2011 Monticello Auditor's Special Purpose ReportCITY OF MONTICELLO
WRIGHT COUNTY, MINNESOTA
Special Purpose Audit Reports on
Internal Controls and
Compliance With Laws and Regulations
Year Ended
December 31, 2011
CITY OF MONTICELLO
Special Purpose Audit Reports
Year Ended December 31, 2011
Table of Contents
Independent Auditor's 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 Auditor's Report on Compliance With Minnesota State Laws
and Regulations
Page
1 -2
Schedule of Findings q—$
MMKR
CERTIFIED PUBLIC
ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL
PRINCIPALS
Thomas M. Montague, CPA
Thomas A. Karnowski, CPA
Paul A. Radosevich, CPA
William J. Lauer, CPA
James H. Eichten, CPA
Aaron J. Nielsen, CPA
Victoria L. Holinka, CPA
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
City Council and Management
City of Monticello, Minnesota
We have audited the financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining find information of the City of Monticello, Minnesota (the City)
as of and for the year ended December 31, 2011, which collectively comprise the City's basic financial
statements, and have issued our report thereon dated May 22, 2012. 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
Management of the City is responsible for establishing and maintaining effective internal control over
financial reporting. In planning and performing our audit, we considered the City'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's internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the City's internal control over financial reporting.
Our consideration of 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, we identified one 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 City'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 as item 2011 -1 to be a
material weakness.
(continued)
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Malloy, Montague, Karnowski, Radosevich & Co., P.A.
5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Telephone: 952 -545 -0424 • Telefax: 952 -545 -0569 • www.mmkr.com
M 4ED R
CERTI LIC
ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE
WITH MINNESOTA STATE LAWS AND REGULATIONS
City Council and Management
City of Monticello, Minnesota
PRINCIPALS
Thomas M. Montague, CPA
Thomas A. Karnowski, CPA
Paul A. Radosevich, CPA
William J. Lauer, CPA
James H, Eichten, CPA
Aaron J. Nielsen, CPA
Victoria L, Holinka, CPA
We have audited the financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the City of Monticello, Minnesota (the City)
as of and for the year ended December 31, 2011, which collectively comprise the City's basic financial
statements, and have issued our report thereon dated May 22, 2012.
We conducted our audit 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; and the provisions of the Minnesota Legal Compliance
Audit Guide for Political Subdivisions, promulgated by the Office of the State Auditor pursuant to
Minnesota Statute § 6.65. Accordingly, the audit included such tests of the accounting records and such
other auditing procedures as we considered necessary in the circumstances.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions covers 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
study included all of the listed categories.
The results of our tests indicate that, for the items tested, the City complied with the material terms and
conditions of applicable legal provisions, except as noted in the Schedule of Findings.
The City's response to the finding in our audit is described in the accompanying Schedule of Findings.
We did not audit the City's response and, accordingly, we express no opinion on it.
This report is intended solely for the information and use of management, the City Council, others within
the City, and the state of Minnesota and is not intended to be, and should not be, used by anyone other
than those specified parties.
/11A A < < o y t /110 �1 tagJ 2t Igo -rvi o-/-5 L.1/ 1QXd 0.s cv,' a � `R
J ! r
May 22, 2012
-3-
Malloy, Montague, Karnowslci, Radosevich & Co., P.A.
5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Telephone: 952- 545 -0424 • Telefax: 952- 545 -0569 • www.minkr.com
CITY OF MONTICELLO
Schedule of Findings (continued)
Year Ended December 31, 2011
B. FINDINGS — MINNESOTA LEGAL COMPLIANCE AUDIT (CONTINUED)
2011 -2 PAYMENT OF INVOICES (CONTINUED)
Cause — This was an oversight by city personnel. The Finance Department paid the invoice
promptly after receiving it.
Effect — Certain payments made to vendors were not paid within the timeframe as required by
state statutes.
Recommendation — We recommend that the City review current procedures in place to ensure
that all invoices are paid within statutory requirements.
Management Response — There is no disagreement with the audit finding. The City will review
the payment procedures and will properly pay all invoices within the 35 -day time limit.
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