07-28-1986 Council Packet - Laserfiche WebLink

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PANNELL tJ KERR FORSTER 1 Certified Public Accountants r 410 Park National Bank Bldg 5353 Wayzata Boulevard -� Minneapolis. MN 55416 Telephone (612) 545-0421 aY ACCOUNTANTS' REPORT ON INTERNAL CONTROLS USED TO ADMINISTER I FEDERAL FINANCIAL ASSISTANCE PROGRAMS ar ~ To the City Council and Residents r City of Orono Orono, Minnesota We have examined the General Purpose Financial Statemerls of the City of Orono, •� Minnesota, for the year ended December 31, 1985, and have issued our report thereon dated May 28, 1986. As a part of our examination, we made a study and r evaluation of the internal control systems, including applicable internal admin- istrative controls, used in administering federal financial assistance pr,A rams •� to the extent we considered necessary to evaluate the systems as required by r generally accepted auditing standarc' the standards for financial and compliance audits contained in the standards for Audit of Governmental •1 Organizations, Programs, Activities, and Functions, issued by the U.S. General r Accounting Office, the Single Audit Act of 1984, and the provisions of OMB Circular A-128, Audits of State and Local Governments. For the purpose of this report, we have classified the significant internal accounting and administra- tive controls used in administering federal financial assistance programs in the • following categories: 11 Cash receipts r Cash disbursements Payroll '1 Grant administration and reporting aY The management of the City is responsible for establishing and maintaining f internal control sy,-ems used in administering federal financial assistance programs. In fulfi. ng that responsibility, estimates and judgements by man- agement are required t<, assess the expected benefits and related costs of control procedures. The objectives of internal control systems used in admin- istering federal financial assistance programs are to provide management with r reasonable, but not absolute, assurance that, with resjiect to federal financial assistance programs, resource use is consistent with laws, regulations, and policies; resources are safeguarded against waste, loss;, and misuse; and ar reliable data are obtained, maintained, and fairly disclosed in reports. Because of inherent limitations in any system of internal accounting and admin- t 1strnti,'e controls used in administering federal financial assistance programs, fr errors or irregularities may nevertheless occur and not be detected. Also, pro- jection of any evaluation of the systems to future periods is subject to the 1 risk that procedures may become inadequate because of changes in conditions or r that the degree of compliance with the procedures may deteriorate. - b - 0