1988 CAFR - Laserfiche WebLink

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BUDGETARY CONTROL. The City maintains budgetary controls to aid in compliance with the annual budget as adopted by the City Council. Formal budgetary integration is employed as a management control device during the year for the General Fund and Special Revenue Funds (excluding the Economic Development and Federal Revenue Sharing Funds). Budgetary control for Debt Service Funds is achieved through general obligation bond provisions. Budgetary control for Capital Project Funds is accomplished through the use of project controls. Budgetary control is maintained at the fund level through the issuance of purchase orders. Expenditures are monitored during the year, and any recommended adjustments to the budget are presented to the Council for approval. Unused appropriations lapse at year -end; however, the Council may approve carryover of specific items. INTERNAL CONTROL. It is the responsibility of the management of the City of Ramsey to establish and maintain an internal control structure to assure the assets of the City are protected from loss, theft, or misuse. In addition, the management is responsible to ensure that adequate accounting data are compiled to allow for the preparation of financial reporting in conformance with generally accepted accounting principles. The structure of internal control is designed to provide reasonable, but not absolute, assurance that these responsibilities of management are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management. FINANCIAL POSITION AND PROSPECTS FOR FUTURE YEARS. The financial position of the City has continued to be sound during the past year due to estimated revenues being realized or exceeded and as a result of financial managment by the various departments presented in this report. By operating within its budget the City continues to maintain sufficient fund balance levels. FUND BALANCES. Fund balances are used by the City in order to operate on a responsible financial basis. Major revenue sources, such as property taxes and intergovernmental revenues, are not received until late in the budget year; therefore, fund balances are used as a funding source for providing City services until current revenues are received. It must be recognized that fund balances are different from cash balances. Fund balances include assets and liabilities such as accounts receivable for revenue accrued but not received and accounts payable for expenditures that have been recorded but not disbursed. DESIGNATED FUND BALANCES. Portions of fund balances may be designated indicating tentative plans for uses of fund balances during future operating periods. During 1988 the following designations of fund balances were made in the City's funds: General Fund: Compensated Absences Working Capital Debt Service Funds: Debt Service vii $ 63,288 846.247 $909,535 $3.111.657