HomeMy Public PortalAbout2020 Communication with governance - Moab City
MOAB CITY
MANAGEMENT LETTER – COMMUNICATION
WITH THOSE CHARGED WITH GOVERNANCE
YEAR ENDED JUNE 30, 2020
Table of Contents
Communication with Those Charged with Governance 1
Schedule of Findings – current year 3
Status of Findings – prior year 3
1
November 30, 2020
To the Honorable Mayor and
Members of the City Council
City of Moab, Utah
We have audited the financial statements of the governmental activities, the business-type activities, each major
fund, and the aggregate remaining fund information of Moab City for the year ended June 30, 2020. Professional
standards require that we provide you with information about our responsibilities under generally accepted
auditing standards (and, if applicable, Government Auditing Standards and the Uniform Guidance), 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 dated August 1, 2020. Professional standards also require that we communicate to you the
following information related to our audit.
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by Moab City are described in Note 1 to the financial statements. No new accounting
policies were adopted and the application of other existing policies was not changed during 2020. 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 financial statement disclosures are neutral, consistent, and clear.
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 clearly trivial, and communicate them to the appropriate level of management.
Management has corrected all such 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 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 November 30, 2020.
2
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.
Other Matters
We applied certain limited procedures to the Management’s Discussion and Analysis, the Schedule of Revenues,
Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund, and the schedules relating to
pensions, which are (is) required supplementary information (RSI) that supplements the basic financial
statements. Our procedures consisted of inquiries of management regarding the methods of preparing the
information and comparing the information for consistency with management’s responses to our inquiries, the
basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
Restriction on Use
This information is intended solely for the use of Moab City, management of Moab City, and other various Federal
and State funding and auditing agencies and is not intended to be, and should not be, used by anyone other than
these specified parties.
Very truly yours,
Larson & Company, PC
Spanish Fork, Utah
3
SCHEDULE OF FINDINGS – CURRENT YEAR
State Compliance Finding(s)
SC-2020.1 Budgetary Compliance
Condition: Sewer and water funds had expenditures in excess of budgeted appropriations.
Criteria: Utah Code 10-6-123 City officers may not make or incur expenditures in excess of total
appropriation for any department in the budget as adopted or as subsequently amended.
Cause: Oversight by management
Recommendation: We recommend that management and those charged with governance
monitor budget to actual expenditures throughout the year on at least a monthly basis. If budgets
are exceeded, budgets should be amended to account for additional expenditures.
Client Response: Management agrees that the water and sewer funds exceeded budgeted
appropriations. Management and those charged with governance will monitor budgeted
appropriations with actual expenditures. Management and those charged with governance will
make appropriate amendments as needed.
Internal Control Finding(s)
No findings related to internal control noted in current period
STATUS OF FINDINGS – PRIOR YEAR
SC-2019.1 Budgetary Compliance
Condition: Sewer fund had expenditures in excess of budgeted appropriations.
Criteria: Utah Code 10-6-123 City officers may not make or incur expenditures in excess of total
appropriation for any department in the budget as adopted or as subsequently amended.
Cause: Management was given inaccurate information on operations and maintenance costs,
real expenditures were in excess of what management had estimated during first year of
operation.
Status of finding: See current year findings
Internal Control Finding(s)
No findings related to internal control noted in prior period