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4 <br />SECTION 2 –ACCOUNTING, AUDITING, AND FINANCIAL REPORTING <br /> <br />Purpose <br />Consistent application of accounting practices that conform to Generally Accepted Accounting <br />Principles (GAAP) and governmental accounting standards ensures public confidence in the <br />integrity of the City’s financial condition and provides meaningful information about the City’s <br />operations. <br />Policy <br />The City will use an accounting system to maintain records consistent with generally accepted <br />accounting standards and principles for local government accounting as set forth in the <br />Government Accounting Standards Board (GASB), and consistent with applicable state statutes <br />and regulations. The following considerations and procedures will be used to comply with this <br />policy: <br /> The City will establish and maintain the highest standard of accounting practices, in <br />conformity with GAAP. <br /> The City will comply with statements promulgated by GASB. <br /> Quarterly reports will present a summary of General Fund financial activity by department <br />as compared to Budget. Department Heads will review quarterly reports comparing actual <br />revenues and expenditures to the budgeted amounts. Any negative variance in any revenue <br />or spending category for their department as a whole projected to exceed $10,000 by <br />year-end will be reported in writing to the Finance Director, City Administrator, and <br />Council. Department heads can request department financial activity at any time during the <br />current quarter and it will be provided. <br /> Staff will bring these Financial Policies to the City Council periodically. <br /> The City will arrange for an annual audit of all funds and account groups by independent <br />certified public accountants. <br /> The City will attempt at all times to maintain the Certificate of Excellence in Financial <br />Reporting issued by the Government Finance Officers Association. <br /> The Finance Director will implement internal control procedures for the following: <br />o Cash and Deposit Handling <br />o Investment and Bank Statement Reconciliation <br />o Accounts Receivables and Collections <br />o Financial transaction recordkeeping including journal entry approval <br />o Capital Asset Reconciliation <br />o Payroll and Payroll Reporting <br />