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Regular City Council Meeting Monday, May 18, 2009 Page 11 Statements in accordance with U.S. GAAP; testing of internal controls and com- pliance with state laws and regulations related to financial reporting. Mr. Eichten advised that some findings were carry-over from the previous year's audit, and that some were new this year. Mr. Eichten briefly reviewed those find- ings related to: Skating Center segregation of duties based on a lack of personnel allowing for transaction flow; internal controls for reimbursable contract costs; prior period adjustments for financial reporting of Housing and Redevelopment Authority (HRA) loans; and adjusting journal entries over the reporting year of the fair value of investments. Mr. Eichten reviewed the status of each of those findings; discussions with staff; and noted that Housing Coordinator Jeanne Kelsey had identified and done exten- sive work in improving accounting for HRA loans prior to their findings, but indi- cating alack of previous controls for that account. Mr. Eichten advised that, based on her work, no additional recommendations were provided, just an ac- knowledgment that those previous controls had been lax. Mr. Eichten noted that the finding related to claims declarations for electronic payments, while a previous finding, could not be resolved until resolution by the State Auditor in 2009, providing that Cities could get cone-time declaration and continue payments to those particular vendors throughout the year, without re- quiring adeclaration for each payment. Discussion among Councilmembers, Mr. Eichten and Mr. Miller included Skating Center operations and the inability to segregate those duties, with Mr. Miller ad- vising that this was indicative of the City's smaller point-of--sale transaction sites and the limited number of employees having developed a sufficient skill set due to turnover and training in progress for part-time staffing and sometimes on a sea- sonal basis. Mr. Miller advised that this may be a recurring situation for some ar- eas of the City; and staff has since been alerted to the need to segregate and cor- rect those situations to the best of their ability. Further discussion included the need to centralize accounting for grants/contracts within the Finance Department, rather than just in specific departments. Mr. Eichten noted that, while it was standard practice for a department to manage grant reporting and reimbursement costs, it was advisable to provide further over- sight of those funds to ensure all applicable costs were being invoiced properly and reimbursed. Mr. Miller concurred, noting that some issues were related to timing and part to the City's organizational structure; and that improving commu- nication between all departments, allowing the Finance Department to be aware of all grant applications and awards, and providing a comprehensive list of those op- portunities to be available for follow-through by the Finance Department and awareness of the Auditor. Mr. Eichten advised that many grant areas were chal- lenging due to their reporting and reimbursement criteria, and that often it was a