Management Letter June 30, 2004
KPMG LLP 1900 Nashville City Center 511 Union Street Nashville, TN 37219-1735
October 31, 2004
The Honorable Mayor and Members of Council The Metropolitan Government of Nashville and Davidson County Nashville, Tennessee Ladies and Gentlemen: We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the Metropolitan Government of Nashville and Davidson County, Tennessee (the Government) as of and for the year ended June 30, 2004, which collectively comprise the Government’s basic financial statements and have issued our report thereon dated October 31, 2004. We also have audited the financial statements of each of the discretely presented component units of the Government, as of and for the year ended June 30, 2004, as displayed in the Government’s basic financial statements. We also have audited the financial statements of each of the Government’s nonmajor governmental, nonmajor enterprise, internal service, and fiduciary funds, as well as the financial statements of the Sports Authority Fund as of and for the year ended June 30, 2004. We did not audit the financial statements of the following Component Units: the Nashville District Management Corporation, the Metropolitan Development and Housing Agency, the Electric Power Board, the Metropolitan Transit Authority, the Nashville Thermal Transfer Corporation, the Metropolitan Nashville Airport Authority, the Emergency Communications District, and the Industrial Development Board. In planning and performing our audit of the aforementioned financial statements, we considered internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements. An audit does not include examining the effectiveness of internal control and does not provide assurance on internal control. We have not considered internal control since the date of our report. During our audit we noted certain matters involving internal control and other operational matters that are presented for your consideration. These comments and recommendations, all of which have been discussed with the appropriate members of management, are intended to improve internal control or result in other operating efficiencies and are summarized in Appendix I. Our audit procedures are designed primarily to enable us to form an opinion on the financial statements, and therefore may not bring to light all weaknesses in policies or procedures that may exist. We aim, however, to use our knowledge of the company’s organization gained during our work to make comments and suggestions that we hope will be useful to you. We would be pleased to discuss these comments and recommendations with you at any time.
KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative.
This report is intended solely for the information and use of the audit committee, management, and others within the organization and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours,
Appendix I RECOMMENDATIONS GENERAL GOVERNMENT TIMELINESS OF CAPITAL ASSETS PHYSICAL INVENTORY ADJUSTMENTS
Observation Physical inventory listings of capital assets are being sent to departments to verify existence of all capital assets each fiscal year. However, the responses received back from the various departments as to which assets have been disposed of, and the potential adjustments that are needed are not being adjusted and reflected in the fixed asset system on a timely basis. During fiscal year 2004, listings were sent out in January 2004, however as of the date of this letter, all adjustments to the fixed asset system still have not been made....