Item 3D: Adoption of Comprehensive Annual Financial Report

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<llIIII1111I\\1\1111111 ATTACHMENT C GROVE, MUELLER & SWANK, P,C, CERTiFIED PUBLIC i\CCOllNTA."<T5 AND CONSUUANTS 475 Cottage Strut NE, Suite )(;0 $ Salem, Oregon 97301 (S03) 581-7788 November 21, 2005 To the HDnorable Mayor, Members of the City Council and the City !vlanager 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 foHo'Ning summarizes various matters which must be communicated to you lJ...'1der auditi11g standards generany accepted in the United States of Amelica.( The Auditor's Responsibilitv Under Audiling Standards Generallv ACCel)ted in the United States of America Our audit of the fmancial statements of the City of Eugene for the year ended June 30, 2005 was conducted in accordance with auditing standards generally accepted in the lJnited States of America, Govemment Auditing Standards issued by the Comptroller General of the United States, the provisions of the Single Audit Act, o.r:v.m Circular A-133 and OMH's Compliance Supplement and the Minimum Standards for Audit of Oregon Municipal Corporations. Those standards, circulars and supplement require that \lie plan and perform the audit to obtain rea.sonable assurance about \vhether 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 sUPPoliing 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 obta.in reasonable, r'ather than absolute, assurance about the financial statements. We believe that our audit accomplished that objective. In accordanc(~ with Government Auditing Standards, we have also performed tests of internal controls over .financial repmiing and tests of compliance with certain provisions of laws, regulations, contracts and gmnt agreements that contribute to the evidence supporting our opinion on the fmandai statements. However, 6e:y do not provide a basis for an opinion on the Cit)"s internal control. The Single Audit Act does require that we express an opinion on compliance requirements for selected Federal programs. We are 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 infonn us of their concems about the risks of fraud within the City, and any knowledge of thud 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. Vie noted no instances that reqUlre cOInmunication to you.