Agenda - Council - 10/27/1998 - Laserfiche WebLink

Home

I I I I I I I I ! I CONSENT # TRANSFER OF THE CITY OF RAMSEY'S SELF-FUNDING INSURANCE PROGRAM FROM A TRUST AND AGENCY FUND TO AN INTERNAL SERVICE FUND Background: Based on the recommendation of the City of Ramsey's auditors, Malloy, Montague, Kamowski, Radosevich, & Co. P.A., following the completion of the year-ending 1997 audit, it was determined that the City's Self-Funding Insurance Program fit the classifications pertaining to an Internal Service Fund. Currently, the Self-Funding Insurance Program is under a Trust and Agency Fund. The Internal Service Fund classification should be used to account for the financing on a cost- reimbursement basis of goods or services provided by one department or agency to other departments or agencies within the same government. Some of the most common activities reported using Internal Service Funds are motor pools, purchasing and risk management activities. Thus, the City's Investment Program is currently in an Internal Service Fund, whereas the City's Self-Funding Insurance Program falls under this category. A Trust and Agency Fund is used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. The City's escrow accounts, which a developer or resident places an escrow in trust with the City, accurately fits the category of a Trust and Agency Fund. Council Action: Based on Auditors recommendation and the definition of an Intemal Trust Fund as outlined above, recommended that City Council authorize the transfer of the City's Self-Funding Insurance Program from a Trust and Agency Fund to an Internal Service Fund. Reviewed by: City Administrator Finance Officer CC: 10/27/98