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Ilmun <br />I NM <br />ARNE H. CARLSON <br />STATE AUDITOR <br />STATE OF MINNESOTA <br />OFFICE OF THE STATE AUDITOR <br />SUITE 400 <br />555 PARK STREET <br />SAINT PAUL 55103 <br />February 16, 1982 <br />The Honorable Benjamin Benson, Mayor <br />and Members of the Lino Lakes City Council <br />1189 Main Street <br />Lino Lakes, Minnesota 55014 <br />Pursuant to Minn. Stat. Sec. 6.54, we have recently completed an <br />examination of certain records of the City of Lino Lakes. <br />296 -2551 <br />We met with the petitioners and determined it to be in the public <br />interest to limit the scope of our examination to the legal <br />compliance concerns of the petitioners. This scope limitation <br />•.. resulted in no duplication of the financial work previously done <br />by the city's independent auditors. <br />Vow <br />Wang <br />Revenue Flow <br />The petitioners expressed concern and questioned why the "Total <br />(Memorandum Only)" column of the combined statement of revenues, <br />expenditures and changes in fund balance of the 1980 financial <br />statements disclosed expenditures to be greater than revenues by <br />$690,635. The bulk of this excess ($689,146) is from the "special <br />assessment funds" column. This column is an aggregate of all <br />special assessment funds held by the city. <br />Our examination showed that this excess of expenditures over <br />revenues in the special assessment fund was due to the sale of <br />special assessment bonds and the receipt of those bond proceeds <br />in 1979. This created a surplus in 1979. Expenditures from the <br />bond proceeds for the special assessment project were then made <br />in the subsequent year of 1980. <br />Interfund Transfers <br />Petitioners questioned the legality of certain interfund transfers <br />in the years 1979 to 1981. Our examination disclosed the following: <br />In 1981 the City of Lino Lakes transferred $72,680.00 from a <br />closed out special assessment fund (bond issue dated 10- 15 -74) <br />to the general revenue fund. The $72,680.00 residual of <br />this fund represented delinquent assessment collections, and <br />related penalties and interest. Since all claims, bonds and <br />other obligations of this special assessment fund had been <br />satisfied, we find this transfer to be proper and in accordance <br />with Minn. Stat. Sec. 435.203. <br />AN EQUAL OPPORTUNITY EMPLOYER <br />