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DEBT SERVICE FUNDS (Continued) We recommend that all Debt Service Funds of the City be reviewed at least annually by applying the above criteria. The Area & Unit Fund is committed to the debt service of some special assessment bonds as well as toward the water revenue bonds. We recommend that the City determine the full commitment of the Area and Unit Fund whenever this fund is used to pledge toward future bond issues and construction projects. Computerization of Special Assessment Records. During the course of the audit we noted the City has not computerized its special assessment records. There are many items that must be tracked throughout the special assessment process; the adopted assessment roll, the annual special assessment levy (principal and interest), property owner prepayments and remaining deferred balances. The current method of tracking this process is predominately done manually and requires manual tracking and verifying of assessments. Because of the importance and dollar amount of the special assessments, the number of parcels to be accounted for and number of separate assessment rolls for each parcel, we recommend that the city investigate computerizing the special assessment records. This will not only assist in maintaining the deferred receivable balances and the certification of the annual spread levy but it will also prove valuable in the certification of payoff balances for individual property owners. Centralization of Bid Records Minnesota Statutes require that specific bidding procedures be followed for contracts entered into by the City meeting certain dollar value criteria. One of the requirements is that documentation of the bidding process be retained. During the course of the audit, it was noted that certain supporting documentation for the contracts selected for testing was unavailable. We suggest the bidding process be centralized and appropriate procedures be implemented or reviewed to ensure compliance with Statutes and that proper documentation is retained. Reporting Model The Governmental Accounting Standards Board (GASB) has issued Statement No.34 on issues related to the Governmental Financial Reporting Model. The implementation date for an organization the size of the City is the year 2003. This new reporting model significantly changes governmental accounting, which will impact the intemal financial accounting and external financial reporting of the City. As a result, it will involve a significant commitment of time by the finance department staff. A summary of the key provisions of the statement is presented below: Key features of the new model. Even though the new governmental financial reporting model has deep roots in traditional public sector accounting and financial reporting, it offers many new features. The most important of these new features are: • Govemment-wide financial reporting. For the first time, users of state and local govemment financial reports have access to government -wide financial statements that provide a clear picture of the govemment as a single, unified entity. These new government -wide financial statements complement rather than replace traditional fund -based financial statements. (13)