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City Council Regular Meeting Minutes June 28, 2016 Page 2 Ms. Peggy Moeller, Redpath, Ltd. presented a power point summary of the 2015 Audit Review. 1 The reports issued were the Comprehensive Annual Financial Report, State Legal Compliance 2 Report, Report on Internal Controls and Communication with Those Charged with Governance. 3 4 Ms. Moeller noted on the Comprehensive Annual Financial Report the financial statements are 5 the responsibility of management. The role of the Independent Auditor is to report on the fair 6 presentation of the financial statements and a “Clean opinion” was issued on the 2015 financial 7 statements. 8 9 Ms. Moeller stated on the Annual Financial Report GASB 68 (Pensions) were implemented 10 during 2015 with full accrual statements only and reporting net pension liability, deferred 11 outflows and inflows of resources. This is only a reporting requirement. The State Legal 12 Compliance Report is required by Minnesota Statute §6.65. The OSA audit guide covers seven 13 categories: contracting and bidding, deposits and investments, conflicts of interest, public 14 indebtedness, claims and disbursements, other miscellaneous provisions, and tax increment 15 provisions. There were no findings of noncompliance. It was noted that under the Report on 16 Internal Control, one finding was reported relating to a lack of segregation of duties. This finding 17 has occurred in the past and is due to the number of staff and the inability to segregate some of 18 the duties. Internal Controls are not audited however they are considered when doing the audit. 19 20 Ms. Moeller reviewed the financial results in detail including General Fund, Water and Sewer 21 Enterprise Fund, Liquor Fund, and HRA Fund. The fund balance available at December 31, 2015 22 is sufficient to meet the City’s policy for minimum unassigned fund balances. The 23 Communication with Those Charged with Governance shows no change in accounting policies 24 used other than the GASB change, no difficulties encountered in performing the audit and no 25 disagreements with management. 26 27 Councilmember Stille asked about the policy on inner fund loans and whether Council should 28 talk about calculating it differently. Ms. Shelly Rueckert stated this is being monitored. 29 Councilmember Stille stated this audit fits well with the annual bond rating done. 30 31 Mayor Faust asked Ms. Moeller if the budgets are running very close and Ms. Moeller stated that 32 is correct. The water and sewer rates are kept as close to actual costs as possible. Mayor Faust 33 stated the auditor is hired by the City Council and validates the work the Finance Department 34 does throughout the year. 35 36 Motion by Councilmember Brever, seconded by Councilmember Stille, to accept the 2015 Audit 37 as presented. 38 39 Motion carried 5-0 40 41 VII. REPORTS FROM CITY MANAGER AND COUNCIL MEMBERS. 42 43 City Manager Casey reported a few weeks ago, members of the City Council and staff attended 44 the League of MN Cities Conference. The City St. Anthony received two awards, the GreenStep 45 Four Award and the City of Excellence Award for Sustainability. These awards will be placed in 46 the trophy case. 47 48 4