07-28-1986 Council Packet - Laserfiche WebLink

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J Our study included all of the applicable control categories listed above. During the year ended December 31, 1985, the City had no major federal financial assistance programs and expended 93% of its total federal financial assistance under the following nonmajor federal financial assistance programs: Federal Revenue Sharing Community Development With respect to internal control systems used in administering these nonmajor federal financial assistance programs, our study and evaluation included con- sidering the types of errors and irregularities that could occur, determining the internal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary procedures are prescribed and are being followed satisfactorily, and evaluating any weaknesses. With respect to the internal control systems used solely in ad roistering the other nonmajor federal financial assistance programs of the C y, our study and evaluation was limited to a preliminary review of the systems to obtain an understanding of the control environment and the flow of transactions through the accounting system. Our study and evaluation of the internal control systems used solely in administering the nonmajor federal financial assistance programs of. the Ci-y did not extend beyond this preliminary review phase. Our study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in administering the federal finan- cial assistance progr-+r:. of the City. Accordingly, we do not express an opinion on the internal contr_ systems aseo �o administering the federal financial assistance programs of the City of )i -_. Minnesota. Also, our examination, made in accordance with the standards mentioned above, would not necessarily disclose material weaknesses in the internal control systems used solely in administering federal financial assistance programs. However, our study and evaluation and our examination disclosed the following conditions that we believe result in more than a relatively low risk that errors or irregularities in amounts that would be material to a federal financial assistance program may occur and not be detected within a timely period. Because of the limited size of your office staff, your organization has limited segregation of duties. A good system of internal accounting control con- templates an adequate segregation of duties so that no one individual handles a transaction from inception to completion. While we recognize that your organi- zation is not large enough to permit an adequate segregation of duties in all respects, it is important, however, that you be aware of this condition. These conditions were considered in determining the nature, timing, and extent of the audit tests to be applied in (1) our examination of the 1985 General Purpose Financial Statements and (2) our examination and review of the City's compliance with laws and regulations noncompliance with which we believe could have a material effect on the allowability of program expenditures for nonmajor federal financial assistance programs. This report does not affect our reports on the ;eneral Purpose Financial statements ana on the City's compliance with laws and regulations dated May 28, 1986. - 7 -