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kennedy and coe 1989STATE OF KANSAS DEPARTMENT OF ADMINISTRATION DIVISION OF ACCOUNTS AND REPORTS August 30, 1989 CITY OF SALINA CITY HALL. P.O. BOX 736 SALINA, KS 67401 In regard to the audit. oft CITY OF SALINA, fiscal year ending December 319 1989. As provided by K.S.A. 75-1120a(c:), I hereby waive: the following requirements- of K.S.A. 75-1120a to the extent requested by the governing body X GAAP -PRESCRIBED FINANCIAL STATEMENTS GENERAL. FIXED ASSETS ACCOUNTING ONLY A waiver from generally accepted accounting principles -prescribed (GAAP -prescribed) f:i.nanc.ial statements permits a municipality to prepare its financial statements on a basis of accounting which demonstrates compliance with the cash basis and budget laws of Such a waiver- automatically includes a waiver from general. Kansas. fixed assets accounting because fixed assets accounting is a part GAAP. Because of the importance of public disclosure of -the municipality's financial condition, as well as the need for additional information by users of the financial reports, such as bond rating companies, we believe every municipality should work toward the goal of presenting its financial statements .in conformity with generally accepted accounting principles. For many municipalities, this would require only minor changes to the accounting system. We urge you to work toward GAAP compliance: with your auditor. If we can be of any further assistance pleases don't hesitate to contact the. Municipal Accounting Section at 913-296--3436. by Very truly yours, James R. Cobler, Director Division of Accounts and Reports -ezxoze� Chief, Municipal Accounting Section Office of City Clerk Room 206 300 West Ash Street P.O. Box 736 Salina, KS 67402-0736 Telephone (913) 827-9653 CITY CLERK DIRECTOR OF FINANCE ROBERT K. BILES, CPA PERSONNEL DIRECTOR M.E. ABBOTT August 25, 1989 James R. Cobler, Director Division of Accounts and Reports Municipal Accounting Section Room 253 - Landon State Office Building Topeka, KS 66612-1248 Dear Mr. Cobler: Pursuant to Resolution Number 89-4114, adopted on August 21, 1989, the governing body found that financial statements and financial reports prepared in conformity with generally accepted accounting principles are not relevant to the requirements of the cash basis law and budget laws of Kansas and are of no significant value to the governing body or members of the general public of this municipality. The governing body hereby requests a waiver from the following components of generally accepted accounting principles for the fiscal year ended December December 31, 1989 in accordance with the provisions of K.S.A. 75-1120a. GAAP - prescribed financial statements —L General fixed assets accounting Very truly yours, J0°�c' l,-.. �I. "A. lacqueAine Shiever Zity Clerk /js losure: Resolution Number 89-4114 cc: Dave Mills, CPA Kennedy and Coe, Certified Public Accountants P. O. Box 1100 Salina, KS 67402-1100 MEMBER ... LEAGUE OF KANSAS MUNICIPALITIES • NATIONAL LEAGUE OF CITIES RESOLUTION NUMBER 89-4114 A RESOLUTION REQUESTING THAT THE DIRECTOR OF ACCOUNTS AND REPORTS WAIVE THE REQUIREMENTS OF LAW RELATING TO THE PREPARATION OF FINANCIAL STATEMENTS AND FINANCIAL REPORTS PURSUANT TO K.S.A. 75-1120a, FOR THE YEAR 1989. Kansas: BE IT RESOLVED by the Governing Body of the City of Salina, Section I. That the Board of Commissioners hereby finds that financial statements and financial reports prepared in conformity with generally accepted accounting principles are not relevant to requirements of the cash basis and budget laws of Kansas and are of no significance and value to the governing body or the general public of the City of Salina. Section 2. That the Director of Accounts and Reports is hereby requested to waive the requirements of law relating to the preparation of financial statements and financial reports that conform to generally accepted accounting principles pursuant to K.S.A. 75-1120a. Section 3. That this Resolution shall be in full force and effect from and after its adoption. Adopted by the Board of Commissioners and signed by the Mayor this 21st day of August, 1989. Warder, ayor [SEAL] ATTEST: lacqu ine Shiever, City Clerk I RESOLUTION NUMBER 89-4114 i A RESOLUTION REQUESTING THAT THE DIRECTOR OF ACCOUNTS AND REPORTS WAIVE THE REQUIREMENTS OF LAW RELATING TO THE PREPARATION OF FINANCIAL STATEMENTS AND FINANCIAL REPORTS PURSUANT TO K.S.A. 75-1120a, FOR THE YEAR 1989. BE IT RESOLVED by the Governing Body of the City of Salina, Kansas: Section 1. That the Board of Commissioners hereby finds that financial statements and financial reports prepared in conformity with generally accepted accounting principles are not relevant to requirements of the cash basis and budget laws of Kansas and are of no significance and value to the governing body or the general public of the City of Salina. Section 2. That the Director of Accounts and Reports is hereby requested to waive the requirements of law relating to the preparation of financial statements and financial reports that conform to generally accepted accounting principles pursuant to K.S.A. 75-1120a. Section 3. That this Resolution shall be in full force and effect from and after its adoption. Adopted by the Board of Commissioners and signed by the Mayor this 21st day of August, 1989. [SEAL] ATTEST: ACL"%'a. L- SL Ww Jacqu ine Shiever, City Clerk I ' ' Warner, -M �Zrl"X� R. MICHAEL BEATTY. C.P.A. MANAGING PARTNER P.O. BOX 1100. SALINA. HS 6.2 I'M OFFICES KANSAS: SCOTT Cm ANTHONY SMITH CENTER COLBY WICHITA CONCORDIA NEBRASKA: GARDEN CITY MCCOOK GOODLAND OKLAHOMA: GREAT BEND ALVA MARYSVRLE COLORADO: MATT LAMAR SALINA WESTMINSTER The Honorable Mayor and The City Commissioners City of Salina Salina, Kansas 67401 KENNEDY AND COE CERTIFIED PUBLIC ACCOUNTANTS UNITED BUILDING P. O. BOX 1100 SALINA. KANSAS 67402-1100 913 � 825.1561 FAX 913.825-3371 August 15, 1989 R. MICHAEL BEATTY. CPA, PARTNERiN{MARGE ROBERT D. WILBUR. C.P.A.. PARTNER ADLEY E. JOHNSON, CPA.. PARTNER DON P. INEDERICH. OP.A, PARTNER ALLEN WESBER. C.P.A.. PARTNER GERALD L. HUNTER. C.P.A.. PARTNER KURTS G. SIEMENS, C.P.A.. PARTNER DALE A. HEUSZKL, C.P.A.. PARTNER SHANNON L. BUCHANAN. C.P.A.. PARTNER 6HAROH K. SMITH. C.P.A.. PARTNER R. BARTON FARMER, PRINCIPAL RALPH E. REITZ, C.P.A. IRETIREDI JOHN W. POOS. C.P.A. (RETIREW E. T. SHEA, C.P.A. METIREDI L. M. MERTZ. C.P.A. IRETIREDI PAUL A. MOTT, C.P.A. (RETIRED) We propose to audit the financial statements of the City of Salina, Kansas, for the year 1989 listed on Appendix A. Our audits will be made in accordance with generally accepted auditing standards adopted by the American Institute of Certified Public Accountants, the Minimum Standard Audit Program approved by the State Municipal Accounting Board, and the requirements of Office of Management and Budget Circular A-128 and will include our examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In addition, supplemental information (as listed in Appendix A), presented for the purpose of additional analysis and not a required part of the basic financial statements, will be subjected to the audit procedures applied in the audit of the basic financial statements. It is our understanding that the funds subject to OMB Circular A-128 requirements for 1989 are (1) Community Development Block Grants - Small Cities Program - Housing Rehabilitation Grants and (2) Fair Housing Assistance Program. The scope of our audit will include all funds of the City except: Salina Arts Commission Salina Housing Authority Salina - Saline County Board of Health Saline County - City Building Authority Salina Airport Authority Firemen's Relief Association It is our understanding that the above organizations have contracted for separate audits of their operations. The objective of our engagement is the completion of the foregoing audits and, upon their completion and subject to their findings, the rendering of our reports. As you know, the financial statements are the responsibility of the management of the City who are primarily responsible for the data and information set forth therein, as well as for the maintenance of an appropriate internal control structure (which includes adequate accounting records and MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS The Honorable Mayor and The City Commissioners City of Salina August 15, 1989 Page 2 procedures to safeguard the City's assets). Accordingly, as required by generally accepted auditing standards, our procedures will include obtaining written confirmation from management concerning important representations which we will rely upon. As also required by generally accepted auditing standards, we will plan and perform our audit to obtain reasonable, but not absolute, assurance about whether the financial statements are free of material misstatement. Accordingly, any such audit is not a guarantee of the accuracy of the financial statements and is subject to the risk that errors, irregularities, or illegal acts, if they exist, might not be detected. If we become aware of any such matters during the course of our audit, we will bring them to your attention. Should you then wish us to expand our normal auditing procedures, we would be pleased to work with you to develop a separate engagement for that purpose. Our fee for services rendered for the engagement described in the preceding paragraphs will be computed at our standard billing rates for municipalities. However, our fee for this engagement will not exceed $25,000. If our charges at standard rates are less than this maximum fee, you will be charged the lesser amount. Billings will be rendered for payment on a monthly basis so that you may readily relate our charges to the work performed. The maximum fee is based on the assumption that the City will obtain the appropriate waiver from financial statements and reports prepared in accordance with generally accepted accounting principles for the year ending December 31, 1989. In the event laws are enacted or the State Municipal Accounting Board makes changes in the audit requirements for Kansas municipalities, which in our judgment materially increases the time required to perform the services set forth in this contract, we reserve the right to renegotiate the maximum fee with the City Commissioners. In order to facilitate the efficient conduct of our work, we will provide the Director of Finance our requirements for audit documentation, schedules and analyses, and develop a schedule for when such information is to be available. We will be happy to discuss any aspects of this proposal with you at your convenience. If you are in agreement with the terms of this letter, please sign the original and return it for our files. The copy is for your files. We appreciate the opportunity to continue to work with you. Very truly yours, Certified Public Accountants The Honorable Mayor and The City Commissioners City of Salina August 15, 1989 Page 3 Accepted this 11's day of S'•, 1989. Mwyer VY of Salina, Kansas %d=:g" 1� axLUw City C erk - City of Salina, Kansas I CITY OF SALINA SALINA, KANSAS Appendix A FINANCIAL STATEMENTS TO BE AUDITED BY KENNEDY AND COE FOR THE YEAR ENDED DECEMBER 31, 1989 I. THE FOLLOWING FINANCIAL STATEMENTS ARE PRESENTED ON THE CASH BASIS, MODIFIED BY RECORDING ENCUMBRANCES SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COMPARISON OF CASH BALANCES WITH ENCUMBRANCES STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET NOTES TO FINANCIAL STATEMENTS II. SUPPLEMENTAL INFORMATION TO THE BASIC FINANCIAL STATEMENTS LISTED ABOVE COMPOSITION OF ENDING CASH BALANCES COMPARISON OF GROSS CASH BALANCES WITH DEPOSITORY SECURITY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE III. THE FOLLOWING FINANCIAL STATEMENTS ARE PRESENTED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES SEPARATE FINANCIAL STATEMENTS - WATER AND SEWERAGE DEPARTMENT BALANCE SHEET STATEMENT OF INCOME STATEMENT OF CONTRIBUTED CAPITAL AND RETAINED EARNINGS STATEMENT OF CHANGES IN FINANCIAL POSITION OR STATEMENT OF CASH FLOWS, AS APPLICABLE NOTES TO FINANCIAL STATEMENTS We propose to audit the financial statements of the City of Salina, Kansas, for the year 1989 listed on Appendix A. Our audits will be made in accordance with generally accepted auditing standards adopted by the American Institute of Certified Public Accountants, the Minimum Standard Audit Program approved by the State Municipal Accounting Board, and the requirements of Office of Management and Budget Circular A-128 and will include our examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In addition, supplemental information (as listed in Appendix A), presented for the purpose of additional analysis and not a required part of the basic financial statements, will be subjected to the audit procedures applied in the audit of the basic financial statements. It is our understanding that the funds subject to OMB Circular A-128 requirements for 1989 are (1) Community Development Block Grants - Small Cities Program - Housing Rehabilitation Grants and (2) Fair Housing Assistance Program. The scope of our audit will include all funds of the City except: Salina Arts Commission Salina Housing Authority Salina - Saline County Board of Health Saline County - City Building Authority Salina Airport Authority Firemen's Relief Association It is our understanding that the above organizations have contracted for separate audits of their operations. The objective of our engagement is the completion of the foregoing audits and, upon their completion and subject to their findings, the rendering of our reports.. As you know, the financial statements are the responsibility of the management of the City who are primarily responsible for the data and information set forth therein, as well as for the maintenance of an appropriate internal control structure (which includes adequate accounting records and MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS KENNEDY AND COE R. MICHAEL BEATTY. CJP A. CERTIFIED PUBLIC ACCOUNTANTS R. MICHAEL BEATTY, C P A. MANAGING PARTNER PARTNER. IN. CHARGE PO. BOX 1100. SALINA. KS 67402.1 im UNITED BUILDING P. O. BOX 1 1 GO SALINA, KANSAS 67402-1 100 ROBERT D. WILBUR. CPA_ PARTNER OFFICES ADLEY E. JOHNSON. C.P A., PARTNER KANSAS: SCOTT CITY 913 - 823.( $81 DON P. OIEDERICH. C.P.A.. PARTNER ANTHONY SMITH CENTER FAX 9138254391 ALLEN WEBBER, C PA.. PARTNER COLBY WICHITA GERALD L. HUNTER, C. P. A.. PARTNER CONCORDIA NEBRASKA: KURTIS G. SIEMERS. C.P.A.. PARTNER GARDEN CITY MCCOOX DALE A. HEUSZEL. C PA. PARTNER GOOOIANO OKLAHOMA: /� C 1J 1989 SHANNON L. BUCHANAN. C.P.A.. PARTNER GREAT BEND ALV1 - L•Ln gust , SHARON X. SMITH. C.P.A.. PARTNER MARYSVILLE COLORADO: -- PRATT LAMAR R. BARTON FARMER. PRINCIPAL SALINA WESTMINSTER RALPH E. REITZ. C P.A. (RETIRED( JOHN W. POO%. C.P.A. (RETIRED) The Honorable Mayor E. T. SHEA. C.P, A. (RETIREDI L M. MERTZ. C G A(RETIRED) The ile City Commissioners PAUL A. MOTT. C. P.A. IRETIREDI City of Salina Salina, Kansas 67401 We propose to audit the financial statements of the City of Salina, Kansas, for the year 1989 listed on Appendix A. Our audits will be made in accordance with generally accepted auditing standards adopted by the American Institute of Certified Public Accountants, the Minimum Standard Audit Program approved by the State Municipal Accounting Board, and the requirements of Office of Management and Budget Circular A-128 and will include our examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In addition, supplemental information (as listed in Appendix A), presented for the purpose of additional analysis and not a required part of the basic financial statements, will be subjected to the audit procedures applied in the audit of the basic financial statements. It is our understanding that the funds subject to OMB Circular A-128 requirements for 1989 are (1) Community Development Block Grants - Small Cities Program - Housing Rehabilitation Grants and (2) Fair Housing Assistance Program. The scope of our audit will include all funds of the City except: Salina Arts Commission Salina Housing Authority Salina - Saline County Board of Health Saline County - City Building Authority Salina Airport Authority Firemen's Relief Association It is our understanding that the above organizations have contracted for separate audits of their operations. The objective of our engagement is the completion of the foregoing audits and, upon their completion and subject to their findings, the rendering of our reports.. As you know, the financial statements are the responsibility of the management of the City who are primarily responsible for the data and information set forth therein, as well as for the maintenance of an appropriate internal control structure (which includes adequate accounting records and MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS The Honorable Mayor and The City Commissioners City of Salina August 15, 1989 Page 2 procedures to safeguard the City's assets). Accordingly, as required by generally accepted auditing standards, our procedures will include obtaining written confirmation from management concerning important representations which we will rely upon. As also required by generally accepted auditing standards, we will plan and perform our audit to obtain reasonable, but not absolute, assurance about whether the financial statements are free of material misstatement. Accordingly, any such audit is not a guarantee of the accuracy of the financial statements and is subject to the risk that errors, irregularities, or illegal acts, if they exist, might not be detected. If we become aware of any such matters during the course of our audit, we will bring them to your attention. Should you then wish us to expand our normal auditing procedures, we would be pleased to work with you to develop a separate engagement for that purpose. Our fee for services rendered for the engagement described in the preceding paragraphs will be computed at our standard billing rates for municipalities. However, our fee for this engagement will not exceed $25,000. If our charges at standard rates are less than this maximum fee, you will be charged the lesser amount. Billings will be rendered for payment on a monthly basis so that you may readily relate our charges to the work performed. The maximum fee is based on the assumption that the City will obtain the appropriate waiver from financial statements and reports prepared in accordance with generally accepted accounting principles for the year ending December 31, 1989. In the event laws are enacted or the State Municipal Accounting Board makes changes in the audit requirements for Kansas municipalities, which in our judgment materially increases the time required to perform the services set forth in this contract, we reserve the right to renegotiate the maximum fee with the City Commissioners. In order to facilitate the efficient conduct of our work, we will provide the Director of Finance our requirements for audit documentation, schedules and analyses, and develop a schedule for when such information is to be available. We will be happy to discuss any aspects of this proposal with you at your convenience. If you are in agreement with the terms of this letter, please sign the original and return it for our files. The copy is for your files. We appreciate the opportunity to continue to work with you. Very truly yours, Certified Public Accountants The Honorable Mayor and The City Commissioners City of Salina August 15, 1989 Page 3 Accepted this Ilp day of S.,a 1989. y of Salina, Kansas City Clerk - City of Salina, Kansas CITY OF SALINA SALINA, KANSAS Appendix A FINANCIAL STATEMENTS TO BE AUDITED BY KENNEDY AND COE FOR THE YEAR ENDED DECEMBER 31, 1989 I. THE FOLLOWING FINANCIAL STATEMENTS ARE PRESENTED ON THE CASH BASIS, MODIFIED BY RECORDING ENCUMBRANCES SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COMPARISON OF CASH BALANCES WITH ENCUMBRANCES STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET NOTES TO FINANCIAL STATEMENTS II. SUPPLEMENTAL INFORMATION TO THE BASIC FINANCIAL STATEMENTS LISTED ABOVE COMPOSITION OF ENDING CASH BALANCES COMPARISON OF GROSS CASH BALANCES WITH DEPOSITORY SECURITY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE III. THE FOLLOWING FINANCIAL STATEMENTS ARE PRESENTED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES SEPARATE FINANCIAL STATEMENTS - WATER AND SEWERAGE DEPARTMENT BALANCE SHEET STATEMENT OF INCOME STATEMENT OF CONTRIBUTED CAPITAL AND RETAINED EARNINGS STATEMENT OF CHANGES IN FINANCIAL POSITION OR STATEMENT OF CASH FLOWS, AS APPLICABLE NOTES TO FINANCIAL STATEMENTS I CITY OF SALINA REQUEST FOR COMMISSION ACTION DATE TIME 9/11/89 4:00 P.M. AGENDA SECTION: Administration (ORIGINATING DEPARTMENT: (APPROVED FOR NO. 8 Department of Finance AGENDA: ITEM N0. 5 BY: Robert K. Biles BY: Resolution Number 89-4120, authorizing the Mayor to execute and the City Clerk to attest an agreement between the City of Salina and Kennedy and Coe, Certified Public Accountants for an audit of city records for the year ending December 31, 1989, in an amount not to exceed $25,000. The accounting firm of Kennedy and Coe has presented the City with a.proposal to audit the 1989 financial statements for an amount not to exceed $25,000. The proposal is attached. Due to the conversion of the accounting data to a new accounting system, staff believes the continuance of the relationship with Kennedy and Coe will be of benefit to the auditor and the City in terms of time required by both parties involved. Recommended action Accept the proposal from Kennedy and Coe to audit the 1989 financial statements, and adopt Resolution Number 89-4120, authorizing the Mayor to sign the contract. MOTION BY TO COMMISSION ACTION SECOND BY RESOLUTION NUMBER 89-4120 li A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE AND THE II CITY CLERK TO ATTEST AN AGREEMENT BETWEEN THE CITY OF SALINA AND I II KENNEDY AND COE, CERTIFIED PUBLIC ACCOUNTANTS, FOR AN AUDIT OF ii CITY RECORDS FOR THE YEAR ENDING DECEMBER 31, 1989, FOR A COST NOT Iii TO EXCEED TWENTY-FIVE THOUSAND DOLLARS ($25,000). BE IT RESOLVED by the Governing Body of the City of Salina, li Kansas: Section 1. That the Mayor and City Clerk of the City of Salina are whereby authorized to execute an agreement between the City of Salina and (.Kennedy and Coe, Certified Public Accountants for an audit of city records for !.the year ending December 31, 1989, at a cost not to exceed Twenty-five Thousand Dollars ($25,000). Adopted by the Board of Commissioners and signed by the Mayor this 11th day of September, 1989. Joseph A. Warner, Mayor [SEAL] ATTEST: Jacqueline Shlever, City Clerk KENNEDY AND COE R. MICHAEL MANAGING PARTNER ANAGINePARTY.N R CERTIFIED PUBLIC ACCOUNTANTS R. MICHAEL BEATTY, C. PA. FO.SOX 1100. SAUNA. KS 671.Z11.671.Z11.UNITED BUILDING P.O. BOX 1100 PARTNER IN CHARGE OFFICES SALINA. KANSAS 67402'1 100 ROBERT D. WILBUR, C.I.A.. PARTNER KANSAS: 913 825-1561 ADLEY E. JOHNSON. C.P A- PARTNER SCOTT CRY DON P. MEDERICN. C.P.A.. PARTNER ANTHONY SMITH CENTER FAX 913.836.6371 ALLEN WEBBED. CP A. PARTNER COLBY WICHITA GERALD L HUNTER, C.P.A., PARTNER CONCORDIA NEBRASKA: MURTIS G. SIEMERS, CP A_ PARTNER GARDEN CITY MCCOOK DALE A. NEUSZEL, CPA, PARTNER GOODLANO OKLAHOMA: p August 1J 1989 SHANNON L. BUCHANAN, CPA,. PARTNER GREAT BEND ALVA , SHARON K. SMITH. C.P.A.. PARTNER MARYSVILLE COLORADO: PRATT LAMAS SALINA R. BARTON FARMER. PRINCIPAL WESTMINSTER RALPH E. REITZ. C.P.A. (RETIRED) JOHN W. POOS, C.PA. WETIRED) The Honorable Mayor E.T SHEA. C.PA.(RETIREDI and The City Commissioners L. M. MERT2. C.PA. IRETIREDI PAUL A. MOTT.CP.A. WETIREOI City of Salina Salina, Kansas 67401 We propose to audit the financial statements of the City of Salina, Kansas, for the year 1989 listed on Appendix A. Our audits will be made in accordance with generally accepted auditing standards adopted by the American Institute of Certified Public Accountants, the Minimum Standard Audit Program approved by the State Municipal Accounting Board, and the requirements of Office of Management and Budget Circular A-128 and will include our examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In addition, supplemental information (as listed in Appendix A), presented for the purpose of additional analysis and not a required part of the basic financial statements, will be subjected to the audit procedures applied in the audit of the basic financial statements. It is our understanding that the funds subject to OMB Circular A-128 requirements for 1989 are (1) Community Development Block Grants - Small Cities Program - Housing Rehabilitation Grants and (2) Fair Housing Assistance Program. The scope of our audit will include all funds of the City except: Salina Arts Commission Salina Housing Authority Salina - Saline County Board of Health Saline County - City Building Authority Salina Airport Authority Firemen's Relief Association It is our understanding that the above organizations have contracted for separate audits of their operations. The objective of our engagement is the completion of the foregoing audits and, upon their completion and subject to their findings, the rendering of our reports. As you know, the financial statements are the responsibility of the management of the City who are primarily responsible for the data and information set forth therein, as well as for the maintenance of an appropriate internal control structure (which includes adequate accounting records and MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS The Honorable Mayor and The City Commissioners City of Salina August 15, 1989 Page 2 h procedures to safeguard the City's assets). Accordingly, as required by generally accepted auditing standards, our procedures will include obtaining written confirmation from management concerning important representations which we will rely upon. As also required by generally accepted auditing standards, we will plan and perform our audit to obtain reasonable, but not absolute, assurance about whether the financial statements are free of material misstatement. Accordingly, any such audit is not a guarantee of the accuracy of the financial statements and is subject to the risk that errors, irregularities, or illegal acts, if they exist, might not be detected. If we become aware of any such matters during the course of our audit, we will bring them to your attention. Should you then wish us to expand our normal auditing procedures, we would be pleased to work with you to develop a separate engagement for that purpose. Our fee for services rendered for the engagement described in the preceding paragraphs will be computed at our standard billing rates for municipalities. However, our fee for this engagement will not exceed $25,000. If our charges at standard rates are less than this maximum fee, you will be charged the lesser amount. Billings will be rendered for payment on a monthly basis so that you may readily relate our charges to the work performed. The maximum fee is based on the assumption that the City will obtain the appropriate waiver from financial statements and reports prepared in accordance with generally accepted accounting principles for the year ending December 31, 1989. In the event laws are enacted or the State Municipal Accounting Board makes changes in the audit requirements for Kansas municipalities, which in our judgment materially increases the time required to perform the services set forth in this contract, we reserve the right to renegotiate the maximum fee with the City Commissioners. In order to facilitate the efficient conduct of our work, we will provide the Director of Finance our requirements for audit documentation, schedules and analyses, and develop a schedule for when such information is to be available. We will be happy to discuss any aspects of this proposal with you at your convenience. If you are in agreement with the terms of this letter, please sign the original and return it for our files. The copy is for your files. We appreciate the opportunity to continue to work with you. Very truly yours, Certified Public Accountants The Honorable Mayor and The City Commissioners City of Salina August 15, 1989 Page 3 Accepted this _ day of Mayor - City of Salina, Kansas City Clerk - City of Salina, Kansas , 1989. CITY OF SALINA SALINA, KANSAS Appendix A FINANCIAL STATEMENTS TO BE AUDITED BY KENNEDY AND COE FOR THE YEAR ENDED DECEMBER 31, 1989 I. THE FOLLOWING FINANCIAL STATEMENTS ARE PRESENTED ON THE CASH BASIS, MODIFIED BY RECORDING ENCUMBRANCES SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COMPARISON OF CASH BALANCES WITH ENCUMBRANCES STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET NOTES TO FINANCIAL STATEMENTS II. SUPPLEMENTAL INFORMATION TO THE BASIC FINANCIAL STATEMENTS LISTED ABOVE COMPOSITION OF ENDING CASH BALANCES COMPARISON OF GROSS CASH BALANCES WITH DEPOSITORY SECURITY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE III. THE FOLLOWING FINANCIAL STATEMENTS ARE PRESENTED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES SEPARATE FINANCIAL STATEMENTS - WATER AND SEWERAGE DEPARTMENT BALANCE SHEET STATEMENT OF INCOME STATEMENT OF CONTRIBUTED CAPITAL AND RETAINED EARNINGS STATEMENT OF CHANGES IN FINANCIAL POSITION OR STATEMENT OF CASH FLOWS, AS APPLICABLE NOTES TO FINANCIAL STATEMENTS s > ., nap` .: •. .. .. bbbd.� Z CITY OF SALI`PaAs" REQUEST FOR COMM ISSION��ACTIQN',;, DATE- TIME AGENDA"SECT,ION Administration ORtlGINATING DEPARTMENT: APPROyED FQ13 W3 VIJ AGENDA: Department of Finance k _. Robe jjjIP .. Rec�tl°review the 1989audit�report from Kennedy and Coe.,'t' �ftY'T$�"�?ti�_` k J4 fi �" �V Included�tnhis.week's information packet is a copy of the- 1988 audit report TihisF repor 4dicludes 'the auditors opinion in seven, different areas; the financial stateme tsfpr th¢ `year, notes to tFixeyfinancial statements and supplemenia;l -in,o matwn� ;Please note their opinion page 1 Which states the"=financI it, ,on., statements are presented fairly. This is, of course, our. goal as a department. ACv#+ci r Repr�esemtatives froma.Kennedy and Coe will be at the, •meeting to discus's this vra'.sgd. tT t , report We:have:attached staff responses to the auditor's.commenfs and findings. Recommender action' 1 1 Accept the 1988 audit report. 11 y{ yq B 4y i i4 ^v t 1 !' COMMISSION ACTION MOTION BY' SECOND BY, T0: 'azaft' Office of City Clerk Room 206 300 West Ash Street P.O. Box 736 KS 67402-0736 TO: Dennis M. Kissinger, City Manager TeLphon(913) 827-9653 FROM: Robert K. Biles, Director of Finance SUBJECT: 1988 Audit report comments DATE: July 18, 1989 On page 36 of the 1988 audit report, in Note 8 to the financial statements, the auditors point to two apparent statutory violations. The first occurs in the Bond and Interest Fund. As you will recall, we discussed this with the Commission during the 1989 budget process. At that time, we explained the violation would occur due to the issuance of the 1987 downtown bonds on a level principal basis rather than a level debt service basis. The level principal basis was very well received by the purchasers and resulted in an extremely good (low) bid for the bonds. As shown on page 20 of the report, cash available at December 31, 1988 exceeded $351,000. Thus, adequate funds were available to meet the additional expenditure. The second apparent violation Is in the area of depository security on cash deposits. When investments are made, the successful bidder for our funds determines whether he meets the statutory guidelines for depository security, In those Instances where the institution must acquire more depository security, the City receives a commitment letter from the financial institution to provide the necessary security. Usually, within two days, the formal depository security is given to the City Treasurer and is dated the date of its issuance rather than the date the commitment letter is dated. We are discussing this with each financial institution. CITY CLERK DIRMOR OF FINANCE ROBERT K. BILES, CPA PERSONNEL DIRECIOR M.E. ABBOTT MEMBER... LEAGUEOFKANSASMUMCIPALN7ES • NATIONAL LEAGUE OFCNIES Department of Planning and Community Development City -County Building 300 West Ash Street P.O. Box 736 Salina, KS 67402-0736 Telephone (913) 827-8781 Salina City Planning CommWba Sell" Board of toning Appeals Salina city Heritage Commission JUL 1 y 1909 July 19, 1989 TO: Dennis M. Kissinger, City Manager FROM: Roy Dudark, Director of Planning and Community Development Re: Kennedy and Coe 1988 Audit Report The following information is in response to comments contained in the Kennedy and Coe Audit Report for 1988 dated June 16, 1989. The audit report states on page 4 - "One employee receipts, disburses, reconciles, and records all transactions for funds received under the CDBG Housing Rehabilitation Program." In order to more fully describe the City's financial procedures involving this program, the following information is provided. Grant checks from the state are sent to the Director of Finance who places the funds in an internal account and then prepares a check to the Department of Community Development which is deposited in an escrow account. When a payment is due on a contract, the Grants Administrator prepares a check for disbursement from the escrow account. Each check must be signed by the Grants Administrator and Director of Community Development. All deposits and disbursements are recorded on a ledger by budget category and contract name. At the conclusion of each month, a statement of activity in the escrow account (deposits and expenditures) is provided to the Director of Finance. On or about the 10th of each month a bank statement is received by the Grants Administrator who reconciles this with the ledger. Therefore, one employee does not receipt or disburse CDBG funds but does record all transactions and reconciles bank statements. However, to further improve internal control, the Director of Finance will reconcile bank statements in the future. Another audit finding pertained to CDBG grant number 87 -HR -088 (Housing Rehabilitation). The audit states on page 11 that the City was to provide $156,900 of local matching funds but only expended $148,554. The amount of local matching funds to be provided at the time of application is projected for the ensuing 18 month period. The vast majority of such funds is derived from weatherization activity occurring in the City of Salina by the North-Central Regional Planning Commission. When the dollar amount budgeted ($127,300) from this source was reached, no further matching funds were recorded although additional funds were expended. That is, additional matching funds could have been included from this source. The City operates under instruction from the state that this is not proper. This may be in error. A more complete accounting of funds expended by this matching source can be provided if allowed. It is believed that such funds will greatly exceed the identified shortfall. MEMBER... LEAGUE OFMNSIS MUNICIPALITIES a NATIONAL LEAGUE OF CITIES Department of Planning and Community Development City -County Building 300 west ash street P.O. Box 736 Salina, KS 6740240736 Telephone (913) 827-8781 Sagas City Planning Cementation Salim goad of Inning Appeals Salina qty Heritage Commission Page 2 The second reason a shortfall was recorded involved the cost of demolition of dilapidated structures. It was anticipated that such work would cost $10,000. Before the project was bid, several property owners completed repairs and/or removal, thus reducing the number of structures to be demolished by the City. Finally, an extremely favorable bid was received from a local contractor ($2,630). The very nature of such work makes cost estimating extremely difficult. Although the actual expenditures from sources comprising local matching funds did not equal budgeted amounts, the shortfall was very slight (5.3%) and could have been reached by recording a larger match from one source - NCRPC weatherization. Please advise if you have any questions or need additional information. RD/ms MEMBER.., LEAGUE OF KANSAS MUMCIPALMES a NATIONAL LEAGUE OF CITIES RESOLUTION NUMBER 89-4120 A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST AN AGREEMENT BETWEEN THE CITY OF SALINA AND KENNEDY AND COE, CERTIFIED PUBLIC ACCOUNTANTS, FOR AN AUDIT OF CITY RECORDS FOR THE YEAR ENDING DECEMBER 31, 1989, FOR A COST NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS ($25,000). BE IT RESOLVED by the Governing Body of the City of Salina, i Kansas: _ Section 1. That the Mayor and City Clerk of the City of Salina are hereby authorized to execute an agreement between the City of Salina and Kennedy and Coe, Certified Public Accountants for an audit of city records for the year ending December 31, 1989, at a cost not to exceed Twenty-five Thousand Dollars ($25,000). Adopted by the Board of Commissioners and signed by the Mayor this ;!11th day of September, 1989. J ph Warner, Mayor 11,1 i [SEAL] ATTEST: Jacquet ne Shiever, City Clerk STATE OF KANSAS ) ) SS COUNTY OF SALINE ) I, Jacqueline Shiever, City Clerk of the City of Salina, Kansas, do hereby certify that Resolution Number 89-4120 was adopted by the Board of Commissioners at its regular meeting on September 11, 1989, and that the above and foregoing is a true and correct copy of the original on file in my office. WITNESS my hand and official seal this 12th day of September, 1989. rcvei 1 Jacqu line Shiever, City Clerk e CITY OF SALINA REQUEST FOR COMMISSION ACTION DATE TIME 10/15/90 4:00 P.M. ACENDA SECTION: Administration ORIGINATING DEPARTMENT: APPROVED FOR NO -- 8 Department of Finance AGENDA: ITEM 3 Robert K. Biles BY: y BY: Receive and review the 1989 Audit report from Kennedy and Coe. Included in this week's information packet is a copy of the 1989 audited financial statements and the auditor's report on those statements (pages 1 and 2). Several other reports required by government auditing standards and the Federal Government are included in pages 3 through 10. Following the financial statements, notes to the financial statements and the supplemental information, the auditors have presented a separate report on the Water and Sewerage accrual basis financial statements. This is required by our revenue bond covenants. Representatives from Kennedy and Coe will be in attendance to discuss their report. We have attached responses to the auditor's comments and findings. Recommended action Accept the 1989 Audit Report. COMMISSION ACTION MOTION BY SECOND BY TO: If, OIIce of City Clerk Suite 206 300 West Ash Street P.O. Box 736 Salina, KS 67402-0736 T0: Dennis M. Kissinger, City Manager Telephone (913) 827-9653 FROM: Robert K. Biles, Director of Finance and Administration SUBJECT: 1989 Audit report comments DATE: October 10, 1990 As a part of each year's audit report, the auditors are required to comment on material internal control weaknesses or statutory violations which might have come to their attention. The 1989 audit report describes 6 areas on pages 4 and 36 which will require our attention. Page 4 The first item notes the bank statements have not been reconciled on a timely basis. We have had problems in this area; however, we have the bank statement reconciliations current for 1990 and will be allowing sufficient staff time each month to perform this reconciliation on a monthly basis. The second item notes encumbrances were not recorded for a portion of 1989. As we installed our software in 1989, we intentionally did not record encumbrances from May 1 to September 1 to allow us to adequately train personnel in the basic software operation before adding the purchase order module. All remaining encumbrances incurred during that period were recorded in September. Recording of encumbrances has occurred since then. We also had a problem after year-end with properly applying payments to outstanding 1989 encumbrances. With the Salina auditors guidance and additional personnel training, I believe this has been rectified. auarmiucm The third comment relates to the clarity of explanations attached to the journal entries we make. We upgraded our explanations +sea shortly after the auditors brought this to our attention. CnY CLERK JACQUELINE B. SHIEVER, CMC DERECIOR OF FINANCE ROBERT K. BILES, CPA PERSONNEL DIREOOR M.E. ABBOrT MEMBER... LEAGUE OF KANSAS MUNICIPALITIES • NATIONAL LEAGUE OF CITIES V Dennis M. Kissinger October 10, 1990 Page 2 Page 36 The first violation relates to the statutory requirement in K.S.A. 12-1608 that the City publish a financial statement each quarter. These have not been published since the third quarter of 1989. Subsequent to our meeting with the auditors today, you directed me to prepare the financial statements for each of the quarters and publish them along with the September 1990 statement. Work has begun and we will do our best to meet the publishing date of the 20th with all five statements. You also directed me to oversee the preparation and publication of future financial statements as an addition to my current duties. I will ensure this is done. The second comment corresponds to one discussed above and has been corrected. The third violation relates to the closing of the Parking Meter Fund's balance of $34.60 to the General Fund. Rather than carry the balance for over a year until a formal budget for the transfer could be established, I made the transfer in 1989 in order to close the fund. Please let me know if you need any additional information regarding these items. CITY OF SAUNA, KANSAS Cfty ntw.-7 Gteg A Brngtmuu (913) 8244M August 8, 1990 Kennedy,dnd Coe P.O, B6x 1100 Kansas 67402-1100 - Re! Audit of City of Salina, Kansas Dear Auditors: 129 sown stn P.O. But 380 Selina. KS 674024380 The following is my response to your request for information on matters to which I have devoted substantive attention on behalf of the City in the form of legal consultation or representation. This response includes matters that existed at December 31, 1989, - and during the period from that date to the date above. PENDING OR THREATENED LITIGATION, CLAIMS AND (EXCLUDING UNASSERTED CLAIMS AND ASSESSMENTS) 1. Claim by John P Bengtson. On October 5, 1989, John P. Bengtson, through his counsel, David R. Platt of Junction City, Kansas, filed a claim under the Kansas Tort Claims Act alleging that during the early morning hours of April 17, 1989, he was taken from his home to the Salina Police Department for questioning against his will. The claim alleged monetary damages of $20,000 for "false arrest, false imprisonment, illegal search and seizure, violation of constitutional rights and numerous other theories in tort." On February 6, 1990, the matter was settled by the City's police liability carrier for $6,000 with a $5,000 deductible. 2. EPA V. City of Salina. In September of 1989 the City of Salina was advised of administrative proceedings initiated by the Environmental Protection Agency seeking to assess a penalty of $55,000 for alleged violation of the Clean Water Act regarding implementation of its pretreatment ordinance. The exchange of information regarding the status of the pretreatment program and negotiations with EPA resulted in a penalty assessment of $25,000, which was paid by the City in January, 1990. 3. James Peoples v. City of Salina et al.-, Case No. 88-4280-S, Federal District Court. Plaintiff, a former firefighter, alleged Kennedy and Coe Page 2 August 8, 1990 that he was discriminated against due to his race and physical handicap in his termination from employment as a firefighter. The suit was filed November 22, 1988, against the City of Salina, Fire Chief Tom Girard, Personnel Director Mel Abbott, and then acting City Manager Bill Harris seeking reinstatement as well as compensatory and punitive damages. On March 20, 1990, the Court entered its order upholding the City's motion for summary judgment on all counts. No appeal was taken by the plaintiff. The case is now closed. 4. Jim Vint v. City of Salina et al., Case No. 90-1190-C, Federal District Court. On April 4, 1990, Plaintiff brought an action seeking damages in excess of $50,000 and for an order enjoining the City's allegedly "unconstitutional practice of arresting people without have probable cause to believe they have committed a crime." The matter was referred to insurance defense counsel under the City's police liability policy. The case was settled on approximately July 24, 1990, for the monetary sum of $7,620, to which a $5,000 deductible applied. 5. Claims by Billy L. Walter Douglas Cheawidden and Barbara Wicks. On the evening of May 13 and into the morning hours of May 14, 1989, Billy L. Walter, Douglas Chegwidden, and Barbara Wicks were involved in a matter with the Salina Police Department. In February, 1990, separate claims were filed by each through their counsel, Richard F. Waters, Junction City, Kansas. All three claims have been submitted to the City's police liability carrier, subject to a $5,000 deductible and an exclusion from coverage for any award of punitive damages. It is my understanding that these claims are not under negotiation by the insurance carrier at this time; however, suit has not been filed. The following is an outline of each claim. 6. A. Checrwidden. On February 27, 1989, the City received a claim on behalf of Douglas Chegwidden alleging that he was physically and mentally assaulted and battered by members of the Salina Police Department, both on a street and at the police station. He also claims to have been illegally arrested and unlawfully imprisoned. The claim seeks actual damages of $350,000 and punitive damages of $1,000,750.00. B. Walter. On February 28, 1989, the City received a claim on behalf of Billy L. Walter alleging the same theory and damages as the claim by Billy L. Walter. C. Wicks. On February 28, 1989, the City received a claim on behalf of Barbara A. Wicks alleging the same theory as the claim by Billy L. Walter. The claim alleges actual damages of $200,000 and punitive damages of $750,000. On February 18, 1989, the Swans were Kennedy and Coe Page 3 August 10, 1990 scheduled to have a sale of bridal merchandise at one of the local motels. At 9:00 a.m. that morning the sale was closed down by the Salina police department since the Swan's did not have a license for itinerant merchants. At 11:45 a.m. that same morning the Swans were advised that their sale did not require a license and that they could resume. On June 23, 1989, the Swans filed a claim against the City through their counsel, Les E. Diehl of Topeka, Kansas. The claim alleged total damages of $32,360 for additional advertising, lost profits, and damage to business reputation. The matter was referred to the City's police liability carrier, subject to a $5,000 deductible. After lengthy negotiations the City was advised by letter from its insurance carrier dated August 13, 1990, that the matter was settled for $11,350. 7. Randall Leiker v. City of Salina John Woody. Don Poore and Hector Saniurio, Case No. 90-2219-V, Federal District Court. Leiker alleges that on August 9, 1989, the City through its employee, police officer Don Poore, deprived him of his constitutional rights by the "unjustified use of excessive force" during his arrest following a high speed chase from Salina into Ottawa County. Both officer Poore and Kansas Highway Patrolman Hector Sanjurjo were involved in the arrest. Then Police Chief John Woody is also a named defendant on the basis of his responsibility for the training and supervision of Salina police officers. Leiker alleges actual damages of $250,000 and requests punitive damages of $1,500,000. Defense of the suit has been assumed by the City's police liability carrier, subject to a $5,000 deductible and an exclusion from coverage for any award of punitive damages. The case is in the early discovery stages. The civil proceedings are somewhat complicated by criminal charges that have been brought against both Officer Poore and Patrolman Sanjurjo by the Ottawa County Attorney. Officer Poore is charged with misdemeanor battery and felony terroristic threat. Officer PooreAs represented by his own private counsel in the criminal case. The City through its insurance defense counsel is contesting the case at this time. Shortly after the incident, an internal investigation by the City resulted in a determination that Officer Poore had used excessive force and a three day suspension was imposed. Since the case is in the very early stages of discovery and since the criminal proceedings are currently pending, any effort to indicate prospects for settlement or the amount of exposure at this time would be purely conjecture. Kennedy and Coe Page 4 August 10, 1990 UNASSERTED CLAIMS AND ASSESSMENTS: This will confirm my understanding that whenever, in the course of performing legal services for the City of Salina with respect to a matter recognized to involve an unasserted possible claim or assessment that may call for financial statement disclosure, if I have formed a professional conclusion that the City should disclose or consider disclosure concerning such possible claim or assessment, as a matter of professional responsibility to the City, I will so advise the City and will consult with the City concerning the question of such disclosure and the applicable requirements of Statement of Financial Accounting Standards No. 5. Please let me know if you have any questions. Ver yyours RiGri AL` yJ,r UGREG A. L_.. A'doil Greg A. Bengtson City Attorney GAB cc: Robert K. Biles, Director of Finance June 26, 1990 OfmOI Cnq Cleric Sutte 206 300 West Ash Street P.O. Box 736 Mr. Greg Bengtson Salina, KS 67402-0736 City Attorney Telephone (913) 827-9653 P.O. Box 380 Salina, KS 67402-0380 Dear Mr Bengtson: In connection with an audit of our financial statements at December 31, 1989, and for the year then ended, please furnish to our auditors, Kennedy and Coe, P.O. Box 1100, Salina, Kansas 67402-1100, the information requested below involving matters as to which you have devoted substantive attention on behalf of the City in the form of legal consultation or representation. Your response should include matters that existed at December 31, 1989, and during the period from that date to the effective date of your response. (Please specify the effective date of your response if it is other than the date of reply). PENDING OR THREATENED LITIGATION, CLAIMS AND ASSESSMENTS (EXCLUDING UNASSERTED CLAIMS AND ASSESSMENTS): Please furnish a list of all litigation, claims and assessments (excluding unasserted claims and assessments) asserted against the City even though legal proceedings have not started. Information regarding each case should include but not be limited to: 1. The nature of the litigation including identification of: a. The proceedings b. The claim(s) asserted C. The amount of monetary or other damages sought. (If no amounts are stated in preliminary case filings, please so state.) d. Whether or not the potential damages are covered by insurance and, if so, to what extent (policy limits, deductibles, etc.) Salina e. The objectives sought by the plaintiff (if any) other billiftlills than monetary or other damages (such as performance Au-ArenUCM 111111 or discontinued performance of certain actions.) ' I I '' 2. The progress of the case to date (in the process of discovery, trial or appeal.) MY CLERK 3. How the City is responding or intends to respond to the JACQUELINE a SHIEVER, CMC litigation, e.g., to contest the case vigorously or to seek out-of-court settlement. DIRECTOR OF FINANCE ROBERT K. BILES, CPA PERSONNEL DIRECTOR M.E. ABBOTT MEMBER .. LEAGUE OF KANSAS MUNICIPALITIES • NATIONAL LEAGUE OF CITIES Mr. Greg Bengtson City Attorney June 26, 1990 Page 2 4. Your evaluation of the likelihood, of an unfavorable outcome. (To avoid potential misunderstandings of your opinion, please avoid vague phrases such as or similar to "meritorious defense," "without substantial merit," or "reasonable chance of dismissal.") If no opinion can be expressed, please so state and explain the reasons. 5. An estimate as to the amount or range of potential loss. It is important that you express an upper limit on possible and probable losses. If no range or upper limits can be expressed, please so state and explain the reasons. Also, please identify any pending or threatened litigation, claims and assessments with respect to which you have been engaged, but as to which you have not yet devoted substantive attention. UNASSERTED CLAIMS AND ASSESSMENTS: We understand that whenever, in the course of performing legal services for us with respect to a matter recognized to involve an unasserted possible claim or assessment that may call for financial statement disclosure, if you have formed a professional conclusion that we should disclose or consider disclosure concerning such possible claim or assessment, as a matter of professional responsibility to us, you will so advise us and will consult with us concerning the question of such disclosure and the applicable requirements of Statement of Financial Accounting Standards No. 5. Please specifically confirm to our auditors that our understanding is correct. We have advised our auditors that we are aware of no unasserted claims and assessments which shall be disclosed. Please specifically identify the nature of and reasons for any limitation on your response. Please return your response directly to our auditors in the enclosed return envelope. Very truly yours, Robert K. Biles Director of Finance RKB/sp cc: Kennedy and Coe P.O. Box 1100 Salina, KS 67402-1100 City Attorney STATE OF KANSAS DEPARTMENT OF ADMINISTRATION DIVISION OF ACCOUNTS AND REPORTS October 17, 1990 KENNEDY & COE P.O. BOX 1100 SALINA, KS 67402-1100 In regard to the audit of: CITY OF SALINA The following described audit report has been filed as a public record in the office of the Director of Accounts and Reports as required by K.S.A. 75-1124^ Audit Period (Year Ended): 891231 Date Received in This Office: 901017 Certified Public Accountant in Charge of Audit.- DAVID udit: DAVID J. MILLS, CPA Permit No.: 2682 Very truly yours, James R. Cobler, Director Division of Accounts and Reports by Chief., Municipal Accounting Section This copy to be attached to voucher and filed with clerk of municipality. AR -102 (10-1-87)