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CITY OF MISSOULA, MONTANA Audit Exit Conference Year Ended June 30, 2009 Presented January 20, 2010 ---PAGE BREAK--- Presentation Outline • Acknowledgements • Scope of Audit • Summary of Audit Results • Financial Statement Highlights • Internal Controls and Compliance • Management Comments • Audit Committee Communications • Component Units • Looking Forward ---PAGE BREAK--- Audit Scope • U.S. Generally Accepted Auditing Standards • Government Auditing Standards • Single Audit Act/OMB Circular A‐133 • All City Funds • Component Units – Missoula Parking Commission – Missoula Redevelopment Agency – Business Improvement District ---PAGE BREAK--- Summary of Audit Results • Clean opinion on financial statements • Two internal control findings considered to be material weaknesses over financial reporting • No internal control or compliance findings related to major federal programs ---PAGE BREAK--- Financial Statement Highlights • Government‐Wide Net Assets • Governmental Funds Fund Balances • Revenues • Expenses • Mill Levies • Taxable Values • Debt Margin ---PAGE BREAK--- Net Assets ‐ 50,000 100,000 150,000 200,000 250,000 2003 2004 2005 2006 2007 2008 2009 Net Assets by Fund Type (000) Governmental Business‐type ---PAGE BREAK--- Net Assets ‐ 50,000 100,000 150,000 200,000 250,000 2003 2004 2005 2006 2007 2008 2009 Net Assets by Category (000) Investment in Fixed Assets Restricted Unrestricted ---PAGE BREAK--- Fund Balances ‐ 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2003 2004 2005 2006 2007 2008 2009 General Fund Other Funds ---PAGE BREAK--- Revenues ‐ 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 2003 2004 2005 2006 2007 2008 2009 General Revenues by Source (000) Taxes Intergovernmental Interest Annexation/Devel Contribs All Other ---PAGE BREAK--- Revenues Taxes 68% Intergovernme ntal 30% Interest 1% All Other 1% 2009 General Revenues ---PAGE BREAK--- Revenues ‐ 5,000 10,000 15,000 20,000 2003 2004 2005 2006 2007 2008 2009 Program Revenues (000) Charges for Services Operating Grants Capital Grants ---PAGE BREAK--- Expenses ‐ 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2003 2004 2005 2006 2007 2008 2009 Expenses (000) Gen Gov't Safety Works Health Soc/Econ Culture/Rec Housing/Dev Interest Other Wastewater Aquatics ---PAGE BREAK--- Expenses General Government Public Safety Public Works Public Health Soc/Econ Culture/Rec Housing/Dev Interest Wastewater Aquatics 2009 Expenses ---PAGE BREAK--- Mill Levies ‐ 100.00 200.00 300.00 400.00 500.00 600.00 700.00 800.00 2003 2004 2005 2006 2007 2008 2009 Tax Levies City County Schools State Urban Trans ---PAGE BREAK--- Taxable Values ‐ 20,000 40,000 60,000 80,000 100,000 120,000 2003 2004 2005 2006 2007 2008 2009 Taxable Values (000) City w/o Increment Tax Increment ---PAGE BREAK--- Debt Margin ‐ 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 2003 2004 2005 2006 2007 2008 2009 Debt Margin (000) ---PAGE BREAK--- Other Post‐Employment Benefits • Accounting and disclosure requirements implemented in 2009 (see Note G‐3) • Relates to health benefits provided to retirees and the implied premium subsidy • Net OPEB obligation was $499,000 for 2009 • Actuarial valuation of unfunded OPEB liability is $5.4 million ---PAGE BREAK--- Internal Controls & Compliance • Financial Statement Level – Two material weakness findings related to taxes receivable and capital assets – No material noncompliance • Major Programs – No significant deficiencies or material weaknesses – No material noncompliance ---PAGE BREAK--- Management Comments • Aquatics point of sale log‐in controls • Review of manual invoices • Long‐term debt schedules • Classification of grant expenditures ---PAGE BREAK--- Governance Communications • Auditor Responsibilities • Planned Scope and Timing • Accounting Policies • Significant Audit Findings • Difficulties in Performing the Audit • Corrected and Uncorrected Misstatements • Other Information in the CAFR • Disagreements with Management • Management Representations • Consultations with Other Accountants ---PAGE BREAK--- Component Units • Missoula Redevelopment Agency – Clean opinion on financial statements – No internal control or compliance findings • Missoula Parking Commission – Clean opinion on financial statements – No internal control or compliance findings ---PAGE BREAK--- Component Units • Business Improvement District – Included in CAFR as a discretely‐presented component unit – No separate report issued – No material internal control or compliance findings – Prior year management letter comments were implemented ---PAGE BREAK--- Looking Forward • The recession has hit Missoula big time • ARRA funds will be subject to audit in 2010 • Change in permissive levy for health benefits will affect 2011 (SB 491) • New rules for fund balance reporting will be effective for 2011 (GASB 54) ---PAGE BREAK--- QUESTIONS?