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City of Lino Lakes, Minnesota <br />Management Report <br />Other Matters <br />them in increasing their awareness of the potential for fraud. We specifically recommend the <br />following steps to improve your comfort that fraud is not existing within your organization. <br />1. Conduct a series of interviews with each department head to determine likely areas in <br />which fraud may occur. <br />2. Designate a position of authority that any City employee can confidentially approach if <br />they observe or suspect fraud may be taking place. <br />3. Adopt a written policy that defines fraud within the City and specifically states the <br />ramifications of noncompliance." <br />4. Require employees to read the above policy when they are hired and periodically (once <br />a year) sign an acknowledgment that they are aware of the policy and they are in <br />compliance with it. <br />We are available to assist the City to increase awareness of fraud and establish policies to <br />improve the likelihood of preventing fraud. <br />Distortion of Subsidies Act of 1997 <br />Federal legislation had been proposed in 1997 to effectively tax (at a federal level) <br />subsidies provided by state and local government to private business. The purpose of the <br />legislation is to reduce unfair competition between states to acquire businesses at the cost of <br />increased taxes to local jurisdictions. <br />Specifically, this Act would tax incentives provided by local government to private <br />enterprises. This would include tax increment payments. The tax would not necessarily be a <br />burden on the City of Lino Lakes; however, it would reduce the incentives available to private <br />enterprise, which seeks subsidies in the form of tax increments, or other concessions from city <br />government. The law is also directed to major sports franchises. In order for private enterprise <br />Page 67 <br />