Item 4C: Adoption of Resolution on FY12 CAFR

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weaknesses. The auditors noted that the City complied with all laws with one exception - the City exceeded its legal budget (page 48) in one fund:  The Parking Services Enterprise Fund overspent its Departmental appropriation by $115,945, or 3.3 percent. The overexpenditure was due primarily to unanticipated garage security costs due to a delay in the implementation of the new downtown police patrol unit.  The Parking Services Enterprise Fund also exceeded its Capital Outlay appropriations by $55,844, because of higher than anticipated costs to complete the steam upgrade project. 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. The auditors conduct the audit of the City's basic financial statements in accordance with generally accepted auditing standards and the Minimum Standards for Audits of Oregon Municipal Corporations. In addition, as a recipient of federal grants, the City is subject to the Federal Single Audit Act of 1984, which requires that the audit be conducted in accordance with Government Auditing Standards, issued by the Comptroller General of the United States and Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments and Non- Profit Organizations. These standards and OMB Circular A-133 require that the auditors plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement and whether the City complied with the laws and regulations pertaining to federally-funded programs. In addition to state and federal requirements, the City has a contractual obligation in connection with its debt issuances which requires that the City issue annual audited financial statements. Management is responsible for the information contained in, and the preparation of, the City's financial statements. To effectively fulfill this responsibility and to contain the cost of auditor services, City staff devotes significant effort to the closing of accounting records, the preparation of schedules and audit workpapers, and the production of the CAFR. This also results in staff expertise being developed on specific financial and service issues that can then be used to assist departments and other pertinent parties. Two additional reports, beginning on page 155, 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. Professional requirements mandate auditors 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 2012 is attached and it states that there were no concerns that required communication to the council. 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, 2011. This was S:\CMO\2013 Council Agendas\M130114\S1301144C.doc