CITY OF MISSOULA, MONTANA

1. CITY OF MISSOULA, MONTANA Audit Exit Conference Year Ended June 30, 2009 PresentedJanuary20, 2010

2. Presentation Outline • Acknowledgements • Scope of Audit • Summary of Audit Results • Financial Statement Highlights • Internal Controls and Compliance • Management Comments • Audit Committee Communications • Component Units • Looking Forward

3. Audit Scope • U.S. Generally Accepted Auditing Standards • Government Auditing Standards • Single Audit Act/OMB Circular A-133 • All City Funds • Component Units • Missoula Parking Commission • Missoula Redevelopment Agency • Business Improvement District

4. Summary of Audit Results • Clean opinion on financial statements • Two internal control findings considered to be material weaknesses over financial reporting • No internal control or compliance findings related to major federal programs

5. Financial Statement Highlights • Government-Wide Net Assets • Governmental Funds Fund Balances • Revenues • Expenses • Mill Levies • Taxable Values • Debt Margin

6. Net Assets

7. Net Assets

8. Fund Balances

9. Revenues

10. Revenues

11. Revenues

12. Expenses

13. Expenses

14. Mill Levies

15. Taxable Values

16. Debt Margin

17. Other Post-EmploymentBenefits • Accounting and disclosure requirements implemented in 2009 (see Note G-3) • Relates to health benefits provided to retirees and the implied premium subsidy • Net OPEB obligation was $499,000 for 2009 • Actuarial valuation of unfunded OPEB liability is $5.4 million

18. Internal Controls & Compliance • Financial Statement Level • Two material weakness findings related to taxes receivable and capital assets • No material noncompliance • Major Programs • No significant deficiencies or material weaknesses • No material noncompliance

19. Management Comments • Aquatics point of sale log-in controls • Review of manual invoices • Long-term debt schedules • Classification of grant expenditures

20. Governance Communications • Auditor Responsibilities • Planned Scope and Timing • Accounting Policies • Significant Audit Findings • Difficulties in Performing the Audit • Corrected and Uncorrected Misstatements • Other Information in the CAFR • Disagreements with Management • Management Representations • Consultations with Other Accountants

21. Component Units • Missoula Redevelopment Agency • Clean opinion on financial statements • No internal control or compliance findings • Missoula Parking Commission • Clean opinion on financial statements • No internal control or compliance findings

22. Component Units • Business Improvement District • Included in CAFR as a discretely-presented component unit • No separate report issued • No material internal control or compliance findings • Prior year management letter comments were implemented

23. Looking Forward • The recession has hit Missoula big time • ARRA funds will be subject to audit in 2010 • Change in permissive levy for health benefits will affect 2011 (SB 491) • New rules for fund balance reporting will be effective for 2011 (GASB 54)

24. QUESTIONS?