HomeMy WebLinkAbout06-25-07 Item 7B, 2006 Financial Statement Presentation
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~HILLS
Request for Council Action
Prepared By:
Dept.:
Council Mtg. Date:
Final Action Needed By:
Sue Iverson, Finance Director_~
Finance .
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Agenda Item:
78.
Budgeted Amount:
Actual Amount:
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iMotion to accept the 2006 Financial Reports as presented.
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~rulY Recommendation:
Recommendation:
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. The financial reports along with management and special purpose reports will be handed out at the meeting. The City's auditor-.will do a
short presentation and summary for the City Council and the public.
DATE:
June 19,2007
7B.
~
.-A~HILLS
MEMORANDUM
TO: Honorable Mayor and City Council
Michelle Wolfe, City Administrator
FROM: Sue Iverson, Finance Director
SUBJECT: 2006 City Financial Statements
BackgroundJDiscussion:
The City's 2006 Financial Statements have now been completed and are in production. Copies of the
reports will be distributed at Monday's meeting. The City's auditor will be present 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, 2006. The total general fund balance at December 31, 2006
was $1,586,438 or 53% of total general fund expenditures for 2007. The general fund balance increased
by $71,658. The City's total net assets increased by $1,838,828 and the combined ending fund balances
were $9,526,330.
In the past, the auditor has done the financial statement preparation for the City. Staff has completed the
statement "in-house" this year, which is a first for the City. We have also 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. Staff will submit this report to the GFOA CAFR program.
As a note of information, the changes to Auditing Standards are increasing and changing. With these
changes, you will see increased findings. As a result of this, things which have always been present, such
as segregation of duties, or adjusting journal entries found by the auditor will now be reported in the
Schedule of Findings and Responses; before these may have been reported as informational items. 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. Another item to note is that the
City had no Finance Director for the last five months of 2006, the Accounting Analyst left before year-
end, and support staff essentially took on the duties. Staff is responding to these finclings, but in light of
the circumstances is pleased with the outcome of the audit.
As a final reporting requirement, staff is preparing the required reports for the State Auditor's Office and
submitting a copy of these financial reports.
Memo
City Council
2006 Financial Statements
2
Staff Recommendation:
Staff recommends a motion to accept the 2006 Financial Statements for the City of Arden Hills as
presented.