HomeMy WebLinkAbout5B 1995 Audit Report
AGENDA #:
PREPARED BY:
SUBJECT:
DATE:
INTRODUCTION:
BACKGROUND:
DISCUSSION:
5 (B)
RALPH TESCHNER FINANCE DIRECTOR
CONSIDER APPROVAL OF 1995 AUDIT REPORT
JUNE 17,1996
Attached for your review is the 1995 Financial Report as prepared by the
certified public accountant firm of Abdo, Abdo and Eick. The audit was
conducted in accordance with generally accepted auditing standards and
represents an independent opinion of the financial results incurred by the
City of Prior Lake during the year of 1995.
On July 17, 1995 the City Council approved Resolution 95-61 which
authorized the engagement of the Abdo, Abdo and Eick Company to
provide auditing services for the period of the years 1995, 1996 and 1997
plus an option for the three subsequent years of 1998-2000. The cost for
their professional services to prepare the 1995 CAFR (comprehensive
annual financial report) was approved at an amount of $9,700.00.
Final budget figures came in quite favorably allowing for the City to
reserve $1,600,000 of its General Fund balance which is equivalent to the
level of the 30% working capital threshold recommended by the Council.
Revenues of $5,372,029 compared to budget of $5,130,765, representing
105.8% of projection. Operating expenditures resulted in an amount of
$4,889,025 or 95.3% of budget.
The City Council approved Resolution 94-27 on June 6, 1994 which
authorized a working capital designation equivalent to 30% of the current
year's Operating Budget, based upon the availability of sufficient funds
and any remaining portion to be allocated as unreserved fund balance.
Each year, the Council is to review these excess amounts for the purpose
of allocating the excess reserves to other City funds on an as needed basis.
Discussion on these reserves will take place in early August which will
give Staff the opportunity to prepare appropriation alternatives for the
Council to consider.
Contained within the financial report is a legal compliance audit which
was performed to ensure compliance with Minnesota Statutes in the areas
of; contracting and bidding, deposits and investments, conflicts of interest,
public indebtedness and claims and disbursements. According to the
auditor's tests, the City has complied with the applicable legal provisions
as they apply to the five main categories stated above.
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
Also noted within their report on internal control is the fact that no matters
involving internal control structure and operation were observed to contain
material weaknesses as defined by GAS (Government Auditing
Standards).
ALTERNATIVES:
The following alternatives are available to the City Council:
1. Accept 1995 Audit Report as submitted.
2. Delay action according to specific Council reason.
RECOMMENDATION: Staff would recommend approval of the financial report for the fiscal year
ended December 31, 1995 as submitted. A Management Letter will be
shortly forthcoming and is anticipated to be reviewed with the City
Council next month.
A City Financial Reporting Form, which is basically a condensed excerpt
of the official document, is required to be submitted to the Office of the
State Auditor by June 30, 1996 along with this report.
Please feel free to contact Staff prior to the meeting regarding content
interpretation. Gerry Eick 0 the firm Abdo, Abdo and Eick will make a
brief presentation regardin the report.
ACTION REQUIRED: M~n to , / of the agenda is in order.
REVIEWED BY:
AUDI1lI. WRT