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, 2023, 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
Inventory
We noted the City has not recorded inventory on its general ledger, although some spare parts are on-hand could be significant enough to track and reflect in the general ledger. The City needs to evaluate whether these items are significant enough to track and reflect in the general ledger.
Donated Infrastructure
The City has a policy in place regarding the recording of donated assets but needs to ensure that procedures are in place for identifying and recording developer donated infrastructure.
To the City Council
Risk Assessment Process
We recommend that the City develop a risk assessment process to identify those risks within the City that could result in fraud or material misstatement of the financial statements, and then to implement internal controls to mitigate those identified risks. This risk assessment process should involve discussing potential risk areas with the council and staff and then ensure controls or processes are in place to mitigate those risks. This risk assessment process should be performed on a periodic basis and can be incorporated into existing Council and staff meetings by adding them to the agenda to discuss these risks.
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 18, 2024 on the financial statements of the City.
March 18, 2024