Laserfiche WebLink
CITY OF HUGO, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS (CONTINUED) <br />2. Stewardship, Compliance, and Accountability <br />Budctetary Information (continued) <br />4. All budgeted appropriations lapse at the end of the fiscal year. The legal level of control <br />(the level on which expenditures may not legally exceed appropriations) for each budget <br />is at the fund level. Management cannot legally amend or transfer appropriations <br />between funds without the approval of the City Council once the budget has been <br />approved. Any over expenditures of appropriations or transfers of appropriated amounts <br />must be approved by the City Council. <br />5. Budgeted amounts are as originally adopted, or as amended by the City Council. The <br />budget cannot be amended without approval by the City Council. <br />All budget amounts presented in the accompanying supplementary information reflect the original <br />budget and the final budget (which are the same for the year ended December 31, 2016). <br />Encumbrance accounting is employed in governmental funds. Encumbrances (e.g. purchase <br />orders, contracts) outstanding at year end are reported as commitments of fund balances and do <br />not constitute expenditures or liabilities because the commitments will be reappropriated and <br />honored during the subsequent year. There were no encumbrances at December 31, 2016. <br />3. Detailed Notes on All Funds <br />A. Deposits and Investments <br />In accordance with applicable Minnesota statutes, the City maintains deposits at depository <br />banks authorized by the City Council. All such depositories are members of the Federal <br />Reserve System. <br />Minnesota statutes require that all deposits be protected by insurance, surety bond, or <br />collateral. The fair value of collateral pledged must equal 110% of the deposits not covered by <br />insurance or surety bonds. <br />Authorized collateral includes certain state or local government obligations and legal <br />investments described in the investment policy section. Minnesota Statutes require that <br />securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial <br />institution other than the institution furnishing the collateral. <br />The City's deposits in banks at December 31, 2016 were entirely covered by federal depository <br />insurance or by collateral held by the City or its agent in the City's name. <br />41 <br />