FY 2006-2007 Comprehensive Annual Financial Report
|Meeting Date:||Novmeber 20, 2007||Primary Staff Contact:||Lee Tuneberg|
|Secondary Dept.:||Secondary Contact:|
|Approval:||Martha Bennett||Estimate Time:||15 minutes|
|Should the City Council accept the Comprehensive Annual Financial Report as recommended by the Ashland Audit Committee?|
|The Audit Committee recommends acceptance of the Comprehensive Annual Financial Report for FY 2006-2007 and staff concurs.|
|The Audit Committee has met with staff and Pauly, Rogers and Company, P.C. to review and accept the annual audit for the fiscal year ended June 30, 2007. The committee's report can be found in the annual financial report on page xv and the auditor opinion on page 3.
The Comprehensive Annual Financial Report (CAFR) is prepared annually as part of the state-required audit by an independent, certified and municipally licensed auditor. In Ashland, the auditor reports to the Audit Committee established by the Council. The committee receives the auditor opinion, management letter and annual financial reports (including the Parks Commission Component Unit Financial Report) prepared by staff. When satisfied with the reports and related information, the committee forwards the report to Council with a recommendation to accept.
The auditor gave an unqualified opinion again this year and found three reportable conditions to include in a management letter for fiscal year 2006-2007. The three conditions that the auditors noted are included in the attachment titled "Management Report."
The Administrative Services Department's responses to the Management Report comments are attached as well. The issues raised are being acted upon at this time and our goal is to clear the comments in this fiscal year.
New requirements for financial reporting and government auditing are imposed each year. The City has complied with implementing Governmental Accounting Standards Board Statement 34 (GASBS), which required changes in the financial reporting model, in FY 2002-2003 and FY 2003-2004 with fixed assets fully included the second year. The City implemented GASBS 44 in FY 2004-2005 to include more financial and economic trending information in the Statistical Section of the report and Parks did in FY 2005-2006. Work on GASBS 45 relating to enhanced disclosure on future liabilities for post retirement benefits has been in process for months with compliance on schedule by next year.
The City, Parks, and the auditor face new requirements that have evolved from changes in the private sector precipitated by ENRON scandals and subsequent legislation like Sarbanes Oxley. These new standards for auditing and reporting are being implemented in the municipal sector and probably are a challenge for all government agencies. The Management Report prepared by the auditor provides a good overview of these new and coming changes. Council will note in the Management Report and draft minutes of the Audit Committee meeting on 10/29/2007 that these issues have been discussed, and City staff is taking steps toward compliance.
Most important during this coming year will be addressing internal controls and communication on the audit as identified in the Management Report. Council will discuss these issues in late January or February as staff brings forward recommendations on important policy changes and procedural documentation. This will take a concerted effort by the Council, Administration, City Recorder and Administrative Services departments and will probably impact all departments and divisions.
The City is responsible for completeness and accuracy of the annual report. The auditor reports are included in the document and presented on their letterhead. These reports attest to the City's compliance with Oregon Budget Law and federal reporting requirements.
The annual report includes a section on pages 5 through 16 called Management's Discussion and Analysis (MD&A) that is intended to provide the reader with a basic understanding of the financial condition and change over the year audited. Please read the MD&A and Notes section to get a general understanding of the financial information provided. Unless otherwise indicated, financial references relate to the City and do not incorporate Parks & Recreation information.
From an overview perspective, the City remains in a good financial position with the net assets increasing slightly ($887,418) to $105,372,602.
Total City assets are down $1.2 million which includes:
1. $1.466 million less in cash & investments (a minus)
City-wide current payables (liabilities) are down $82,000 and long-term liabilities (claims payable and debt) is down $2.1 million.
The net result approximates the $887,418 increase. In general, the City used cash to pay for projects (that added to net fixed assets) and debt service (to reduce liabilities).
The Parks and Recreation Commission net assets decreased approximately $470,000 primarily due to less cash on hand at the end of the year having paid for some operations with reserves as budgeted.
The financial report indicates the City is doing well. Consistent with prior years, most funds are doing well when considering fund balances. As discussed throughout the recent budget process, balancing revenue streams with the cost of services will be difficult in funds reliant upon taxes (General, Street and Parks funds) and funds that include capital improvements funded through rates, fees, taxes and borrowing (Street and all enterprise funds). However, funds with ending fund balances beyond targets will be able to offset future costs like the Telecommunications Fund and Central Services Fund.
Changes in Ending Fund Balances (Adopted and Actual) for all funds can be viewed on pages 106-107. Other key places to look within the document are:
|Related City Policies:|
|City of Ashland Financial Management Policies, Budget Document Appendix|
|Council may accept the Committee's report and the annual report as presented, recommend modifications as discussed or defer acceptance (takes no action) awaiting further information or clarification.|
A. Council moves to accept the Audit Committee Report and the Comprehensive Annual Financial Report for the fiscal year ended June 30, 2007 as presented.
|Attachments: Click on the PDF file below to view the following attachments:|
FY 2006-2007 Comprehensive Annual Financial Report