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All 10 members of the council were present to hear the presentation.
The city of Lincoln operates on a fiscal year from May 1 through
April 30. When the year ends, the city clerk and staff perform their
closing entries for the year and then turn the books over to an
outside auditor who prepares the official audit document based on
what is referred to as GAAP, generally accepted accounting
practices.
As the auditors prepare their statements, if they encounter any
discrepancies in the financial statements or any lax practices in
the accounting procedure, they are required to report that in what
is commonly called a letter of findings.
This year it came as no surprise to the council, and the
findings revolve around the lax accounting practices that made it
possible for former City Clerk Melanie Riggs to remove funds from
the city coffers undetected.
While the letter has to be recorded, Ogden noted that many of the
circumstances surrounding the findings have already been corrected
or are in the process of being corrected.
While Ogden spoke in very general terms, the principal issue was
that they found a lack of checks and balances within the city's
accounting system. He noted that changes that need to be made
include assuring that no one person is responsible for a transaction
from beginning to end.
Ogden said: "I'm not going to go into detail unless you really
want to, but it has to do with purchasing and contracting policies,
having better written policies on internal controls, and management
responsibilities. The bank reconciliation process needs to be
improved and strengthened, and also the manual check process has
some weaknesses. We've given general recommendations here, and again
we've gone over these with officials, and we think they are making
progress on them."
Ogden moved on to reviewing the actual audit document. The annual
audit this year was a 50-page document that separates city revenues
and expenditures in several ways, ranging from cash received and
expended according to the revenue source, to cash expended according
to the city department.
Ogden singled out a few pages to go through with the group.
He pointed out that in a statement of revenue versus expenditure
for the general operating funds of the city, the year ended $215,000
to the good.
He complimented the council on being able to manage the city's
funds so well, saying that with the economic downturn of the past
year, many communities the size of Lincoln are struggling to stay in
the black.
Ogden also spoke about the retirement funds for the city police
and firefighters.
Due to the fall in the stock market this past year, the value of
the retirement funds has fallen. Ogden stressed this is something
that is beyond the city's control and that as time passes those
values will rise again.
However, it poses a bit of a problem for the city right now.
A portion of the auditor's responsibility is to file reports with
the Illinois Department of Insurance regarding these retirement
funds. The department in turn will contact the city with what their
required contribution to the funds will be for the coming year.
Ogden commented: "We file a detailed report to the Department of
Insurance regarding the police and fire pension funds, giving them
information on employees, the assets that are in those funds and
accounts, the money transferred in during the year, and the benefits
taken out."
He continued: "They will determine what your pension obligation
is for the coming year."
Les Plotner, city treasurer, noted that this is a real problem
because the city is not going to have much of a tax increase this
year, and the contribution to the pension fund may be more than the
city can handle.
Ogden said he thought there were some tax levy exemptions that
would allow the city to collect enough to cover the needs. Plotner
said he thought they were included in the tax cap.
In the end Ogden said he would investigate the issue further and
see if he had any advice for Plotner on how to handle the situation.
Alderwoman Joni Tibbs, during the course of the presentation,
asked about the city's current method of doing bank reconciliations.
Ogden said that past practices had not separated the bank
reconciliation from the check writer. He emphasized that the person
doing the bank reconciliation should be someone who is not connected
to paying the bills.
Tibbs wondered if the city were to hire a city manager, could
that person do the bank reconciliations, and Ogden indicated that
indeed he or she could.
He later said that the person doing the reconciliations could be
"anyone who has the knowledge to know if something is wrong, the
ability to do the reconciliation in a timely manner." He continued:
"The other thing that is important is that the person not be in a
position where they are threatened by a supervisor. They need to
have a line of communication directly to the mayor or council."
Tibbs also asked about the use of signature stamps for check
signing and whether or not it is an acceptable practice.
Ogden said that use of signature stamps is acceptable, as long as
it is done using proper internal controls.
Mayor Keith Snyder brought up a mention in the management letter
issued by the auditors regarding board involvement in the city
finances.
Ogden summarized, saying: "There is an increased responsibility
that the finance committee and or the full council be aware of what
is going on in the city finances, to be aware when there are
problems and to be involved in fixing the problems instead of
relying solely on city management to take care of things."
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Ogden closed by saying: "In summary, the audit went pretty well. It
took us longer than we thought, but we think that after this year,
when those controls are put in place, it will go a lot faster."
During the voting session, Anderson made a motion that the audit
be approved as presented. The motion carried unanimously.
Workers' compensation bid awarded to IPRF
Alderwoman Stacy Bacon reported that when seeking bids for the
city's workers' compensation policies, the Illinois Public Risk Fund
was the only company to submit a bid.
The IPRF, the current carrier for the city, submitted a bid of
$237,349.
This is an increase of 24 percent over last year. Alderman Nathan
Turner said that the original estimate had been that the premiums
would increase by more than 40 percent. So while this increase is
not good news, it is better than it could have been.
The bid was accepted with a vote of 10-0.
Tax levy abatement approved
Approval was given for a tax abatement of $64,822.50 relating to
the economic development of the Goody's and Dollar Tree complex on
the city's west side.
This is part of an agreement that was signed with the development
firm of that complex in January of 2004.
Streets and Alleys to hire one employee
With the retirement of Jim Kirk, there is one opening in the
city's streets and alleys department that needs to be filled.
Turner made a motion that the first person on the civil service
list be hired to fill that gap. He, with assistance from city
attorney Bill Bates, explained that this is a civil service position
that must be filled according to civil service guidelines.
Bates said that those who pass the civil service exam are placed
on the hire list according to their scores, and when a position is
to be filled, the top person on the list is the one who must be
hired.
With a vote of 10-0, Kyle Straite, the top person on the list,
was approved as the city's new hire.
Search to begin for new zoning and safety officer
Les Last has announced that he will be retiring in February of
2010 from his position as the city's zoning and safety officer.
Snyder said that he has asked Aldermen David Wilmert and Bacon to
assist him in conducting a search for a suitable replacement.
IPRF to offer safety grants
Snyder said that he has received a letter from the Illinois
Public Risk Fund stating that this year they will again be awarding
safety grants.
The city is invited to apply for a grant that amounts to
approximately $400 and must be used for employee safety training.
Holiday hours and pay approved
Via the consent agenda and by unanimous vote, approval was given
for City Hall to be closed the entire day of Dec. 24 and half the
day on Dec. 31.
Also approved via the consent agenda, the last paycheck of the
year for city employees was bumped up from Dec. 29 to Dec. 23.
U.S. Census Bureau conducting testing for new hires
Snyder handed out a flier from the U.S. Census Bureau with a
testing schedule for new hires.
Testing is going on now at the Lincoln Public Library and will
conclude on Dec. 18.
Anyone interested in obtaining a temporary position to assist
with the 2010 census in Logan and DeWitt counties is encouraged to
take the test.
Sessions are taking place Monday through Friday, at 10 a.m. and 2
p.m.
Applicants must bring with them two forms of identification,
which must include an original Social Security card or birth
certificate, along with a valid Illinois driver's license, state ID
card, school ID card with picture, voter's registration card or
military ID.
If these forms of identification are not available, an un-exempt
passport will qualify for both.
Thanks to Jackson and city crew
Tibbs said that she wanted to thank Tracy Jackson, city street
and alley superintendent, and his city crew for the work they did
decorating the city's float for the Christmas parade.
She noted that this was the first time ever the group had done
this and that they did a very nice job.
Roadshows to wrap up on Dec. 15
Ward 4 Aldermen Buzz Busby and Nathan Turner will host the fifth
and final roadshow of the city council on Dec. 15 at Lincoln
Christian Church on North McLean Street, just one block north of
City Hall.
[By NILA SMITH] |
