Agenda - Council - 12/11/1990 - Laserfiche WebLink

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City Council and Residents July 2, 1990 Disagreements With Management We have no disagreements with management concerning the applica- tion of accounting principles, accounting estimates, the scope of the audit, disclosures in the financial statements, wording of the auditor's report, or any other matter significant to the City's general purpose financial statements. 4. Difficulties Encountered in Performing the Audit We encountered no difficulties in dealing with management relating to the performance of the audit. Financial Condition of General Fund The City has improved its General Fund financial position over the past few years to a healthy level. An adequate level of fund balance such as yours is essential to providing working capital for your operations. As you can see from the enclosed graph entitled "Cash and Investment Flow" the level of cash flow is very sporadic because of the timing of tax and state aid receipts. This healthy fund balance is needed to support the City during the low months and is becoming even more important with the cutbacks we have experienced and can expect in state and federal aids. Delay in Audit Process and Issuance of City's Annual Financial Repor.t The timing of the 1989 audit and issuance of the financial report was unusually delayed this year. The major cause for the delay in our audit fieldwork was related to the computer crash which you encountered early in 1990. The information needed from your old computer system, a detailed general ledger and trial balance, which is vital to your staff in closing the year-end records, for preparing year-end accounting and audit schedules, and which is the focus of all of our financial audit work, was not available until June~ This situation caused a chain reaction of problems considering we were scheduled to perform your audit in April. This also caused a significant burden for your staff as they were working on fixing the computer problems, trying to provide information to us on a limited basis, installing a new computer system, and keeping up with the current day-to-day operations. Additional problems encountered included turnover of City staff, lack of software support for your old system, required manual transfer of finan- cial data base from your old system to the new system, and the need to completely reconcile the old system prior to setting up the new one.