Audit Report for 2013

Results of the City’s annual audit and the 2013 financial statements will be presented at the May 20 city council meeting.

 

The Colorado Revised Statutes require local governments to have an annual audit to provide assurance for citizens and others that government funds are accounted for properly and that government organizations are in compliance with applicable laws and regulations.

 

The annual audit was completed by an independent accounting firm in March. They reviewed agreements and invoices, read meeting minutes and conducted a variety of detail and analytical testing procedures on the City’s financial records in order to express their opinion as to whether the City’s financial statements and supplemental information are materially correct. After the auditors were satisfied with the numbers, work began to prepare financial statements and notes in the format prescribed by the Governmental Accounting Standards Board.

 

Government financial statements include information presented in different ways to meet multiple objectives of different users. Financial reporting objectives for governments are much broader than those for businesses. In addition to staff and elected officials, the primary users of governmental financial statements include oversight and legislative bodies, creditors, investors, granting agencies, taxpayers and ordinary citizens. A section of the annual report called Management’s Discussion and Analysis includes an overview of the financial statements to help readers understand how information is presented.

 

Government activities are grouped into two categories, each of which uses a different measurement focus and basis of accounting. Government funds are for services provided without charges to users, and accounting for these types of activities requires a different measurement focus and basis of accounting than fee-based services. The business-type activities of governments that are provided with a charge to users to cover the cost of providing such services are recorded for in proprietary funds that are accounted for similarly to a regular business.

 

Like other organizations with different operating divisions, the financial performance of each of the City’s fund can vary significantly each year.

  • General fund reserves increased again during 2013. The financial results were better than expected primarily due an increase in sales tax revenue and a delay in certain capital expenditures.
  • As planned, the finances of the City’s enterprise funds were stabilized over the past two years as a result of recent rate increases, and some cash reserves were generated for necessary capital improvements. An increase in development activity along with water lease revenue led to positive financial results compared to recent years and the 2013 budget. However, continued major capital expenditures and the burden of debt payments for capital projects will continue to strain the water and wastewater enterprise fund.
  • The SteamPlant Event Center generated nearly $300,000 in revenue and was the location for over 500 events during 2013. The SteamPlant covered 77% of its operating costs with the revenue generated.
  • Most of the $57,000 in lottery proceeds received by the Conservation Trust Fund was added to reserves in 2013 and then used in early 2014 for an open space purchase.

The City’s 2013 internal financial report includes other supplemental information that further helps readers understand Salida’s financial condition.