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Central Services <br />Finance <br />City of Eugene <br />th <br />100 West 10 Ave., Suite 400 <br />Eugene, Oregon 97401 <br />(541) 682-5022 <br />(541) 682-5802 FAX <br />www.eugene-or.gov <br />December 7, 2012 <br />Citizens of Eugene <br />The Honorable Kitty Piercy, Mayor <br />Members of the City Council <br />Jon R. Ruiz, City Manager <br />It is my pleasure to submit to you the Comprehensive Annual Financial Report of the City of Eugene, Oregon, for <br />the fiscal year ended June 30, 2012. <br />Local ordinances and state statutes require that the City of Eugene issue a report on its financial position and <br />activity within six months of the close of each fiscal year. In addition, this report must be audited in accordance <br />with generally accepted auditing standards by an independent firm of certified public accountants. <br />This report consists of management’s representations concerning the finances of the City. Consequently, <br />responsibility for the accuracy of the data and the completeness and fairness of the presentation, including all <br />disclosures, rests with management. To provide a reasonable basis for making these representations, <br />management has established an internal control structure designed to safeguard City assets against loss, theft, or <br />misappropriation, and to ensure the reliability of financial records for preparing financial statements in conformity <br />with generally accepted accounting principles (GAAP). The internal control structure has been designed to <br />provide reasonable, but not absolute, assurance that these objectives are being met. The concept of reasonable <br />assurance recognizes (1) the cost of the control structure should not exceed the benefits likely to be derived; and <br />(2) the evaluation of cost and benefits require estimates and judgments by management. We believe that the <br />City's internal control structure adequately safeguards assets and provides reasonable assurance of proper <br />recording of financial transactions. To the best of our knowledge, the enclosed data is presented accurately in all <br />material respects, along with the disclosures necessary to provide the reader with a reasonable understanding of <br />the City's financial affairs. <br />The City’s financial statements were audited by Isler CPA, a firm of licensed certified public accountants. The <br />goal of the independent audit is to provide reasonable assurance that the financial statements of the City for the <br />fiscal year ended June 30, 2012 are free of material misstatements. The independent audit involved examining, <br />on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the <br />accounting principles used and significant estimates made by management; and evaluating the overall financial <br />statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable <br />basis for rendering an unqualified opinion that the City’s basic financial statements for the fiscal year ended June <br />30, 2012, are fairly presented, in all material respects, in conformity with GAAP. The independent auditors’ report <br />on the Basic Financial Statements is included in the Financial Section of this report. <br />In addition to meeting the requirements set forth above, the independent audit also was designed to meet the <br />special needs of federal grantor agencies as provided for in the Federal Single Audit Act and the Office of <br />Management and Budget’s (OMB) Circular A-133. These standards require the independent auditor not only <br />report on the fair presentation of the basic financial statements, but also on the audited government’s internal <br />controls and compliance with legal requirements, with special emphasis on internal controls and legal <br />requirements involving the administration of federal awards. The results of the independent audit for the fiscal <br />year ended June 30, 2012 indicated no instances of material weaknesses in the internal control structure or <br />significant violations of applicable laws and regulations. The independent auditors’ reports related specifically to <br />the Single Audit and OMB Circular A-133 are included in the Government Auditing Standards Section. <br />1 <br />