Audit and Finance Committee

REGULAR MEETING OF THE AUDIT AND FINANCE COMMITTEE DATE: MONDAY, October 5, 2020 – 5:30 p.m. to 7:00 p.m. Corrected 10-5-2020 Changed to a Zoom Meeting AGENDA 1. Call to Order: 2. Roll Call and Statement of Quorum 3. Establishment of Order of Items on the Agenda A. Approval of the July 20, 2020 Minutes B. 2021 Budget review by Larry Perney and Don Yucuis C. Fixed Asset Policy review D. Finance Department Closing Procedures E. Future meetings 4. Adjournment  CITY OF MANCHESTER Fixed Asset Policy PROPERTY CONTROL MANUAL 1  TABLE OF CONTENTS Page SECTION 1 – INTRODUCTION Overview 3 SECTION 2 – DEFINITIONS Capital Assets 3 Depreciation 3 Information needed to calculate depreciation 3 Salvage Value 3 Estimated Useful Life 3 SECTION 3 – POLICY Asset Cost 4 Establishing & Setting Threshold Levels for Recording Capital Assets 4 Capitalized & Depreciated Thresholds 4 Obtaining an Asset’s Cost or Acquisition Value 4 Capitalized Interest 4 Maintenance & Repairs 4 SECTION 4 – ASSETS THAT REQUIRE MONITORING Land 5 Rights of Ways (ROW) 5 Easements 5 Land Improvements 5 Non-exhaustible 5 Exhaustible 5 Buildings 5 Building Improvements 5 Machinery & Equipment 5 Computer Equipment 6 Computer Software 6 Vehicles 6 Leased Equipment 6 Sidewalks 6 Street Signs 6 Street Lighting 6 Infrastructure Assets 6 Streets, Roads & Other Components 6 Bridges 6 Storm Sewers 6 Construction in progress 7 SECTION 5 – PROCEDURES Inventory Records 7 Non-Expendable Items not Capitalized 7 Disposal of Capital Assets 8 Recording Capital Assets in Audited Financial Statements 8 Insurance Records 8 Record Retention 8 2 SECTION 1 - INTRODUCTION Overview: The City of Manchester wishes to establish accounting control and accountability for the City’s assets. The Finance Department is the central accounting locale for all audited fixed assets. Assets under this classification follow specific accounting rules and are subject to annual audit requirements. The accounting and reporting policies of the City conform to generally accepted accounting principles (GAAP) applicable to state and local governments. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The City intends to apply all applicable Government Accounting Standard Board pronouncements as well as follow all Financial Accounting Standard Board Statements and Interpretations, Accounting Principles Board Opinion and Accounting Research Bulletins of the Committee on Accounting Procedure issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements will supersede all financial reporting requirements referenced within this policy. SECTION 2 – DEFINITIONS Capital Assets: Capital assets are real or personal property with a value equal to or greater than the capitalization threshold for the classification of the asset and have an estimated life of greater than one year. They include land, buildings and improvements, machinery and equipment, vehicles, and infrastructure. A capital asset is to be reported and, with certain exceptions, depreciated in government-wide statements. In the government-wide statements, assets that are not capitalized are expended in the year of acquisition. Infrastructure assets are long-lived capital assets that normally can be preserved for a significantly greater number of years than most capital assets and that are normally stationary in nature. Examples include roads, sidewalk, traffic lights, street-lights, sewer lines, and similar items). Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset lives are not capitalized. Capital assets of the City are depreciated using a straight-line method over the following estimated useful lives: Classification Life Building and improvements 5-40 years Machinery and equipment 5-20 years Vehicles 5 years Infrastructure 10-50 years Depreciation: In accounting terms, depreciation is the process of allocating the cost of tangible property over a period rather than deducting the cost as an expense in the year of acquisition. Generally, at the end of an asset’s life, the sum of the amounts charged for depreciation in each accounting period (accumulated depreciation) will equal original cost less salvage value. Good accounting and financial management practices require that a government entity take both the cost expiration and the declining value of an asset into consideration. The cost expiration of a government entity’s assets must be recognized if the cost of providing services is to be realistically reported. Also, the decline in the value of those assets must be considered if the government entity’s net assets are to be stated correctly. 3 Information Needed to Calculate Depreciation: To calculate depreciation on a capital asset, the following five factors must be known.  The date the asset was placed in service.  The asset’s cost or acquisition value.  The asset’s salvage value  The asset’s estimated useful life, and  The depreciation method Salvage Value: The salvage value of an asset is the value it is expected to have when it is no longer useful for its intended purpose. In other words, the salvage value is the amount for which the asset could be sold at the end of its useful life. This value can be based on (1) general guidelines from some professional organizations such as GFOA, ASBO, etc., (2) information from other governmental entities, (3) internal experience, or (4) information from professionals such as engineers, architects, etc. Since the City normally keeps assets until there is no remaining value, due to being obsolete, scrapped or junk, most equipment and vehicles should have a zero salvage value. In most cases, it is probable that many infrastructure assets will have no residual or salvage value, given the cost of demolition or removal. Estimated Useful Life: An asset must have an estimated useful life greater than one reporting period to be considered for capitalization and depreciation. Assets that are consumed, used-up, habitually lost or worn-out in one year or less should not be capitalized. Estimated useful life means the estimated number of months or years that an asset will be able to be used for the purpose for which it was purchased. In determining estimated useful life, the City will consider an asset’s present condition, use of the asset, construction type, maintenance policy, and how long it is expected to meet service and technology demands. Useful lives should be based upon the City’s own experience and plans for the assets. Although comparison with other governments or other organizations may provide some guidance, property management practices, asset usage, and other variables (such as weather) may vary significantly between governments. SECTION 3 - POLICY Asset Cost – The City will not capitalize every asset with a useful life greater than one year. The table listed below will be used in determining the dollar thresholds to use for tracking the City’s capital assets. The capitalized and depreciated column will be audited on an annual basis as part of the external auditor’s fieldwork. Establishing and Setting the Threshold levels for Recording Capital Assets GASB Statement #34 does not give a “complete” definition of a capital asset. Paragraph #19 lists many categories. Other criteria and the threshold levels for capitalizing and depreciating are: Capitalized and Depreciated Thresholds Land $1 – Capitalize Only Land Improvements $10,000 Buildings $25,000 Building Improvements $25,000 Machinery & Equipment $ 5,000 Infrastructure $50,000 4 Construction in Progress Capitalize Only Obtaining an Asset’s Cost or Acquisition Value: Capital assets should be reported at historical cost and should include the cost of freight, site preparation, architect, and engineering fees, etc. If payment is made other than in cash and the fair-market value of the non-cash payment or consideration cannot be determined, the asset’s fair-market value determines its cost. With few exceptions, an asset’s cost should also include necessary costs incurred to place the asset in service. Costs include the invoice price plus incidental costs (insurance during transit, freight, capitalized interest as described below, duties, title search, registration fees and installation costs). Maintenance & Repairs: The following criteria will determine if maintenance or repairs should be capitalized or expensed. With respect to asset improvements of $25,000 or more ($50,000 for infrastructure) should be capitalized if: 1. The estimated life of the asset is extended by more than 25%, or 2. The cost results in an increase in the capacity of the asset, or 3. The efficiency of the asset is increased by more than 10%, or 4. Significantly changes the character of the asset, or 5. In the case of streets and roads – if the work done impacts the “base” structure. Otherwise, the cost should be expensed as repair and maintenance. Maintenance costs allow an asset to continue to be used during its originally established useful life. Maintenance costs are expensed in the period incurred. Preservation costs generally extend the useful life of an asset beyond its original estimated useful life, but do not increase the capacity or efficiency of the asset. Preservation costs are capitalized and depreciated if they extend the original estimated life by more than the assigned percent listed above and cost $25,000 or more ($50,000 for infrastructure). A change in capacity increases the level of service provided by an asset and is capitalized and depreciated if the cost is $25,000 or more ($50,000 for infrastructure). For example, additional lanes could be added to a road or the weight capacity could be increased. The following improvements will be considered maintenance and not capitalized: tuck pointing, roof repair or replacement (unless it extends the life of the building, such as going from a flat roof to a pitched roof), window replacement (unless replaced with energy efficient windows), repainting, epoxy repair, re-carpeting, etc. SECTION 4 – ASSETS THAT REQUIRE MONITORING Land: Land is to be capitalized but not depreciated. It is recorded at historical cost and remains at the cost until disposal. If there is a gain or loss on the sale of land, it is reported as a special item in the statement of activities. All land will be capitalized unless the City plans to immediately sell it instead of putting it to use. The following items should be included as part of the cost of land: purchase price or fair market value at the time of the gift; commissions, professional fees (title searches, legal, appraisal, etc.), grading, removal, relocation, or reconstruction of property of others (railroad, telephone and power lines); interest on mortgages accrued at date of purchase; accrued and unpaid taxes at date of purchase; other costs incurred in acquiring the land. 5 Rights of Way (ROW): ROW costs will be booked at the time of the project. If ROW costs are known at the time of the project, those values will be setup based upon actual costs. If the actual cost is not available, a cost per square foot will be determined by using an assessor’s valuation of bare agricultural land in the vicinity. Easements: Easements are not reported in the financial statements. An easement is an interest in land owned by another that entitles its holder to a specific limited use or enjoyment (right to use the land). The City has no ownership interest in the property associated with easements across private property, only a right to access the property for the stated use (water lines, sewer, lines, etc.). Land Improvements: Land improvements consist of betterments, other than buildings, that ready land for its intended use. A few examples include retaining walls, parking lots, pavilions, sidewalks, playground equipment, dugouts, bleachers, outdoor lighting, fencing/gates, and landscaping. Land improvements can be further categorized as non- exhaustible and exhaustible. Non-Exhaustible – Expenditures for improvements that do not require maintenance or replacement, expenditures to bring land into condition to commence erection of structures, expenditures for improvements not identified with structures, and expenditures for land improvements that do not deteriorate with use or passage of time are additions to the cost of land and are generally not exhaustible and therefore not depreciable. The portion of the cost attributable to non-depreciable land improvements should be reported with other assets not being depreciated, such as land and construction in progress in the Comprehensive Annual Financial Report (CAFR). Exhaustible – Other improvements that are part of a site, such as parking lots, landscaping and fencing, are usually exhaustible and are therefore depreciable. Depreciation of site improvements is necessary if the improvement is exhaustible. Other items include: gates, outside sprinkler systems, athletic fields, golf courses, swimming pools, tennis courts, fountains, retaining walls, soccer fields, recreational lighting, sidewalks, bus ramps, etc. Exhaustible land improvements that meet the capitalization threshold of $10,000 will be capitalized. Buildings: Buildings should be recorded at either their acquisition cost or construction cost if they meet the capitalization threshold of $25,000. Usually projects consist of major components such as land, land improvements, building construction (including professional fees and permits), furniture, fixtures and equipment. The various components should be broken out when setting up the initial building construction project. The components of the building itself (heating/air conditioning, carpet, windows etc.) should be included in the initial cost of the building. Building Improvements: Building improvements that extend the useful life of the building by more than 25% should be capitalized. Examples of building improvements include major roofing projects that tear the original roof down to the joints or peak a flat roof, major energy conservation projects, or remodeling and replacing major building components. Normal maintenance and repair projects like re-shingling or re-tarring a roof will be expensed. The inventory should include a project description, the year completed, and funding source and dollar amounts. Only those projects that meet the capitalization threshold of $25,000 should be included. 6 Machinery & Equipment: Assets such as furniture, shop equipment, lawn equipment, computers, machinery and other equipment that meet the threshold levels should be identified and inventoried. Some assets, individually, may fall below the capitalization threshold but may be purchased in large quantities. Examples include library books, textbooks, and computers. They should only be capitalized if they meet the threshold individually of $5,000. Computer Equipment: Computers will be excluded if they individually cost less than the threshold per unit of $5,000. If the dollar amount exceeds the limit, those assets will be capitalized and depreciated. However, they will be inventoried for insurance purposes even if they are excluded for depreciation. Computer Software: Computer software will be excluded if its cost is less than the threshold per unit. Computer software that meets the capitalization threshold of $5,000 should be capitalized. Vehicles: Vehicles should be identified, inventoried, and depreciated if they exceed the threshold limit per unit. When setting up the initial costs of the vehicle, lettering will be added to the cost of the vehicle. In addition, for the police department; the cost of the sirens, light bars, etc., will be included as part of the cost of putting the car in service. In the case of moving existing sirens etc. that cost will be included as part of the initial cost associated with new purchases. Vehicles that meet the capitalization threshold of $5,000 will be capitalized. Sidewalks: The City owns the sidewalks that are in the public ROW and is responsible for maintaining and replacing them. The City will capitalize sidewalks on in the ROW classify as land improvements if they exceed the dollar threshold of $10,000. Street Signs: The City’s street department installs street signs after a project is complete if a City Project. Developer’s install the street signs in developments before the Infrastructure is turned over to the City. The cost of the signs is not part of the construction costs. Based upon the above criteria, the City will not capitalize street signs. Street lighting: AmerenUE owns most of the street-lights. Any City owned street-lights that meet the capitalization threshold of $10,000 per unit will be capitalized. Infrastructure Assets: As most new infrastructure construction is associated with a project, with certain funds set aside based on the project, infrastructure items will be evaluated based on the total cost of the project. Any project with a total cost that meets the threshold for infrastructure should be capitalized, with the date of acceptance as the acquisition date. If a project includes more than one type of Infrastructure, each part of the project should be setup separately. In addition to the actual construction costs, engineering fees, and other incidental expenses should be added into the project cost. If engineering costs cannot be determined for each segment, then the costs should be prorated to each segment based on the segment’s percent of the overall project (excluding costs that will be allocated). 7 If ownership of infrastructure associated with land, such as roads, sewers etc. is unclear, the government with primary responsibility for managing the asset should report the asset. Streets, roads and other components: The City will include frontage roads and alleys as part of the street and roads network if it exceeds the dollar threshold of $50,000 per street, alley or portion thereof. Within this category, the original project will include costs associated with curb and gutter. Streets and alleys will be broken down by the following types: seal coat, gravel, concrete, asphaltic concrete and brick or stone. Bridges: Bridges will be broken down into vehicular and pedestrian subsystems. The cost of the initial project will include the sidewalk and guardrails associated with the bridge. The bridges will be further broken down into the classifications listed in the class lives schedule. Bridges that meet the capitalization threshold of $50,000 will be capitalized. Storm Sewers: Storm sewers, detention ponds and other collection systems will be kept separate. Storm sewer projects often involve assets that are under the responsibility of different departments. For example, replacing the street over the sewer that is being worked on is the responsibility of the street department. A project that involves replacing a section of storm sewers also included replacing the street that must be torn up. The entire project may meet the capitalization threshold of $50,000, but the street portion does not. The street portion will still be set up as a separate asset if it meets the threshold of $50,000. The exception to this would be if the street is not improved by this process or is made worse; in this case the entire cost of the project would be under the sewer asset. Construction in Progress: Construction in progress that is financed by the City should be capitalized and not depreciated until in service. It should be reported with land and other non-depreciating assets at the government-wide level. Unspent debt proceeds from capital assets related debt should be reported in the net assets section of the state of net assets as “restricted for capital projects”. SECTION 5 – PROCEDURES Inventory Records: Completeness and accuracy of inventory records should be ensured through physical counts, review of purchase records, prior inventory count records, listings maintained by other agencies, and other methods deemed necessary. An inventory of all capital assets that meet or exceeds the City’s threshold limits shall be maintained. Each inventory record should include: description, year of acquisition, method of acquisition (purchase, donation, etc.), funding source, cost or estimated cost, salvage value, estimated useful life, and the function(s) that use the asset. The inventory of assets will be centrally maintained through the Finance Department. 8 Non Expendable Items not Capitalized: The City has determined that it is both prudent and sound business practice to keep track of certain non- expendable items not meeting the minimum capitalization requirement ($5,000 or more) with a cost between $500 and $4,999. The following is a partial listing of examples of non-expendable items not capitalized with a cost of between $500 and $4,999. 1. Desktop and laptop computer systems, including monitors 2. Printers 3. Copiers 4. Fax machines 5. Scanners 6. Video and/or audio recording equipment 7. Televisions 8. VHS and DVD players 9. Furniture & cabinets 10. Precision tools, laboratory equipment and other such items Each Department is responsible for establishing procedures, tailored to best suit the individual Departments’ needs (i.e., a Department may choose to track items with a cost of less than $500) that ensure the following: 1. Identification of such non-expendable items to ensure cost is charged to appropriate general ledger account, project or personnel code 2. Periodic review of the nonexpendable items not capitalized to safeguard against unauthorized, unnecessary or duplicate purchases of such items 3. Non-expendable not capitalized items listings, records, analysis or the like may be subject to outside, independent verification, i.e., external auditors The City’s general and specific (departmental) policies and procedures for fixed assets or non-expendable items ensure the following: • Prevention of unauthorized acquisitions • Control over fixed assets and their related records to ensure all recorded fixed assets exist and are in use as prescribed by the City • Safeguards against loss, damage or theft • The cost of each acquisition is accurate, complete and recorded in the appropriate period • Accurate calculation and recording of depreciation expense and accumulated depreciation • Periodic physical inventory of fixed assets is reconciled to records • Control over the disposal of fixed assets • Distinguish repair and maintenance expenses from fixed asset acquisitions • Compliance with OMB Circular A-110, subpart C • Fixed asset disposals are accurately recorded in the general ledger and the Fixed Asset Module 9 Disposal of Capital Assets: All depreciated assets in this policy must be taken to the City Administrator for approval prior to disposition. The report to City Council will include the method of disposal and identify whether it is for sale, obsolete, junked, or using other disposal methods. When an asset is sold, a gain or loss must be recognized under this policy when:  Cash is exchanged and the amount paid does not equal the net book value of the asset.  Cash is not exchanged and the asset is not fully depreciated or has a residual value. Based on the answer from question #131 of GASB 34 implementation guide #1, GASB recommends that as a practical matter, insignificant gains or losses could be eliminated by adjusting the current period’s depreciation expense by the amount of the gain or loss. Based upon this, gain or loss will not be reported when:  Cash exchanged equals the net book value and the asset does not have a residual value.  Cash is not exchanged and the asset is fully depreciated and has no residual value. Reporting Capital Assets in the Audited Financial Statements: Capital assets and the associated accumulated depreciation are reported in the Statement of Net Assets. Accumulated depreciation will be reported separately. Capital assets will be reported in greater detail by major class of asset (for example, infrastructure, buildings and improvements, machinery and equipment, etc.) Insurance Records: The City will maintain insurance records in conjunction with the fixed assets. It is the responsibility of each department to notify the Director of Finance concerning insurance coverage. Coverage, when applicable, must be added to new equipment prior to use. Record Retention: The Finance Department will keep individual asset detail associated with capital assets that meet or exceed the city’s threshold limits while an asset is current. Individual asset detail records may be disposed three years after an asset’s disposal date. All fiscal year end reports can be disposed five years after the audit has been finalized unless grant provisions require a longer retention period. The recommendations from the “Record Retention Manual for Missouri Cities” will supersede any time periods covered in this paragraph if their retention period exceeds the time periods listed. 10 CITY OF MANCHESTER – FINANCE CLOSING PROCEDURES October 5, 2020 Daily, weekly, monthly, annual Closing Procedures • Cash/Checking Accounts o Perform bank reconciliations daily for Operating (xx0022), ShowMe Court (xx0938), Incode Case Mgmt (xx4046), General Fund Reserve (xx1667), and Prop S (xx4591) accounts. o For each account listed:  Print out previous day bank statement from Commerce Connections  clear all checks daily  All checks are approved through a Positive Pay system  Clear all deposit transactions  Clear any Cashiering Deposits  Process JE for any other entries, fees, deposits, or other items o Parks  Enter all Deposit Entries emailed from Parks  Clear all credit card entries when they hit the bank account either as a deposit from CivicPlus, with the coinciding JE for fees o Cashiering  Process Cashiering packet entered by front desk  Clear as the cash or credit cards hit the bank o Police Clerk  Enter all Deposit Entries emailed from Police Clerk  Clear as the cash or credit cards hit the bank  Download monthly bank statements and save in Commerce Bank Folder by account: • Compare month end reconciliation to daily • Compare check names, dates, and amounts to the bank reconciliation o All approved through Positive Pay system • Compare total checks and deposit amount to bank reconciliation • Adjust for any differences with approval of Director of Finance • Look at any differences generated in interfund transfers • Adjust for interfund transfers with approval of Director of Finance • Sign and date by the Director of Finance o Perform bank reconciliations for all cash/checking accounts as the month progresses when the month end statement becomes available. o Reconcile the Operating account pooled total to the “Claim on Cash” accounts per fund in the GL to make sure it is in balance. • Investments – Commerce Capital Markets Group Portal-Accounts – Accounts-General ending in xx0596, General Fund Reserve ending in xx0051, and Proposition S ending in xx0073.  Print month end Investment Statements  Compare to running spreadsheet kept with activity from daily bank statements  Compare spreadsheet, and statement with the GL  Make any necessary adjustments to GL reconcile to the statement on a cost basis  Market adjustments are made at year end  Sign and date by the Director of Finance • Fixed Assets o Additions  Process - Tyler Preliminary Asset Process for the end of the month 1   Add any capitalizable items over the City’s threshold  Pull invoices and attach to Documents in Tyler  Run Fixed Asset Report  Compare to GL  Send to Departments for review  Approved by Director of Finance  Make changes to Fund 99 o Deletions  Run Fixed Asset Report  Scan for any items that have been impaired, sold, or removed  Compare to GL  Send to Departments for review  Approved by Director of Finance  Make changes to Fund 99 o Depreciation/ Accumulated Depreciation  Process – Tyler Depreciation • Run Process at month end • Review Fixed Asset Report for reasonableness in Accumulated Depreciation and Depreciation Expense • Compare totals to Fund 99 Ensure all necessary interfund entries have hit Fund 99 at year end closing • Compare Fixed Asset Report with GL • Send to Departments for Review • Approved by Finance Director • Accounts Payable o Accounts Payable – Operating o Routinely process Accounts Payable aging report and compare with GL o Reconcile any differences o Adjust for differences o Explain any longstanding items • Revenues o Sales tax - State • Receive Data (Around the 10th of each month for input) • Use excel template for JE • Input into Tyler o Use monthly JE entry template to compare to GL for the month o Adjust for any differences • Approved by Finance Director • Prepare ACH and JE for TIF o Sales Tax – St. Louis County • Receive Data (Around the 10th of each month for input) • Use excel template for JE • Input into Tyler o Use monthly JE entry template to compare to GL for the month o Adjust for any differences • Approved by Finance Director • Prepare ACH and JE for TIF 2  o Property tax -St. Louis County • Receive Data • Use excel template for JE • Input into Tyler o Use monthly JE entry template to compare to GL for the month o Adjust for any differences o Approved by Finance Director • Prepare ACH and JE for TIF (if necessary) o Gross Receipts tax • Receive Data • Use excel template for JE • Input into Tyler o Use monthly JE entry template to compare to GL for the month o Adjust for any differences o Approved by Finance Director o Intergovernmental • Receive Data • Use excel template for JE • Input into Tyler o Use monthly JE entry template to compare to GL for the month o Adjust for any differences o Approved by Finance Director o Grants • Receive Data • Use excel template for JE • Input into Tyler o Use monthly JE entry template to compare to GL for the month o Adjust for any differences o Approved by Finance Director • At least quarterly, obtain the Missouri Department of Transportation/Federal Highway Administration Reimbursement Logs from the Public Works Director. • All Other Revenue and Expense o Review trial balance and detail report o Compare with budgeted figures o Analyze, review, and adjust for any differences deemed inaccurate o Month End JN  TIF UMB Account 151194– GL 30-100-1143 2019 TIF Bond Activity • Download Month end statements from UMB and save in H:\Finance Shared Docs\Dyucuis-DTuberty Files\TIF Bonds\UMB Statements\CY 2020 - 2019 Bond Statements UMB 151194 TIF • Update spreadsheet of monthly activity and generate a JN to balance GL to UMB Statement Activity.  Prepare JN to post Karla Miller Payroll Activity for the Month-Run a History Report for the month-50% of costs are charged to Sewer Lateral Fund 40 from General Fund Administration 10-420.  Post any bank fees and credits from month end statements. o Reconcile State of Missouri Income Tax to Monthly State Report 3  • Financial Reports o After Month End, process an All Funds Revenue and Expenditure Income Statement Report for that month. Export it to Excel, massage the data to be able to add into a monthly report template. o Once completed, send to Senior Staff. o Quarterly prepare a more comprehensive report with narrative to send to the Audit & Finance Committee for review and discussion as well as the Mayor and Board of Aldermen. Both are normally separate meetings on the same day. • Budget and Amendments o Prior to January 1, upload the Adopted Budget into the Tyler Incode General Ledger o Post any approved budget amendments as soon as possible after being approved by Board of Aldermen. Quarterly • Federal Income Tax – reconcile, run and print Reports out of Tyler Incode: • Federal 941 Register Report • Tax Reconciliation Report by Employee • Federal Form 941 with Schedule B-this form is signed and mailed to the IRS • Missouri 941 Reconciliation entered monthly into the MO DoR website • City of St. Louis tax filing with A/P check mailed • US Department of Labor, Bureau of Labor Statistics (BLS), Employment Statistics Report-BLS 790G from Tyler Incode 10. • State of Missouri-Unemployment Report o Print the Unemployment Report from Tyler Incode 10 o Create an Excel document to upload to the website o Upload the document o Print Confirmation Annually W-2’s • W-2’s Balance to the 941 and Payroll • Print W-2’s and distribute by January 31 • File with IRS 1099’s-process and distribute by January 31 1094-C and 1095-C filing for Employer Provided Health Insurance-currently due by March 2. Property Tax - Delinquent Tax Adjustments • Delinquent tax adjustments (“unavailable revenue”) for year-end closing –delinquent tax adjustments are done with auditor assistance due to timing of available information from STL County. Prepaid Expenses • Adjust Prepaid workpapers as expenses are found that will be expensed over a future time frame • Compare workpapers to GL 4  • Make any necessary adjustments Long Term Debt • Compile annual statements • Compare to GL • Make any necessary adjustments Accrued Wages • Run accrued wage report for year end • Review for accuracy • Compare to GL • Make any necessary adjustments Accrued Vacation/ Sick Leave • Run accrued vacation/ sick report for year end • Review for accuracy • Compare to GL • Make any necessary adjustments Severance Liabilities • Run accrued vacation/ sick report for year end • Review for accuracy • Compare to GL • Make any necessary adjustments Fund Balance • Compare Fund Balance to PY Audit • Consider the need to adjust for PY Audit • Discuss any possible discrepancies with auditors • Make any necessary adjustments Grants • Collaborate grant records with Public Works, Police, and Parks. • Compare PW worksheet to GL. • Record revenues submitted for and received after year-end for the MODOT projects. 5 Year End for AUDIT Prepare confirmation letters to auditors by the end of the first week in February. Originals given to auditors to mail out. Below is the 2019 audit confirm checklist. 2019 Confirm Checklist H:\Finance Shared Docs\Dyucuis-DTuberty Files\Audit\2019\2019 Confirms\2019 Completed Confirms Type Sent to Person Document 1 Banking Commerce Bank Bob Oehler Collateral to Secure Deposits 2 Banking Enterprise Bank PO Box 66940 Acct# 7201177625 OP-Acct# 0254020022 Bond-Acct# 0254724046 GF Res- Acct# 0254721667 Prop S - Acct# 450864591 3 Banking Commerce PO Box 66940 Muni Court- Acct #265109938 4 Investments Commerce Bank Marg Mack Acct# 107000051 5 Investments Commerce Bank Marg Mack Acct# 5140596 6 Investments Commerce Bank Marg Mack Acct# 603000073 Prop S 7 TIF 2010 UMB Nancy Mogelnicki 136106-2010 TIF Bond 8 2010 TDD UMB Nancy Mogelnicki 133886-2010 TDD 9 2010 TIF Refunding UMB Nancy Mogelnicki 151493-2010 TIF Refunding 10 TIF 2019 UMB Nancy Mogelnicki 151194-2019 TIF Bond 11 GO 2018 UMB Nancy Mogelnicki 2018 GO Bonds 12 2010 TIF UMB Nancy Mogelnicki 2010 TIF Bonds 13 2019 TIF UMB Nancy Mogelnicki 2019 TIF Bonds 14 Revenue Charter Page Dunnegan 5% Franchise Tax 15 Revenue SW Bell Gary Johnson 5% Franchise Tax 16 Revenue Charter Advanced Services St. Louis MO 5% Franchise Tax 17 Revenue Spire Tax Dept 5% Utility Tax 18 Revenue New Cingular Wireless N. Palm Beach,FL 5% Utility Tax 19 Revenue SW Bell N. Palm Beach,FL 5% Utility Tax 20 Revenue Sprint Spectrum Overland Park, KS 5% Utility Tax 21 Revenue Verizon Wireless Robt. Mutzenback 5% Utility Tax 22 Revenue MO American Water Calvin Cannon 5% Utility Tax 23 Revenue MO Dept of Revenue Ken Pearson General 1/2 cent Sales TaxCapl Imp and Park Storm 24 Revenue MO Dept of Revenue Ken Pearson TIF 1/2 cent Sales TaxCapl Imp and Park Storm 25 Revenue Collector of Revnue St. Louis County Mark Devore TIF 1/2 cent Sales TaxTransportation Tax 26 Revenue Collector of Revnue St. Louis County Mark Devore Prop P Sales Tax 27 Revenue Collector of Revnue St. Louis County Mark Devore 1 cent, 1/4 cent local option, TIF 1/2 cent Sales Tax 28 Revenue Collector of Revnue St. Louis County Mark Devore Property Tax 29 Revenue Collector of Revnue St. Louis County Mark Devore Road & Bridge 30 Revenue Collector of Revnue St. Louis County Mark Devore TIF Property Tax 31 Revenue MO Dept of Revenue Ken Pearson Cigarette Tax 32 Revenue MO Dept of Revenue Tax Admin Bureau -Motor Vehicle Sales Tax-Motor Vehicle Tax-Gasoline Tax Prepare related party letters for the Mayor, Board of Aldermen and Senior Staff. Provide auditors with originals to mail out. Prepare any attorney letters to firms that provided services to the City. Annually provide the auditors with the following items in an electronic format (i.e. Excel, Word, or PDF) prior to the start of audit fieldwork: • List of all City Council members with contact information. • City Council minutes for the 2020 calendar year and any available through the start of fieldwork, if not on the City’s website. Please instruct how to obtain closed session minutes. • Updated internal control documentation, if any. • Documentation of risk assessment performed by the City Council during the 2020 calendar year, if any. • Status of all prior year audit findings. • A copy of the original 2020 calendar year budget, all amendments, and final budget. • All December 2020, and January, February and March 2020 bank statements with reconciliations. March can be provided as soon as available given the fieldwork start date. 6  • Statements for any certificates of deposits as of December 2020 • Any schedules of collateral provided by your financial institutions as of December 31, 2020 • Schedule of unrestricted and restricted cash • Schedule of unrestricted and restricted investments with maturities. • All investment statements as of December 31, 2020 and reconciliations of investment income to investment income reported on the trial balance • Schedule of accrued interest • Schedule of Municipal Court bonds and court fines receivable. • Schedule of 2020 approved property tax rates • Schedule of interfund receivables and payables. • Schedule of interfund transfers. • Accounts receivable aging schedule at December 31, 2020 for all tax revenue and special assessments, and other items • Schedule of unearned and deferred revenue. • Schedule of deferred inflows for property tax revenue levied but not collected within 60 days of the year end • Schedule of prepaid expenses. • Amortization schedules for all bonds issued Amortization schedules for all bond premiums and discounts. • Schedule of accrued interest for all bonds • Accounts payable aging schedules at December 31, 2020 for all funds. • Schedule of encumbrances. • Schedule of escrow payable liabilities. • Fixed asset and depreciation schedules for the year ended December 31, 2020 • Construction in process schedules. • Schedule of unrestricted and restricted fund balance - all funds. • Schedule of Grants received and expended - Federal and State. • Any grant award agreements in which the City received funds during the 2020 calendar year. • A fee schedule for all service charges • Reconciliation of payroll expense accounts and payroll taxes accounts to 941’s all funds. • 2020 Form 941’s • Schedule of payroll liabilities including severance liability calculation. • Schedule of accrued wages - all funds. • Schedule of accrued compensated absences - all funds. • Other schedules as necessary or as requested by the auditor. Have available the following items: • All 2020 W-2’s and 1099’s. • All December 31, 2020 credit card statements. • All investment statements for all accounts • All lease agreements for office equipment or office space. • All contracts for services in excess of $5,000. • All files related to any federal awards received and expended. • Copy of insurance certificates showing amount of coverage for all policies, if new. • Copy of any employee benefit plans (retirement, Cafeteria, etc.), if new. Additionally, the auditors will send over an Excel file with a selection of checks and journal entries. For fieldwork testing, have all the support (invoices, purchase orders, email approvals, etc.) for each check and journal entry included in the testing list. 7 October 5, 2020 3 F - Future Audit & Finance Committee meetings. November 2, 2020 Nine Month Financial Report ending September 30, 2020 As we develop the 2021 Budget Calendar, information will be added to an existing or new Audit & Finance Committee meeting.