Item 3C: Adoption of Resolution Acknowleding CAFR

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The key pages of the CAFR which you may wish to review are pages 11-12 and pages 155-156, where two of the auditors' reports are found. In the first report, the auditors have issued an unqualified opinion (also known as a "clean opinion") on the City's basic financial statements, indicating that the City has prepared these statements in conformity with generally accepted accounting principles (GAAP). GAAP for state and local governments is promulgated by the Governmental Accounting Standards Board (GASB) to ensure consistency in accounting and comparability in financial reporting among state and local governments. A clean opinion is a fundamental financial goal for every government, as it represents the highest level of opinion a government can receive from its independent auditors. A clean opinion is an important indicator of sound financial management and creditworthiness to the citizens, other governmental jurisdictions (state and federal), credit rating agencies, investment bankers, bond holders, and other private sector entities. In the second report, the auditors address the City’s compliance with applicable provisions of Oregon Revised Statutes including, requirements related to debt, deposit of public funds, preparation and adoption of the budget, accounting records and related internal control structure, etc. In addition, the auditors also report if the City had any significant internal control weaknesses. The auditors noted that the City complied with all laws with one exception. The General Obligation Debt Service Fund overspent its debt service payment authority by $169,897, or 2.7%. This occurred due to timing of repayments on the GO Line of Credit. ORS require that all over-expenditures be brought to the attention of the governing body. Because there is no dollar threshold, it is common for local governments to have occasional over-expenditures. Two additional reports, beginning on page 159, specifically address compliance with federal laws, regulations, contracts and grants, and indicate that the auditors found no material instances of the City's noncompliance with these requirements, nor were there any findings or questioned costs noted in relation to federal awards made to the City. Starting with the fiscal year 2008 audit, there were new professional requirements mandating auditors to provide a report to the governing body that addresses any concerns or findings they encountered in such audit-related issues as significant audit findings, accounting estimates and disagreements with management. Isler CPA’s memo addressing these issues for fiscal year 2009, is attached and it states that there were no concerns that required communication to you. The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Eugene for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2008. This was the thirty-third consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR, which satisfies both generally accepted accounting principles and applicable legal requirements. In addition, the requirements for the certificate provide much of the information needed for the City’s credit assessments. RELATED CITY POLICIES Policy B.1 of the City’s Financial Management Goals and Policies states that “The City will maintain an accounting and financial reporting system that allows reporting in conformance with Generally Z:\CMO\2010 Council Agendas\M100111\S1001113C.doc