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1995 PROGRAM/PERFORMANCE BUDGET <br /> DEPARTMENT FINANCE PROGRAM ANNUAL FINANCIAL REPORT & AUDIT <br /> FUNDING SOURCE PROPERTY TAXES <br /> This <br /> program'am rovi <br /> des <br /> for <br /> the <br /> production ction <br /> o <br /> f <br /> the <br /> City's <br /> Comprehensivere <br /> he si <br /> ve <br /> Ii.,':::ZPROGRAIVETIMPOSENfi Annual Financial Report (CAAFR)_and the conduct of an annual-audit <br /> of the City's financial records by a firm of Certified Public Accountants. <br /> • <br /> Section <br /> 6 <br /> .03 <br /> Su <br /> bd. <br /> 90 <br /> of the Ci <br /> tYCharter <br /> states <br /> The <br /> Cler - <br /> Administrafor <br /> shall prepare an annual <br /> financial statement eme <br /> nt <br /> and <br /> such <br /> other <br /> statements nts <br /> as <br /> required <br /> b <br /> Ylaw.". <br /> The City <br /> Council <br /> created <br /> the <br /> position of Municipal <br /> Finance Director/Treasurer and, in effect, delegated the Clerk- <br /> Administrator's duties relative to financial accounting and reporting to the Municipal Finance <br /> Director/Treasurer. MSA 412.51 states "If the bookkeeping functions of the clerk are delegated to the city <br /> treasurer, the council shall provide for an annual audit of the city's financial affairs in accordance with the <br /> minimum procedures prescribed by the state auditor." Minnesota Accounting &Financial Reporting Standards, <br /> issued by The Office of The State Auditor, provides that Minnesota Cities, over 2,500 population, issue a <br /> Comprehensive Annual Financial Report prepared in accordance with generally accepted accounting principles <br /> as promulgated by the Governmental Accounting Standards Board. <br /> The process of preparing the City's CAAFR and preparing for the annual audit involves all of the Finance <br /> Department's staff and is done throughout the entire year. Files and work sheets are prepared and maintained <br /> throughout the year. Examples include collections of property taxes, tax increments, special assessments; <br /> acquisition and disposition of fixed assets; and construction project records and payments. During the month <br /> of September a pre audit planning conference is held with the auditors, a list of information and work sheets <br /> and schedules needed by the auditors is prepared, and a date is set for the auditors to conduct their field work. <br /> Finance Department staff gathers information requested and prepares schedules and work sheets requested <br /> to help reduce the cost of the annual audit. <br /> Staff prepares information requested by the auditors and a preliminary CAAFR. The auditors conduct their <br /> field work in March and may make revisions to the CAAFR. The auditors also perform a legal compliance <br /> audit, as prescribed by the Office of The State Auditor, to test the City's compliance with the terms and <br /> conditions of applicable legal provisions pertaining to: 1)contracting and bidding; 2) deposits and investments; <br /> 3) conflicts of interest; 4) Public indebtedness; and, 5) claims and disbursements. If the City, in any one year, <br /> receives federal grants in excess of $25,000 an audit on compliance with general requirements applicable to <br /> federal financial assistance programs is required by federal law. <br /> The City's CAAFR is generally prepared in late April and includes the auditors opinion on the City's financial <br /> statements. The auditors present their management report and recommendations, and various audit findings <br /> to the City Council in May. Staff then completes the•"City Financial Reporting.Form" and sends it and the <br /> City's CAAFR to the Office of The State Auditor. The City also participates in The Certificate of <br />