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HomeMy WebLinkAbout1985-02-11 85-115 RESOLVE85-115 Introduced by Councilor Willey, February 11, 1985 CITY OF BANGOR ITEILEJ YaWI ref Assign to the Council Research and Review Group the Review of the 0 t ideAud [ Cements ,,,o Accounting_fo Reserves Ey W City ComN plGu Cky pfBayppr: RESOLVED, That the, Council Research and Review Group review the Peat, Marwick and Mitchell Co. consents on Ranger's method for Accounting for Reserves As contained in their Management Letter of August 31, 1 and report to the City Council possible alternatives, or lack of, in [hi f�$ so, no later than first City Council meeting of April, 1985. Copy of the auditors torments attached. BS -115 IV C1TY ccvRllc a 6 S O L V E FeCxva[y 11, 1985 Assign to the Council Research and Review Group Indefinitely Postponed by the the Review of the Outside Auditors CoMRnts on `following yea and no votes. ACCountins for Reserves. Courcilois voting yes: Damn, Cox, Davis, Gass, and Mcca[thy. Councilors voting no: T311ey /Qfj� and Wheeler. Councilors absent: Frankel and Willey. Apgdd L�inn 3 y deleting "1985" and adding "1986". uu C T Cl cleRK The Honorable Mayor, City Council and City Manager 85-115 August 31, 1984 Page 2 Authorization of Payroll We noted numerous instances where weekly payroll jackets were plot signed by the department heads. The weekly jackets contain information on hours worked and evidenex of review assigns responsibility and clears exceptions of the time claimed by employees. This weekly payroll information should be reviewed and documented before being processed. Fixed Assets We recommend that the City take a periodic inventory of City property to facilitate proper stewardship and the implementation of a system to monitor Purchaseand disposals. Cur ently� 8n: City doe not have formal procedures to account for disposals of assets or to delete costs associated with infrastructure replacements - Accounting for Reserves She City presently hasreserve accounts for such Stems a automotive, bus service and fir equipment replacement. Them cots a carried on the City's financial statements as designated e fund balance. Me City's practice is to increase theea by charges to departmental accounts and decrease the - reserves directly as purchases are made. This present system does not follow generally accepted accounting principles nor the method followed by most municipalities. We believe that the City should revise its pre systemc of accounting for these items so that additions to the reserve and purchases from the reserve are identified as period costs and shown as such on the City's statement of revenues, s expenditures and Changes n fund balance rather than a a direct charge to fund balance (See presentation of operating results on previous page). Selected city officials have inquired as to whether the balances in the City's reserve accounts are excessive a compared to other municipalities. Balances in reserve accounts vary nr widely among v municipalities depending upon their financial strength and expected futureneeds. In order to judge the adequacy or sof the City's r recommend that the City son,..ate thecurrent ent state of .their equipment and their proposed needs during the next five to ten years. Implementing Management Letter Comments The implementation of changes recommended in this letter can be facilitated if eagement and Council: Consider and establish priorities for implementing the chance. Develop an overall plan and marked of implementation that reflects the priorities. Assign the responsibility for carrying out each change to a specific individual.