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HomeMy WebLinkAboutOlness & Associates OLNESS & ASSOCIATES, P. C. BRENT D. OLNESS, CPA CERTIFIED PUBLIC ACCOUNTANTS ERNEST J. OLNESS, CPA CURT D. WYSS, CPA 2810 CENTRAL AVENUE, SUITE B BILLINGS, MONTANA 59102 (406) 252-6230 FAX (406) 245 -6922 March 14, 2011 To the Mayor and City Council City of Laurel Laurel, Montana We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Laurel, Laurel, Montana for the year ended June 30, 2010. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards (and, if applicable, Government Auditing Standards and OMB Circular A- 133), as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices: Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by City of Laurel are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during fiscal year 2010. We noted no transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were useful lives on capital assets, the current portion of the compensated absences liability and the estimated uncollectible portion of the ambulance receivable. We evaluated the key factors and assumptions used to develop the estimates in determining that they are reasonable in relation to the financial statements taken as a whole. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. The attached schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. • Management Representations We have requested certain representations from management that are included in the management representation letter dated March 14, 2011. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the governmental unit's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This information is intended solely for the use of governing body and management and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, Olness & Associates, PC Certified Public Accountants CITY OF LAUREL June 30, 2010 Summary of Passed Audit Adjustments Journal Entry Number Account Number Account Description Debit Credit 1 2990 - 132000 Due from governments 4,223.34 - 2990- 334160 HB 645 - 4,223.35 Revenue accrual for HB 645 to match expenditures incurred.