City Council Minutes 2010 08 17 - Laserfiche WebLink

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City Council Meeting Minutes August 17, 2010 Page 4 of 7 Finance Director Watson explained David DeZutter from Eide Bailly, the City external auditors, would present the 2009 Comprehensive Annual Financial Report (CAFR). Finance Director Watson addressed Management's responses to the three issues mentioned in the 2009 Audit Management Letter. The key issue concerns a restatement of the City's 2008 financial statements. The 2008 budget included a loan of $700,000 from the Wastewater Utility Fund to the Golf Course Fund to cover the cost of pond repairs and repaving the golf course parking lot. This loan was made and recorded as an interfund transfer at the end of 2008. The City Council held a public hearing and passed Ordinance No. 1558, Series 2009 to authorize the $700,000 interfund loan. In 2009, City Council approved an additional $370,000 loan from the Wastewater Utility Fund to the Golf Course Fund to cover the 2009 Golf Course operating deficit. The City Council approved this interfund transfer as part of the 2009 budget, held a public hearing and passed Ordinance 1565, Series 2010 approving the loan. When preparing the 2009 financiial statements, both Staff and the auditors agreed that the best way to accurately reflect these interfund transactions was to report them as an interfund transfer on a budget basis and as an interfund loan on a GAAP basis. It was also agreed the City should restate the 2008 financial statements to report the interfund transfer /loan on the same basis as reported in 2009. The Auditor recommended segregation of duties within the City's accounting functions, to ensure an individual without access to the accounts payable module for entering payables and paying the vendor is made responsible for setting up vendors in the accounting system. With the new ADG financial management software, staff will develop a report which displays all new vendors. That report will be generated and reviewed by an appropriate staff member who is not responsible for entering payables and paying the vendor. With respect to journal entries, the Auditor recommended transactions made by the Accounting Manager be reviewed by the Finance Director. Staff agrees with this recommendation and has already implemented the process. David DeZutter, Eide Bailly, the City independent auditors, presented the 2009 Comprehensive Annual Financial Report (CAFR). He noted there were no significant adjustments made as a result of the audit. He stated the Management Discussion and Analysis of the City's 2009 operations assures City's finances in 2009 were sound. He explained the general fund maintains a healthy fund balance; the Capital Project Funds and Open Space funds are financially healthy and the Enterprise Water and Waste Water Fund is strong. He referred to the footnotes, which follow the financial statements, and deal with various accounting principles, fixed assets and detailed issues on bond matters. At the end of the report is the statistical section, which presents ten years of accumulative information. He noted the City will be the recipient of federal funding for transportation. Next years' audit will have to be extended to audit the spending of federal funding. COUNCIL COMMENTS