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Emily Council Hears Audit Report

Web posted July 9, 2019
By Bill Monroe, Northland Press Correspondent

(Editor’s Note: The following article was written from the unapproved minutes of a meeting of the Emily City Council held on Tuesday, June 11, 2019 as provided by the city clerk.)

The Emily City Council heard good news from the city’s CPA firm when it met in regular session June 11. Members present included Mayor Roger Lund and council members Bryce Butcher, Wesley Friesner, Gerhart Hanson, and Bill Spiess. Also present were City Auditor Chris Clasen, City Attorney Tom Pearson and City Clerk and Treasurer Cari Johnson.

Clasen, of Justin, Clasen & Company, presented the city’s final 2018 audit, including a financial summary and the auditor’s findings. The city’s records were in good order, available, and complete; the financial statements were fairly stated; and no compliance issues were noted in review of laws, regulations, contracts and grant agreements. The general fund balance decreased by $162,283 to end at $1,387,321 for 2018. The 2018 year-end general fund balance represents 102 percent of the next year’s expenditures, which is a healthy fund balance and able to handle fluctuations in state aid and property tax collections.

The cash balance of the governmental funds was $1,705,509. Of the total governmental funds, $606,589 is either restricted, committed, or assigned for a specific future projects. Unassigned funds of $1,098,920 are available to dedicate to future projects and road construction. Governmental fund receipt percentages were: 75 percent property taxes, 10 percent intergovernmental, five percent special assessments, three percent licenses and permits. Governmental fund disbursement percentages were: 20 percent general government, 14 percent public safety, 15 percent streets and highways, 29 percent capital outlay. Disbursement percentages were not standard due to the purchases of a snowplow truck and property and completion of road projects.

The net position of the sewer fund was negative $49,877. The wastewater treatment plant loan payment is quite high. The end of year sewer fund balance was $173,778, but the balance will continue to decrease. Clasen stated the council will need to look at options in three to five years.

Clasen stated the noted internal control deficiencies are not uncommon for a city of Emily’s size, but need council attention. One noted deficiency is the city does not have enough staff to segregate the five functions of accounting. The council needs to diligently review bank statements, bank reconciliations, receipts, and disbursements. The other noted deficiency is the preparation of financial statements and related notes. The city has outsourced preparation of the financial statements to the city auditor. To remove the deficiency financial statements would need to be prepared by city staff and the auditor would complete two pages of the report. Clasen anticipates the deficiency will be removed in a year or two after staff have more experience. The city removed three deficiencies from last year.

There were no noted disagreements with management and no material journal entries. With the change in clerk in 2018 the auditors tested more and took more time. Clasen reported everything was in good working order and the council did a very good job with the choice of personnel.

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