Audit Report 12/31/1976 - Laserfiche WebLink

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CITY OF LINO LAKES NOTES TO FINANCIAL STATEMENTS December 31, 1976 Note 1: Summary of Significant. Accounting Policies The balance sheets and statements of changes in fund balances of the Water and Sewer Fund and the Special Assessments Fund were prepared on the accrual basis. The balance sheets and statements II of changes in fund balances of all other funds were prepared on the modified accrual basis whereunder fund balances essentially are credited with revenue when received and charged with expenditures' when incurred. b. Clerk's balances consist of cash on hand, cash in bank and invest- ments which are stated at cost. c. Property, plant and equipment of the Water and Sewer Fund is stated at actual or estimated original cost. Depreciation is provided on the straight -line method over the estimated useful lives of the* assets. 1 General fixed assets are stated at actual or estimated values. The policy of stating such assets at other than cost is at variance with I generally accepted accounting principles. Additions and deletions are not accounted for in detailed inventory records. Depreciation of general fixed assets is not provided for in the City's records because depreciation-does not constitute a current budgetary expenditure. The cost of these items are accounted for as current expenditures of the various funds in the year paid. Note 2: Property, Plantand Equipment Depreciation on Water and Sewer Fund assets is computed on the straight- line method at rates of 6 to 20% for equipment and 2 to 5% for all other assets. Depreciation: on contributed assets of $11,480 in the Water and Sewer Fund was charged against contributed equity. Note 3: Special Assessment Bonds In addition to the long -term debt exhibited in the Statement of Long -Term Debt, the City of Lino Lakes has a contingent liability against its full faith and credit on $180,000 for a special assessment bond recorded in the special assessment fund. The general credit of the municipality is obligated only to the extent that any liens foreclosed against properties involved in the special assessment district are insufficient to retire the outstanding special assessment bond. -24- 1 1 1 1 1 1 1 1 1