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<br />3 <br />Opinions <br /> <br />In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of <br />the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City <br />of Pequot Lakes, Minnesota as of December 31, 2019, and the respective changes in financial position and, where applicable, cash <br />flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. <br /> <br />Other Matters <br /> <br />Required Supplementary Information <br />Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, <br />Budgetary Comparison Schedules, Schedule of City’s Proportionate Share of the Net Pension Liability, Schedule of City Pension <br />Contributions, Schedule of Changes in Net Pension Liability (Asset), and Schedule Changes in Net OPEB Liability be presented to <br />supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by <br />the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic <br />financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to <br />the required supplementary information in accordance with auditing standards generally accepted in the United States of America, <br />which consisted of inquiries of management about the methods of preparing the information and comparing the information for <br />consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during <br />our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the <br />limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. <br /> <br />Supplementary Information <br />Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic <br />financial statements. The introductory section, combining nonmajor fund financial statements and schedule of indebtedness, as <br />listed in the table of contents, are presented for the purposes of additional analysis and are not a required part of the basic financial <br />statements. <br /> <br />The introductory section, combining nonmajor fund financial statements and schedule of indebtedness have not been subjected to <br />the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or <br />provide any assurance on them. <br /> <br />Other Reporting Required by Government Auditing Standards <br /> <br />In accordance with Government Auditing Standards, we have also issued our report dated May 22, 2020 on our consideration of <br />the City of Pequot Lakes’ internal control over financial reporting and our tests of its compliance with certain provisions of laws, <br />regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of <br />internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the <br />effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit <br />performed in accordance with Government Auditing Standards in considering the City of Pequot Lakes’ internal control over <br />financial reporting and compliance. <br /> <br />Report on Other Legal and Regulatory Requirements <br /> <br />In accordance with Minnesota Statutes, we have also issued our report dated May 22, 2020 on our consideration of the City of <br />Pequot Lakes’ compliance with provisions of the Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State <br />Auditor pursuant to Minnesota Statute Section 6.65. The purpose of the report is to determine if the City has complied with <br />Minnesota laws and regulations. That report is an integral part of an audit performed in the State of Minnesota. <br /> <br /> <br /> <br /> <br /> <br />SCHLENNER WENNER & CO. <br />St. Cloud, Minnesota <br />