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<br />· Government auditing standards included no internal control findings and there were no <br />instances of non-compliance to report. <br />· Legal compliance included two findings: <br />o Payment to contractors: Language is required in the City's contracts that prime <br />contactors must include language in the contract with their subcontractors stating <br />that once the City pays the contractor it is being passed on to their subcontractors. <br />This is not an uncommon finding. <br /> <br />Finance Officer Lund explained this finding was in relation to the municipal <br />center contract; it was not included with the bidding documents. <br /> <br />Councilmember Elvig asked if there would also be language required showing <br />proof of lien waivers would go to subcontractors as well. <br /> <br />Mr. Nielsen replied he is not aware specifically of any lien language <br />requirements. <br /> <br />o Coverage of excess deposits: One account was in excess by $3,000; since then <br />that account has been closed entirely, and this was really an issue oftiming. <br />o Payment of invoices: Statute requires the City to make payments to various <br />vendors within 30 days. The City has difficulty in tracking the timing of the <br />original invoices and the approval channels and getting them to the Finance <br />Department in time to have the invoice paid. This is not significant, and there <br />were isolated instances, but the various departments should be reminded they <br />need to keep the invoices moving. <br />· Audit comments were very positive with regards to changes made and the segregation <br />of duties in the Finance Department. Also, this year the City undertook the <br />responsibility for preparing the financial report, which is a very positive change. <br /> <br />Mr. Nielsen indicated the audit is conducted on the accuracy of past transactions; however, the <br />City should monitor on an ongoing basis the bonded debt per capita. <br /> <br />Councilmember Elvig requested the Council have an opportunity to further review the financial <br />audit reports and discuss them at a future work session. <br /> <br />Mr. Nielsen provided an overview of the City funds, including the following: General Fund; <br />Sources of Revenue; Utility Funds. <br /> <br />Finance Officer Lund indicated the Consent Agenda in the regular Council meeting includes <br />acceptance of the 2005 Comprehensive Annual Financial Report. She explained this report is <br />considered when the City goes out for bonding; the City's bonding is currently A-I. <br /> <br />Mayor Gamec commended Finance Officer Lund and Finance staff for their work. <br /> <br />MAYOR, COUNCIL AND STAFF INPUT <br /> <br />Schedule Special Citv Council Meeting <br /> <br />City Council Work Session / June 27, 2006 <br />Page 2 of3 <br />