By Clark Natalie
Financial progress in the city of Harris is evident. That was the conclusion of Dennis Oberloh of Oberloh and Associates as he presented the 2011 audit to the city council June 11.
Both the audit process and the numbers were explained in great detail. The bottom line is that the in the financial aspect of operations, the city has “complied with the material terms and conditions of applicable legal provisions.”
There were three exceptions in the report. The first two dealt with Internal controls.
The city does not have internal controls to monitor all journal entries.
Also, there is not segregation of duties to set up a series of checks and balances.
Oberloh said that he audits 32 Cities in Minnesota and all 32 have the same two exceptions.
Because of the small size of Harris, it is not practical to set up the necessary procedures due to the additional costs.
The third exception had to do with the safety of the deposited funds of the city. The banks that the city uses have a Federal guaranteed limit of $250,000 on deposited funds. At the end of the year, the amount of city funds exceeded that amount. When that happens, the bank is to pledge secured collateral to cover the amount on deposit in excess of the federal guarantee.
Oberloh pointed out that this can happen at times, and City Treasurer Marlys Balfany worked with the bank concerning this issue. But Oberloh pointed out that when the pledged amount does not exceed 110 percent of the deposited amount, it is the city’s responsibility to make sure the banks pledge sufficient collateral. Oberloh and Balfany have worked out a schedule of review with the banks to curb this in the future.
Oberloh stressed that the ease of the audit, which should reduce the cost, is mainly due to the excellent work done by Balfany. Oberloh also stressed that if an examination is done of the last four years, as reflected in the financial statements, progress is evident.
Mayor Diane Miller pointed out that the financial statement “shows the struggle over the last four years, and you can see it is turning around.”