3. Independent Auditors ReportDenning, Downey c& Associates, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
1740 U.S. Hwy 93 South, P.O. Box 1957, Kalispell, MT 59903-1957
INDEPENDENT AUDITOR'S REPORT
Mayor and City Council
City of Kalispell
Flathead County
Kalipsell, Montana
We have audited the accompanying 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 City of Kalispell, Flathead County, Montana, as
of and for the year ended June 30, 2009, which collectively comprise the City's basic financial
statements as listed in the table of contents. These financial statements are the responsibility of
City of Kalispell management. Our responsibility is to express opinions on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position 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 City of Kalispell, Flathead County, Montana, as of June 30, 2009, and
the respective changes in financial position, and cash flows thereof for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
As described in Note 1, the City of Kalispell, Flathead County, Montana, has implemented the
Post Retirement Benefits other than Pensions, as required by the provisions of GASB Statement
No. 45, as of June 30, 2009.
In accordance with Government Auditing Standards, we have also issued our report dated
February 15, 2010, on our consideration of the City of Kalispell's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts,
and grant agreements and other matters. The purpose of that report is to describe the scope of
our testing of internal control over financial reporting and compliance and the results of that
testing and not to provide an opinion on the internal control over financial reporting or on
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Robert K. Denning, CPA • Kim M. Downey, CPA
compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards and should be considered in assessing the results of our audit.
The management's discussion and analysis, budgetary information, and schedule of Funding
Progress — Other Post Employment Healthcare Benefits on pages 6 through 15 and page 59 and
page 60, are not a required part of the basic financial statements but are supplementary
information required by accounting principles generally accepted in the United States of
America. We have applied certain limited procedures, which consisted principally of inquiries
of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion
on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The combining and individual
nonma.or fund financial statements and the statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements, and they have not
been subjected to the auditing procedures applied in the audit of the basic financial statements.
The accompanying schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits
of States, Local Governments, and Non -Profit Organizations, and is not a required part of the
basic financial statements of City of Kalispell, Flathead, County, Montana. Such information
has been subjected to the auditing procedures applied in the audit of the basic financial
statements and , in our opinion, is fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.
amu�, /0" "_,� a ad" ,
February 15, 2010
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