HomeMy WebLinkAboutRepresentation Letter December 31, 2003 loo� n
March 18, 2004
HLB Tautges Redpath, Ltd.
4810 White Bear Parkway
White Bear Lake, Minnesota 55110
We are providing this letter in connection with your audit of the financial statements of the City
of Oak Park Heights, Minnesota as of December 31, 2003 and for the year then ended for the
purpose of expressing an opinion as to whether the financial statements present fairly, in all
material respects, the financial position of the City of Oak Park Heights, Minnesota and the
results of its operations and the cash flows of its proprietary funds in conformity with U.S.
generally accepted accounting principles. We confirm that we are responsible for the fair
presentation in the financial statements of financial position, results of operations, and cash flows
of the proprietary funds in conformity with generally accepted accounting principles. We are
also responsible for adopting sound accounting policies, establishing and maintaining internal
control, and preventing and detecting fraud.
We confirm, to the best of our knowledge and belief, as of February 16, 2004, the following
representations made to you during your audit.
1. The financial statements referred to above are fairly presented in conformity with U.S.
generally accepted accounting principles and include all properly classified funds and
account groups of the primary government and all component units required by U.S.
generally accepted accounting principles to be included in the financial reporting entity.
2. We have made available to you all:
a) Financial records and related data.
b) Minutes of all meetings of the City Council or summaries of actions of recent
meetings for which minutes have not yet been prepared.
3. There have been no communications from regulatory agencies concerning
noncompliance with, or deficiencies in, financial reporting practices.
4. There are no material transactions that have not been properly recorded in the
accounting records underlying the financial statements.
5. We believe the effects of the uncorrected financial statement misstatements summarized
in the attached schedule are immaterial, both individually and in the aggregate, to the
financial statements taken as a whole. In addition, you have recommended adjusting
journal entries that have been posted. We acknowledge that we have reviewed and
approved those entries.
HLB Tautges Redpath, Ltd.
Representation Letter, Page 2
6. We acknowledge our responsibility for the design and implementation of programs and
controls to prevent and detect fraud.
7. We have no knowledge of any fraud or suspected fraud affecting the entity involving:
a) Management;
b) Employees who have significant roles in internal control, or
c) Others where the fraud could have a material effect on the financial statements.
8. We have no knowledge of any allegations of fraud or suspected fraud affecting the
entity received in communications from employees, former employees, analysts,
regulators, short sellers, or others.
9. The City of Oak Park Heights, Minnesota has no plans or intentions that may materially
affect the carrying value or classification of assets, liabilities or fund equity.
10. The following, if any, have been properly recorded or disclosed in the financial
statements:
a) Related parry transactions, including revenues, expenditures /expenses, loans,
transfers, leasing arrangements and guarantees, and amounts receivable from or
payable to related parties.
b) Guarantees whether written or oral, under which the City of Oak Park Heights,
Minnesota is contingently liable.
c) All accounting estimates (approximations of financial statement amounts made
when measurement of the amounts of the valuation of accounts is uncertain pending
the outcome of future events, or when relevant data concerning events that have
already occurred cannot be accumulated on a timely, cost- effective basis) that
could be material to the financial statements, including the key factors and
significant assumptions underlying those estimates, and we believe the estimates are
reasonable in the circumstances.
d) Joint ventures, jointly governed organizations, and other related organizations.
11. We are responsible for compliance with the laws, regulations, and provisions of
contracts and grant agreements applicable to us; and we have identified and disclosed to
you all laws, regulations and provisions of contracts and grant agreements that we
believe have a direct and material effect on the determination of the financial statement
amounts, including legal and contractual provisions for reporting specific activities in
separate funds.
434435.1
HLB Tautges Redpath, Ltd.
Representation Letter, Page 3
12. There are no:
a) Violations or possible violations of budget ordinances, laws or regulations
(including those pertaining to adopting and amending budgets), provisions of
contracts and grant agreements, tax or debt limits, and any related debt covenants
whose effects should be considered for disclosure in the financial statements or as a
basis for recording a loss contingency.
b) Unasserted claims or assessments that our lawyer has advised us are probable of
assertion and must be disclosed in accordance with Financial Accounting Standards
Board (FASB) Statement No. 5, Accounting for Contingencies,
c) Other liabilities or gain or loss contingencies that are required to be accrued or
disclosed by FASB Statement No. 5.
d) Reservations or designation of fund equity that were not properly authorized and
approved.
13. The City of Oak Park Heights, Minnesota has satisfactory title to all owned assets, and
there are no liens or encumbrances on such assets nor has any asset been pledged as
collateral.
14. The City of Oak Park Heights, Minnesota has complied with all aspects of contractual
agreements that would have a material effect on the financial statements in the event of
noncompliance.
15. There are no audit, finance, or other committees that require additional audit
communication in accordance with Statement on Auditing Standards No. 61.
16. In connection with your preparation of draft financial statement and related notes, we
confirm that management of the City of Oak Park Heights, Minnesota has reviewed,
approved and assumes responsibility for the financial statements and related notes as
required by Government Auditing Standards and believe they are adequately supported
by the books and records of the government. We also confirm the following:
a) The individual responsible for overseeing the preparation of draft financial
statements and related notes is qualified to do so.
b) We have monitored the performance of the preparation of draft financial
statements and related notes.
c) We made all decisions that involved entity management functions related to the
preparation of draft financial statements and related notes and accept full
responsibility for those decisions.
d) We have evaluated the adequacy of the services performed.
To the best of our knowledge and belief, no events, including instances of noncompliance, have
occurred subsequent to the balance sheet date and through the date of this letter that would
require adjustment to or disclosure in the aforementioned financial statements.
434435.1
HLB Tautges Redpath, Ltd.
Representation Letter, Page 4
Signed:
Title:
Signed:
Titl Gi OIZNI
434435.1
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AUDIT DIFFERENCE EVALUATION FORM
Name of Governmental Unit Oak Park Heights Date of Combined Balance Sheet 12/31/2003
Fund Type or Account Group General Fund
This form should be used to accumulate known errors by fund type or account group detected by nonsampling substantive
tests (including differences in accounting estimates) and projected errors from substantive tests that used sampling. This
form should not include normal closing entries that the client expects the auditor to prepare and book. At the end of the
audit, the auditor evaluates all uncorrected differences. In a governmental audit of GPFS, materiality evaluations are made
at the fund type and account group level. Thus, a separate Audit Difference Evaluation Form should be maintained for each
fund type and account group and discretely presented component unit.
In The Following Table List Audit Differences Exceeding..... $ 500
Financial Statement Effect -
Amount of Over (Under) Statement of:
Description W/P Total Total Fund
of Audit Difference Ref. Assets Liabilities Equity Revenues Expenditures
Difference between cost and Current Value of Investments B 05 $1,939 $1,939 $709
Total $1,939 $0 $1,939 $709 $0
Less Audit Adjustments Subsequently Booked
Net Unadjusted Audit Differences - This Year $1,939 $0 $1,939 $709 $0
Effect of Unadjusted Audit Differences - Prior Year ($1,230) $0
Net Audit Differences $1,939 $0 $1,939 ($521) $0
Financial Statement Caption Totals $1,769,791 I $88,718 $1,681,073 $2,612,285 $2,062,776
Net Audit Differences as a % of F/S Captions 0.1% 0.0% 0.1% 0.0% 0.0%
HLB TR, Ltd. 3/17/2004 RV
AUDIT DIFFERENCE EVALUATION FORM
Name of Governmental Unit Oak Park Heights Date of Combined Balance Sheet 12/31/2003
Fund Type or Account Group Special Revenue
This form should be used to accumulate known errors by fund type or account group detected by nonsampling substantive
tests (including differences in accounting estimates) and projected errors from substantive tests that used sampling. This
form should not include normal closing entries that the client expects the auditor to prepare and book. At the end of the
audit, the auditor evaluates all uncorrected differences. In a governmental audit of GPFS, materiality evaluations are made
at the fund type and account group level. Thus, a separate Audit Difference Evaluation Form should be maintained for each
fund type and account group and discretely presented component unit.
In The Following Table List Audit Differences Exceeding..... $ 500
Financial Statement Effect -
Amount of Over (Under) Statement of
Description W/P Total Total Fund
of Audit Difference Ref. Assets Liabilities Equity Revenues Expenditures
Total $0 $0 $0 $0 $0
Less Audit Adjustments Subsequently Booked
Net Unadjusted Audit Differences - This Year $0 $0 $0 $0 $0
Effect of Unadjusted Audit Differences - Prior Year $0 $0
Net Audit Differences $0 $0 $0 $0 $0
Financial Statement Caption Totals $84,105 I $121 $83,984 I $9,698 $4,642
Net Audit Differences as a % of F/S Captions 0.0% 0.0% 0.0% 0.0% 0.0%
AUDIT DIFFERENCE EVALUATION FORM
Name of Governmental Unit Oak Park Heights Date of Combined Balance Sheet 12/31/2003
Fund Type or Account Group Debt Service
This form should be used to accumulate known errors by fund type or account group detected by nonsampling substantive
tests (including differences in accounting estimates) and projected errors from substantive tests that used sampling. This
form should not include normal closing entries that the client expects the auditor to prepare and book. At the end of the
audit, the auditor evaluates all uncorrected differences. In a governmental audit of GPFS, materiality evaluations are made
at the fund type and account group level. Thus, a separate Audit Difference Evaluation Form should be maintained for each
fund type and account group and discretely presented component unit.
In The Following Table List Audit Differences Exceeding..... $ 500
Financial Statement Effect -
Amount of Over (Under) Statement of
Description W/P Total Total Fund
of Audit Difference Ref. Assets Liabilities Equity Revenues Expenditures
Difference between cost and Current Value of Investments B 05 $1,118 $1,118 $116
E
E
Total $1,118 $0 $1,118 $116 $0
Less Audit Adjustments Subsequently Booked
Net Unadjusted Audit Differences - This Year $1,118 $0 $1,118 $116 $0
Effect of Unadjusted Audit Differences - Prior Year ($1,002) $0
Net Audit Differences $1,118 $0 $1,118 ($886) $0
Financial Statement Caption Totals $1,425,897 $835,688 $590,209 $243,177 $490,581
Net Audit Differences as a % of F/S Captions 0.1% 0.0% 0.2% -0.4% 0.0%
n n
AUDIT DIFFERENCE EVALUATION FORM
Name of Governmental Unit Oak Park Heights Date of Combined Balance Sheet 12/31/2003
Fund Type or Account Group Capital Proiects
This form should be used to accumulate known errors by fund type or account group detected by nonsampling substantive
tests (including differences in accounting estimates) and projected errors from substantive tests that used sampling. This
form should not include normal closing entries that the client expects the auditor to prepare and book. At the end of the
audit, the auditor evaluates all uncorrected differences. In a governmental audit of GPFS, materiality evaluations are made
at the fund type and account group level. Thus, a separate Audit Difference Evaluation Form should be maintained for each
fund type and account group and discretely presented component unit.
In The Following Table List Audit Differences Exceeding..... $ 500
Financial Statement Effect -
Amount of Over (Under) Statement of
Description W/P Total Total Fund
of Audit Difference Ref. Assets Liabilities Eouity Revenues Expenditures
Difference between cost and Current Value of Investments B 05 $9,098 $9,098 $2,573
I
I
I
Total $9,098 $0 $9,098 $2,573 $0
Less Audit Adjustments Subsequently Booked
Net Unadjusted Audit Differences - This Year $9,098 $0 $9,098 $2,573 $0
Effect of Unadjusted Audit Differences - Prior Year ($6,525) $0
Net Audit Differences $9,098 $0 $9,098 ($3,952) $0
Financial Statement Caption Totals $5,393,320 $230,691 $5,162,629 $2,028,724 $1,266,966
Net Audit Differences as a % of F/S Captions 0.2% 0.0 0.2% -0.2% 0.0%
AUDIT DIFFERENCE EVALUATION FORM
Name of Governmental Unit Oak Park Heights Date of Combined Balance Sheet 12/31 /2003
Fund Type or Account Group Enterprise
This form should be used to accumulate known errors by fund type or account group detected by nonsampling substantive
tests (including differences in accounting estimates) and projected errors from substantive tests that used sampling. This
form should not include normal closing entries that the client expects the auditor to prepare and book. At the end of the
audit, the auditor evaluates all uncorrected differences. In a governmental audit of GPFS, materiality evaluations are made
at the fund type and account group level. Thus, a separate Audit Difference Evaluation Form should be maintained for each
fund type and account group and discretely presented component unit.
In The Following Table List Audit Differences Exceeding..... $ 500
Financial Statement Effect -
Amount of Over (Under) Statement of:
Description W/P Total Total Fund
of Audit Difference Ref. Assets Liabilities Equity Revenues Expenditures
Difference between cost and Current Value of Investments B 05 $1,031 $1,031 $204
Prepaid insurance is not recorded 101 ($11,046) ($11,046) $11,046
Two assets in the utility fund have not been depreciated J 04 $3,970 $3,970
Total ($6,045) $0 ($6,045) $204 $11,046
Less Audit Adjustments Subsequently Booked
Net Unadjusted Audit Differences - This Year $6,045 $0 $6,045 $204 $11,046
Effect of Unadjusted Audit Differences - Prior Year ($13,132)
Net Audit Differences ($6,045) $0 ($6,045) $204 ($2,086)
Financial Statement Caption Totals $6,470,007 $60,150 $6,409,857 $1,093,426 $1,045,203
Net Audit Differences as a % of F/S Captions -0.1% 0.0% -0.1% 0.0% -0.2%