FY 2005 MWMC Annual Financial Statements

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~~~i~ GROVE, MUELLER & SWANK, I'.C. CEftTiFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 475 Cottage Street NE, Suite 200 • Salem, Oregon 97301 (503) SSI-7788 Oregon Administrative Rules 162-10-000 through 162-16-000 of the Minimum Standards for Audits of Oregon Municipal Corporations, prescribed by the Secretary of State in cooperation with the Oregon State Board of Accountancy, enumerate the financial statements, schedules, comments, and disclosures required in annual financial reports. Required comments and disclosures related to our audit of such financial statements .and schedules are set forth on the following pages. Significant Accounting Policies The significant accounting policies followed in preparing the Commission's. financial statements are summarized in the notes to the financial statements. Organization and Fund Structure The organization and fund structure of the Commission is documented in the notes to the financial statements. Internal Accounting Control We have audited the basic financial statements of the Metropolitan Wastewater Management Commission as of and far the year ended June 30, 2005, and have issued our report thereon dated November 14, 2005. As part of our audit, we made a study and evaluation of accounting systems and controls as required by auditing standards generally accepted in the United States of America. The purpose of olzr study and evaluation was to determine the nature, timing and extent of the auditing procedures necessary for expressing an opinion on the Commission's financial statements. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control of the Commission taken as a whole. However, our study and evaluation disclosed no condition that we believe to be a material weakness. Schedule of Accountability of Independently Elected Off cials There are no elected officials who collect or receive funds on behalf of the Commission. Accounting Records We found the records of the Commission to be adequate for audit purposes. Adequacy of Collateral Securing Depository Balances '' ~ . As described in the notes to the financial statements, the Commission participates in a cash and investment pool maintained by the City of Springfield, Oregon. ORS 295 provides that each depository, throughout the period of its possession of public fund deposits, shall maintain on deposit with its custodians, at its own expense, securities L `' having a value not less than 25% of the certificates of participation issued by the pool manager for funds in excess of those insured by the Federal Deposit Insurance Corporation. Our review of the adequacy of collateral securing depository balances for the City indicated the collateral was insufficient at times during the year ended ~ June 30, 2005. 21