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Winnebago receives favorable audit report

By Staff | Jul 19, 2009

An annual audit shows Winnebago officials made improvements, must continue to improve and the city is financially sound.

Morey Schaefer of Abdo, Eickp & Meyers told the City Council the city’s assets exceed its liabilities by $8.5 million.

Of this amount, he says, $3 million are unrestricted net assets that may be used to meet ongoing obligations to citizens and creditors.

Other good news was the taxes per capita ratio.

In 2007, city taxes were $211 per capita, while the peer group — other Minnesota cities — was $381.

The amount shows how dependent the city is on tax dollars to fund operations.

“Comparatively, our taxes are lower than our peers. The previous councils have done an excellent job keeping taxes down,” says Councilman Chris Ziegler.

The audit also notes that the unreserved fund balance for the general fund was $423,161, or 45.5 percent of the fund’s total expenditures. It also represents 42.4 percent of the 2009 budget.Schaefer says the State Auditor’s Office and League of Minnesota Cities recommends having 35 to 50 percent of planned expenditures.

Although improvements have been made since the last audit, four areas still needed to be addressed.

Schaefer says segregation of duties is limited for payroll, disbursements, cash receipts, utility billing and investments.

“It has been a finding for years and years because of limited office (staff) size,” says the auditor.

In an ideal situation — four employees would perform record-keeping, custody, reconciliation and authorization duties, says the audit.

According to the audit, the city’s limited segregation increases the likelihood of fraud.

Internal control over payroll was another concern identified by the audit.

All duties are handled by the deputy city clerk.

Schaefer says improvements have been made since last year. He says checks are now locked in a cabinet in the city administrator’s office and pay increases, time cards and printed checks are reviewed by the administrator.

“While we recognize staff is not large enough to eliminate this deficiency, it is important that the council is aware of this condition and monitor all financial information,” the audit says.

The city is doing a better job with disbursements and cash receipts.

The council now reviews and approves expenditures and regular review of financial statements.

The city administrator also is more involved in approving all expenditures and checks the work of the deputy city clerk.

Again, since 2007 preparation of financial statements continues to be an internal control deficiency, says the audit.

Coding changes and reclassifying amounts to funds were made to correct a material weakness — significant deficiencies that result in mistakes likely not being prevented or detected by the city’s internal control.

Despite the deficiencies, Schaefer says the deputy city clerk has done a good job in working with city finances in her first year.

In other business, the council:

• Approved a request to extend a balloon payment of $20,350 for Zierke Built Manufacturing over three years. The amount was due July 1.

In making his request, Greg Zierke told the Economic Development Authority he needs the extension because of present economic conditions.

• Accepted a $2,000 grant check from CenterPoint Energy to buy nine pagers for the fire department.

• Approved a Kaduce Plumbing and Heating low lid of $5,285 for a pool heater.