Item 4D: Resolution Acknowledging Receipt of CAFR

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111 . CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS November 30, 2006 To the Honorable Mayor, Members of the City Council and the City Manager City of Eugene, Oregon This letter is intended to inform the City Council, City Manager and management of the City of Eugene, Oregon about significant matters related to the conduct of the annual audit. Our purpose is to assist you in appropriately discharging your oversight responsibility, and to comply with our professional responsibilities. The following summarizes various matters which must be communicated to you under auditing standards generally accepted in the United States of America. The Auditor's Responsibilitv Under Auditinf! Standards Generallv Accellted"in the United States of America Our audit of the financial statements of the City of Eugene for the year ended June 30, 2006 was conducted in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards issued by the Comptroller General of the United States, the provisio~s of the Single Audit Act, OMB Circular A-133 and OMB's Compliance Supplement and the Minimum Standards for Audit of Oregon Municipal Corporations. Those standards, circulars and supplement require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error, fraudulent financial reporting or misappropriation of assets. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Accordingly, the audit was designed to obtain reasonable, rather than absolute, assurance about the financial statements. We b.elieve that our audit accomplished that objective. In accordance with Government Auditing Standards, we have also performed tests of internal controls over financial reporting and tests of compliance with certain provisions of laws, regulations, contracts and grant agreements that contribute to the evidence supporting our opinion on the financial statements. However, they do not provide a basis for an opinion on the City's internal control. The Single Audit Act does require that we express an opinion on .compliance requirements for selected Federal programs. Weare also required under auditing standards generally accepted in the United States of America (Statement on Auditing Standards No. 99, Consideration of Fraud in a Financial Statement Audit) to communicate directly with management concerning fraud. The required communication was included as part of our arrangement letter. It is the responsibility of management of the City of Eugene to inform us of their concerns about the risks of fraud within the City, and any knowledge of fraud or suspected fraud affecting the City. It is our responsibility to communicate to you matters related to the conduct of the audit including 1) fraud involving senior management and fraud (whether caused by senior management or other employees) that causes a material misstatement of the financial statements, 2) illegal acts that come to our attention (unless they are clearly inconsequential), 3) disagreements with management and other serious difficulties encountered in performing the audit, and 4) various matters related to the entity's accounting policies and financial statements. We noted no instances that require communication to you. www.gmscpa.com Mailing Address fA) P.O. Box 2122 Salem, Oregon 97308-2122 Salem · 475 Cottage Street NE, Suite 200 · Salem, Oregon 97301-3814 fA) (503) 581-7788 fA) FAX (503) 581-0152 Albany · P.O. Box 663 fA) 519 S. Lyon Street. Albany, Oregon 97321-0570 · (541) 967-2315 fA) FAX (541) 926-5926 MEMBERS OF THE McGlADREY NETWORK · WORLDWIDE SERVICES THROUGH RSM INTERNATIONAL