HomeMy WebLinkAboutAgenda Report - December 18, 1985 (70)Following introduction of the matter by City Manager
Peterson Finance Director Robert Hohn presented, for
Council's perusal, the 1984-85 Annual Audit and Management
Letter as subadtted by the audit firm of Ernst and
Whinney. Comments regarding the Management Letter were
provided by Librarian Leonard Lachendro and Finance
Director Holm.
Following discussion, with questions being directed to
Mr. Holm, Council., on motion of Mayor Pro Tempore Reid,
Hir_chman second, received for fiiinq the 1984-85 Annual
Audit and Management Letter as suh-pitted by the audit
firm of Ernst and TMiinney.
COUNCIL COMMUNICA'10N
T
TO "HE CITY COUMCIL DATE k1o.
FRO&A: THE CITY MANAGER'S OFFICE December 10, 1985
SUBJ'EC": ERNST & WHINNEY AUDIT AND MANAGEMENT LETTER FOR 1984-85 FISCAL YEAR
A
A Attached for Council acceptance is the 1984-85 .1nnual Audit and
Management Letter, as submitted by the audit firm. of 1.rnst, & Whinney.
I have also attached comments on the Management Letter from
Finance Director -City Treasurer, Robert H. Holm.
TO: Thomas A. Peterson, City Manager
FROM: Robert H. Holm, Finance Director
DATE: December 10, 1985
SUBJECT: E & W's MANAGEMENT LETTER - 1984-85
Attached are ten (10) copies of the above subject letter. I have
retained an additional two (2) copies for our files. Distribution in
past years has been as follows:
5 - City Council Members
1 - City Manager
1 - Assistant City Manager
1 - City Clerk
2 - Extra
In the past, Council has formally accepted the Management Letter for
filing at one of its regular meetings.
I have reviewed the letter with E&W and Finance staff, and wish to
offer the following comments.
Robert H. Holm
Finance Director
City Treasurer
CITU' OF LODI
City Manager
December 10, 1985
Comments - Management Letter 84-85-
attachment
4-85attachment
Officals' Expenses
In the past, the contingent fund has been used for cash
advances for travel. I certainly concur with the auditors' comments
regarding the establishment of an alphabetic subsidiary ledger, and I
have instructed staff to proceed with the installation of these.
Full documentation of all expenses, whenever possible, should be
provided.
Inventor
The Public Works Director, Electric Utility Director and
myself are studying the feasibility of centralized purchasing, as per
your letter of October 4, 1985, establishing the committee. The
areas we are examining are not only centralized purchasing for all
City departments, but also material handling, computerized inventory
controls and sale of scrap material.
Recordkeeping and Reporting
To comply with the auditors' comments, our staff will
prepare summary work sheets at year-end of all operating transfers.
This should also be included in the client's preparation package
distributed by the auditors prior to their visit at year-end. We
have already established separate accounts for prior year's revenue
and expenditure accounts to facilitate year-end closing and
preparation of reports.
Centralized Accounting
I agree with the comments regarding centralized
accounting for receipts, disbursements and other finance activities
for all City departments. It not only falls under the concept of
Generally Accepted Accounting Principles (G.A.A.P.), but also is
provided for in the California Government Code. The City Council has
the legislative authority to appoint a City Treasurer whose duties
are set forth in government code sections 41001 through 41005, and
include the receipt, disbursement, deposit (investing), and monthly
reporting of all money coming into the treasury.
Grants
The Finance staff is presently reviewing all
reimbursement requests regarding various grants and are making sure
requests are reconciled to the general ledgers.
DECEMBER 109 1985
T0: CITY COUNCIL
FROM: CITY LIBRARIAN
SUBJ: AUDITOR'S REPORT Or SEPTEMBER 2'/1, 1985
The Assistant City manager has asked me to comment on that portion
of the auditor's report which pertains to the Library. The auditor
has recommended 't... integrating the library recordkeeping into the
central City systema"
The Finance Department currently makes all deposits into the Library
Fund, reconciles the Library Fund's bank statements, files the can-
celled checks, and handles the Library's payroll. The Library Board
draws checks to vendors from the Library Fund.
As a municipal library in a general law city, our Library operates
urOer the requirements of the Education Code, Sections 18900-18965.
Section 18953 stipulates that the President and the Secretary of the
Library Board shall sign the checks drawn on the Library Fuzid.
Even though the Library has operated efficiently for seventy-eight
years in this manner and has passed every audit without problems,
I have agreed to meet with the Finance Director to explore the pos-
sibility of a legal and efficient; way to fully integrate the Library's
financial procedures with the City's. Obviously, the Library Board
would have to authorize any changes in the Library's procedures.
Respectfully sul-itted9
Leonard L. Lachendro