2. Financial SectionFINANCIAL
SECTION
1v"GEST.
GALUSHA
(3
HIGGINS
B& GALUSHAvc19x9
A PROFESSIONAL CORPORATION OF
CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS
City Council Members
City of Kalispell, Montana
910 N. Last Chance Gulch, Helena, MT 59601
INDEPENDENT AUDITOR'S REPORT
Report on the Financial Statements
P.O. Box 1699, Helena, MT 59624
Phone (406) 442-5520
Fax (406)-443-1017
www.ghg-cpa.com
We have audited the accompanying financial statements of the governmental activities, the business -type activities, the
aggregate discretely presented component units, each major fund, the aggregate remaining fund information, and
budgetary comparisons of each major fund of the City of Kalispell, as of and for the year ended June 30, 2014, and the
related notes to the financial statements, which collectively comprise the City of Kalispell's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor's Responsibility
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 involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
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, the aggregate remaining fund information, and budgetary comparisons of each major fund of the City of
Kalispell, as of June 30, 2014, and the respective changes in financial position and, where applicable, cash flows thereof
for the year then ended in conformity with accounting principles generally accepted in the United States of America.
11
Billings • Bozeman • Havre • Helena • Missoula • Idaho Falls
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and
analysis, schedule of funding progress — other post -employment healthcare benefits and budgetary comparison
information on pages 14 through 27, 76 and 77 through 78 be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements
in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States of America,
which consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
City of Kalispell's financial statements. The introductory section, combining and individual nonmajor fund financial
statements, budgetary comparisons (other than major funds), capital asset schedules, statistical tables and the Schedule of
Expenditures of Federal Awards, required by the U.S. Office of Management and Budget Circular A-133, Audits of
States, Local Governments, and Non -Profit Organizations, and the introductory and statistical section are presented for
purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements, budgetary comparisons (other than major funds),
capital assets schedules, and the Schedule of Expenditures of Federal Awards are the responsibility of management and
were derived from and relate directly to the underlying accounting and other records used to prepare the financial
statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain other procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the combining and individual nonmajor fund financial statements and the Schedule of
Expenditures of Federal Awards are fairly stated in all material respects in relation to the financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the
basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 29, 2014 on our
consideration of the City of Kalispell's internal control over financial reporting and on 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 compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards in considering the City of Kalispell's
internal control over financial reporting and compliance.
GALUSHA, HIGGINS & GALUSHA, PC
Certified Public Accountants and Advisors
Helena, Montana
December 29, 2014
12