1. CITY OF MISSOULA, MONTANA Audit Exit Conference Year Ended June 30, 2007

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

4. Summary of Audit Results Clean opinion on financial statements No significant internal control or compliance findings at either the financial statement level or over major programs One management comment regarding IT security policy

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

6. Net Assets

8. Fund Balances

9. Revenues

12. Expenses

14. Mill Levies

15. Taxable Values

16. Debt Margin

17. Internal Controls & Compliance Financial Statement Level – No material weakness – No material noncompliance Major Programs – No significant deficiencies or material weaknesses – No material noncompliance

18. Management Comments Prior Year Comments Implemented – Payroll – Pledged securities – Deficit fund balances – Capital assets

19. Management Comments The City does not have a written IT security policy. A written policy would provide guidance to all staff should a network security issue arise. We recommend that the IT department develop and adopt a written security policy. Management Response – The City of Missoula Finance Department will work in conjunction with the Information Technologies Department and the City Attorney’s Department to draft and adopt a network security policy in the fiscal year 2008.

20. Audit Committee Communications Auditor Responsibilities Accounting Policies Accounting Estimates Audit Adjustments Disagreements with Management Consultations with Other Accountants Issues Prior to Retention Difficulties in Performing the Audit

21. Component Units Missoula Redevelopment Agency – Clean opinion on financial statements – Old Sawmill project dominates the financials – Internal control finding relative to MAEDC loan Missoula Parking Commission – Clean opinion on financial statements – No internal control or compliance findings

22. Looking Forward New Risk Assessment Auditing Standards Revised Government Auditing Standards Short-Term Investment Pool Impact of Slowing Economy

23. QUESTIONS?