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Report on Examination of Firemen's Relief Assoc. I 1 SALINA FIREMEN'S RELIEF ASSOCIATION Salina, Kansas 1 ' REPORT ON EXAMINATION December 31, 1977 1 1 1 II 1 ' WOODS & DURHAM Certified Public Accountants Salina, Kansas • I I SALINA FIREMEN' S RELIEF ASSOCIATION Salina, Kansas OFFICERS AND REPRESENTATIVES 1977 President: Thomas C. Girard Vice President: James H. Yost Secretary-Treasurer: James H. Young Representatives: Thomas W. Wright Richard Spracklin 1 1 SALINA FIREMEN'S RELIEF ASSOCIATION Salina, Kansas 1 ' INDEX Page Number Accountant's Report 1 ' Exhibit "A" Balance Sheet 2 Exhibit "B" Revenues, Expenditures and Changes in Fund Balance 3 Exhibit "C" Note to Financial Statements 4 Supplemental Information Schedule 1 Investments 5 Schedule 2 Comparison of Depository Security with Balances ' on Deposit 6 Schedule 3 Treasurer' s Fidelity Bond 7 ' Compliance Questionnaire 1 ' .51 WOODS & DURHAM sway <ir- Wen let galina 605 W. NORTH STREET • P.O. BOX 1324 TELEPHONE — AREA 913-ffi5-5494 SALINA, KANSAS 67401 1 ' Board of Directors Salina Firemen's Relief Association Salina, Kansas We have examined the balance sheet of the Salina Firemen' s Relief Association ' at December 31, 1976 and 1977, and the related statements of revenue, expendi- tures and changes in fund balance, for the years then ended. Our examination was made in accordance with generally accepted auditing standards and the Min- . ' imum Standard Audit Program approved by the State Municipal Accounting Board March 19, 1976, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circum- stances. In our opinion, the aforementioned financial statements present fairly the fi- nancial position of the various funds and account groups of Salina Firemen's ' Relief Association at December 31, 1976 and 1977, and the results of operations of such funds for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. The accompanying supplemental schedules and related information listed in the table of contents are not necessary for a fair presentation of the financial ' statements, but are presented as additional analytical data. This information has been subjected to the tests and other auditing procedures applied in the examination of the financial statements mentioned above and, in our opinion, is fairly stated in all material respects in relation to the financial state- ments taken as a whole. WOODS & o DURHAM ' Novembf e� 6, 1976 W. Rex�Woods, LMPA, CPA In Charge Of and Actively Engaged On This Audit 1. 1 1 I 1 SALINA FIREMEN'S RELIEF ASSOCIATION • Salina, Kansas ' BALANCE SHEET Exhibit "A" December 31, 1976 1977 ASSETS Cash $ 5,427 $ 3,209 ' Savings Account 10,505 17,151 Certificate of Deposit 122,266 112,266 TOTAL ASSETS $138,198 $132,626 ' LIABILITIES, RESERVES AND FUND BALANCES Fund Balance $138,198 $132,626 ' TOTAL LIABILITIES, RESERVES AND FUND BALANCES $138,198 $132,626 1 1 2. I I I SALINA FIREMEN' S RELIEF ASSOCIATION Salina, Kansas IREVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE Exhibit "B" For The Years Ended December 31, ' 1976 1977 I REVENUES Kansas Commissioner of Insurance $ 31,342 $ 32,207 Insurance Premium Refunds 339 282 I Interest 8,639 8,982 Benefits Received From Insurance Policies 11, 717 3,032 ITOTAL REVENUES 52,037 44,503 EXPENDITURES Funeral Expenses of Deceased Firemen - 1,636 I Gratuity to Widow 10,000 - Medical and Other Payments to Injured Firemen 86 78 Life and Disability Insurance Premiums 18,256 18,066 I Blue Cross-Blue Shield 19,967 26,858 Refund to Firemen' s Benefit Fund of Overpayment to Blue Cross-Blue Shield 88 - I Insurance Benefits Paid Out Other 2,613 3,032 325 375 Treasurer's Bond 25 30 ITOTAL EXPENDITURES AND ENCUMBRANCES 51,360 50,075 REVENUES OVER (UNDER) EXPENDITURES 677 (5,572) IFUND BALANCE - January 1, 137,521 138,198 IFUND BALANCE December 31, $138,198 $132,626 I I I I 3. SALINA FIREMEN' S RELIEF ASSOCIATION Salina, Kansas NOTE TO FINANCIAL STATEMENTS Exhibit "C" For The Year Ended December 31, 1977 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Salina Firemen' s Relief Association conform to generally accepted accounting principles. • BASIS OF ACCOUNTING ' The modified accrual basis of accounting is used. Modifications in such method from the accrual basis follow: 1. Revenues are recorded as received in cash except for: ' a. Revenues susceptible to accrual b. Material revenues that are not received at the normal time of receipt 2. Expenditures are recorded on an accrual basis except for: ' a. Disbursements for inventory type items which are consid- ered expenditures at the time of purchase or at the time the items are used ' b. Prepaid expenses which normally are not recorded c. Interest on long-term debt which is normally an expendi- ture when due and paid d. The encumbrance method of accounting which is adopted as ' an additional modification ' INVESTMENTS Investments are stated at cost. ' FIXED ASSETS Firemen' s Relief Association has no fixed assets. 1 4. 1 1 1 i 1 1 SALINA FIREMEN' S RELIEF ASSOCIATION Salina, Kansas 1 INVESTMENTS Schedule 1 December 31, 1977 ' Issue Maturity Maturity Date Date Number Rate Cost Value ICertificate of Deposit 4- 1-74 4- 1-78 10472 7. 00% $ 52,265. 87 $ 52,265. 87 ICertificate of Deposit 7-16-75 7-16-79 10777 7.25% 50,000.00 50,000. 00 Certificate of Deposit 8-24-76 8-24-80 12974 7.25% 10,000.00 10,000.00 1 $112,265.87 $112,265.87 1 1 1 1 1 1 1 5. 1 1 1 1 1 1 SALINA FIREMEN'S RELIEF ASSOCIATION Salina, Kansas COMPARISON OF DEPOSITORY SECURITY WITH BALANCES ON DEPOSIT Schedule 2 December 31, 1977 1 F.D.I. C. Bank Balance Bank Unsecured Security Balance Bank Coverage Balance By Bank Pledged Unsecured IFirst National Bank and Trust Company 1 Demand Deposits $ 40,000 $ 20,360 $ - $ - 1 Investments 100,000 112,266 12,266 10,000 TOTALS $140,000 $132,626 $12,266 $10,000 $2, 266* 1 *Legally Adequate Per K. S.A. 9-1402. 1 1 i 1 1 1 A 1 • • SALINA FIREMEN'S RELIEF ASSOCIATION • Salina, Kansas ' TREASURER'S FIDELITY BOND Schedule 3 December 31, 1977 Date Date of Effective Expiration Amount Treasurer, Salina Firemen' s Relief Association 9-10-77 9-10-78 $10,000 • 1 1 t 7. I STATE OF KANSAS . I . ISTATUTORY COMPLIANCE QUESTIONNAIRE I - . . Firemen' s Relief Association City of Salina , Kansas IFor the year ended 12-31-77 . IPrescribed By Director of Accounts and Reports ' March 19 , 1976 I ' THIS QUESTIONNAIRE SHALL BE MADE A PART OF THE AUDITED FINANCIAL STATEMENT I ' Instructions If the .answer to any question indicates statutory violation , Ithe matter should be fully discussed in the comments. section. Questions are designed to be answered yes or no . "Not I Applicable" is not a useful answer . Independent auditors should amend questions which do not exactly fit a particular city so that substitute or supplementary provisions of the statutes or local regulations are reflected in the question and answered by I the auditor. See Part V , Section C , Paragraph 2 of the Minimum Standard Audit Program . • I ' GENERAL ' ES No I1. Was there an adequate system of internal control , properly maintained (K.S.A. 12 -101) 7 X i 2. Were liquid assets accounted for properly (K .S .A . 21-3701 and 21-3703) ? IX I I ' 3. Were fixed assets accounted- for properly. (K.S.A. . 12-101) ? - No fi d I ' I I4. Did the district'or county attorney 's copy 'of the audited financial statement include a copy of this Iaudit questionnaire (K .S .A . 75-1126) ? I( 5. Were audit adjustments to correct erroneous or un- ' lawful transactions placed on' the books of account during the course of the examination, whenever ' possible (Raw Valley Drainage District v. Zimmer , 141 Kan. 623) 7 X I I I6. Was income from investments accounted for and credited to proper funds (K.S.A. 10-131 and 12-1675) ? IX I7. Were all boards , commissions , departments , or sub- divisions of City audited? (If not, give reason for X� I their omission , K .S .A . 75-1117?) This report covers only the Salina Firemen' s IRelief Association, which comes as a result of a separate engagement. Not covered in this I 8. Were expenditures for .the library made on order of report. the library board (K. S.A. 12-1225) 7 1 � I I 9. Were funds of the firemen 's relief association invested (K. S.A. 40-1706) or disbursed as authorized I (K.S.A. 40-1707) 7 X 10. Were disbursements from the band fund made in accordance with the terms of a written contract Not covered in this 1 report. with the band (K.S .A. 12-14a04) ? 11. Were interfund transactions made upon legislative ' . . authority (K .S .A . 79-2934) ? None 12. Do the minutes contain an adequate record of the Iproceedings of the governing body (K.S .A . 13-518, 13-2106, etc. )? - x -' I I 1. II13. Were the minutes properly approved by the governing fr ESi L0 1 I body (K.S.A. 13-518 , 13-2106 , etc .) ? . L� n 14 . Were the directives of the governing body with fi I. nancial- import carried out (K .S .A . 12-101) ? Ix 1 1 I 15. Were depositories designated for all city officials . • • receiving public moneys (K.S.A. 9-1401) 7 _. n I 1 I . 16. Were all public 'moneys deposited in designated de- - f;� positories (K .S .A . 9-1401) ?. il, 1 ' 17. Are bank deposits of all city officials adequately secured (K.S.A. 9-1402) 7 IX En I18. Did the governing body approve collateral security and personal bonds furnished to secure deposits I (K. S.A. 9-1402) 7 X I I 19. Are fidelity bonds and insurance policies properly ' filed (K. S.A. 13-518 , 13-2106 , etc .) ? IX I r1 20. Were investments made in accordance with statutory I I p r o v i s i o n s? . I X I I j 21. Were proceeds from city obligations - expended for I .I authorized purposes (K .S .A . 10-117 , etc. ) ? rill I 22 . Were sinking or reserve funds created and used in I accordance with statutory provisions (K.S.A. 10-113 , None etc) ? • I L7 . I . 23. Were claims itemized , internally audited and approved as provided by law (K .S .A . 12-l05o) ? LC I24. Did the governing body approve a budget appropriating by funds as required by the budget law (K.S.A. 79- None I2925 et. seq. ) ? l 1 1 • - 25. Were expenditures from city funds made in compliance None Iwith the budget law (K.S.A. 79-2935) ? n 26. Were expenditures from city funds made in compliance r�� 1 with the cash,-basis law (K.S .A . 10-1113) ? . II._I CITY CLERK � I • 27. Did Clerk maintain a fund ledger (K .S.A. 10-1117) ? ( rr In g—�1 l I 28. Does clerk maintain required fund encumbrance re- Non coral (K, S .A . 10-1117)? n I . 2. IVES ED.. .. 29. Did Clerk open and keep an account of each fund showing the unencumbered budget balance as required (K.S.A. 79-2934) 7 None 1 1 I 30. Was the fiscal agency balance reconciled with out- • 1 1 1 t \` Istanding matured bonds and coupons (K.S .A . 13-518,'- ' E 13-2106, etc. ) ? - - LJn I '1 i31. Were unpaid special assessments certified to the. - `J County Clerk to be placed on tax roll (K.S.A. 12- 608, 12-6a10 , etc .) ? . - EineEll CITY TREASURER - - - I - . .32. Were City funds disbursed as provided by K.S.A. I12-105a, 105b and 10-801 et seq? - _ - I XI -33. Did the City Treasurer maintain records independently Iof those maintained by the City Clerk (K .S .A . 10-1118) ? I j1 f f 34. Were there frequent reconciliations between the ICity Treasurer and the City Clerk (K.S.A. 13-518 ; , 13-526; etc.:) ? [±1111--1 35. Did the Treasurer maintain a chronological record of collateral securities pledged to secure deposits I (K.S. A. 9-1405)7 . . n 36. Did the City Treasurer pay over to Library Treasurer Ithe funds appropriated and collected for maintenance Not covered in this of such public library (K .S .A . 12-1226) 2 L Tri• I - 37. Did the City Treasurer publish quarterly reports as None required (K. S .A . 12-1608)7 I f 1-1 IENTERPRISE (UTILITY) FUNDS (Not applicable to this report) I38. Were operations of these funds budgeted (K.S.A. 79-2925) 7 - I I I I I39. Were transfers of utility "surpluses" anticipated in the current budget (K .S ;A. 12-825d)? I I I I I40. Were utility fund transfers made in compliance with statutory provisions (K.S.A. 10-1204 , 12-825d and I K.S.A. 79-2935) 7 I _ I El 3. 1 /ES F(51 .- 41. Was petty cash fund confined to statutory use (K.S.A. I 12-825a) or as provided by local home rule? f 42. Were charges for utility services in accordance with 1 rates fixed by ordinance (K.S .A. 10-1202 , 12-829 , etc .)? n 43. Did the balance in the customers.' deposit fund equal 1 the amount of deposits in effect (K.S.A. 12-822) ? I I ' 44. Was interest credited on thposits annually as re- fquired by statute (K. S.A. 12-822) ? COMMENTS • 1 1 i 1 i 1 1 1 1 1 1 1 1 1 4.