2014-12-31 MN Legal Compliance Auditing Standards
CITY OF ALBERTVILLE
Wright County, Minnesota
REPORTS ON COMPLIANCE WITH GOVERNMENT
AUDITING STANDARDS AND
MINNESOTA LEGAL COMPLIANCE
For the Year Ended December 31, 2014
CITY OF ALBERTVILLE
TABLE OF CONTENTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ...................................... 1
REPORT ON LEGAL COMPLIANCE ........................................................................................ 3
SCHEDULE OF FINDINGS AND RESPONSES
ON LEGAL COMPLIANCE AND INTERNAL CONTROL .................................................. 4
REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDACE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDE
Honorable Mayor and Members
of the City Council
City of Albertville
Albertville, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
the City of Albertville, Minnesota as of and for the year ended December 31, 2014, and the related
have issued our report thereon dated April 7, 2015.
Internal Control Over Financial Reporting
control over financial reporting (internal control) to determine the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not for
do not express an opinion on the
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that
were not identified. However, as described in the accompanying Schedule of Findings and Responses
on Legal Compliance and Internal Control, we identified certain deficiencies in internal control that we
consider to be material weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of financial statements will not be prevented, or detected and corrected on a
timely basis. We consider the deficiency listed as Audit Finding 14-02 in the accompanying Schedule
of Findings and Responses on Legal Compliance and Internal Control to be a material weakness.
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A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance. We consider the deficiency listed as Audit Finding 14-01, in the accompanying Schedule
of Findings and Responses on Legal Compliance and Internal Control to be a significant deficiency.
Compliance and Other Matters
As part of obtain
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards
ng Schedule
of Findings and Responses on Legal Compliance and Internal Control
subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we
express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
internal control or on compliance. This report is an integral part of an audit performed in accordance
Accordingly, this communication is not suitable for any other purpose.
KERN, DEWENTER, VIERE, LTD.
Minneapolis, Minnesota
April 7, 2015
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REPORT ON LEGAL COMPLIANCE
Honorable Mayor and Members
of the City Council
City of Albertville
Albertville, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America, and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund and the aggregate remaining fund information of
the City of Albertville, Minnesota as of and for the year ended December 31, 2014, and the related
Notes to the Financial Statements, and have issued our report thereon dated April 7, 2015.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State
Auditor pursuant to Minnesota Statutes § 6.65, contains seven categories of compliance to be tested:
contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and
disbursements, miscellaneous provisions and tax increment financing. Our audit considered all of the
listed categories.
In connection with our audit, nothing came to our attention that caused us to believe that the City of
Albertville failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for
Political Subdivisions. However, our audit was not directed primarily toward obtaining knowledge of
such noncompliance. Accordingly, had we performed additional procedures, other matters may have
come to our attention regarding the City
This report is intended solely for the information and use of those charged with governance, management of
the City and the State Auditor and is not intended to be and should not be used by anyone other than these
specified parties.
KERN, DEWENTER, VIERE, LTD.
Minneapolis, Minnesota
April 7, 2015
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CITY OF ALBERTVILLE
SCHEDULE OF FINDINGS AND RESPONSES ON LEGAL COMPLIANCE AND INTERNAL
CONTROL
December 31, 2014
CURRENT AND PRIOR YEAR INTERNAL CONTROL FINDING:
Material Weaknesses:
Audit Finding 14-02 Prior Period Adjustment
During the course of our engagement, a prior period audit adjustment was required that would not have
In order to ensure financial
statements were free from material misstatement, a prior period adjustment was required to remove the
$
schedule.
:
The City is aware of t
2006 when the City advanced the funding for the locker room addition. The City has otherwise properly
identified and maintained separate capital asset listings for the City and the Ice Arena and will not be an
issue going forward.
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CITY OF ALBERTVILLE
SCHEDULE OF FINDINGS AND RESPONSES ON LEGAL COMPLIANCE AND INTERNAL
CONTROL
December 31, 2014
CURRENT AND PRIOR YEAR INTERNAL CONTROL FINDING:
Significant Deficiencies:
Audit Finding 14-01 Lack of Segregation of Accounting Duties
Four areas related to each transaction cycle should be segregated: authorization, custody, recording and
reconciliation. During the year ended December 31, 2014, the City had a lack of segregation of
accounting duties. The lack of adequate segregation of accounting duties could adversely affect the
management in the financial statements. This lack of segregation of accounting duties can be
demonstrated in the following areas, which is not intended to be an all-inclusive list:
The Finance Director is able to receive cash receipts at the front window and has read/write
access to the general ledger.
The Finance Director verifies purchase orders to invoices and can also enter disbursements into
the accounts payable module. Additionally, the Finance Director can print checks, is an
authorized signer and reconciles the bank accounts.
The Finance Director has the ability to post utility billing information into the general ledger,
makes adjustments to bills and maintains customers and rates.
The Administrative Assistant II imports, calculates and sends out the utility billings, maintains
customer accounts, enters the billing payments, posts receipts to the general ledger and maintains
the billing register.
The Finance Director sets up/maintains employee payroll records, posts payroll to the general
ledger, issues direct deposits, reconciles the bank account, prepares the payroll taxes, prepares all
W-2s, as well as maintains all data files and the payroll program.
The Building Technician fills out permit fees schedules, sends out all accounts receivable
invoices, has access to receive payments and scans all permits and/or inspections into a house
file.
The Finance Director enters all accounts receivable invoices, maintains the accounts receivable
billings, reports all outstanding bills to the City Council and can post payments to the general
ledger.
The Administrative Assistant II collects fines and fees, receives payments and enters them into
the POS module.
We recommend management, along with the City Council, remain aware of this situation and look for
opportunities to provide additional segregation.
The City is aware of the lack of segregation, which is due to limited office staff, and continues to look
for opportunities to provide additional segregation in a cost effective manner.
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