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<br />opinion on the City’s financial statements based on their audit. They also performed a <br />single Audit of Grant Awards and, in their opinion, they complied in all respects with <br />requirements and principles of all major federal programs for the year-end June 30, <br />2011. In addition to the financial statements and the single Audit, a report was issued <br />on material weaknesses (deficiencies) in internal control. Ms. Lenk thanked all the <br />City employees for their assistance that was provided during the Audit. <br /> <br />Mr. Price said that the recommendations seemed basic. <br /> <br />Ms. Ricci thanked the auditors for a good job. <br /> <br />Mr. Crow asked about the $31 million dollars in the Condensed Statement of Changes <br />in Net Assets, which is a decrease of $1.5 million dollars from the previous year in <br />Public Safety from the previous year. Ms. Lenk said she would get that information for <br />him. Ms. Charumilind said it was not a decrease in manpower but rather in accounting <br />procedures as depreciation, vacations, sick days, etc. <br /> <br />Mr. Price noted the deficiencies are not new so he requested that this City Manager <br />get them fixed. Ms. Lenk said they needed to be prioritized and then worked through. <br />Mr. Price then asked the City Manager to come back with a plan for implementation of <br />prioritized recommendations of what will be done. <br /> <br />Mr. Kraft noted that Schowalter & Jobouri were to audit the City’s Finance but 18 <br />pages of Journal Entries should not be part of the audit. He said essentially the <br />Finance Department was not ready for the auditors even though Ms. Watson had said <br />they were ready. Mr. Kraft said the auditors could do a faster job if they did not have <br />to go through all the Journal Entries. He said the auditors noted that material <br />weaknesses meant it is was bad and the auditor said it was significant. Mr. Kraft <br />asked about the three basic financial statements. Ms. Charumilind said that the three <br />different financial statements consist of government-wide financial statements, <br />Financial Statements, and notes to financial statements. She said the Government- <br />wide Financial statement consists of a statement of Net Assets and a Statement of <br />Activities. The Fund Financial statement consists of Governmental Funds, Proprietary <br />Fund and Fiduciary Funds. <br /> <br />Ms. Ricci stated that these deficiencies noted were what she has been questioning for <br />years and their importance should not be minimized. <br /> <br />Mayor Welsch stated that she had the same concerns when she was on Council in <br />2003 – 2004. She said that Mr. Walker said that he has hired a financial consulting <br />firm to do an overview of the finance department and the report will be sent to the City <br />in four to six weeks. Mayor asked to have on record that this is the first time the <br />Council interviewed and hired the auditor as City Council is the governing body. She <br />noted that in the past the auditor had been hired by the City Manager and when the <br />City Manager and staff saw their report, they asked for changes to be made to this <br />report. She noted that this Council has hired this auditor and the Council did not ask <br />for any changes to be made in the report that was presented to them. Mayor Welsch <br />noted that the report is posted on the City’s website. <br /> <br />M. UNFINISHED BUSINESS <br />BILLS <br />5 <br /> <br />