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Home My WebLink About2007 Audit Review May 13, 2008 r 2007 Audit Review City of Oak Park Heights, Minnesota May 13, 2008 David J. M01 Member of HLB International 1 RU_ Taaatgea Redpatti. Ltd_ Reports Issued ♦ Opinion on financial statements ♦ Report on Compliance with Minnesota Statutes ♦ Report on Internal Control ♦ Management / Audit Committee Letter Member of HLB International 2 Tautgas FRacdpatft. Ltd_ Annual Financial Report ♦ The financial statements are the responsibility of management ♦ The role of the Independent Auditor is to report on the fair presentation of the financial statements ♦ Audit standards followed: — GAAS — GAGAS ♦ "Clean opinion" on the 2007 financial statements Ica. Member of HLB International 3 • Ta...c nea asr., Financial Results Governmental Business -type Activities Activities Expenses $3,299,000 $1,182,000 Less charges for services (755,000) (1,334,000) Less operating grants and contributions (143,000) Less capital grants and contributions (11,000) - Net expenses funded by property taxes and other sources (2,390,000) 152,000 Property taxes 2,731,000 - Unrestricted grants 111,000 - Investment income 533,000 60,000 Other 37,000 - Interfund transfers (329,000) 329,000 Total general revenues 3,083,000 389,000 Increase in net assets $693,000 $541,000 Member of HLB Intemational 4 Tautges RadpatF�, Ltd_ Budget Performance ♦ General Fund Budget Actual Variance Revenue $3,363,000 $3,426,000 $63,000 Expenditures 2,717,000 2,519,000 198,000 Revenue over expenditures 646,000 907,000 261,000 Transfers out (567,000) (694,000) (127,000) Net increase in fund balance $79,000 $213,000 $134,000 Member of HLB International 5 Tautges Radpatl-s� Lid_ General Fund Reserves General Fund Balance December 31, 2006 2007 Designated for: Cash flow $1,237,000 $1,698,000 Contingent employee benefits 141,533 183,000 General contingency 439,000 595,000 Subtotal - designated 1 2 Undesignated 286,210 39,620 Total fund balance $2 $2,515 Member of HLB Intemational 6 Tautges F:sclpatti. Ltd_ Capital Project Funds December 31, Increase Fund 2006 2007 (Decrease) comments Capital Revolving $723,527 $791,554 $68,027 Budgeted Projects and Equipment Revolving 1,033,981 931,631 (102,350) see later comments 2007 expenditures include land purchase ($294,000), park shelter ($118,000), Trails Park Development 769,057 485,002 (284,055) ($125,000) Street Reconstruction 688,138 951,872 263,734 receives annual transfer from Water and Renewal and Replacement 2,928,984 3,243,027 314,043 Sewer in amount equal to depreciation Brekke Park Memorial 350 368 18 Water Tower Rental 57,573 86,590 29,017 Oakgreen Avenue Utilities - - - Novak Avenue Street and Utility Improvements - - - 2007 expenditure was $377,000. Funded Water Tower Rehabilitation - (214,813) (214,813) by transfer from Water fund of $160,000. Sanitary Sewer Connection 476,280 479,286 3,006 Water Connection 667,284 718,130 50,846 Storm Sewer Connection 882,414 915,153 32,739 Well Rehabilitation - 24,950 24,950 Sewer Rehabilitation - 68,134 68,134 Totals $8,227,588 $8,480,884 $253,296 Member of HLB International 7 'f"autgss FRaclpatF%. ILtcd_ Water Uti $700,000 Water Operating Revenue & Expense $600,000 -- - - I $500,000 - -- -- I M Transfer Out $400,000 T- - M Depreciation M All Other Expenses M Contractual Services =Personal Services $300,000 - t Operating Revenue j $200,000 -- - $100,000 - -- -- - -- - $0 +- -- - 2001 2002 2003 2004 2005 2006 2007 Member of HLB Intemational 8 Tautgas RadpatFs� Ltd Sewer Utility $800,000 -- - - Sewer Operating Revenue & $700,000 - - - - - -- Expense $600,000 - - -- - - -- I i $500,000 - -- ® Transfer Out M Depreciation M Personal Services $400'000 ! - - -- -- M All Other Expenses O MCES t Operat Revenue $300,000 - -- - — $200,000 - — - - $0 - -- T - 2001 2002 2003 2004 2005 2006 2007 Member of HLB Intemational 9 'Tautgaa Radpa�F.� Ltd_ Storm Sewer Uti $80,000 - - - - - Storm Sewer Operating a Revenue & $70,000 - - - — Expense I $60,000 - - $50,000 - - - - - =Transfer Out All Other Expenses $40,000 - -- - - - =Contractual Services O Personal Services --*- Rev enue $30,000 rt - $20,000 - - - - I $10,000 -- - - - - - $0 - - - - 2001 2002 2003 2004 2005 2006 2007 Member of HLB Intemational 10 Tautges R ®dpatt�. Ltd_ Sanitation Util Refuse Transfer Refuse Collection Revenue as a from Net Collection Expenditures/ Net Percent of General Income Year Revenue Expenses Cost Expenditures Fund (Loss) General Fund: 1992 $66,076 $251,121 ($185,045) 26% $ - $ - 1993 103,039 297,452 (194,413) 35% - - 1994 108,310 326,926 (218,616) 33% - - 1995 110,021 334,053 (224,032) 33% - - 1996 103,444 326,036 (222,592) 32% - - 1997 87,830 298,842 (211,012) 29% - - Enterprise Fund: 1998 93,014 309,051 (216,037) 30% 190,400 (25,637) 1999 71,585 169,210 (97,625) 42% 65,000 (32,625) 2000 87,434 175,164 (87,730) 50% 84,000 (3,730) 2001 97,575 184,179 (86,604) 53% 83,000 (3,604) 2002 98,030 182,575 (84,545) 54% 88,500 3,955 2003 97,970 181,013 (83,043) 54% 88,500 5,457 2004 96,909 167,258 (70,349) 58% 88,500 18,151 2005 96,876 164,572 (67,696) 59% 88,500 20,804 2006 97,266 147,565 (50,299) 66% 88,500 38,201 2007 98,159 153,848 (55,689) 64% 76,800 21,111 Member of HLB International 1 1 Tautges RsdpstFs� Ltd State Compliance Report ♦ Required by Minnesota Statute §6.65 ♦ OSA established a task force to develop audit guide for legal compliance ♦ Audit guide covers seven categories 1) contracting and bidding 2) deposits and investments 3) conflicts of interest 4) public indebtedness 5) claims and disbursement 6) other miscellaneous provisions 7) Tax increment provisions ♦ No findings of noncompliance for 2007 Member of HLB International 12 � T %+*s•. Rsdpalh. Lld. Report on Internal Control ♦ Three internal control findings reported — Segregation of duties — Financial statement preparation — Audit adjustments Member of HLB International 13 Tautgas RedpatF. Ltd_ Communication to Those Charged with Governance • Audit firm responsibility under U.S. audit standards. • Planned scope and timing of the audit. • Significant accounting policies. • Accounting estimates. • Difficulties encountered in performing the audit. • Audit Adjustments. • Disagreements with management. • Consultations with other auditors. • Issues discussed prior to retention of auditor. Member of HLB International 14 � Tautgss R4Wdp4Nt1+, Ltd. Recent Standards ♦ Audit standards — SAS 104 to 111 Risk Assessment — SAS 114 Auditor Communication to those Charged with Governance ♦ Accounting standards — GASB 45 Other Post Employment Benefits r Member of HLB International 15 � Taaatgas ReclpatFs Ltd_