them. This report is intended for solely the information and use of the Commission, management, City Council and the Minnesota Office of the State Auditor and is not intended to be and should not be used by anyone other than these specified parties. O~f~..~m~,~c~ Apri17, 2008 Minneapolis, Minnesota ABDO, EICK & MEYERS, LLP Certified Public Accountants -35- 952.835.9090 Fax 952.835.3261 www.aemcpas.com