A report on the 2014 audit will be presented at the next council meeting April 7th. This post provides a brief summary of the audit and annual financial report.
Independent accountants are hired to conduct an audit, which is required by the Colorado Revised Statutes. A “clean opinion” provides assurance for citizens that money is accounted for properly and the City is in compliance with applicable laws and regulations.
Auditors perform “detail testing” of a sample of invoices, payroll records and receipts. They perform analytical procedures and review agreements, meeting minutes, resolutions and ordinances, policies and procedures and other documents before expressing an opinion as to whether the City’s financial statements and supplemental information are materially correct.
Financial statements and notes are prepared 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. In addition to staff and elected officials, governmental financial statements are used by oversight and legislative bodies, creditors, investors, granting agencies, taxpayers and ordinary citizens. Therefore, financial reporting objectives for governments are much broader than those for businesses.
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 and reasons for increases or decreases in net position and fund balances. Like any organization with different operating divisions, the financial performance of each City fund can vary significantly each year based on economic factors and the timing of one-time revenues or expenditures.
In the financial statements, government activities are grouped into two categories with a different measurement focus and basis of accounting. Government funds are primarily for services provided without charges to users such as public safety and street maintenance; accounting for these types of activities requires a different measurement focus and basis of accounting than fee-based services. Business-type activities of governments are provided with a charge to users to cover the cost of providing those services and are recorded in proprietary funds that are accounted for like a regular for-profit business.
In the City’s general fund, reserves increased during 2014 primarily because it took longer than expected to obtain CDOT’s approval on plans for the third phase of the Highway 50 Enhancement project. The matching grant funds not spent, therefore, remain in the bank.
As planned, some of the savings in the water and wastewater enterprise funds were spent for capital improvements. An increase in development activity along with water lease revenue led to positive financial results in 2014.
The SteamPlant generated nearly $300,000 in revenue, which paid for 72% of its operating costs. It was the location for over 500 events during 2014.
Lottery proceeds received in 2014 by the Conservation Trust Fund purchased playground equipment at Chisholm Park. In addition, some reserves saved in previous years were spent for open space in the Arkansas Hills where volunteers continue to expand the recreational trail system.
A preliminary financial report is already available on the City’s website. It includes extra information to help readers understand Salida’s financial condition. Preliminary results were presented to council during the February 17th meeting. The final audited financial report will be available by the end of March. Be sure to check out the Financial Documents page on our website for financial updates each month.