07-08-1996 Council Packet - Laserfiche WebLink

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To the City Council are! Citizens of the City of Orono May 29, 19% Financial Information The management of the City is responsible for establishing and maintaining a system of internal accounting control. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing financial statements in conformity with generally accepted accounting principles and maintaining accountability for assets. The concept of benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within this framework for the purpose of adequately safeguarding assets and providing reasonable assurance in the proper recording of fmancial transactions. The City maintains budgetary controls to aid in compliance with the annual budget as adopted by the City Council. Formal budgeury integration is employed as a management control device during the year for the General Fund and Special Revenue Funds. Budgetary control for Debt Sen ice Funds is achieved through general obligation bond provisions. Budgetary control for Capital Project Funds is accomplished through the use of project controls. Budgetary control is maintained at the department level through the issuance of purchase orders. Expenditures are monitored during the year, and any recommended adjustments to the budget are presented to the Council for approval by City management. Unused appropriations lapse at year-end; however, the Council may approve carryover of specific items. The financial statements and schedules included in the Financial Section of this report reflect the City’s continued adherence to sound financial management. General Fund The General Fund is the general operating fund of the City and is used to account for all fmancial resources except those required to be accounted for in another fund. General fund revenues for 1995, totaled $3,422,407, an increase of $138,812 or 4.2% over the prior year. Expenditures, including transfers, totaled $3,196,264, an increase of $93,669 or 3.0% over 1994 levels. The undesignated fund balance of the General Fund increased from $1,248,592 at December 31, 1994, to $1,515,788 at December 31, 1995, or 21.4%. The 1995 ending undesignated fund balance provides 45.3% coverage of the 1996 adopted budget of $3,347,755. -7-