2013 Drug Task Force Audit
NORTHWEST METRO DRUG TASK FORCE
COMMUNICATIONS LETTER
Year Ended December 31, 2013
NORTHWEST METRO DRUG TASK FORCE
TABLE OF CONTENTS
REPORT ON MATTERS IDENTIFIED AS A RESULT OF
THE AUDIT OF THE FINANCIAL STATEMENTS
............................................................... 1
REQUIRED COMMUNICATION
................................................................................................ 2
REPORT ON MATTERS IDENTIFIED AS A RESULT OF
THE AUDIT OF THE FINANCIAL STATEMENTS
Administrative Board and Management
Northwest Metro Drug Task Force
New Hope, Minnesota
In planning and performing our audit of the financial statements of Northwest Metro Drug Task Force as
of and for the year ended December 31, 2013, in accordance with auditing standards generally accepted
in the United States of America, we considered the internal control over financial reporting
(internal control) as a basis for designing our auditing procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the internal control. Accordingly,
we do not express an opinion on the effectiveness of the Northwest Metro Drug internal
control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that
were not identified
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 a
combination of deficiencies in internal control, such that there is a reasonable possibility that a material
misstatement of the financial statements will not be prevented or detected and corrected,
on a timely basis. We did not identify any deficiencies in internal control that we consider to be material
weaknesses.
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.
This communication is intended solely for the information and use of management and the
Administrative Board and is not intended to be and should not be used by anyone other than these
specified parties.
KERN, DEWENTER, VIERE, LTD.
Minneapolis, Minnesota
March 17, 2014
1
NORTHWEST METRO DRUG TASK FORCE
REQUIRED COMMUNICATION
December 31, 2013
We have audited the financial statements of Northwest Metro Drug Task Force for the year ended
December 31, 2013, and have issued our report thereon dated March 17, 2014. Professional standards
require that we provide you with the following information related to our audit.
OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN
THE UNITED STATES OF AMERICA
As stated in our engagement letter, our responsibility, as described by professional standards, is to
express an opinion about whether the financial statements prepared by management with your oversight
are fairly presented, in all material respects, in conformity with accounting principles generally accepted
in the United States of America. Our audit of the financial statements does not relieve you or
management of your responsibilities.
PLANNED SCOPE AND TIMING OF THE AUDIT
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; therefore, our audit involved judgment about the number of transactions to be
examined and the areas to be tested.
Our audit included obtaining an understanding of the Task Force and its environment, including internal
control, sufficient to assess the risks of material misstatement of the financial statements and to design
the nature, timing and extent of further audit procedures. Material misstatements may result from
(1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or
governmental regulations that are attributable to the Task Force or to acts by management or employees
acting on behalf of the Task Force.
QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the Task Force 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 the
year ended December 31, 2013. We noted no transactions entered into by the Task Force during the
year for which there is a lack of authoritative guidance or consensus. All significant transactions have
been recognized in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are
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 estimate affecting the financial statements was:
Depreciation The Task Force is currently depreciating its capital assets over their estimated useful
lives, as determined by management, using the straight-line method.
The financial statement disclosures are neutral, consistent and clear.
DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT
We encountered no difficulties in dealing with management in performing and completing our audit.
2
NORTHWEST METRO DRUG TASK FORCE
REQUIRED COMMUNICATION
December 31, 2013
CORRECTED AND UNCORRECTED MISSTATEMENTS
Professional standards require us to accumulate all misstatements identified during the audit, other than
those that are clearly trivial, and communicate them to the appropriate level of management.
Management did not identify and we did not notify them of any uncorrected financial statement
misstatements
DISAGREEMENTS WITH MANAGEMENT
For purposes of this letter, a disagreement with management is a financial accounting, reporting or
auditing matter, whether or not resolved to our satisfaction that could be significant to the financial
eements arose during the
course of our audit.
MANAGEMENT REPRESENTATIONS
We requested certain representations from management that are included in the management
representation letter.
MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS
In some cases, management may decide to consult with other accountants about auditing and accounting
nancial statements or a determination of the
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
However, these discussions occurred in the normal course of our professional relationship and our
responses were not a condition to our retention.
3
NORTHWEST METRO DRUG TASK FORCE
New Hope, Minnesota
AUDITED FINANCIAL STATEMENTS
For the Year Ended December 31, 2013
NORTHWEST METRO DRUG TASK FORCE
TABLE OF CONTENTS
APPOINTED OFFICIALS AND ADMINISTRATION
.............................................................. 1
INDEPENDENT AUDITORS REPORT
..................................................................................... 2
BASIC FINANCIAL STATEMENTS
Balance Sheet Statement of Net Position ..................................................................................... 5
Statement of Revenues, Expenditures and Changes in Fund Balance
Statement of Activities .................................................................................................................. 6
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual General Fund ............................................................................................... 7
Notes to the Financial Statements ................................................................................................... 8
REPORT ON LEGAL COMPLIANCE
........................................................................................ 13
NORTHWEST METRO DRUG TASK FORCE
APPOINTED OFFICIALS AND ADMINISTRATION
December 31, 2013
Appointed OfficialsPosition
Tim FournierBoard Chair - New Hope
Rich StanekBoard Member - Hennepin County
Sheriff's Office
Stacy CarlsonBoard Member - Golden Valley
Steve SmithBoard Member - Robbinsdale
Mike GoldsteinBoard Member - Plymouth
Stephanie ReveringBoard Member - Crystal
Kevin BennerBoard Member - Brooklyn Center
Administration
Agt. Bob ToppCommander
Capt. Scott SlawsonCoordinator/Fiscal Agent
1
INDEPENDENT AUDITORS REPORT
Administrative Board
Northwest Metro Drug Task Force
New Hope, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and the major
fund of Northwest Metro Drug Task Force, New Hope, Minnesota, as of and for the year ended
December 31, 2013, and the related Notes to the Financial Statements, which collectively comprise the
tents.
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those Standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedu
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the Task
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and the major fund of Northwest Metro Drug
Task Force, New Hope, Minnesota, as of December 31, 2013, and the respective changes in financial
position thereof and the budgetary comparison for the General Fund for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Other Matters
Omitted Required Supplementary Information
generally accepted in the United States of America require to be presented to supplement the basic
financial statements. Such missing information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic or
historical context. Our opinion on the basic financial statements is not affected by this missing
information.
KERN, DEWENTER, VIERE, LTD.
Minneapolis, Minnesota
March 17, 2014
3
BASIC FINANCIAL STATEMENTS
4
NORTHWEST METRO DRUG TASK FORCE
BALANCE SHEET - STATEMENT OF NET POSITION
December 31, 2013
Statement of
General FundAdjustmentsNet Position
ASSETS
Cash $ 416,429$ -$ 416,429
Cash Seizures 151,578 - 151,578
Due From Other Governments 12,076 - 12,076
Prepaid Items 6,039 - 6,039
Capital Assets:
Equipment - 173,607 173,607
Less Accumulated Depreciation - (162,172) (162,172)
Total Capital Assets,
Net of Depreciation - 11,435 11,435
$ 586,122$ 11,435$ 597,557
Total Assets
LIABILITIES/FUND BALANCE
Liabilities
Accounts Payable$ 3,521$ -$ 3,521
Due To Other Governments 15,007 - 15,007
Pending Forfeitures 151,578 - 151,578
170,106 - 170,106
Total Liabilities
Fund Balance
Nonspendable 6,039 (6,039) -
Unassigned 409,977 (409,977) -
Total Fund Balance 416,016 (416,016) -
$ 586,122
Total Liabilities and Fund Balance
NET POSITION
Net Investment in Capital Assets 11,435 11,435
Unrestricted 416,016 416,016
Total Net Position 427,451 427,451
Total Liabilities and Net Position$ 11,435$ 597,557
The Notes to the Financial Statements are an integral part of this statement. 5
NORTHWEST METRO DRUG TASK FORCE
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE -
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2013
Statement of
General FundAdjustmentsActivities
REVENUES
Intergovernmental$ 76,432$ -$ 76,432
Seizures and Forfeitures 100,062 - 100,062
Capital Contributions - 7,000 7,000
Total Revenues 176,494 7,000 183,494
EXPENDITURES/EXPENSES
Salaries and Benefits 99,059 - 99,059
Building Rent 39,499 - 39,499
Supplies and Evidence 38,336 - 38,336
Insurance 5,607 - 5,607
Professional Fees 8,319 - 8,319
Training 9,816 - 9,816
Utilities 13,178 - 13,178
Repairs and Maintenance 9,338 - 9,338
Buy Fund Expenditures 7,180 - 7,180
Miscellaneous 238 - 238
Depreciation - 14,786 14,786
Total Expenditures/Expenses 230,570 14,786 245,356
Excess of Revenues Under
Expenditures/Expenses (54,076) (7,786) (61,862)
OTHER FINANCING SOURCES
Proceeds from Sale of Capital Asset 580 - 580
Net Change in Fund Balance/
Net Position (53,496) (7,786) (61,282)
FUND BALANCE/NET POSITION
Beginning of Year 469,512 19,221 488,733
End of Year$ 416,016$ 11,435$ 427,451
The Notes to the Financial Statements are an integral part of this statement. 6
NORTHWEST METRO DRUG TASK FORCE
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL -
GENERAL FUND
For the Year Ended December 31, 2013
Variance with
Original and Final Budget
Final BudgetActualOver (Under)
REVENUES
Intergovernmental$ -$ 76,432$ 76,432
Seizures and Forfeitures - 100,062 100,062
Total Revenues - 176,494 176,494
EXPENDITURES
Salaries and Benefits 85,000 99,059 14,059
Building Rent 43,000 39,499 (3,501)
Supplies and Evidence 39,300 38,336 (964)
Insurance 10,000 5,607 (4,393)
Professional Fees 10,000 8,319 (1,681)
Training 5,700 9,816 4,116
Utilities 13,300 13,178 (122)
Repairs and Maintenance 18,000 9,338 (8,662)
Buy Fund Expenditures 10,000 7,180 (2,820)
Miscellaneous 4,150 238 (3,912)
Total Expenditures 238,450 230,570 (7,880)
Excess of Revenues Over
(Under) Expenditures (238,450) (54,076) 184,374
OTHER FINANCING SOURCES
Proceeds from Sale of Capital Asset - 580 580
Net Change in Fund Balance$ (238,450) (53,496)$ 184,954
FUND BALANCE
Beginning of Year 469,512
End of Year$ 416,016
The Notes to the Financial Statements are an integral part of this statement. 7
NORTHWEST METRO DRUG TASK FORCE
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A.Reporting Entity
Northwest Metro Drug Task Force was established by a joint powers agreement
among the following governmental units through their respective law enforcement agencies: Hennepin
County, the Cities of Golden Valley, Robbinsdale, Plymouth, Crystal, New Hope and Brooklyn Center
Police Departments. The purpose of the Task Force is to provide a comprehensive and multi
jurisdictional effort to reduce drug trafficking and eliminate local street level drug dealers through the
coordination of law enforcement agencies within its jurisdiction. The Task Force Administrative Board,
comprised of one designated official from each named agency, is responsible for the operations of the
Task Force.
The financial statements of the Task Force have been prepared in conformity with accounting principles
generally accepted in the United States of America. Accounting policies adopted by the Task Force
reflect practices common to similar organizations. The more significant accounting policies are
described below.
member Cis not a component unit of the Cities. In
addition, the Task Force has no component units.
B.Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the provider have
been met.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
Task Force considers revenues to be available if they are collected within 60 days of the end of the
current period. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, expenditures related to claims and judgments are recorded only when payment is
due.
C. Seized Assets
Monetary and nonmonetary assets are seized as the result of drug busts and sting operations. Seized
monetary assets are reported as seized cash at the date of seizure on the accompanying Statement of Net
Position with an offsetting pending forfeiture liability. Once the monetary assets are officially forfeited,
they are recorded as forfeiture revenue. Seized nonmonetary assets are not reflected on the Statement of
Net Position until forfeited or sold.
8
NORTHWEST METRO DRUG TASK FORCE
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D.Budgetary Data
The Task Force adopts an annual budget based upon grant funds, member matching funds and money
made available from other sources. The joint powers agreement specifies procedures regarding the
adoption of the General Fund budget. The budget is effective January 1 of each year and is adopted on a
basis consistent with accounting principles generally accepted in the United States of America.
E.Fund Equity
In the fund financial statements, governmental funds report various levels of spending constraints.
Nonspendable Fund Balances These are amounts that cannot be spent because they are not in
spendable form or they are legally or contractually required to be maintained intact.
Restricted Fund Balances These are amounts that are restricted to specific purposes either by
a) constraints placed on the use of the resources by creditors, grantors, contributors or laws or
regulations of other governments or b) imposed by law through constitutional provisions or
enabling legislation.
Committed Fund Balances These are amounts that can only be used for specific purposes
pursuant to constraints imposed by the Board by resolution.
Assigned Fund Balances These are amounts that are constrained by the Asso
be used for specific purposes, but are neither restricted nor committed. Assignments shall be
Unassigned Fund Balance These are residual amounts in the General Fund not reported in any
other classification.
F.Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenditures/expense during the
reporting period. Actual results could differ from those estimates.
NOTE 2 DEPOSITS AND INVESTMENTS
Cash balances of the Task Force are invested to the extent available in various accounts authorized by
Minnesota Statutes. As of December 31, 2013, cash was comprised of deposits at a commercial bank.
The Task Force does not have formal policies in place specifically to address custodial credit risk and
interest rate risk for deposits or investments.
Minnesota Statutes require all deposits with financial institutions be collateralized in an amount equal to
110% of deposits in excess of Federal Deposit Insurance Corporation (FDIC) insurance.
9
NORTHWEST METRO DRUG TASK FORCE
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013
NOTE 2 DEPOSITS AND INVESTMENTS
Custodial Credit Risk Deposits: Custodial credit risk is the risk that in the event of bank failure, the
As of December 31, 2013
balance was fully insured through FDIC or pledged collateral.
NOTE 3 CAPITAL ASSETS
Capital assets, which include property, plant and equipment, are reported in the government-wide
financial statements and include equipment and vehicles with a historical cost greater than $ 5,000.
Such assets are recorded at historical cost. The costs of normal maintenance and repairs that do not add
to the value of the asset are not capitalized.
Equipment of the Task Force is depreciated using the straight- method over the estimated useful lives
line
of three to five years.
Capital asset activity for the year ended December 31, 2013, was as follows:
BeginningEnding
BalanceIncreasesDecreasesBalance
Governmental Activities:
Capital Assets being Depreciated:
Equipment$ 171,607$ 7,000$ 5,000$ 173,607
Less Accumulated Depreciation:
Equipment 152,386 14,786 5,000 162,172
Governmental Activities Capital
Assets, Net$ 19,221$ (7,786) $ -$ 11,435
NOTE 4 RELATED PARTY TRANSACTIONS
The Task Force utilizes personnel assigned to the Task Force by certain members of its member
agencies. Under the terms of the grant application approved by the Task Force Committee, member
benefits. For the years ended December 31, 2013, the Task Force reimbursed member agencies
$ 99,059 for personnel assigned to the Task Force. In addition, the Task Force utilizes other personnel
and resources of its member agencies without charge in the performance of its duties. The value of
services provided was not determined and, accordingly, such amounts are not reported in the
accompanying financial statements.
10
NORTHWEST METRO DRUG TASK FORCE
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013
NOTE 5 RISK MANAGEMENT
The Task Force is exposed to various risks of loss related to torts: theft of, damage to and destruction of
assets; errors and omissions and natural disasters. In order to protect against these risks of loss, the Task
Force purchases commercial insurance through the League of Minnesota Cities Insurance Trust
(LMCIT), a public entity risk pool. This pool currently operates common risk management and
insurance programs for municipal entities. The Task Force pays an annual premium to the LMCIT for
its insurance coverage. The LMCIT is self-sustaining through commercial companies for excess claims.
The Task Force is covered through the pool for any claims incurred but unreported, however, retains risk
for the deductible portion of its insurance policies. The amounts of these deductibles are considered
immaterial to the financial statements.
During the year ended December 31, 2013, there were no significant reductions in insurance coverage
from the prior year. Settled claims have not exceed
the past three years.
NOTE 6 OPERATING LEASES
The Task Force entered into a lease agreement on June 13, 2008 with Standal Properties, Inc. for the
period of August 1, 2008 through July 31, 2013 for 4,500 square feet of a 24,100 square foot building.
Base rent of $ 125,042 is payable in monthly installments of $ 1,940 for the first 36 months, and $ 2,300
for the last 24 months of the lease term. In addition, the Task Force is required to pay $ 172 per month
for 60 months to amortize the cost of installing an air system in the building. The lease agreement also
states that the Task Force must pay 18.67% of all taxes, assessments, maintenance, and water and sewer
charges related to the building.
The Task Force entered into a lease agreement on May 8, 2013 with Standal Properties, Inc. for the
period of August 1, 2013 through July 31, 2018 for 4,500 square feet of a 24,100 square foot building.
Base rent of $ 138,023 is payable in monthly installments of $ 2,300. The lease agreement also states
that the Task Force must pay 18.67% of all taxes, assessments, maintenance, and water and sewer
charges related to the building.
Total lease expense for the year ended December 31, 2013 was $ 39,499. Future minimum lease
payments to the end of the lease are as follows:
December 31,Amount
2014$ 27,605
2015 27,605
2016 27,605
2017 27,605
2018 16,103
Total$ 126,523
11
NORTHWEST METRO DRUG TASK FORCE
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013
NOTE 7 NONMONETARY ASSETS
The Task Force held nonmonetary assets at December 31, 2013 with an estimated fair market value of
$ 40,000, these assets are not recorded within the financial statements until sold upon forfeiture and the
proceeds deposited.
NOTE 8 SUBSEQUENT EVENTS
On October 28, 2013 the Task Force entered into a lease agreement with Enterprise FM Trust for five
vehicles and maintenance on those vehicles. Annual lease payments are $ 28,700 and payable in
monthly installments. These vehicles were not received and put into use until 2014.
12
REPORT ON LEGAL COMPLIANCE
Administrative Board
Northwest Metro Drug Task Force
New Hope, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America, the financial statements of the governmental activities and the major fund of Northwest Metro
Drug Task Force, New Hope, Minnesota, as of and for the year ended December 31, 2013, and the
related Notes to the Financial Statements, and have issued our report thereon dated March 17, 2014.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State
Auditor pursuant to Minn. Stat. § 6.65, contains six categories of compliance to be tested: contracting
and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and
disbursements, and miscellaneous provisions. Our audit considered all of the listed categories, except
that we did not test for compliance with the provisions for public indebtedness because the Task Force
has not issued nor had any outstanding debt for the year ended December 31, 2013.
In connection with our audit, nothing came to our attention that caused us to believe that the Task Force
failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Political
Subdivisions. 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
This report is intended solely for the information and use of those charged with governance and
management of the Task Force and the State Auditor and is not intended to be and should not be used by
anyone other than these specified parties.
KERN, DEWENTER, VIERE, LTD.
Minneapolis, Minnesota
March 17, 2014
13