#5b 2009 Single Audit Report
CITY OF JANESVILLE Janesville, Wisconsin REPORT ON FEDERAL AND STATE AWARDS For the Year Ended December 31,2009
CITY OF JANESVILLE TABLE OF CONTENTS December 31,2009 Independent Auditors' 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 Independent Auditors' Report on Compliance with Requirements Applicable to Each Major Program and Internal
Control Over Compliance in Accordance with OMB Circular A-133 and the State Single Audit Guidelines and the Schedule of Expenditures of Federal and State Awards Schedule of Expenditures
of Federal Awards Schedule of Expenditures of State Awards Notes to Schedule of Expenditures of Federal and State Awards Schedule of Findings and Questioned Costs Corrective Action Plan
Summary Schedule of Prior Audit Findings 1-2 3-4 5-6 7 8 9 -11 12 13
~AKER T ILLY Baker Tilly Virchow Krallse, LLP Ten Terrace Ct, PO Box 7398 Madison, WI 53707·7398 tel 608 249 6622 fax 608 249 8532 bakertilly.colll INDEPENDENT AUDITORS' REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED To the City Council City of Janesville Janesville, Wisconsin
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS We have audited the financial statements of the governmental activities, the business-type activities, the discretely presented component
unit, each major fund, and the aggregate remaining fund information of the City of Janesville, Wisconsin as of and for the year ended December 31,2009. We conducted our audit 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Janesville's internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the City of Janesville's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Janesville's
internal control over financial reporting . Our consideration of the internal control over financial reporting was for the limited purpose described in the preceding paragraph and was
not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses; and therefore, there can be no assurance
that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as described in the accompanying schedule of findings and questioned costs, we
identified a deficiency in internal control over financial reporting that we consider to be a material weakness. 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 combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial
statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiency described in the accompanying schedule of findings and questioned costs to be
a material weakness. This material weakness is item 09-1 . ~ ~All1 d ep Cndc ntmcnlbelo l BAKER TILLY INTERNATIO NAL Page 1
To the City Council City of Janesville Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Janesville's financial statements are free of
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.
We noted certain matters that we reported to management of the City of Janesville in a separate letter dated June 11, 2010. The City of Janesville's response to the finding identified
in our audit is described in the accompanying schedule of findings and questioned costs. We did did not audit the City of Janesville's response and, accordingly, we express no opinion
on it. This report is intended solely for the information and use of the City of Janesville's management, others within the entity, federal and state awarding agencies and pass-through
entities and is not intended to be, and should not be, used by anyone other than these specified parties. ~w~Jtj V~ ~uP June11,2010 Page 2
~AKER TILLY Baker T illy Virchow Krause. LLl' Ten Terrace Ct. PO Box 7398 Madison. WI 53707·7398 tcl 608 249 6622 fax 608 249 8532 baker tilly.com INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND THE STATE SINGLE AUDIT GUIDELINES AND THE SCHEDULE OF
EXPENDITURES OF FEDERAL AND STATE AWARDS To the City Council City of Janesville Janesville, Wisconsin Compliance We have audited the compliance of the City of Janesville, Wisconsin with
the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement and the State Single Audit Guidelines that are applicable
to each of its major federal and major state programs for the year ended December 31 , 2009. The City of Janesville's major federal and major state programs are identified in the summary
of auditors' results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to
each of its major federal and major state programs is the responsibility of the City of Janesville's management. Our responsibility is to express an opinion on the City of Janesville's
compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable
to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations; and the State Single Audit Guidelines. Those standards, OMB Circular A-133, and the State Single Audit Guidelines require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance reqUirements referred to above that could have a direct and material effect on a major federal or major
state program occurred. An audit includes examining, on a test basis, evidence about the City of Janesville's compliance with those requirements and performing such other procedures
as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City of
Janesville's compliance with those requirements. In our opinion, the City of Janesville complied, in all material respects, with the requirements referred to above that are applicable
to each of its major federal or major state programs for the year ended December 31, 2009. ~ a nlndtPtn d~n l mernberOI BAKER TILLY INTERNATIONAL Page 3
To the City Council City of Janesville Internal Control Over Compliance The management of the City of Janesville is responsible for establishing and maintaining effective internal control
over compliance with requirements of laws, regulations, contracts and grants applicable to federal and state programs. In planning and performing our audit, we considered the City of
Janesville's internal control over compliance with requirements that could have a direct and material effect on a major federal or major state program in order to determine our auditing
procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMS Circular A-133 and the State Single
Audit Guidelines, but not for the purpose of expressing an opinion on the effectiveness of the internal control over compliance. Accordingly, we do not express an opinion on the effectiveness
of the City of Janesville's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not
allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of
a federal or state program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance,
such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal or state program will not be prevented, or detected and corrected,
on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify
all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control
over compliance that we consider to be material weaknesses, as defined above. Schedule of Expenditures of Federal and State Awards We have audited the financial statements of the governmental
activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Janesville, Wisconsin
as of and for the year ended December 31,2009, which collectively comprise the city's basic financial statements and have issued our report thereon dated June 11, 2010. Our audit was
performed for the purpose of forming opinions on the financial statements that collectively comprise the City of Janesville's basic financial statements. The accompanying schedule of
expenditures of federal and state awards is presented for purposes of additional analysis as required by OMS Circular A-133 and the State Single Audit Guidelines and is not a required
part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the City of Janesville's
management, others within the entity, federal and state awarding agencies and pass-through entities and is not intended to be, and should not be, used by anyone other than these specified
parties. ~ lJ!:Jn V~ ~/Uf September 20, 2010, except for the schedules of expenditures of federal and state awards as to which the date is June 11, 2010. Page 4
CITY OF JANESVILLE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2009 Revenues Grantor Share FEDERAL AWARDS Federal Agency/State Agencyl Pass-Through Agencyl
Program Title U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Direct Programs Section 8 Housing Choice Vouchers Home Investment Partnerships Programl Rock Co. Consortium CDBG -Entitlement
Grants Cluster Community Development Block Grants 1 Entitlement Grants ARRA -Community Development Block Grants 1 Recovery & Reinvest. Total CDBG -Entitlement Grants Cluster Passed Through
Wisconsin Department of Commerce Neighborhood Stabilization Program (NSP) Grant Community Development Block Grants 1 Emergency Assist. Program Passed Through Rock County, Wisconsin Healthy
Homes-Healthy Kids Lead Hazard Control Program Total U.S. Department of Housing and Urban Development u.S. DEPARTMENT OF JUSTICE Direct Program Bulletproof Vest Partnership Passed Through
Rock County, Wisconsin Project Safe Neighborhood Edward Byrne Memorial Formula Grant Program ARRA -JAG '09 Recovery Act Grant Edward Byrne Memorial Justice Assistance Grant Program Total
U.S. Department of Justice u.S. DEPARTMENT OF TRANSPORTATION Passed Through Wisconsin Department of Transportation Highway Planning and Construction Safe Routes to School Plan Local
Streets-W Memorial/N Washington LRIP Local Streets-Randall Ave LRIP Total Highway Planning and Construction CFDA 14.871 14.239 14.218 14.253 14.256 14.219/.228 14.900 16.607 16.609 16.579
16.808 16.738 20.205 20.205 20.205 20.205 (Accrued) Deferred Cash Beginning Received Balance (Returned) $ -$ 3,078,363 (39,999) 166,646 (161,035) 404,505 (161,035) 404,505 136,138 1,047,454
(94,690) 191,253 (295,724) " n?.d,359 4,402 1 0,198 (136) 136 137,499 22,120 21,984 152,235 (45,661) 115,313 8,766 153,372 (151,645) 151,645 (197,306) 429,096 See accompanying notes
to schedule of expenditures of federal and state awards. Accrued (Deferred) Ex~enditures Ending Total Grantor Balance Revenue Share $ (237,439) $ 2,840,924 $ 2,840,924 165,288 291,935
291,935 287,706 531,176 531,176 7,894 7,894 7,894 295,600 539,070 539,070 83,282 219,420 219,420 354,482 1,401,936 1,401,936 96,563 96,563 661,213 5,389,848 5,389,848 4,402 4,402 1 0,198
10,198 (95,775) 41,724 41,724 (22,120) (117,895) 56,324 56,324 21,393 91,045 91,045 8,186 16,952 16,952 153,372 153,372 29,579 261,369 261,369 Page 5
CITY OF JANESVILLE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2009 Revenues Grantor Share (Accrued) Accrued Federal Agency/State Agency/Deferred Cash
(Deferred) Expenditures Pass-Through Agency/CFDA Beginning Received Ending Total Grantor Program Title Number Balance (Returned) Balance Revenue Share U.S. DEPARTMENT OF TRANSPORTATION
(cont.) Direct Programs Federal Transit Formula Grants Federal Transit Formula Grants (operating 2009) WI-90-4538 20.507 $ -$ 919,763 $ -$ 919,763 $ 919,763 Federal Transit Formula Grants
(operating 2008) WI-90-4514 20.507 (141,592) 141,592 Passed Through Wisconsin Department of Transportation Federal Transit Formula Grants ARRA -Federal Grant WI-96-X009-00 20.507 22,227
22,227 22,227 Federal Transit Formula Grants (capital) WI-90-0006 20.507 (29,563) 29,563 Federal Transit Formula Grants (capital) WI-90-0084 20.507 (705) 705 4,514 4,514 4,514 Federal
Transit Formula Grants (capital) WI-90-0091 20.507 (84,276) 84,276 44,201 44,201 44,201 Transit Strap Grant (planning) WI 20.507 16,162 16,256 32,418 32,418 Total Federal Transit Formula
Grants (256,136) 1,192,061 87,198 1,023,123 1,023,123 State and Community Highway Safety 20.600 (2,108) 46,552 2,878 47,322 47,322 Total U.S. Department of Transportation (455,550) 1,667,709
119,655 1,331,814 1,331,814 INSTITUTION OF MUSEUM AND LIBRARY SERVICES Passed Through Wisconsin Department of Public Instruction Listening for Literacy 45.310 5,867 5,867 5,867 U.S.
DEPARTMENT OF HOMELAND SECURITY Direct Programs Assistance to Firefighters Grants 97.044 (77,222) 77,222 Passed Through Wisconsin Department of Administration Homeland Security Grant
Training Grant 97.067 19,294 19,294 19,294 Total U.S. Department of Homeland Security (77,222) 77,222 19,294 19,294 19,294 FEDERAL EMERGENCY MANAGEMENT AGENCY Passed Through Wisconsin
Department of Military Affairs Hazard Mitigation Grant 97.039 360,386 360,386 360,386 FEMA-1768-DR-WI Flood 97.036 (528,824) 613,343 2,242 86,761 86,761 Total Federal Emergency Management
Agency (528,824) 613,343 362,628 447,147 447,147 U.S. DEPARTMENT OF ENERGY ARRA -Energy Efficiency and Conservation Block Grant 81.128 10,801 10,801 10,801 TOTAL FEDERAL AWARDS $ (1,335,336)
$ 7,534,868 $ 1,061,563 $ 7,261,095 $ 7,261,095 See accompanying notes to schedule of expenditures of federal and state awards. Page 6
CITY OF JANESVILLE SCHEDULE OF EXPENDITURES OF STATE AWARDS For the Year Ended December 31, 2009 Revenues Grantor Share (Accrued) Accrued Federal Agency!State Agency! Deferred Cash (Deferred)
Exeenditures Pass-Through Agency! Beginning Received Ending Total Grantor Program Title State 10 No. Balance Adjustments (Retumed) Balance Revenue Share STATE AWARDS WISCONSIN DEPARTMENT
OF NATURAL RESOURCES Brownfield SAG Grant 370.687 $ (35,976) $ $ 52,716 $ 7,681 $ 24,421 $ 24,421 Knowles-Nelson Stewardship 2000 370.512 23,750 23,750 23,750 Storm water Master Plan
370.658 (44,067) 22,034 54,536 32,503 32,503 Total Wisconsin Department of Natural Resources (80,043) 98,500 62,217 __ 80,674 80.674 WISCONSIN DEPARTMENT OF TRANSPORTATION Transit Operating
Aids 2007 Operating Aids 395.104 (62,706) 62,706 2008 Operating Aids 395.104 (72,460) 72,460 2009 Operating Aids 395.104 633,924 55,693 689,617 689,617 Transit Strap Grant (planning)
395.104 16,162 16,256 32,418 32,418 Total Transit Operating Aids (135,166) 650,086 207,115 722,035 722,035 Total Wisconsin Department of Transportation (135,166) 650,086 207,115 722,035
722,035 WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES Emergency Medical Service Cost Reimbursement 435.162 13,611 13,611 13,611 WISCONSIN DEPARTMENT OF MILITARY AFFAIRS Hazard Mitigation
Grant 465.342 60,135 60,135 60,135 FEMA-1768-DR-WI Flood State Assistance 465.305 (66,801) 79,985 70,088 83,272 83,272 Total Wisconsin Department of Military Affairs (66,801) 79,985
130,223 143,407 143,407 WISCONSIN DEPARTMENT OF ADMINISTRATION Recording Equipment 505.636 4,664 4,664 4,664 Law Enforcement Assistance Program 505.646 10,868 132,882 (5,875) 137,875
137,875 Total Wisconsin Department of Administration 10,868 137,546 (5,875) 142,539 142,539 TOTAL STATE AWARDS $ (204,341) $ (66,801) $ 979,728 $ 393,680 $ 1,102,266 $ 1,102,266 1 -Amount
was reported as cash received in the 2008 report, however, it was not received until 2009. See accompanying notes to schedule of expenditures of federal and state awards. Page 7
CITY OF JANESVILLE NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS For the Year Ended December 31, 2009 NOTE 1 -REPORTING ENTITY This Report on Federal and State Awards
includes all of the funds of the City of Janesville. The reporting entity for the city is based upon criteria established by the Governmental Accounting Standards Board. The City of
Janesville is the primary government according to GASB criteria, while the City of Janesville's Community Development Authority (CDA) is a component unit. Federal and state awards received
directly by the CDA are included in this report. The schedule includes only those state programs required to be included by the State Single Audit Guidelines. NOTE 2 -BASIS OF PRESENTATION
The accounting records for some grant programs are maintained on the modified accrual basis of accounting. Under the modified accrual basis, revenues are recorded when susceptible to
accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures
are recorded when the liability is incurred. The accounting records for other grant programs are maintained on the accrual basis, i.e., when the revenue has been earned and the liability
is incurred. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations
and the State Single Audit Guidelines. Page 8
CITY OF JANESVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2009 SECTION 1-SUMMARY OF AUDITORS' RESULTS FINANCIAL STATEMENTS Type of auditors' report
issued: Unqualified Internal control over financial reporting: > Material weakness identified? > Significant deficiency identified? Noncompliance material to basic financial statements
noted? FEDERAL OR STATE AWARDS Internal control over federal or state award programs: > Material weakness identified? > Significant deficiency identified? X yes yes __ yes yes yes no
X none reported X no X no X none reported Type of auditor's report issued on compliance for federal or state award programs: Unqualified Any audit findings disclosed that are required
to be reported in accordance with section 510(a) of Circular A-133? __ yes Federal Programs X no State Programs Auditee qualified as low-risk auditee? __ yes ~ no __ yes X no Identification
of major federal programs: CFDA Number 14.871 14.218 14.253 14.219/14.228 20.507 97.039 Name of Federal Program Section 8 Housing Choice Vouchers CDBG -Entitlement Grants Cluster Community
Development Block Grants/Entitlement Grants ARRA -Community Development Block Grants/Recovery Community Development Block Grants/Emergency Assistance Federal Transit -Formula Grants/ARRA-Federal
TransitFormula Grants Hazard Mitigation Grant Federal State Dollar threshold used to distinguish between type A and type B programs: $ 300,000 $ 100,000 Identification of major state
program: State ID Number 395.104 Name of State Program Transit Operating Aids Page 9
CITY OF JANESVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2009 SECTION 11-FINANCIAL STATEMENT FINDINGS FINDING 09-1: INTERNAL ACCOUNTING CONTROLS Criteria:
Statement on Auditing Standards (SAS) 112 requires auditors to communicate circumstances that were evaluated to be significant deficiencies or material weaknesses in the city's structure
of internal control. Condition: During the financial audit, audit procedures and inquiries were performed to evaluate the effectiveness of controls over various transaction cycles. As
a result of these procedures, we noted there was no independent second party review of year-end financial statements and year-end conversion journal entries. Effect: Year-end financial
statements prepared by the city may contain material misstatements and improper year-end conversion journal entries could be recorded. Recommendation: We recommend that year-end financial
statements and year-end conversion journal entries be reviewed by a second individual to ensure appropriateness and accuracy. Management Response: The auditors point out that year-end
audited financial statement preparation and year-end conversion journal entries were not always reviewed by someone in the city other than the preparer. The city prepares high quality
financial statements, conversion entries, and footnote disclosures for the auditors to review. However, because of the city's size, management does not believe it is cost effective to
hire the additional staff needed with the expertise to review all aspects of financial reporting, and relies on the auditor for this review. Therefore, we anticipate that the material
weakness in financial reporting review will likely continue to be reported in future years. SECTION 111-FEDERAL AND STATE FINDINGS AND QUESTIONED COSTS None noted. Page 10
CITY OF JANESVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31,2009 SECTION IV -OTHER ISSUES 1. Does the auditor's report or the notes to the financial statements
include disclosure with regard to substantial doubt as to the auditee's ability to continue as a going concern? __ yes X no 2. Does the audit report show audit issues (i.e., material
non-compliance, non-material noncompliance, questioned costs, material weakness, significant deficiency, management letter comment, excess revenue or excess reserve) related to grants/contracts
with funding agencies that require audits to be in accordance with the State Single Audit Guidelines: Department of Natural Resources yes X no Department of Transportation yes X no Department
of Health and Family Services yes X no Department of Military Affairs yes X no Department of Administration yes X no 3. Was a Management Letter or other document conveying audit comments
issued as a result of this audit? X yes __ no 4. Name and signature of partner ~1k H r S. Acker 5. Date of report September, 20 2010 ) Page 11
CITY OF JANESVILLE CORRECTIVE ACTION PLAN For the Year Ended December 31,2009 FINDING 09-1: INTERNAL ACCOUNTING CONTROLS Criteria: Statement on Auditing Standards (SAS) 112 requires
auditors to communicate circumstances that were evaluated to be significant deficiencies or material weaknesses in the city's structure of internal control. Condition: During the financial
audit, audit procedures and inquiries were performed to evaluate the effectiveness of controls over various transaction cycles. As a result of these procedures, we noted there was no
independent second party review of year-end financial statements and year-end conversion journal entries. Effect: Year-end financial statements prepared by the city may contain material
misstatements and improper year-end conversion journal entries could be recorded. Recommendation: We recommend that year-end financial statements and year-end conversion journal entries
be reviewed by a second individual to ensure appropriateness and accuracy. Corrective Action Planned: See Management's Response to Finding in Section" of the audit report. Page 12
CITY OF JANESVILLE SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS For the Year Ended December 31, 2009 FINDING 08-1: INTERNAL ACCOUNTING CONTROLS Criteria: Statement on Auditing Standards
(SAS) 112 requires auditors to communicate circumstances that were evaluated to be significant deficiencies or material weaknesses in the city's structure of internal control. Condition:
During the financial audit, audit procedures and inquiries were performed to evaluate the effectiveness of controls over various transaction cycles. As a result of these procedures,
we noted there was no independent second party review of annual financial statements and adjusting journal entries. Effect: Annual financial statements prepared by the city may contain
material misstatements and improper adjusting journal entries could be recorded. Recommendation: We recommend that financial statements and adjusting journal entries be reviewed by a
second individual to ensure appropriateness and accuracy. Management Response: The auditors point out that annual report preparation and adjusting journal entries were not always reviewed
by someone in the city other than the preparer. The city prepares high quality financial statements, conversion entries, and footnote disclosures for the auditors to review. However,
because of the city's size, management does not believe it is cost effective to hire the additional staff needed with the expertise to review all aspects of financial reporting, and
relies on the auditor for this review. Therefore, we anticipate that the material weakness in financial reporting review will likely continue to be reported in future years. Updated
Response: The auditors point out that year-end audited financial statement preparation and year-end conversion journal entries were not always reviewed by someone in the city other than
the preparer. The city prepares high quality financial statements, conversion entries, and footnote disclosures for the auditors to review. However, because of the city's size, management
does not believe it is cost effective to hire the additional staff needed with the expertise to review all aspects of financial reporting, and relies on the auditor for this review.
Therefore, we anticipate that the material weakness in financial reporting review will likely continue to be reported in future years. Page 13