2012 Special Purpose ReportOTA
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CITY OF NEW HOPE
HENNEPIN COUNTY, MINNESOTA
Table of Contents
Page
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 1 -2
Independent Auditor's Report on Minnesota Legal Compliance 3
Schedule of Findings 4
MMKR
CERTIFIED) PUBLIC;
ACCOUNTANTS
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
To the City Council and Management
City of New Hope, Minnesota
PRINCIPALS
Thomas M. Montague, (TA
Thomas A. Karnowski, CPA
Paul A. Radosevieh, CPA
William J. Lauer, CPA
James H. Eichren, CPA
Aaron J. Nielsen, CPA
Victoria L. Holinka CPA
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 New Hope, Minnesota (the City) as of and for the year ended December 31, 2012, and the
related notes to the financial statements, which collectively comprise the City's basic financial statements,
and have issued our report thereon dated May 16, 2013.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal 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 the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do
not express an opinion on the effectiveness of the City's internal control.
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. 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.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
(continued)
Malloy, Montague, Karnowski, Raclosevich, & Co., P.A.
5153 Wayzata Boulevard • Suite 410 • Minneapolis. MN 55416 • Telephone: 952 - 545 -0424 • Tcle {ax: 952.545.0569 • www.mmkr.com
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
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.
In addition, we noted certain other matters that we have reported to management of the City in a separate
letter dated May 16, 2013.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Minneapolis, Minnesota
May 16, 2013
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MMKR
CERTIFIE[ PUBLIC
ACCOIJN'I'ANTS
INDEPENDENT AUDITOR'S REPORT
ON MINNESOTA LEGAL COMPLIANCE
To the City Council and Management
City of New Hope, Minnesota
PRINCIPALS
Thomas M. Montague, (TA
Thomas A. Karnowski, CPA
Paul A. Radosevieh, CPA
William J. Lauer, CPA
James H. Eichren, CPA
Aaron J. Nielsen, CPA
Victoria L. Holinka CPA
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 New Hope, Minnesota (the City) as of and for the year ended December 31, 2012, and the
related notes to the financial statements, which collectively comprise the City's basic financial statements,
and have issued our report thereon dated May 16, 2013.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the Office of
the State Auditor pursuant to Minnesota Statute § 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 failed to
comply with the provisions of the Minnesota Legal Compliance Audit Guide for Political Subdivisions,
except as described in the Schedule of Findings as item 2012 -1. 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's noncompliance
with the above referenced provisions.
The City's response to the legal compliance finding identified in our audit has been included in the
Schedule of Findings. The City's response was not subject to the auditing procedures applied in our audit
of the financial statements and, accordingly, we express no opinion on it.
The purpose of this report is solely to describe the scope of our testing of compliance and the results of
that testing, and not to provide an opinion on compliance. Accordingly, this report is not suitable for any
other purpose.
r
Minneapolis, Minnesota
May 16, 2013
511
Malloy, Montague, Karnowski, Radosevich, & Co., P.A.
5153 Wayxa t. Bo u1c ... d • Suite 410 • Min —ap.hi . MN 55416 • Telephone: 952 - 545 -0424 • Te3e {ax: 952.545.0569 • --.kr —m
CITY OF NEW HOPE
Schedule of Findings
Year Ended December 31, 2012
A. FINDINGS — FINANCIAL STATEMENT AUDIT
None.
B. FINDINGS — MINNESOTA LEGAL COMPLIANCE AUDIT
2012 -1 PAYMENT OF INVOICES
Criteria — Minnesota Statue § 471.425 requires prompt payment of local government bills within
a standard payment period of 35 days from the receipt of goods and services, or the invoice for
goods or services, for cities with governing bodies that meet at least once a month.
Condition — One invoice selected for testing was not paid within the required 35 -day time period.
Context — One out of twenty -five disbursements tested was not in compliance. This is a current
year finding.
Cause — This was an oversight by city personnel.
Effect — The City of New Hope, Minnesota (the City) did not pay this invoice in a timely manner.
Recommendation — We recommend that the City review its procedures for paying invoices to
ensure that all invoices are paid within the statutory time limit.
Management's Response -- There is no disagreement with the audit finding. The City will
review its procedures for paying invoices to ensure future compliance with this statute.
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