Management Report and Recommendations 12/31/1990

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City of Lino Lakes, Minnesota Management Report, Page 53 Forfeiture of Property - Public Safety The 1988 legislature passed laws which allow local police departments to seize property which is used during a crime associated with controlled substances. There is a variety of rules and regulations included in Minnesota Statutes Section 609.53 related to circumstances under which property may be forfeited and procedures regarding disposition of forfeited property. There are several areas which may impact the financial accounting records of the City, as follows: 1. Certain property may be retained by the law enforcement agency for official use by the agency or prosecuting agency. Under certain circumstances, the City may be required to add these assets to any fixed assets records which the City retains including insurance of such property. 2. 70% of the money or proceeds from the sale of the forfeited property may be retained by the City for use in its operating fund or similar fund for use in law enforcement. Certain other amounts must be forwarded to the County Attorney or other prosecuting agency and 10% must be forwarded to the State Treasury for crime victim and witness account. We recommend that the City's Finance Department coordinate with the Police Department to determine procedures to properly account for any property forfeited pursuant to the preceding statute. And any other such monies which might be donated to the City's Police Department. Utility Billing System During 1989 and 1990 the City did not reconcile utility payments from the utility system to the general ledger. During our examination of the utility billing system, it was discovered there is no documentation of billing adjustments. We recommend that the City establish written procedures regarding adjustments. Developer Deposits The City collects deposits from developers for costs which the City incurs during the permit process. Remaining amounts are returned to the developer. The City has not been consistent in coding costs against the developers deposit versus the construction funds once a project has been started. We recommend the City develop procedures to establish at what point costs should be charged to the construction fund rather than the developers deposit. The City's system of calculating amounts to be returned to developers does not always produce adequate verifiable documentation. The City has made improvements in the above areas during 1990 and we recommend that the City continue to review the system and improve reconciliation procedures.