12-11-1991 Council Agenda - Laserfiche WebLink

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CITY OF LI1 ILE CANADA, MINNESOTA Page 1 of 10 YEAR END CLOSING PROCESS 1991 The City's year end closing process is a process of producing financial statements (general ledger, trial balance) and supporting documentation for the numbers in the financial statements. The City produces "draft" trial balances after all 1991 information has been entered into the general ledger. The City then goes through the trial balances according to the steps listed on the attached year end closing procedures. The City then makes adjustments to the draft trial balances as a result of performing the year end closing procedures. These adjustments made by the City could be considered the "13th month ". The draft trial balance is the 12 month period, the adjustments to the draft are the 13th month. After the 13th month adjustments have been made, the City arrives at the "adjusted per City" trial balances. In order to complete the year end closing process, the City will have to complete the attached year end closing steps. Completion of these steps is necessary to ascertain the correctness and completeness of the numbers on the adjusted trial balance. The year end closing steps include analytical procedures such as comparing budget expenditures and revenues to actual, comparing revenues and expenditures to prior years, a detailed examination of coding to determine that items such as bond proceeds, bond payments, tax increment receipts, assessment receipts, construction expenditures, etc. have been allocated to the proper funds and fund types. Some of the main items addressed in the attached year end closing procedures are: • Cash • Investments • Receivables • Taxes • Assessments • Payables • Bonds • Construction • Intergovernmental revenue Only after the completion of the year end closing process can the audit begin. The audit procedures will use many of the same steps as the year end closing process to verify accuracy of the financial data. For example, the City needs to use Ramsey County "seven year sheets" to determine the correct tax and assessment receivable and revenue balances. The audit will use the same County information to verify the receivable and revenue balance. A desription of audit assistance procedures follows the year end closing procedures. Page 49