06-27-2016 Council Packet - Laserfiche WebLink

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CliftonLarsonAllen LLP CLAconnect.com Honorable Mayor and Members of the City Council City of Orono Orono, Minnesota We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Orono (the City) for the year ended December 31, 2015, and have issued our report thereon dated June 21, 2016. We have previously communicated to you information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. Professional standards also require that we communicate to you the following information related to our audit. Significant audit findings Qualitative aspects of accounting practices Accounting policies Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. As described in Note 1, during the fiscal year ended December 31, 2015, the City changed accounting policies related to its accounting for pensions by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 68, Accounting and Financial Reporting for Pensions, and the related GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date-an amendment of GASB Statement No. 68. Accordingly, this change in principle resulted in the restatement of beginning net position related to the recognition of the City’s proportionate share of the Public Employees’ Retirement Association of Minnesota General Employees’ Retirement Fund’s net pension liability as well as the City’s proportionate share of the Public Employees’ Retirement Association of Minnesota Public Employees’ Police and Fire Fund’s net pension liability. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: