2B, 2009 City Financial Statements

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/,--ARZEN HILL 5 MEMORANDUM DATE: August 9, 2010 TO: Honorable Mayor and City Council Patrick Klaers, City Administrator FROM: Sue Iverson, Finance Director SUBJECT: 2009 City Financial Statements NOTE: The 2009 Financial Statements were delivered to the City Council under separate cover on Monday, August 2, 2010. The City's Auditor, Aaron Neilson, will present the Council with a summary report at the August 9, 2010 Council Meeting. Background/Discussion: The City's 2009 Financial Statements have been completed and submitted to both the State Auditor and the GFOA. The City's auditor will be present at the August 9, 2010 City Council meeting to give an overview and answer questions. The auditors have issued an unqualified ("clean") opinion on our financial statements for the year ended December 31, 2009. The total general fund balance at December 311 2008 was $1,822,260 or 54% of total general fund expenditures for 2009. The general fund balance decreased by $28,505 as a$123,696 transfer was made from the General Fund to the TCAAP Fund. The City's total net assets increased by $1,278,967 and the combined ending fund balances for governmental funds were $10,861,379, and combined ending working capital balance for enterprise funds were $251715942. We have completed the report in the form prescribed by the Government Finance Officers Association of United States and Canada (GFOA) for their Certificate of Achievement for Excellence in Financial Reporting. In order to qualify for this, the report has to be published in an easily readable and efficiently organized Comprehensive Annual Financial Report (CAFR) that satisfies both accounting principles generally accepted in the United States of America and applicable legal requirements As a note of information, the changes to Auditing Standards are increasing and changing. With these changes, you will see increased Endings. This does not mean that the City has done anything wrong compared to previous years, only that the reporting requirements have become much stricter. Many cities are experiencing these findings, and the findings are expected to increase for all cities as these standards become stricter. We continue to have the finding related to "Segregation of Duties". The"Segregation of Duties" finding is common to organizations of our size. Staff continues to review and make improvements to its internal control structure on an ongoing basis and attempts to maximize the segregation of duties in all areas within the limits of the staff available. We did get a comment on "Payroll Declarations", this comment results from the increased use of electronic funds transfers,