06/04/2007 Council Packet (2) - Laserfiche WebLink

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Budget Appropriations Each year the City adopts an annual budget for the general fund. Each department receives an appropriation based upon detailed budget estimates for individual expenditure accounts. Department heads have the ability to transfer appropriations within a department. This can be helpful and improves flexibility in meeting department needs as they change during the year. However, such a policy can lead to unnecessary or unauthorized expenditures. For example, equipment purchases. We suggest the City review this policy and consider adding controls on the amounts that can be transferred within a department without bringing it to the City Council for approval. These controls could include dollar limits, restrictions on the types of purchases or getting the approval of someone in administration. Developer Escrow Accounts The City maintains an Agency Fund to account for the activity related to developer escrows. It is our understanding that developers deposit an escrow prior to a project beginning and that certain costs may be applied against this escrow. We noted that there are several escrow accounts that carry a "negative" balance (which represents an additional receivable balance from the developer) or have remained idle from the prior year. Efforts were made during 2006 by the City to reconcile negative and idle accounts with the related developers. We recommend that the City continue this process. Conclusion We welcome the opportunity to discuss the points mentioned in this letter or any other accounting and procedural issues in order to coordinate our efforts with you, the mutual objective being the development of more effective accounting procedures for the City. We understand that some of the aforementioned points are in the process of implementation or may already have been implemented; however, these points are noted so that effective follow -up can be accomplished. We sincerely appreciate all the courtesies and cooperation extended to us by you and the staff of the City, and thank you for the opportunity to be of service to you. We look forward to working with you in the future. This report is intended solely for the use of the Finance Committee, City Council, and management of the City of Lino Lakes and is not intended to be, and should not be used by anyone other than these specified parties. LarsonAllen, LLP Austin, Minnesota May 30, 2007