City Council Minutes 06-23-2008 SpecialMINUTES
SPECIAL MEETING - MONTICELLO CITY COUNCIL
Monday June 23, 2008 - 5 p.m.
Members Present: Clint Herbst, Wayne Mayer, Tom Perrault, Brian Stumpf and Susie
Wojchouski
Members Absent: None
1. Call to Order.
Clint Herbst called the meeting to order at 5 p.m.
2. Review of 2007 Audit.
Finance Director Tom Kelly introduced Jim Eichten of MMKR, the City's auditing firm.
Tom Kelly commented that city staff did a good job in pulling stuff together for the auditors
but they still are pushing the deadline for submission to the state which is June 30~'.
Jim Eichten submitted three documents for Council review and discussion; 1) Annual
Financial Report; 2) Management Report and 3) Special Purpose Audit Report. He noted
there were a number of findings in the report some relating to internal controls and some to
compliance. The findings relating to internal controls included segregation of duties,
account reconciliation, preparation of financial statements, audit adjusting journal entries
and lack of documentation of the internal controls. Jim Eichten explained each of the
findings and what needed to be done to rectify them. The findings relating to compliance
with Minnesota law and regulations had to do with collateral assigned and contract
language. It was explained that state statute requires language in contracts that require
payment to the subcontractors in a timely manner.
Jim Eichten explained their duties and responsibilities asauditors and noted that there is a
new audit standard out. The "old school" philosophy had the auditor serving kind of a dual
function as both auditor and accountant. The current practice is to only serve one function.
The Special Purpose Audit report provides the opinion of the auditor on certain financial
controls. It is the City's responsibility to have those controls in place so that the report can
be prepared. The auditor provides feedback and recommendations as to what those controls
should be.
Jim Eichten stated that some of the findings in the report such as segregation of duties is a
common finding for a city the size of Monticello since generally the size of staff does not
allow for complete segregation of duties. He discussed the City's construction projects.
The City has construction projects which have gone on for a number of years without being
closed out and converted to a fixed asset. In summary Jim Eichten indicated that the
findings were a result of a change in administration, achange in auditors and new audit and
accounting standards. He is quite certain that some of these findings will be rectified by the
next audit. Jim Eichten briefly touched on the fund balances for the general fund, sewer and
water funds and liquor store funds. Jim Eichten pointed out the reports contained a lot of
detailed information and if any of the Council had questions they should feel free to contact
him.
3. Review of Fiber Oatics Issues.
WAYNE MAYER MOVED TO ENTER INTO A CLOSED SESSION OF THE COUNCIL
TO DISCUSS ISSUES RELATING TO THE FIBER OPTICS PROJECT. TOM
PERRAULT SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY.
The Council came out of closed session at 6:45 p.m.
SUSIE WOJCHOUSKI MOVED TO ADJOURN THE WORKSHOP AT 6:45 P.M. TOM
PERRAULT SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY.
~Tr ~ Ito S ~~---
Recording Secretary