07-11-2011 Council Minutes - Laserfiche WebLink

Home Browse Search

MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, July 11, 2011 7:00 o'clock p.m. (3. 2010 COMPREHENSIVE ANNUAL FINANCIAL REPORT, Continued) GASB No. 61 relates to the financial reporting entity and becomes effective in 2013. It does modify some previous requirements for inclusion of component units such as the City's HRA. The method for including the HRA will need to be re- evaluated. GASB No. 62 relates to the codification of accounting and financial reporting guidance and becomes effective in 2012. This will potentially impact accounting policies followed by the proprietary funds such as water, sewer, storm water, and internal service funds. Hoffman noted the City received the GFOA Certificate of Achievement for Excellence in Financial Reporting for 2009. Franchot noted sometimes in the audit report they refer to taking a test sample. Franchot asked if they are also making any projections to the whole financial picture. Popenhagen stated the audit is a combination of both and that they also do some projections on revenues, particularly in the enterprise funds. Franchot asked how big of a sample they test. Franchot asked whether they only test 10 percent and not the other 90 percent. isPopenhagen indicated that is not necessarily true. When samples are pulled, they are looking at basically controls of approval and supporting documentation for the selected transactions.. Based off of that sampling, a financial analysis will be done on the other 90 percent. Printup inquired as it relates to the dollar amount threshold mentioned in the report, what that means for a city of this size. Franchot commented it relates to a segregation of duties and that the auditor made a recommendation that certain expenditures should be approved by the council. Franchot noted there was no number attached to that and that Council Member Printup's question related to whether that should be a $500 limit or a $25,000 limit. Franchot asked whether a double signature system would meet those requirements. Popenhagen stated a two signature system would work and that typically city councils approve individual transactions over $5,000. Olson noted Staff currently brings any expenditure over $5,000 to the council for approval. McMillan noted the audit also found that the city's accounting manual is very outdated and that it is something the City should look at updating. Popenhagen recommended the manual be reviewed periodically. The City is about two years in on the current accounting system and some processes have changed during that time. The Council will have to make some decisions about how much authority they would like to delegate as well as possible changes to some of the funds. The City Council took no formal action on this item. Page 3 of 19