1988 Annual Financial ReportCITY SECRETARY
ORIGINAL COPY
CITY OF BANGER, TEXAS
FINANCIAL REPORT FOR THE
FISCAL YEAR ENDED SEPTEMBER 30, 1988
ELECTED CITY OFFICIALS
CITY COUNCIL
Nel Armstrong
Jerry Jenkins
Glenn Shaw
Danny McDaniel
Carroll McNeill
Harvey W. Thomas
APPOINTED OFFICIALS
John Hamilton
Rosalie Garcia
Mayor
Alderman
Mayor ProTem
Alderman
Alderman
Alderman
Alderman
City Manager
City Secretary
Tax Collector
CITY OF SANGER, TEXAS
TABLE OF CONTENTS
SEPTEMBER 30, 1988
Accountant's Report on Financial Statements and
Supplemental Schedules 1
Single Audit 2-3
Combined Balance Sheet -All Funds 4-7
Combined Statement of Revenue, Expenditures, and Changes
in Fund Balances -All Governmental Fund Types 8-9
Statement of Revenue, Expense, and Changes in Retained
Earnings -Utility Fund 10
Notes to the Financial Statements 11-17
Balance Sheet -General Fund 18
Statement of Revenue, Expenditures, and Changes in Fund
Balances -General Fund 19-20
Statement of Revenue, Expenditures, and Changes in Fund
Balances -Budget and Actual -General Fund 21
Balance Sheet -Sanger Electric 22-23
Balance Sheet -Water and Sewer 24-25
Balance Sheet -Enterprise Fund -Combined 26-27
Schedule of Revenue and Expenditures -Enterprise Fund 28
Schedule of Revenue and Expenditures -Budget and
Actual -Enterprise Fund 29
Balance Sheet -Payroll Fund 30
Balance Sheet -Revenue Sharing Fund 31
Statement of General Funded Debt 32
Statement of Changes in General Fixed Assets -By Source 33
Property Tax Levies and Collections 34
CITY OF SANUER, TEXAS
TABLE OF CONTENTS (CONT'D)
Combined Schedule of Bonds Payable 35-36
Utility Revenue Bonds -Principal and Interest Requirements 37
Utility Rates 38
Management Letter 39-42
JOHN P. GRAVES
CERTIFIED PUBLIC ACCOUNTANT
520 SOUTH HIGHWAY 377 P.O. BOX 33 PILOT POINT, TEXAS 76258
Honorable Mayor and City Council
City of Sanger, Texas
(817) 686-2449
January 23, 1989
We have examined the financial statements of the various funds
and account groups of the City of Sanger, Texas, for the fiscal year
ended September 30, 1988, listed in the foregoing table of contents.
Our examination was made in accordance with generally accepted
auditing standards and, accordingly, included such tests of the
accounting records and such other auditing procedures as we considered
necessary in the circumstances.
In our opinion, such financial statements present fairly the
financial position of the various funds and account groups of the
City of Sanger, Texas, at September 30, 1988, and the results of
operations of such funds for the fiscal year then ended in conformity
with generally accepted accounting principles applied on a basis
consistent with that of the preceeding year. It is our further
opinion that the accounting requirements of the bond ordinances for
the revenue bond issues have been met.
The accompanying supplemental schedules and statistical section
listed in the foregoing table of contents are not considered essential
for the fair presentation of financial position, results of
operations, or changes in financial position in conformity with
generally accepted accounting principles, but are presented as
additional analytical data. This information has been subjected
to the audit 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 statements
taken as a whole.
ohn Graves
ti ied Public Accountant
JOHN P. GRAVES
CERTIFIED PUBLIC ACCOUNTANT
520 SOUTH HIGHWAY 377 P.O. BOX 33 PILOT POINT, TEXAS 76258
REPORT ON INTERNAL CONTROLS (ACCOUNTING
ON A STUDY AND EVALUATION MADE AS A PART
GENERAL PURPOSE FINANCIAL STATEMENTS AND
BY THE SINGLE AUDIT ACT
To the City Council
Sanger, Texas
January 23,
(817) 686-2449
1989
AND ADMINISTRATIVE) -BASED
OF AN EXAMINATION OF THE
THE ADDITIONAL TESTS REQUIRED
We have examined the general purpose financial statements of the
City of Sanger, for the year ended September 30, 1988, and have issued
our report thereon dated January 23, 1989. As part of our
examination, we made a study and evaluation of the internal control
systems, including applicable internal administrative controls, used
in administering Federal financial assistance programs to the extent
we considered necessary to evaluate the systems as required by
generally accepted auditing standards, the standards for financial
and compliance audits contained in the Standards for Audit of
Governmental Organizations, Programs, Activities, and Functions,
issued by the U.S. General Accounting Office, the Single Audit Act
of 1984, and the provisions of OMB Circular A-128, Audits of State
and Local Governments.
The management of the City of Sanger is responsible for establishing
and maintaining internal control systems used in administering Federal
financial assistance programs. In fulfilling that responsibility,
estimates and judgements by management are required to assess the
expected benefits and related costs of control procedures. The
objectives of internal control systems used in administering Federal
financial assistance programs are to provide management with
reasonable, but not absolute, assurance that, with respect to Federal
financial assistance programs, resource use is consistent with laws,
regulations, and policies, resources are safeguarded against waste,
loss, and misuse, and reliable data are obtained, maintained, and
fairly disclosed in reports.
Because of inherent limitations in any system of internal accounting
and administrative controls used in administering Federal financial
assistance programs, errors or irregularities may nevertheless occur
and not be detected. Also, projection of any evaluation of the
systems to future periods is subject to the risk that procedures
may become inadequate because of changes in conditions or that the
degree of compliance with the procedures may deteriorate.
Our study included all of the applicable control categories listed
in the first paragraph. With respect to internal control systems
used in administering major Federal financial assistance programs,
our study and evaluation included considering the types of errors
and irregularities that could occur, determining the internal control
procedures that should prevent or detect such errors and
irregularities, determining whether the necessary procedures are
prescribed and are being followed satisfactorily, and evaluating
any weaknesses.
With respect to the internal control systems used solely in
administering the nonmajor Federal financial assistance programs
of the City of Sanger, our study and evaluation was limited to a
preliminary review of the systems to obtain an understanding of the
control environment and the flow of transactions through the
accounting system. Our study and evaluation of the internal control
systems used solely in administering the nonmajor Federal financial
assistance programs of the City of Sanger, did not extend beyond
this preliminary review phase.
Our study and evaluation was more limited than would be necessary
to express an opinion on the internal control systems used in
administering the Federal financial assistance programs of the City
of Sanger. Accordingly, we do not express an opinion on the internal
control systems used in administering the Federal financial assistance
programs of the City of Sanger. Further, we do not express an opinion
on the internal control systems used in administering the major
Federal financial assistance programs of the City of Sanger.
Also, our examination, made in accordance with the standards mentioned
in the first paragraph, would not necessarily disclose material
weaknesses in the internal control systems used solely in
administering nonmajor Federal financial assistance programs.
Any weaknesses were considered in determining the nature, timing,
and extent of the audit tests to be applied in (1) our examination
of the 1988 general purpose financial statements and (2) our
examination and review of the City's compliance with laws and
regulations noncompliance with which we believe could have a material
effect on the allowability of program expenditures for each major
Federal financial assistance program and nonmajor Federal financial
assistance programs. This report does not affect our reports on
the general purpose financial statements and on the City's compliance
with laws and regulations dated January 23, 1989.
This report is intended solely for the use of management and should
not be used for any other purpose. This restriction is not intended
to limit the distribution of this report, which, upon acceptance
by the City of Sanger, is a matter of public re Ord.
/ n P. raves
CITY OF SANGER, TEXAS
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30, 1988
Governmental Fund Ty es
Special
General Revenue
Assets
CASH AND INVESTMENTS:
Cash
Certificates
and Savings
RECEIVABLES:
Taxes
of
Deposits
Accounts (Net)
DUE FROM OTHER FUNDS
INVENTORY - at cost
RESTRICTED ASSETS:
Cash
Investments at cost
PROPERTY, PLANT, AND EQUIPMENT:
Land/Easement
Building
Water System
Sewer System
Electric System
Equipment
Improvements
Accumulated Depreciation
AMOUNT TO BE PROVIDED FOR RETIREMENT
OF GENERAL LONG-TERM DEBT
TOTAL ASSETS
66,677
76,255
2,855
Debt
Service
0
See Notes to Financial Statements
Library
Proj ects
10,690
n
Proprietary Fund Account Groups Totals
General General
Fixed Long -Term (Memorandum Only)
Enterprise Assets Debt >� 1 988 1 987
$ 1 1 2, 81 0 $ $ $ 1 29, 991
39,552 116,919
76,255
254,532 254,532
65,400 68,255
67,949 67,949
733,945 733,945
1,500 58,683 60,183
125,945 125,945
943,290 943,290
1,790,298 1,790,298
1,491,029 1,491,029
219,430 364,923 584,353
446,577 446,577
(1,503,886) (1,503,886)
713, 686 713, 686
$ 1 66, 096
94,249
70,112
252,158
2,855
52,238
123,354
635, 81 1
60,1 83
125,945
941 , 368
1,790,298
1,406,640
476,464
446,577
(1,354,020)
760,300
CITY OF SANGER, TEXAS
COMBINED BALANCE SHEET (CONT'D)
ALL FUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30, 1988
Governmental Fund Types
Special Debt Library
General Revenue Service Projects
Liabilities and Fund Equity
LIABILITIES:
Accounts Payable $ 91606
Due to other funds 60,400
Customer Deposits
Deferred tax revenue 76,505
PAYABLE FROM RESTRICTED ASSETS:
Revenue bonds payable (current)
Accrued interest payable
REVENUE BONDS PAYABLE
CERTIFICATES OF OBLIGATION
INSTALLMENT NOTE PAYABLE
TOTAL LIABILITIES
FUND EQUITY:
Contributed capital
Investment in general
fixed assets
Retained Earnings
Reserved for revenue
bond retirement
Unreserved
Fund Balances
Unreserved
Designated for debt
service
Undesignated
TOTAL FUND EQUITY
TOTAL LIABILITIES & FUND EQUITY
$1 46, 51 1
E:
0
0
0
0
0
$ 15,290 $ $ $ 11,857
$1 61,801 $ $ $ 1 1 , 857
See Notes to Financial Statements
Proprietary Fund
Enterprise
4,321
81 , 825
90,000
51 , 802
1,655,000
40,085
Account Groups
General General
Fixed Long -Term
Assets Debt
$ 2,047,415 $
100,1 96
996, 1 28
871,231
1,197,007
645,000
68,686
$ 71 3, 686
Totals
(Memorandum Only)
1 988 1987
$ 133,988 $ 139,227
64,721 2,855
81 , 825 80, 81 9
76,505 70,112
90,000 80,000
51,802 61,185
1,655,000 11745,000
645,000 700,000
1 08, 771 1 09, 949
$2,907,612 $2,989,147
1 00, 1 96 100,197
996,128 888,239
871,231 773,456
1,197,007 1,049,341
178,012
27,147 72,236
$ 41215,849 $ 996,128 $ 713,686 $6,099,321 $6,0501628
CITY OF BANGER, TEXAS
COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
FOR THE YEAR ENDED SEPTEMBER 30, 1988
REVENUES:
Ad valorem taxes,
penalties, and interest
F h' t
ranc ise
axes
Municipal
sales
tax
Sanitation
Court/Fines
Intergovernmental revenue
Interest Income
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
General Government
Public Works
Public safety
Non -departmental
Capital Outlay
Debt Service:
Principal Retirement
Interest
Fees
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
Governmental Fund
s
Special Debt Library
General Revenue Service Projects
$ 31 4, 544 $ $ $
22,741
90,237
140,757
26,437
11,038
6, 370 667
47,683 1,391
.�: •• 1•.
$ 203,385
214,493
193,114
1,247
17,900
69,513
168,790
751
867.946 � 1.247
0
12,697
12.697
$(219,177) $ (1,247) $ $ 399
OTHER FINANCING SOURCES (USES):
Operating transfers in $ 163,881
Operating transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND OTHER
SOURCES OVER (UNDER)
0
0
0
$ (55,296) $ (1,247) $ $ 399
FUND BALANCES -BEG. OF YEAR $ 70,586
FUND BALANCES -END OF YEAR $ 15,290
1,247
11,458
11,857
Totals
Memorandum Onl
$ 314,544
22,741
90,237
140,757
26,437
11,038
7,037
49.074
$ 291 ,1 64
32,152
99,130
110,981
33,689
14,575
10,682
78.101
$ 661,865 $ 670,474
$ 203,385
21 4, 493
193,114
13,944
17,900
69, 51 3
1 68, 790
751
$ 294, 1 79
244,692
189,784
13,926
2,044
,
71,611
1 .271
59861
$ (220,025) $ (206,894)
$ 1 63, 881
$ 204, 874
( 49,1 84
$ 163,881 $ 155,690
$ (56,144) $ (511204)
$ 83,291 $ 134,495
$ 27.147 it 83,291
9
CITY OF SANGER, TEXAS
UTILITY FUND
STATEMENT OF REVENUE AND EXPENSE AND CHANGES IN RETAINED EARNINGS
FOR THE YEAR ENDED SEPTEMBER 30, 1988
Operating Revenue:
Electricity
Water Sales
Sewer Charges
Sanitation
Miscellaneous
Total Operating
Revenues
Operating Revenue Deductions:
Sanger Electric System
Water Department
Less: Utilities Expense and
Capital Outlays
Sewer Department
Less: Utilities Expense and
Capital Outlays
Total Operating Revenue
Deductions
Operating Revenue before Depr.
Depreciation
Operating Revenue
Non -Operating Revenue:
Interest Earnings
EPA Grant
Tota Non -Operating Revenue
Non -Operating
Interest
Fees on
Transfer
Net Revenue
Expense:
Expense and
Revenue Bonds
to Other Funds
Prior Period Adjustment
Retained Earnings:
Beginning of Year
End of Year
$1,727,587
281 , 372
191 1424
141,658
8,857
$1,373,942
231 , 935
$1,696,355
$ 654,543
t•:l
$1,745,482
283,977
149,182
9,950
8.591
$1,549,636
103,656
40.293
$1,693,585
$ 495,006
$ 516,325 $ 358,082
�
$ 39,890 $ 53,742
�230SA 46, 481
$ 52,1 90 $ 100,223
$ (165,790) $ (187,646)
(Net) (145,636) (155,690)
$ $ 114,969
257,089
$ (11,648) $
1,822,797 $1,707,828WE
These Financial Statements are subject to the accountant's opinion.
CITY OF SANGER, TEXAS
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1988
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Sanger operates under a Council -Manager form of government
and provides the following services as authorized by its charter:
public safety (police and fire), highway and streets, sanitation,
health and social services, culture -recreation, public improvements,
planning and zoning, and general administrative services.
The City's comprehensive annual financial report included the accounts
of all City operations.
The accounting policies of the City of Sanger, Texas conform to
generally accepted accounting principles. The following is a summary
of such significant policies.
Principles Determining Scope of Reporting Entity
The financial statements of the City consists only of the funds and
account groups of the City. The City has no oversight responsibility
for any other governmental entity since no other entities are
considered to be controlled by or dependent on the City. Control
or dependence is determined on the basis of budget adoption, taxing
authority, funding, and appointment of the respective governing board.
Fund Accounting
The accounts of the City are organized on the basis of fund and
account groups, each of which is considered a separate accounting
entity. The operations of each fund are accounted for with a separate
set of self -balancing accounts that comprise its assets, liabilities,
fund equity, revenues, and expenditures, or expenses, as appropriate.
Government resources are allocated to and accounted for in individual
funds based upon the purposes for which they are to be spent and
the means by which spending activities are controlled. The various
funds are grouped, in the financial statements in the report, into
generic fund types and broad fund categories as follows:
Governmental Funds
General Fund - The General Fund is the general operating fund of
the City. It is used to account for all financial resources except
those required to be accounted for in another fund.
Special Revenue Funds - The Special Revenue Funds account for revenues
derived from specific taxes or other earmarked revenue sources.
The Revenue Sharing Fund is a special revenue fund used to account
for revenue from Federal Revenue Sharing.
Debt Service Fund - The General Debt Service Fund is used to account
for the accumulation of resources for, and the payment of, general
long-term debt principal, capitalized lease obligations, interest,
and related costs.
Proprietary Funds
Enterprise Fund - The Water Works, Electric and Sewer System Fund
is used to account for the operations of the Water, Electric and
Sewer Utility Enterprise Fund. Enterprise Funds are used to account
for operations (a) which are financed and operated in a manner similar
to private business enterprises - where the intent of the governing
body is the costs (expenses, including depreciation) of providing
goods or services to the general public on a continuing basis be
financed or recovered primarily through user charges; or (b) where
the governing body has decided that periodic determination of revenues
earned, expenses incurred, and/or net income is appropriate for
capital maintenance, public policy, management control,
accountability, or other purposes.
Fixed Assets and Long -Term Liabilities
The accounting and reporting treatment applied to the fixed assets
and long-term liabilities associated with a fund are determined by
its measurement focus. All governmental funds are accounted for
on a spending or "financial flow" measurement focus. This means
that only current assets and current liabilities are generally
included on their balance sheets. Their fund balance (net current
assets) is considered a measure of "available spendable resources."
Governmental fund operating statements present increases (revenues
and other financing sources) and decreases (expenditures and other
financing uses) in net current assets. Accordingly, they are said
to present a summary of sources and uses of "available spendable
resources" during a period.
Fixed assets used in governmental fund type operations (general fixed
assets) are accounted for in the General Fixed Assets Account Group,
rather than in governmental funds. Public domain ("infrastructure")
general fixed assets consisting of certain improvements other than
buildings, including roads, bridges, curbs and gutters, streets and
sidewalks, drainage systems, and lighting systems, have not been
capitalized. Such assets are normally immovable and of value only
to the City, therefore, the purpose of stewardship for these items
is satisfied without recording of these assets. No depreciation
has been provided on general fixed assets.
All fixed assets are valued at historical cost or estimated historical
cost if actual historical cost is not available. Donated fixed assets
are valued at their estimated fair value on the date donated.
12
Long -Term liabilities expected to be financed from governmental funds
are accounted for in the General Long -Term Debt Account Group, not
in the governmental funds.
The two account groups are not "funds." They are concerned only
with the measurement of financing position. They are not involved
with measurement of results of operations.
Because of their spending measurement focus, expenditure recognition
for governmental fund types is limited to exclude amounts represented
by noncurrent liabilities. Since they do not affect net current
assets, such long term amounts are not recognized as governmental
fund type expenditures or fund liabilities. They are instead reported
as liabilities in the General Long -Term Debt Account Group.
All proprietary funds are accounted for on a cost of services or
"capital maintenance" measurement focus. This means that all assets
and all liabilities (whether current or noncurrent) associated with
their activity are included on their balance sheets. Their reported
fund equity (net total assets) is segregated into contributed capital
and retained earnings components. Proprietary fund type operating
statements present increases (revenues) and decreases (expenses)
in net total assets.
Depreciation of all exhaustible fixed assets used by proprietary
funds is charged as an expense against their operations. Accumulated
depreciation is reported on proprietary fund balance sheets.
Depreciation has been provided over the estimated useful lives using
straight line method. The estimated useful lives are as follows.
Utility Plant 40-50 years
Improvements 20-30 years
Machinery and Equipment 5-10 years
Basis of Accounting
Basis of. accounting refers to when revenues and expenditures or
expenses are recognized in the accounts and reported in the financial
statements. Basis of accounting relates to the timing of the
measurements made, regardless of the measurement focus applied.
All governmental funds are accounted for using the modified accrual
basis of accounting. Their revenues are recognized when they become
measurable and available as net current assets. Property Taxes are
recorded as revenue when levied even though a portion of the taxes
may be collected in subsequent years. Penalties and Interest, Court
and Miscellaneous Revenues are recorded when received in cash because
they are generally not measurable until actually received. Franchise
Taxes, Sales Taxes, Intergovernmental Revenue, and Interest Income
are accrued, when their receipt occurs soon enough after the end
of the accounting period so as to be both measurable and available.
Expenditures are generally recognized under the modified accrual
basis of accounting when the related fund liability is incurred.
Exceptions to this general rule include principal and interest on
general long-term debt which is recognized when due.
All proprietary funds are accounted for using the accrual basis of
accounting. Their revenues are recognized when they are earned,
and their expenses are recognized when they are incurred. Unbilled
Water Works, Electric, and Sewer System Fund Utility service
receivables are recorded at year end.
Investments
Investments are stated at cost or amortized cost, which approximates
market.
Inventories
Inventory held by the Water Works, Electric, and Sewer System Fund
is priced at the lower of cost (first -in, first -out) or market.
Minimum amounts of inventory are not maintained, therefore, equity
reserves for inventory have been presented on an average cost basis.
Restricted Assets
These assets consist of cash and short-term investments restricted
for Water Works, Electric, and Sewer System Fund debt service.
Reserves
The City records reserves to indicate that a portion of the fund
balance is legally segregated for a specific future use.
Following is a list of all reserves used by the City and a description
of each:
Reserved for Revenue Bond Debt Service - An account used to segregate
a portion of fund balance for debt service resources legally
restricted to the payment of long-term debt principal and interest
amounts maturing in future years.
Reserved for Revenue Bond Retirement - An account used to segregate
a portion of fund balance for debt service resources restricted to
the payment of long-term debt principal and interest amounts maturing
in future years when sufficient amounts are not reserved in bond
debt. service accounts.
Reserved for Revenue Bond Contingency - An account used to segregate
a portion of fund balance for debt service resources restricted to
the payment of long-term principal and interest amounts maturing
in future years when sufficient amounts are not reserved in the bond
debt service and bond retirement reserve accounts.
"tom
Revenue Recognition - Property Taxes
Property taxes attach as an enforceable lien on property as of January
1. Taxes are levied on October 1 and are due and payable at that
time. All unpaid taxes levied October 1 become delinquent February
1 of the following year.
Property tax revenues are recognized when they become available.
Available includes those property tax receivables expected to be
collected within sixty days after year end. Delinquent taxes are
considered fully collectable and therefore no allowance for
uncollectable taxes is provided.
General Obligation Enterprise Bonds
The Water, Electric, and Sewer System Fund provides the annual debt
service requirements on certain general obligation enterprise bonds
(not secured by system revenues) issued to finance system
improvements. Since the Water, Electric, and Sewer System Fund
provides the annual debt service on these general obligation
enterprise bonds, the bonds are considered to be obligations of the
Water, Electric, and Sewer System Fund and have been reported on
the balance sheet of the Water, Electric, and Sewer System Fund.
Although the general obligation enterprise bonds are reported on
the balance sheet of the Water, Electric, and Sewer System Fund,
they are backed by the full faith and credit of the City and are
therefore a contingent liability to the general government.
Total Columns on Combined Statements - Overview
Total columns on the Combined Statements - Overview are captioned
Memorandum Only to indicate that they are presented only to facilitate
financial analysis. Data in these columns do not present financial
position, results of operations, or changes in financial position
in conformity with generally accepted accounting principles. Neither
is such data comparable to a consolidation. Interfund eliminations
have not been made in the aggregation of this data.
NOTE 2 - DEBT SERVICE REQUIREMENTS
The City is required under provision of revenue bond ordinances to
maintain interest and sinking funds adequate for payments of interest
and principal on the revenue bonds, and to establish reserve and
emergency funds which are to be used only for payment of interest
and principal in the event there are not sufficient funds available
in the required interest and sinking funds. For the year ended
September 30, 1988, the required interest and sinking funds were
adequately maintained and the required amounts of reserve and
emergency funds had been established.
NOTE 3 - CERTIFICATES OF OBLIGATION/NOTES PAYABLE
Certificates of Obligation consisted of the following:
Description
General Fund -Street
Construction
8-11� interest rate
Road Improve.
Notes Payable consisted of the following:
Description Use
First National Bank
of Sanger Utility
9.5� interest rate Truck
Gruman Emergency Products,
Inc.
8.25� interest rate Fire Truck
First National Bank
of Sanger
9.5� interest rate
First National Bank
of Sanger
9.5� interest rate
TOTAL
NOTE 4 - SECURITY BOND
Police Car
Patchman
Original Current
Amount Amount
$700,000 $700,000
$ 54,487 $ 40,839
23, 91 4 1 8, 562
23,675 19,545
$878,764 $833,434
The First National Bank of Sanger operates as the depository bank
for the City of Sanger. The First National Bank of Sanger pledged
bonds totaling $989,145 as security for the City's cash accounts.
NOTE 5 - PRIOR PERIOD ADJUSTMENT
When the audit was conducted fiscal year ended September 30, 1987,
an error in calculating depreciation was made. The following is
a recap of the required adjustment:
Sanger Electric
Utility -Water and Sewer
Adjustment
Depreciation Expense
As Reported As Corrected Adjustment
$ 593,493 $ 691,545 $ 98,052
760,527 674,123 (86,404)
$1,354,020 $1,365,668 $ 11,648
17
CITY OF BANGER, TEXAS
GENERAL FUND
BALANCE SHEET
SEPTEMBER 30, 1988
Cash
Investments
Due from other Funds: Sanger
Taxes Receivable -Delinquent
Due from Sanitation
Fire Department CD
TOTAL ASSETS
ASSETS
Electric
Sept. 30,
1988
$ 32, 691
2,855
76,255
50,000
$ 1 61 , 801
LIABILITIES. REVENUES, AND FUND BALANCE
Accounts Payable
Reserve for Uncollected Taxes -Delinquent
Due to Other Funds
Fund Balance
TOTAL LIABILITIES, RESERVES, AND FUND
BALANCE
$ 9,606
76,505
60,400
15,290
:�
Sept. 30,
1987
$ 1 5, 759
56,141
2,855
70,112
11,055
$ 1 55, 922
$ 15,224
70,112
70,586
$ 1 55, 922
These financial statements and accompanying notes are subject to
the accountant's opinion.
CITY OF SANGER, TEXAS
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
FOR THE YEAR ENDED SEPTEMBER 30, 1988
1988 1987
REVENUES:
Ad valorem taxes, penalties
and interest $ 314,544 $ 291,164
Franchise taxes 22,741 32,152
Municipal sales tax 90,237 99,130
Sanitation 140,757 110,981
Court/Fines 26,437 33,689
Interest Income 6,370 8,401
Miscellaneous 47,683 78001
TOTAL REVENUES $ 648,769 $ 653,618
EXPENDITURES:
General Government $ 203,385 $ 294,179
TOTAL GENERAL GOVERNMENT $ 203,385 $ 294,179
Public Works:
Sanitation $ 158,855 $ 157,983
Streets 46,938 72,898
Planning/Parks 8,700 13,811
TOTAL PUBLIC WORKS $ 214,493 $ 244,692
Public Safety:
Police $ 163, 641 $ 1 65, 31 9
Fire 29,473 17,330
TOTAL PUBLIC SAFETY $ 193,114 $ 182,649
TOTAL CURRENT EXPENDITURES $ 610,992 $ 721,520
Capital Outlay 17,900 2,044
TOTAL EXPENDITURES $ 628,892 $ 723,564
See Notes to Financial Statements
19
CITY OF SANGER, TEXAS
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
FOR THE YEAR ENDED SEPTEMBER 30, 1988
OTHER FINANCING SOURCES (USES):
Debt Service
Operating transfers in
Operating transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND
OTHER FINANCING SOURCES
OVER EXPENDITURES AND
OTHER USES
FUND BALANCE (DEFICIT) -
Beginning of Year
FUND BALANCE (DEFICIT) -
End of Year
•::
$(239,054)
1 63, 881
$ (75,173)
$ (55,296)
��
$ 15,290
See Notes to Financial Statements
1987
$ (88,518)
169,423
( 37,1 66 )
$ (26,207)
$ 96,793
� :.
20
CITY OF BANGER, TEXAS
GENERAL FUND
SCHEDULE OF INCOME AND EXPENDITURES
BUDGET VERSUS ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 1988
Revenue:
Ad valorem Taxes:
Penalties and Interest
Franchise Taxes
Municipal Sales Taxes
Sanitation
Court/Fines
Intergovernmental Revenu
Interest Income
Miscellaneous Income
Total Revenue
Expenditures:
Current:
General Government
Public Works
Public Safety
Non -Departmental
Capital Outlay
Debt Service:
Principal Retirement
Interest
Fees
Total Expenditures
Excess
Over/(Under)
Budget Actual Budget
$ 306,929 $ 314,544 $ (7,615)
23,000 22,741 259
96,050 90,237 5,813
146,352 140,757 5,585
25,000 26,437 (1,437)
e 32,000 11,038 20,962
2,000 7,037 (5,037)
29,420 49,074 (19,654)
$ 660,741 $ 661,865 $ (1,124)
$ 253,268 $ 203,385 $ (49,883)
233,122 214,493 (18,629)
184,562 193,114 8,552
23,124 13,944 (9,180)
46,549 17,900 (28,649)
70, 01 8 69, 51 3 ( 505 )
60,550 168,790 108,240
751 751
$ 871 ,1 93 $ 881 , 890 $ 1 0, 697
Excess Expenditures
Over Revenue $(210,452) $(220,025) $ 9,573
Operating Transfers In 77,965 $ 163,881 $ (85,916)
Operating Transfers Out
Remaining Excess $(132,487) $ (56,144) $ (76,343)
Fund Balance, Beginning 83,291
Fund Balance, Ending $ 27,147
These Financial Statements are subject to the accountant's opinion.
21
CITY OF SANGER, TEXAS
SANGER ELECTRIC SYSTEM
BALANCE SHEET
SEPTEMBER 30, 1988
ASSETS
Current Assets•
Cash $ 98,252
Investment 80,263
Accounts Receivable
(Net of Allowance for Bad Debts) 210,041
Inventory 67,949
Due From General Fund 60,400
Total Current Assets $ 516,905
Restricted Assets:
Customer Deposits 51,449
Total Restricted Assets $ 51,449
Property, Plant, and Equipment:
Electric Plant 1,491,029
Furniture and Equipment 119,907
Less: Accumulated Depreciation (743,634)
Total Property, Plant, and Equipment $ 867,302
Total Assets $1,435,656
These Financial Statements are subject to the accountant's opinion.
CITY OF SANGER, TEXAS
SANGER ELECTRIC SYSTEM
BALANCE SHEET
SEPTEMBER 30, 1988
(Continued)
LIABILITIES & EQUITY
Current Liabilities:
Due to Other Fund $ 4,321
Accounts Payable 117,480
Customer Deposits 51,449
Notes Payable (Current Portion) 8,017
Total Current Liabilities $ 181,267
Long -Term Liabilities:
Notes Payable 40,085
Less: Current Portion (81017)
Total Long -Term Liabilities $ 32,068
Contributions:
Customers 25,314
Total Contributions $ 25,314
Equity:
Retained Earnings, September 30, 1987 1,049,341
Prior Period Adjustments (See Note) (98,052)
Current Period Income 245,718
Ending Retained Earnings
Total Liabilities and Equity
$1,197,007
$1,435,656
These Financial Statements are subject to the accountant's opinion.
CITY OF BANGER, TEXAS
SANGER WATER AND SEWER SYSTEM
BALANCE SHEET
SEPTEMBER 30, 1988
ASSETS
Current Assets:
Cash $ 14,558
Investments -Savings 181,022
Investments-CD's 430,387
Accounts Receivable 45,443
Less: Allowance for Doubtful
Accounts (952)
Due from General Fund 5,000
Total Current Assets $ 675,458
Restricted Assets:
Customer Water Deposits 30,376
Total Restricted Assets $ 30,376
Property, Plant, and Equipment:
Water System 943,290
Sewer System 1,790,298
Furniture and Fixtures 99,523
Easement -Utility Fund 1,500
Less: Accumulated Depreciation (760,252)
Total Property, Plant, and Equipment 2,074,359
Total Assets $2,780,193
CITY OF SANGER, TEXAS
SANGER WATER AND SEWER SYSTEM
BALANCE SHEET
SEPTEMBER 30, 1988
(Continued)
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable $ 61902
Customer Deposits 30,376
Current Portion of Bonds Payable 90,000
Accrued Interest Payable 51,802
Total Current Liabilities $ 179,080
Long -Term Liabilities:
Bonds Payable 1,745,000
Less: Current Portion (90,000)
Total Long -Term Liabilities 1,655,000
Contributions:
Contribution in Aid of Construction 74,882
Total Contributions 74,882
Equity:
Retained Earnings, September 30, 1987 773,456
Prior Period Adjustments (See Notes) 86,404
Current Period Income (Loss) 11,371
Total Equity 871,231
Total Liabilities and Equity
$2,780,193
25
CITY OF SANGER, TEXAS
ENTERPRISE FUNDS -COMBINED
BALANCE SHEET
SEPTEMBER 30, 1988
Current Assets:
Cash
Investments
Accounts Receivable
Net of Allowance for
Inventory
Due from General Fund
ASSETS
$ 112,810
6911672
Doubtful Accounts) 254,532
67,949
65,400
Total Current Assets
Restricted Assets:
Customer Deposits
Total Restricted Assets
Property, Plant, and Equipment:
Electric Plant
Water System
Sewer System
Furniture and Fixtures
Easement -Utility Fund
Less: Accumulated Depreciation
Total Property, Plant,
Total Assets
1,491,029
943,290
11790,298
219,430
1,500
(11503,886)
A Equipment
$1,192,363
$2,941,661
$4,215,849
26
CITY OF SANGER, TEXAS
ENTERPRISE FUNDS -COMBINED
BALANCE SHEET
SEPTEMBER 30, 1988
(Continued)
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable $ 124,382
Due to Other Funds 4,321
Customer Deposits 81,825
Accrued Interest Payable 51,802
Current Portion of Long -Term
Liabilities 98,017
Total Current Liabilities $ 360,347
Long -Term Liabilities:
Bonds Payable 11745,000
Notes Payable 40,085
Less: Current Portion (98,017)
Total Long -Term Liabilities 1,687,068
Contributions:
Customers 25, 31 4
In Aid of Construction 74,882
Total Contributions 100,196
Equity:
Retained Earnings, September 30, 1987 1,822,797
Prior Period Adjustment (11,648)
Current Period Income 257,089
Total Equity 2,068,238
Total Liabilities and Equity $4,215,849
27
CITY
SUMMARY SCHEDULE
FOR THE YEAR
REVENUES:
OF SANGER, TEXAS
UTILITY FUND
OF REVENUES AND
ENDED SEPTEMBER
EXPENDITURES
30, 1988
1 987
Electricity System $1,727,587 $1,819,179
Water System 281,372 283,977
Sewer System 191,424 149,182
Sanitation 141,658
Miscellaneous 81857 91950
Interest 39,890 53,742
Grant 12,300 46,481
$2,403,088 $2,362,511
EXPENDITURES:
Sanger Electric System $1,430,220 $1,557,831
Water Department 277,919 153,309
Sewer Department 285,453 79,266
Debt Service 152,407 187,646
$2,145,999 4t1,978,052
Transfer to General Fund (Net) $ 145,636 $ 155,690
o
ti t
.P
These Financial Statements anal accompanying notes are subject to
the accountant's opinion.
CITY OF SANGER, TEXAS
ENTERPRISE FUND
SCHEDULE OF INCOME AND EXPENDITURES
BUDGET VERSUS ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 1988
Revenue:
Electric System
Water
Sewer
Sanitation
Miscellaneous
Interest
Grant
Total Revenue
Operating Expenditures:
Electric System
Water Department
Sewer Department
Debt Service
Total Operating
Expenditures
Excess Income
Over Expenditures
Excess
Over/(Under)
Budget Actual Budget
$1,6981783 401,727,587 $ (281804)►
272,500 281,372 (8,872)
183,179 191,424 (81245)
141,500 141,658 (158)
3,500 8,857 (5,357)
18,400 39,890 (211490)
12,300 (121300)
$21317,862 $2,403,088 $ (85,226)
$1,588,459 $1,430,220 $ (158,239)
198,831 277,919 79,088
215,416 285,453 70,037
188,178 152,407 (35,771)
$2,190,884 4t2,145,999 $ (44,885)
$ 126,978 $ 257,089 $ (130,111)
Beginning Retained Earnings
Net of Prior Period Adjustment
of ($11,648)
Retained Earnings
1,811,149
$2,068,238
These Financial Statements are subject to the accountant's opinion.
Cash
Due from Other Funds
Total Assets
CITY OF BANGER, TEXAS
PAYROLL FUND
BALANCE SHEET
SEPTEMBER 30, 1988
ASSETS
•::
$ 5, 1 69
� •:
$ 1 , 464
$ 5,169 $ 1,464
LIABILITIES AND FUND BALANCE
Fund Balance $ 5,169 $ 1,464
Total Fund Balance $ 5,169 $ 1,464
These financial statements and accompanying notes are subject
to the accountant's opinion.
30
CITY OF SANGER, TEXAS
REVENUE SHARING FUND
BALANCE SHEET
SEPTEMBER 30, 1988
ASSETS
1 988 1 987
Cash $ 906
Investments $ 341
Total Assets $ $ 11247
LIABILITIES AND FUND BALANCE
Fund Balance $ $ 11247
ANALYSIS OF CHANGES IN FUND BALANCE
FOR THE YEAR ENDED SEPTEMBER 30, 1988
Balance, Beginning of Year
Add: Excess of Revenues over
Revenue
Expenditures
Balance, End of Year
1 988 1 987
$ 1,247 $ 4,915
Expenditures
3,467
(1,247) (7,135)
It
(1,247) $(3,668)
These financial statements and accompanying notes are subject
to the accountant's opinion.
CITY OF BANGER, TEXAS
STATEMENT OF GENERAL FUNDED DEBT
SEPTEMBER 30, 1988
Amounts to be provided for
Retirement of Debt
TOTAL ASSETS
ASSETS
•::
1987
$713,686 $760,300
LIABILITIES AND FUND BALANCE
Certificate of Obligation
Note Payable
$645,000
68.686
$700,000
60.300
TOTAL LIABILITIES AND FUND BALANCE $713,686 $760,300
These financial statements and accompanying notes are subject
to the accountant's opinion.
�£
CITY OF SANGER, TEXAS
STATEMENT OF CHANGES IN GENERAL FIXED ASSETS -BY SOURCE
(Rounded to the Nearest Dollar)
FOR THE YEAR ENDED SEPTEMBER 30, 1988
General Fixed Assets
Beginning of Year
Capital Expenditures
General Fixed Assets
End of Year
TOTAL
107,889
LAND BUILDING
$58,683 $125,945
IMPROVEMENTS
OTHER THAN
BUILDING
$446,577
MACHINERY
AND
EQUIPMENT
$257,034
107,889
$996,128 $58,683 $125,945 $446,577 $364,923
These financial statements and accompanying notes are subject to the accountant's opinion.
33
CITY OF SANGER, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1988
Tax Assessed Tax Current Total
Year Value Levv Collections Percent Collections Percent
1974 $5,411,061 $ 32,466 $ 291088 89.60$ $ 29,907 92.12�
1975 5,974,913 35,846 33,067 92.25% 36,040 100.54%
1976 61478,717 38,873 35,643 91.69% 39,244 100.96%
1977 6,782,337 40,694 37,601 92.40% 39,885 98.00%
1978 7,740,725 46,444 41,947 90.30% 44,389 95.57%
1979 81655,680 60,821 52,391 86.10% 54,650 89.85%
1980 9,597,514 65,951 58,384 88.50% 64,049 97.11%
1981 21,3781529 106,870 99,068 92.70% 107,153 100.26%
1982 40,919,840 184,139 172,019 93.42% 178,008 96.67%
1983 43,073,043 202,443 192,500 95.09% 205,379 101.48%
1984 44,445,069 215,559 205,218 95.20% 210,657 97.73%
1985 511763,572 271,672 243,201 89.52% 250r397 92.17%
1986 62,066,231 295,496 264,530 89.52% 297,677 100.74%
1987 74,735,416 308,107 280,328 90.98% 280,328 90.98%
TAX RATE:
1
971
-1 977
1978-1980
1
981
1
982
1983
1
984
1
985
1986
1987
.60
.70
.50
.45
.47
.485
.524
.4740
163
These financial statements and accompanying notes are subject to the accountant's opinion.
34
CITY OF SANGER, TEXAS
COMBINED SCHEDULE OF BONDS PAYABLE
SEPTEMBER 30, 1988
Description
General Obligation Bonds:
Series 1986
Utilities Revenue Bond:
Series
1973
Series
1976
Series
1977
Series
1982
Series
1985
Total Utility Revenue Bonds
Totals
Interest Rates
9.385�
Issues
Dates Date
Final
Maturity
Date
05/15, 11/15 1986 1986
5 1/2�-5 7/8� 05/15, 11/15 1973 1993
5 1/2�-7 1/4� 05/15, 11/15 1976 1995
4.9�-6� 05/15, 11/15 1977 1996
12.71� 05/15, 11/15 1982 1997
9.3835� 05/15, 11/15 1985 2001
These financial statements and accompanying notes are subject to the
accountant's opinion.
35
Authorized
$ 700,000
BONDS
Issued Retired
$ 700,000
$ 55,000
Outstanding
$ 645,000
295,000 295,000 160,000 135,000
305,000 305,000 100,000 205,000
360,000 360,000 135,000 225,000
450,000 450,000 100,000 350,000
845,000 845,000 15,000 830,000
$ 2,255,000 $ 2,255,000 $ 510,000 $ 1,745,000
$ 2,955,000 $ 2,955,000 $ 565,000 $ 2,390,000
36
CITY OF BANGER, TEXAS
PRINCIPAL AND INTEREST REQUIREMENTS
SEPTEMBER 30, 1988
UTILITY REVENUE BONDS
Year Ended
September 30 Principal Interest Total
1989 $ 90,000 $ 155,607 $ 245,607�
1990 95,000 148,495 243,495
1991 105,000 140,737 245,737
1992 115,000 132,066 247,066
1993 120,000 122,387 242,387
1994 130,000 112,788 242,788
1995 145,000 101,938 246,938
1996 160,000 89,180 249,180
1997 170,000 75,210 245,210
1998 190,000 56,510 246,510
1999 210,000 39,220 249,220
2000 210,000 19,900 229,900
2001 5,000 475 5,475
$ 1 , 745, 000 $ 1 , 1 94, 51 3 $ 2, 939, 51 3
GENERAL OBLIGATION BONDS
1989 $ 60,000 $ 54,500 $ 114,500
1990 65,000 48,125 113,125
1991 70,000 41,300 111,300
1992 75,000 33,950 108,950
1993 80,000 28,700 108,700
1994 90,000 22,900 112,900
1995 100,000 16,150 116,150
1996 105,000 8,400 113,400
$ 645,000 $ 254,025 $ 899,025
These financial statements and accompanying notes are subject to the
accountant's opinion.
37
CITY OF SANUER, TEXAS
UTILITY RATES
SEPTEMBER 30, 1988
Water Rates:
First 2,000 gallons (minimum)
Per 1,000 gallons thereafter
Sanitation Rates:
Residential
Commercial -
Sewer Rates:
- Flat Rate
Flat Rate
Residential
First 11000 gallons
Per 1,000 gallons thereafter
Commercial
First 1,000 gallons
Per 1,000 gallons thereafter
Number of Connections (September 30, 1988):
Water
Sewer
Electric
Water Usage
9.00
1.20
6.50
9.00
$ 14.00
.60
1,220
1,375
1,716
156,615,000 gallons
These financial statements and accompanying notes are subject to the
accou�itant's opinion.
m
JOHN P. GRAVES
CERTIFIED PUBLIC ACCOUNTANT
520 SOUTH HIGHWAY 377 P.O. BOX 33 PILOT POINT, TEXAS 76258 (817) 686-2449
Honorable City Council
City of Sanger, Texas
Sanger, Texas
Gentlemen:
In connection with our examination of the financial statements
of the City of Sanger, Texas for the year ended September 30, 1988,
we reviewed the City's accounting procedures and system of internal
accounting control. We believe the existing controls and procedures
are adequate to provide reasonable assurance that assets are
safeguarded against loss from unauthorized use or disposition, and
that transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of
financial statements in accordance with generally accepted accounting
principles. In addition, we discovered the following problems:
(1) FINDING:
The City of Sanger currently operates a total of eight
funds. These include six separate funds within the
"General Fund" category. There are two separate funds
in the "Enterprise Fund" category. Separate accounting
is required to properly account for each fund.
RECOMMENDATION:
There should be only two "Fund" groups within the City
structure. A General Fund should be established as the
operating fund, and each other area should be set up as
a separate department within this General Fund; ie Library,
Police, Fire, Street, etc. Also, the "Enterprise" group
should be set up under one enterprise fund with a depart-
ment for each operating activity, ie Electric, Water and
Sewer, etc.
(2) FINDING:
An excessive number of transfers are required from each
fund in order to pay the expenses of each fund. These
transfers are being made mostly to the A/P and Payroll
checking accounts.
RECOMMENDATION:
By reducing the number of funds operated, all transfers
should be made from one checking account; ie General Fund
or Enterprise Fund. Using the existing computer system,
these expenditures could then be allocated by department.
(3) FINDING:
In conducting the audit for FYE 9-30-88, I reviewed the
audit report and financial statements issued for FYE
9-30-87. I discovered these financial statements were
not in balance and contained several errors that led to
the understatement of income and an error on the calcu-
lation of depreciation expense.
RECOMMENDATION•
Audit reports should be reviewed carefully by both the
City Manager, City Secretary, City Auditor, and City
Council. Any discrepancies should be resolved and
corrections, if needed, should be made.
(4) FINDING:
In October, 1988, numerous checks were written for
expenses that should have been accrued and applied to
the FYE 9-30-88 Budget.
RECOMMENDATION:
Proper accounting is the responsibility of all city
officials. By circumventing the generally accepted
accounting principles we are required to abide by, does
not allow much reliance to the accuracy of data. Any
expense incurred must be accounted for in the period it
occurs and applied to that budget. To do anything
different will invalidate both the underlying accounting
records as well as the budget process itself.
(5) FINDING:
The general ledger by fund was not in balance. Although
the overall general ledger was in balance, each individual
fund was not. This indicates an error was made in posting,
or recording of transactions by fund.
RECOMMENDATION:
Batch control totals should be used
actions on the computer. Also, see
a further discussion of corrective
the entire accounting system.
when entering trans-
findinq #8 below for
action necessary on
(6) FINDING:
There are entirely too many bank accounts currently in
use by the City of Sanger. This excessive number of
accounts requires an overwhelming number of transfers
monthly to insure all bills are paid. Also, a great
deal of time is being used in reconciling these accounts.
RECOMMENDATION:
The City should be operating no more than seven accounts.
These should be as follows:
(1) General Fund
(2) Enterprise Fund
(3) Payroll
(4) Accounts Payable
(5) Revenue Sharing Checking
(6) Grant Fund Checking
(7) Other Checking
The computer system now in place has the
(7) FINDING:
Deposits are recorded on
RECOMMENDATION:
A separate deposit
revenue. An audit
daily reports, bank
documents.
capability
one
ticket should be made for each fund
trail is then available to trace to
statements, and other supporting
(8) FINDING:
The financial statements being generated by the computer
accounting system are virtually useless. The general
ledger is so detailed and spread out the statements do
not accurately provide sufficient information, or inform-
ation is not combined to reflect a total amount. I
discovered numerous accounts with the same number and
name as well as several account numbers with different
names. I also discovered an alarming number of asset
type accounts reported as liabilities on the financial
statements. Budget comparisons are impossible when
accurate information is not provided. There is no way
of insuring proper posting of information when the
underlying accounting system is faulty.
RECOMMENDATION:
The entire general ledger as currently exists needs to
be scrapped. A completely new setup of accounts needs
to be done under the direction of a CPA or other indiv-
idual capable of insuring a correct and useful output.
The accounting system and software now is place is a good
system, however, it is not being utilized properly. To
accomplish this will be a major undertaking, however, an
imperative action if the efficient and effective use of
the City's assets are to be accomplished. Also, all
General Ledger accounts must be standardized.
(9) FINDING:
The Firemen's Fund is not under the control or direction
of the General Fund in any way. For the year ended
September 30, 1988, this fund deposited a total of $24,645
and wrote checks for $20,670. Also, the Fire department
owns a CD valued at $50,000. During the year the Fire
department secured a $40,000 line of credit loan secured
by the $50,000 CD. Of this $40,000 note, $10,000 was
drawn on 5.13-88 for the purchase of a rescue van from
American Transcoach. Total cost of the van was $10,000,
Two checks were written for this van, #740, 4-18, $1,000
and #748 5-13, $9,000. Also, during the year a truck was
purchased for $4,104 from Wylie Sprayer. This was for
the purchase of a 1972 Ford Truck with a 2500 gallon
Fiberglass tank. Upon request for the underlying invoice
for this purchase, none could be produced. Also, after
discussion with the City Administrator, John Hamilton,
I learned neither of these purchases were put out to bid
as required by Texas Statutes.
RECOMMENDATION'
All operations of the Sanger Fire department should come
under the control and direction of the City of Sanger.
Because the majority of funds generated comes from other
governmental agencies, a proper accounting and control
must be done. Also, by allowing any department to borrow
funds and buy equipment without the approval of the City
Council only exposes the City of Sanger to the liability.
Since the City supports the Fire department and has paid
expenses of $24,468 from other fund revenue, any income
generated by the Fire department should be controlled by
the City, not the Fire department. Since the Fire depart-
ment is a function of the City of Sanger, the City can
be held liable for the $40,000 note secured on note
#8093478, dated 5^11-88.
The above findings and recommendations and possible corrective
action have been discussed with the City Administrator.
I will be happy to discuss any and all findings in detail at
your convenience. I would also like to offer my services to help
institute these recommendations.
This management report is designed solely for the use of
management and should not be used in any other context. This letter,
when accepted by the City Council, City of Sanger, becomes a matter
of public record.
Sincerely,
=�
J n P. Graves
ertified Public Accountant