Agenda - Council - 11/25/1981 - Laserfiche WebLink

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IAr~ H. S~^T~ Atn)rro~ I I STATE OF /~INNESOTA OFFICE OF TIlE ST^TE AUDITOlq SAINT PAUL 55103 October 22, 1981 I I I I I I I I I I I I Independent Public Accountants: The Office of the State Auditor has reviewed all available city audit reports for the 1980 fiscal year using a quality review checklist. The reviews of your city audit report(s) for cities of over 2,500 in population are enclosed for your use in the improvement of future financial statements. The data from these quality reviews has been accumulated for computer analysis and the results will be shared with the GovernmeNtal Accounting Committee of the Minnesota Society of CPAs. The Governmental Accounting Committee plans to write an article for the Footnote early next year based on this data. We understand the City Quality Review Subcommittee, of the Governmental Accounting Committee, plans to review the 1981 reports using lgSO as a reference point. Substandard 1981 reports showing a lack of significant improvement over 1980 will be referred to the Governmental Accounting Committee for whatever action is deemed appropriate. Firms with two or three unsatisfactory answers on this year's audit report need not be too concerned, except in the case of major items such as not having all the required financial statements present. One common error occurred on question I-2, concerning the appropriate basis of accounting for all funds. The proper basis of accounting for governmental funds, includino capital projects and special assessment funds, is the modified accrual basis of accounting. The Minimum ReDortino Requirements, a publication of this office based on an NCGA Statement 1 exposure draft, refers to the accrual basis of accounting for capital projects and special assessment funds, which is not appropriate. This office recommends using the NCGA Statement 1 approach for these funds, which is the modified accrual basis of accounting. For those firms which received several negative answers in the quality review checklist, this office strongly recommends attendance at the Advanced City Audit training course offered by the Governmental Accounting Committee of the Minnesota Society of CPAs. This eight hour course will be held December 9, 1981 in Bloomington. Contact the Minnesota Society office for details on this and other training courses. If you have any questions about this reporting checklist, please call Ed Fuller of this office at (612) 297-3683. Air~k,~.n cerel Y' H. Ca / sol1 State Auditor Enclosures AN EOUAL OP UNITY EMPLOYER