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NOTE 7 — COMMITMENTS AND CONTINGENCIES <br />A. Legal Claims <br />The City has the usual and customary type of miscellaneous legal claims pending at year-end. Although. <br />the outcome of these. lawsuits is nott presently determinable, theCity: s management believes Yhat the City <br />wilt not incur any material monetary loss resulting from 'these claims. No loss has been recorded ott the <br />City s financial statements relating to these claims. <br />B. Federal: and State bonds <br />Amounts recorded. -or receivable from federal and state. agencies are .subject to agency audit and <br />adjustment>.Any disallowed claims, inclodirtg amounts already collected, way constitute a liability of the <br />applicable funds: The amount; if any; of claints.-which may be disallowed by the grantor agencies cannot. <br />be determined at this time, although the City expects such amounts, if any, to be immaterial. <br />NOTE 8 — ERROR CORRECTION <br />An error results from mathematical mistakes: mistakes in the application of accounting principles* or <br />oVersight or misuse of facts that existed at the time the financial statements were issued about conditions <br />that existed .as of the financial -statement date. <br />lhiriug fiscal year 2024,. the City determined. an e�i %vas made in .the: businessAy-pe aetiVities and the <br />Sewer Enterprise Fund. The City determined -that -the. beginning;net position of the $ewer Enterprise Fund <br />was understated by $9,776. This error caused the ending net position in fiscal 2023 to bi�_understated by <br />$9,776-and'the'related revenues or expenditures to 1 understated of*overstated, respectively by the safr►e <br />anlUlil7t. <br />-31- <br />