Graettinger

Schedule of Findings Year ended June 30,20252025-002 Preparation of Financial Statements Criteria - Management is responsible for establishing and maintaining internal controls over financial reporting and procedures related to the fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Condition - The City does not have an internal control system designed to provide the preparation of the financial statements, including the accompanying footnotes, as required by generally accepted accounting principles. Cause - The staff has not obtained the expertise necessary to prepare the financial statements, including the accompanying footnotes. Effect -The audit firm was requested to draft the financial statements and accompanying notes to the financial statements, which is not unusual in an organization of your size. Recommendation - We realize that obtaining the expertise necessary to prepare the financial statements, including all necessary disclosures, in accordance with generally accepted accounting principles can be considered costly and ineffective. However, it is the responsibility of the City's management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Response -Management feels that committing the resources necessary to remain current on GASB reporting requirements and corresponding footnote disclosures would lack benefit in relation to the cost, but will continue evaluating on a going forward basis. Conclusion- Response accepted.INSTANCES OF NON-COMPLIANCE:No matters were noted. 51 ### Page 58 City of Graettinger, Iowa Schedule of Findings Year ended June 30,2025Part II: Other Findings Related to Required Statutory Reporting:2025-A Certified Budget - Disbursements during the year ended June 30, 2025 exceeded amount budgeted in the community and economic development function. Chapter 384.20 of the Code ofiowa states, in part, "Public monies may not be expended or encumbered except under an annual or continuing appropriation."Recommendation- The budget should have been amended in sufficient amounts in accordance with chapter 3 84.18 of the Code oflowa before disbursements were allowed to exceed the budget. Response - The budget will be amended in sufficient amounts in the future, if applicable. Conclusion- Response accepted. 2025-B Questionable Disbursements- No disbursements were noted that may not meet the requirements of public purpose as defined in an Attorney General's opinion dated April25, 1979. 2025-C Travel Expense- No disbursements of City money for travel expenses of spouses of City officials or employees were noted. 2025-D Business Transactions- No transactions between the City and City officials were noted. 2025-E Restricted Donor Activity - No transactions were noted between the City, City officials, City employees and restricted donors in compliance with Chapter 68B of the Code oflowa. 2025-F Bond Coverage - Surety bond coverage of City officials and employees is in accordance with statutory provisions. The amount of coverage is reviewed annually to ensure that coverage is adequate for current operations. 2025-G Council Minutes -No transactions were found that we believe should have been approved in the City Council minutes but were not. 52 ### Page 59 City of Graettinger, Iowa Schedule of Findings Year ended June 30,20252025-H Deposits and Investments - No instances of non-compliance with the deposit and investment provisions of Chapters 12B and 12C of the Code oflowa and the City's investment policy were noted.2025-I Revenue Notes- No instances of non-compliance with the revenue note resolutions were noted.2025-J Financial Condition- The capital projects fund had a deficit balance of$32,883 as of June 30, 2025.Recommendation- The City should investigate alternatives to eliminate this deficit. Response - This deficit should be eliminated upon transfer of funds. Conclusion - Response accepted. 53