06-09-1997 Council Packet - Laserfiche WebLink

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J J ^"1 A ccounting and R eporting Comments Installation of Banyon Data Systems TTk City implemented an on-site financial applications system during 1995. This new system should save the City a^roximately $11,000 annually in comparison with the previous system that was in place. The City . ° 15!“"Plementing a system which will belter serve its needs and save money at the same time. City staff has adjusted to the new financial applications system. The audit took place one month earlier than that in 1995 and we found that the 1996 audit went much smoother than in the prior year. Accounting and A uditing U pdates Single audit - audits of Federal Financial A ssistance Programs In July 1996, the President signed into law an amendment to the Single Audit Act that calls for a number of significant c.ianges m the requirements for performing single audits. The amended Act will be effective for Tsral ye?/s beginning on ot after July 1,1996, meaning it will apply to audits of Minnesota cities for the 1997 ^en^ yw The revised act calls for the elimination of Office of Management and Budget (0MB) Circul^A-128-Audits of State and Local Governments.- In the future, all single audits will be done under * “Audits of Institutions of Higher Learning and Nonprofit Insotunons. This will make the guidance uniform for all single audits. Under the new Act. the threshold for requiring a single audit wUl rise from $100,000 to $300,000 of federal revenue, which will exclude most Minnesota cities. Investment V aluation pie Goverrane^ Accounting Standards Board recenUy issued Statement No. 31. “Accounting and Financial External Investment Pools.- The statement establishes fair value stai^ for governmental entities investments in interest-earning investment contracts, external investment ^Is. <j)en-end mutual funds. deN securities, and equity or equity-related securities with readily determinable fair values. Governmental entities will be required to report investments at fair (market) value on their financial statements, except for certain money market investments purchased with a remaining maturity of one year or less. The statement also changes revenue recognition, as all investment income, including changes m the fair value of mvestments. will be reported as revenue in the operating statement. The provisions of this statement are effective for fiscal years beginning after June 15. 1997, with earlier application encouraged Broker N otification - Law C hange Several years ago, a Minnesota Statute was passed that requir.d cities investing public funds to notify all brokers with which it mtended to invest idle funds of the Stale laws governing such transactions, as well as any additional investment policies that the city may have in place. The broker notification form created to ^ument thi^nderstanding was to be signed by the brokers prior to cities investing any funds with them, pw law aibwed that for brokers with which the city maintained an ongoing relationship, the notification form need only be completed once. Effective January 1. 1997. Minnesota cities are required to complete the broker notification process annually for all brokers with which they invest. -15-