City Council Agenda and Packet 2015 09 21 BUDGET

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the auditors consider such communication necessary to fulfill their legal and professional responsibilities. 8.4 Financial Reporting. The City's Comprehensive Annual Financial Report (CAFR) will be published annually to present the results, financial position, and results of operations of the City for the prior year. As an additional independent confirmation of the quality of the City's financial information, the City will annually submit its CAFR to the Government Finance Officers Association's Certificate of Achievement for Excellence in Financial Reporting program. The Finance Department will provide monthly interim financial reports to the Finance Committee after the close of each month. The reports will be designed to keep the Committee continuously informed of the City's overall financial status. 8.5 Internal Controls. The goals and objectives of the City's internal control policies are to safeguard City assets and to foster reliance on public information for decision - making purposes at all levels both internally and externally. Management shall establish the presence of integrity, ethics, competence, and a positive control environment. Directors are responsible for establishing, executing, and maintaining control policies and procedures at the detail level within their specific departments. The City's internal control structure will be based on the Committee of Sponsoring Organizations of the Treadway Commission on Fraudulent Financial Reporting (COSO) framework and comprised of the following elements: • Control Environment — Factors include integrity and ethical values, commitment to competence, leadership philosophy and operating style, assignment of authority and responsibility, and policy and procedures; • Risk Assessment — Routine assessment of risk and its impact on internal controls; • Control Activities — Such as segregation of duties, authorization of transactions, retention of records, supervision and monitoring of operations, and physical safeguards; • Information and Communication — Policies and procedures are documented and accessible; and • Monitoring — Assessment of the quality of performance over time to determine whether controls are effective and track resolution achievements of identified problems. 8.6 Capitalization of Assets. The terms capital assets, capital outlay, and fixed assets are used to describe assets that are used in operations that have initial lives extending beyond a single reporting period, such as water rights, infrastructure, land, buildings, improvements other than buildings, and equipment. It is incumbent upon departments to maintain adequate control over all resources, including capital assets, to minimize the risk of loss or misuse. Not all fixed assets are required to be reported on the City's balance sheet. Specifically, fixed assets with extremely short useful lives or fixed assets of small monetary value are properly reported as an "expenditure" or "expense" of the period in which they are acquired. 39