By By KATHERINE HEMPEL / Niles Daily Star
The City of Niles Monday night council meeting drew a full house as it met at the Ring Lardner Middle School to hear the FY2006 City Audit. Armed with agendas and notepads, students took notes on the process for their civics studies, encouraged by the councilors to make the most of their school years.
"This is the best turnout we have ever had," said City Clerk Ruth Harte. "Tom Desenberg did a wonderful job in getting this organized."
Highlights of the 75 page audit report were presented by Steven Bland of Rehmann Robson, Certified Public Accountants engaged by the city after the audit contract was put out for bid. Finance Director Dave Flowers, prior to introducing Bland, said he and his department had been a bit apprehensive about what procedures might be required by the new auditor. However, he reported that all went very well adding the office portion of the audit was completed in a record nine days.
Niles' net assets at the end of the fiscal year were $32,839,539, an increase of $449,174 from the previous year. Niles Housing Commission reported net assets of $2,488,610, an increase of $89,404 from the year before. Of the $32,839,539 reported in net assets, $16,885,083 was listed under liabilities to meet the ongoing obligations of the council.
At the end of the fiscal year, the City's governmental funds reported total fund equity of $5,214,556, an increase of $101,217 from the previous year. Of this fund equity, approximately 91 percent or $4,746,775 is available for spending at the government's discretion (undesignated fund balance).
Bland explained that only the first two pages comprised the auditor's report with the rest of the document consisting of the details in a variety of forms. Niles' finances were given the highest level of assurance for accuracy. "A clean audit does not mean that we have checked all transactions item by item," Bland explained. "Just as surveys do not have to poll every citizen to know what Americans think, we take random samplings of the transactions and through this statistical sampling get an accurate rating."
While there is no set formula or rate by which to determine what a healthy fund balance should be, Niles, at the end of the current fiscal year, had an unreserved undesignated fund balance for the General Fund of $2,720,920 or 34 percent of the total General Fund expenditures of $8,010,555. While there is no magic number, the bigger this balance is, the less hardship a community is likely to suffer when setbacks such as state funding cuts and unexpected major expenses occur.
The amended budget for FY2006 was set at $8 million but actually came in approximately $50,000 less. Revenues exceeded expectations by $120,000.
Reporting next on the Single Audit done this year, Bland said that here too the city received a very clean audit report. He cautioned the council not to be alarmed by the one checked box that suggested this did not qualify as a low risk audit explaining that it was only when a city had two clean single audits that the low risk designation would apply. This being the first year the city has qualified for the single audit, it would have to achieve another clean audit next year in order to get a positive mark as a low risk audit.
The city's financial department received such high marks that the only specific comment made by the auditor was a suggestion with regard to the internal control of journal entries. Although the books presented no problems, Bland said the city may want to consider an official policy of having a second set of eyes review and initial each entry.
Throughout the evening students took notes regarding the meeting. With a short agenda to cover, when the time came for their individual reports, each of the councilors took the time to pass on some advice to their young audience.
Councilor Daniel VandenHeede said, while it was the smallest agenda he had ever seen, he wanted the students to understand that normally councilors will receive a large packet of material by the Wednesday before the Monday meeting for review. "There is still a lot of homework after junior high," he said, further warning the eighth graders that apathy is the biggest threat at all levels of government.
"Stay involved. This is your government, a representative democracy, but you have to stay involved," he said.
VandenHeede's comments echoed those of the other councilors. Councilors urged the students to stay in school and to get their education. Bill Weimer also addressed the matter of apathy telling the students that voting statistics are way down. "Get involved and stay involved," he urged them.
Georgia Boggs, who was appointed to a five-year term on the Niles Housing Commission, commented on how nice it was to be back in the school from which she had retired. Councilor Pat Gallagher told the students she was pleased by the full house.
During his report, Mayor Mike McCauslin explained the restricted reasons for which a council was allowed to discuss issues in closed session.
"We are only allowed to conduct business and discussion in a closed session when it concerns personnel matters, contracts or the sale or acquisition of property. The council then entered closed session for an "information only" session.