2016.05.24 WS Packet Combined - Laserfiche WebLink

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J,AM 1V GH y Lhe city that works for you To: Mayor Johnson Council Members Bauman, Burg, Jacobsen, Strub Dean Lotter, City Manager From: Brenda Davitt, Director of Finance Date: May 24, 2016 Re: Comprehensive Annual Financial Report, Legal Compliance Report, and Communications Letter BACKGROUND This report contains a discussion of the reports listed below and provides a summary of financial activity for the budgeted funds. These reports present the City's financial activity for the year 2015, the financial position (assets, liabilities, deferred inflows or resources and fund equity) at December 31, 2015, and any audit findings. 1. Legal Compliance Audit and opinion 2. Communications Letter 3. Comprehensive Annual Financial Report and opinion LEGAL COMPLIANCE The legal compliance audit requires an examination of seven main areas, including: 1. Contracting and bidding 2. Deposits and investments 3. Conflicts of interest 4. Public indebtedness 5. Claims and disbursements 6. Miscellaneous provisions 7. Tax increment financing When auditors review these items, they are reviewing the actions, documents, and agreements for all departments involved in these activities. The attached opinion states that for 2015 the auditors found nothing which caused them to believe the City of New Brighton failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Political Subdivisions, except for these two following issues: 1) Lack of Segregation of Accounting Duties — Due to a limited number of employees the lack of segregation could adversely affect the City's ability to initiate, record, process and report financial data consistent with the assertions of management in the financial statements. The City is very aware of this issue and takes reasonable precautions while we continue to review and make changes and recommendations as necessary. The new financial software will be used to help re-evaluate and strengthen our internal controls. 2) Park Dedication Fees Based on Fair Market Value — State Statute states cash fees must be charged on the fair market value of the land. The City currently charges a flat fee for park dedication. Please refer to pages four and five of the Legal Compliance Report to review the City responses to these findings.