It was welcome news for the Great Bend City Council Monday night as Vickie Dreiling of Adams, Brown, Beran and Ball presented the city’s 2017 annual audit. After the presentation, it adopted the audit as reported.
“Our opinion is an unmodified opinion,” Dreiling said. “It is the highest form of opinion we can use on a regulatory basis.”
She then read from the report:
“The financial statement referred to above presents fairly, in all material respects, the aggregate cash and unencumbered cash balance of City of Great Bend, Kansas, as of Dec. 31, 2017, and the aggregate receipts and expenditures for the year then ended in accordance with the financial reporting provisions of the Kansas Municipal Audit and Accounting Guide.”
The only ding involved bond payments to the State of Kansas, and it was a minor one, she said. The city did not remit its interest and principal due on bond issues at least 20 days before their maturity, which is a statute violation.
The city remitted the Sept. 1, 2017, payment on Aug. 18, 2017, which was only 13 days before maturity. “The state got its money in plenty of time. There are no consequences for the city,” Dreiling said.
In more good news, Dreiling said this was the time in many years she has not had to bring up several recommendations from the previous year. “The staff has done a good job cleaning up any old, outstanding issues.”
The only remaining suggestion was the implementation of an ambulance write-off policy. The department should continue to utilize the new software to help with these processes.
A tour of the audit
Because there are several new council members, Dreiling took a little more time walking those present through the auditing process.
She explained the city each year votes to waive adherence to the generally accepted accounting principles (GAAP). In short, GAAP requires reporting cash and non-cash assets, and liabilities.
However, when it comes to what the state wants in its budget documents, this won’t work, Dreiling said. So, many municipalities waive GAAP annually and operate on a regulatory basis (modified cash basis), tracking cash, certain accounts payable and encumbrances only, to make reporting easier.
She said auditors must note this in their reports, but there is no averse impact for it.
Great Bend had nearly $33 million in cash on hand. Of that, nearly $29 million was “unencumbered,” not committed to any outstanding debts.
The $5 million in encumbrances is up from last year, she noted. “But, you have a lot of projects (such as the waterline work).”
Of that $33 million, about $12 million is in reserves, she said. “That is very good for the city.”
The city has about $10.5 million in long-term debt, most tied to bond issues for water, sewer and street improvements. “But, the good news is that all but one of these (bonds) will be paid off by 2019,” Dreiling said.
And, “there were no budget violations,” Dreiling said, adding all the city’s funds stayed within their budgets. “You are operating in the black.”