550 Howe Avenue, Suite 210
Sacramento, California 95825
Telephone: (916) 564-8727
FAX: (916) 564-8728
MANAGEMENT LETTER
City Council
City of Marysville
Marysville, California
In planning and performing our audit of the financial statements of the governmental activities, businesstype activities, each major fund, and the aggregate remaining fund information of the City of Marysville (the City) for the year ended June 30, 2021, in accordance with auditing standards generally accepted in the United States of America, we considered the City’s internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion 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 was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control that we consider to be material weaknesses and other deficiencies that we consider to be significant deficiencies.
A deficiency in internal control 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 and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis.
During our audit, we became aware of the following matters that have been included in this letter for your consideration, which are in addition to the material weaknesses discussed in the Report on Internal Control and Compliance:
Current Year Comments
Appropriation Limit
We noted that the City used the incorrect population estimate in their calculation of the Appropriation Limit and undercalculated their limit. We recommend that the City establishes a policy to review the calculations to ensure clerical accuracy.
Prior Year Comments
Pooled Cash Difference
As of June 30, 2021 and 2020, the cash balances reported in all of the funds exceeds actual bank balances held in the pooled cash fund by $37,043 and $39,195 respectively. The City needs to ensure To the City Council
that the pooled cash balances are reconciled to the cash maintained in the funds on a monthly basis so these differences can be identified in a timely manner.
Capital Assets
We noted that capital outlay expenditures did not match current year additions to fixed assets. Most of the additions were found in repairs and maintenance expense accounts instead. When recording additions to fixed assets, it is important to ensure the corresponding expense is either recorded or reclassified to a capital outlay account. Capital outlay should match fixed assets additions, and any expected capital expenditures to be made should be budgeted for in capital outlay accounts.
We would like to take this opportunity to acknowledge the courtesy and assistance extended to us during the course of the audit. This report is intended solely for the information and use of the City Council, management, and others within the organization and does not affect our report dated March 28, 2022 on the financial statements of the City.
March 28, 2022