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.