Fiscal Compliance Report 7/25/11

THE FOLLOWING IS A REPORT ON COMPLIANCE WITH NEWLY ENACTED FISCAL POLICIES AS ADOPTED BY CITY COUNCIL ON APRIL 11, 2011 VIA OR

 

 

COMPLIANCE REPORT ON
ORDINANCE #17-2011
BY THE OFFICE OF THE CITY AUDITOR JULY 25, 2011


 

 

 

THE FOLLOWING IS A REPORT ON COMPLIANCE WITH NEWLY ENACTED FISCAL POLICIES AS ADOPTED BY CITY COUNCIL ON APRIL 11, 2011 VIA ORDINANCE #17-2011 AND RECOMMENDATIONS FROM OUR ACT 47 COORDINATORS: PUBLIC FINANCIAL MANAGEMENT (PFM).

 

THE TWO MAIN AREAS OF THE ORDINANCE ARE REGULATIONS CONCERNING INTERFUND BORROWINGS AND APPROPRIATION TRANSFERS.

REGARDING THE FIRST ITEM (INTERFUND BORROWINGS); THERE WERE NO INTERFUND BORROWINGS IN EITHER THE 1ST QUARTER (1/1-3/31) OR THE 2ND QUARTER (4/1-6/30) OF 2011. HOWEVER, A REPAYMENT OF A PREVIOUS YEAR(S) BORROWING(S) DID OCCUR IN THE 1ST QUARTER OF 2011. ON 2/4/11, THE GENERAL FUND (#01) WAS REPAID IN FULL THE AMOUNT OF $810,103.25 FROM THE LIQUID FUELS FUND (#35).

 

THE SECOND ITEM PERTAINS TO APPROPRIATION TRANSFERS. SECTION F OF ORDINANCE #17-2011 REQUIRES “AN AMENDMENT TO THE CITY’S ANNUAL BUDGET ORDINANCE TO AUTHORIZE ANY CUMULATIVE MODIFICATION TO ANY DEPARTMENTAL OVERALL BUDGET OR LINE ITEM EXCEEDS (sic) $10,000.”

 

AS OF 6/30/11, IN THE GENERAL FUND (#01), THERE WERE THIRTY SEVEN (37) EXPENDITURE ACCOUNTS (see attached chart) EACH HAVING A NEGATIVE BALANCE. OF THOSE ACCOUNTS, TWELVE (12) HAVE NEGATIVE BALANCES OF $10,000 OR MORE.

 

THERE ARE ALSO EIGHT (8) NON-GENERAL FUND EXPENDITURE ACCOUNTS (see attached chart) THAT ALSO HAVE NEGATIVE BALANCES. OF THOSE ACCOUNTS, THREE (3) HAVE NEGATIVE BALANCES IN EXCESS OF $10,000.

 

SOME OF THESE ACCOUNTS MIGHT SHOW A NEGATIVE BALANCE DUE TO INCORRECT POSTINGS TO THEIR RESPECTIVE ACCOUNTS. IF THAT IS THE CASE, THEN A RECLASSIFYING ENTRY SHOULD BE PREPARED AND POSTED TO CORRECT THE ERROR. IF IT IS A LEGITIMATE NEGATIVE BALANCE, THEN THE ADMINISTRATION MUST PREPARE APPROPRIATION TRANSFER(S) FOR CITY COUNCIL’S APPROVAL TO CORRECT THE SITUATION AS PER ORDINANCE #17-2011. THE APPROPRIATION TRANSFER(S) SHOULD NOT ONLY COVER THE CURRENT DEFICIENCY, BUT ALSO ANY ADDITIONAL ANTICIPATED EXPENDITURES DURING THE REMAINED OF THE CURRENT FISCAL YEAR.

 

 

I WILL BE REPORTING ON THIS TOPIC ON A QUARTERLY BASIS. IF THERE ARE ANY QUESTIONS REGARDING THE CONTENTS OF THIS REPORT, PLEASE FEEL FREE TO CONTACT ME IN THE OFFICE, VIA PHONE AT (610) 655-6123 OR BY E-MAIL AT DAVID.CITUK@READINGPA.ORG.

 

 

RESPECTFULLY SUBMITTED

 

 

 

DAVID M. CITUK

CITY AUDITOR

CITY OF READING, PA.