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CITY OF ST. ANTHONY, MINNESOTA <br />SCHEDULE OF FINDINGS AND QUESTIONED COSTS <br />For The Year Ended December 31, 2006 <br />2006-6 Transfers Between Funds <br />Criteria: Transfers in and transfers out are required to be reported when the City moves <br />assets between funds. <br />Condition: The City recorded expense and revenue in two funds when the only transaction <br />was transferring cash between the funds. The City recorded transfers out of the Liquor Fund <br />directly to retained earnings rather than to transfer out. <br />Cause: Unknown. <br />Effect: The City is not properly recording financial activity resulting in overstated revenues <br />and expenditures or financial statements that do not balance. <br />Recommendation: We recommend that all transfers between funds be recorded as transfers <br />in and transfers out. <br />Views of Responsible Officials and Corrective Action Plan: The City has corrected its <br />accounting procedures so that Liquor Fund transfers to other funds will be correctly expensed <br />to transfers to other funds. The previous technique of recording the transfers against retained <br />earnings has been discontinued. <br />