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Report on Compliance with Minnesota <br />Legal Compliance Audit Guide for Local Government <br />Page 3 <br />Finding: Errors in Report of Outstanding Indebtedness <br />Criteria: Minnesota statutes require that the annual report of outstanding obligations is to be <br />reported to the auditor of each county in which such municipality is situate, the total amount <br />of outstanding obligations accurately. <br />471.70 Animal Report of Outstanding Obligations <br />For the purposes of this section "municipality' means a city, however organized; a school district, <br />however organized; a town; or any other body corporate and politic created under Minnesota law. <br />An "obligation" as used in this section means an obligation as defined in chapter 475. On or before <br />February first each year, it shall be the duty of the principal accounting officer of each municipality to <br />report to the auditor of each county in which such municipality is situate, the total amount of outstanding <br />obligations, and the purpose for which issued as of December 31, of the preceding year. Such report shall <br />be kept by the auditor of each county in a suitable record. On March first each year, it shall be the duty of <br />the auditor of each county to make report to the state auditor of such obligations as reported to the county <br />auditor by the principal accounting officer of the municipality, together with the amount and character of all <br />outstanding obligations issued by the county. <br />Condition: The report that was submitted to the County was submitted with incorrect <br />information relating to the City's total amount of outstanding obligations. <br />Cause: The City did not report the 2006 tax increment bonds as City indebtedness. <br />Effect: The effect of noncompliance is not determinable. <br />Recommendation: We recommend the City review all bonds issued and determine whether <br />bonds are the City's obligations or conduit debt. <br />Views of Responsible Officials and Corrective Action Plan: The City has established <br />procedures to correct this going forward by developing proper accounting procedures for all <br />TIF Revenue Bonds. City staff will closely monitor all bond sales to determine the proper <br />accounting of all outstanding obligations and report them on a timely basis to the County <br />Auditor. <br />35 <br />