Finance Committee Agenda and Packet 2009 07 20

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,w:.: EideBailly, �1 CPAs g BUSINESS ADVISORS June 19, 2009 To the Mayor, Members of City Council and City Management City of Louisville Louisville, Colorado In planning and performing our audit of the financial statements of the governmental activities, the business -type activities, each major fimd, and the aggregate remaining fund information of City of Louisville as of and for the year ended December 31, 2008, in accordance with auditing standards generally accepted in the United States of America, we considered City of Louisville's internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. IIowever, as discussed below, we identified certain deficiencies in internal control that we consider to be significant deficiencies and other deficiencies that we consider to be material weaknesses. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or a combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of an entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. We consider the following deficiencies to be significant defciencies in internal control. Accounts Payable Purchasing The City does not have an approved vendor listing which allows employees to purchase any items from any vendor. An approved vendor listing should be compiled and made available to all employees that are allowed to make purchases. This should reduce confusion for employees and help prevent unauthorized purchases. Transactions should regularly be checked against this listing to ensure that only approved vendors are being utilized and that purchasing abilities are not being abused. Although the City does require a pre qualification document that states whether the contractor is in good standing with the State of Colorado, the City does not check for suspension or debarment issues on the EPLS website on a regular basis. Checking for suspension or debarment is also a federal compliance requirement if federal funds are used to pay the vendor. PEOPLE. PRINCIPLES. POSSIBILITIES. www.eide�aiIly.com 440 Indiana St., Ste. 2001 Golden, CO 80401 -5021 1 Toll Free 877.882.7929 1 Phone 303.986.2454 1 Fax 303.980.5029 1 EOE