5.1. SR 05-14-2001 - Laserfiche WebLink

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io t� EICK & _ MEYE1 W LLP Certified Public Accountants & Consultants 7241 Ohms Lane Suite 200 Minneapolis, MN 55439 Members of the City Council City of Elk River, Minnesota March 15, 2001 We have audited the general purpose financial statements of the City of Elk River for the year ended December 31, 2000 and have issued our report thereon dated March 15, 2001. Professional standards require that we provide you with the following information related to our audit. Our Responsibility under U.S. Generally Accepted Auditing Standards and Government Auditing Standards 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 U.S. generally accepted accounting principles. 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 City. 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 City's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial 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, your organization 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. The City has procedures in place to ensure that there is segregation whenever possible. Monitoring is also done by the Finance Director to provide assurance that the systems used are functioning as intended, but the fact that the City has a limited staff, prevents full segregation of accounting functions. 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 laws, regulations, contracts and grants. However, the objective of our tests was not to provide an opinion on compliance with such provisions. We noted one instance of noncompliance with Federal regulations relating to the Highway Planning and Construction Grant. It is reported as fmding 2000-2 in the Schedule of Findings and Questioned Costs in the Federal Financial Award Program Report. The finding related to the City requesting more than allowable with one pay request. It is a relative minor finding and will be corrected with next pay request. 612.835.9090 • Fax 612.835.3261