06-10-1985 Council Packet - Laserfiche WebLink

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To the Ci _y Cou:. City of Orono, Minnesota PANNELL KERR FORSTER Certified Public Accountants 410 Park National Bank Bldg 5353 Wayzata Boulevard Minneapolis MN 55416 Telephone (612) 545-0421 We have examined the financial statements of the City r uronc for the year ended December 31, 1984, and have issued our report thereon, dated April 25, 1985. As a part of our examination, we made a study and evaluation of the City's system of internal accounting control to the extent we considered necessary to evaluate the system as required by general's accepted auditing standards. The purpose of our study and evaluation was to de. ermine the nature, timing, and extent of the auditing proce- dures necessary to express an opinion on the City's financial statements. Our sr•av and evaluation was more limited than would be necessary to express an opinion system of intp rnal accounting contto' taken as a whole. The City is ret rEible for estab'isl.inq and maintaining a system of internal accounting conic :. In fulfilling this responsibility, estimate d j, :'s by management are required to assess the expected benefits and rel. 170s .ontrol procedures. Tho objectives of a system are to provide manageme, . r, rec._.;a le, but not absolute, assurance that assets are safeguarded against loL..s from unauthorized use or dip:-sition, and that transactions are executed in accordance with management's autho• .ion and recorded properly to permit the preparation of financial statements ace ance with generally accepted accounting principles. ause of inherent li❑.itatioi.: in any system of internal accounting control, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation, of the system to future periods is sub3ect to the risk that procedures may become inadequate because of change., in conditions ur that the degree of compliance with the procedures m: deteriorate. Our study and evaluation made for the :invited purpose descrit n the first pares ;ph would not necessarily disclose all material weaknesses in tilt ..ystem. Accordingly, we do not express an opinion on the system c.• internal accounting control of * _ City taken as a whole. howe••^r, our study and evaluation disclosed that bec-wise of the limited size of your of � staff, your organization has limited segregation of duties. A good system of inter^-. .vcounting control contemplates an adequate segregation of duties so 1•at no one .,vidual handles a transacti.cn trom inception to c-�,plet�on. While we recognize thdi your office staff is not lac=,e enough to permit !Wk,.F,udte segregation of duties in all respects, it is importat . however, that aware of ltfi this condition. The foregoing conditions were considered in determin'ng the naty. -i•ns.ng, and extent of audit tests to be applied in o,:r examination of the financia: stat•_.r.ent8, and this report of such conditions dues n•::" �god.'fy our report, dated April 2�p 1985, or. such financial statements. T1'.in rel.ort is inte:cde., solely t..•r the use of management and s3houl(: not be used t-,r dry otthMr purp,•,e. Cert 1 t ied Put llr Acc-ount,int s Minneap•.�lisa, Minnrsutd April 21, 1985