Other Auditor Reports 12/31/2001

Home Search

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. Developer Escrow Accounts The City maintains a Trust and 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. We recommend that the City monitor these escrow balances and if they go negative that the developer be contacted so that an additional deposit can be made. 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 internal 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: • Government-wide financial reporting. For the first time, users of state and local government financial reports have access to government-wide financial statements that provide a clear picture of the government as a single, unified entity. These new government-wide financial statements complement rather than replace traditional fund-based financial statements. • Additional long-term focus for governmental activities. Traditional reporting for tax-supported (governmental) activities has focused on near-term inflows, outflows, and balances of spendable financial resources. The new financial reporting model retains this short-term focus in the governmental fund financial statements while providing a long-term perspective on these same activities in the government-wide financial statements. • Narrative overview and analysis. The new governmental financial reporting model provides financial report users with a simple narrative introduction, overview, and analysis of the basic financial statements in the form of management's discussion and analysis (MD&A). (13)