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2023-001 Material Audit Adjustments <br />Condition:During our audit, material adjustments were needed to correct the year-end balances for various <br />accounts receivable and investment balances. <br />Criteria: <br />accounting system need to agree to the underlying supporting documentation. <br />Cause:City staff did not correctly adjust for receivable and payable balances during the year. <br />Effect: <br />control, which could lead to a material misstatement. <br />Recommendation:We recommend management review the related journal entries, obtain an understanding of why <br />the entries were necessary and modify current procedure to ensure that future corrections are not <br />needed. <br />Management Response: <br />Management agrees with the finding and understands the reason the adjustments were needed. Procedures over year- <br />end adjustments will be reevaluated to eliminate the need for related audit adjustments in the future. <br />Compliance and Other Matters <br />misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, <br />and noncompliance with which could have a direct and material effect on the financial statements. However, providing an <br />opinion on compliance with those provisions was not an objective of our audit. Also, in accordance with the Uniform <br />Guidance, we examined, on a test basis, evidence <br />Federal programs for the purpose of expressing an opinion on the City <br />compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal <br />programs. While our audit provides a reasonable basis for our opinion, it does not provide a legal determination on the <br />matters that is required to be reported in accordance with the Uniform Guidance , Government Auditing Standards or <br />Minnesota statutes. <br />Qualitative Aspects of Accounting Practices <br />Management is responsible for the selection and use of appropriate accounting policies. The significant accounting <br />policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted <br />and the application of existing policies were not changed during the year ended December 31, 2023. We noted no <br />transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or <br />consensus. All significant transactions have been recognized in the financial statements in the proper period. <br />3 <br />misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, <br />and noncompliance with which could have a direct and material effect on the financial statements. However, providing an <br />opinion on compliance with those provisions was not an objective of our audit. Also, in accordance with the Uniform <br />Guidance, we examined, on a test basis, evidence <br />Federal programs for the purpose of expressing an opinion on the City <br />compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal <br />programs. While our audit provides a reasonable basis for our opinion, it does not pro vide a legal determination on the <br />195