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City audit comes back nearly clean

INDEPENDENCE — City Manager David Clyne said there are a few challenges city staff needs to fix when it comes to finances after an audit report was read by Kamala Austin from Merina & Co. LLC.

December 18, 2013

INDEPENDENCE — City Manager David Clyne said there are a few challenges city staff needs to fix when it comes to finances after an audit report was read by Kamala Austin from Merina & Co. LLC.

"It's nothing where we were four years ago," he said. "We've made a lot of strides."

He said Gloria Butsch, the city's accounting manager, would be promoted to finance director in January in part because of those strides.

She has shown she can handle a lot, Clyne said.

The audit came through with what's called an "unmodified opinion," Austin said.

"That's the highest level of opinion you can receive," she said.

Merina & Co. auditors looked at the city finances, federal awards and the urban renewal agency, among other things.

The $500,000 in federal awards had a single audit that had two findings, Austin said.

In a sports fish restoration grant, the city did not submit the required progress report. Austin said city managers were under the impression Oregon Fish and Wildlife Department personnel were going to submit the report, but didn't. She suggested the city better track which reports are due and when.

The other issue in federal awards came up around the HALO fund. The nonprofit needs to add Job Growers to its auto insurance.

"That's all been resolved, too," Austin said.

Two funds have deficit balances: the urban renewal fund and the HALO fund, Austin said.

"That's an improvement from last year," she said. "We had five funds with deficit funds."

Because the city works on an accrual basis rather than a cash basis, these funds are always going to have negative balances, Austin added.

"You spend the money first, and then you get paid for it," she said.

The city also had minor budget violations in the way some funds were spent, Austin said.

Once the city's finance department upgrades its software, it will help monitor spending, she said, and should fix the problem.

Overall, it is a big improvement from last year, which included some material weaknesses. The city has since fixed that issue as well.

"Looks like we did good," said Mayor John McArdle. "There's nothing better than a boring audit. I mean that with all positiveness."

In other business:

• A church will begin renting the Independence Event Center each Sunday. City Manager David Clyne said the group is not receiving any discounts. "We're doing it by legal access to a church, in the same manor and at the same price as anyone else."

• Clyne said there was, again, nothing new to report on Independence Station, adding what has become his catch phrase on the matter: "We're two weeks closer to March." At that time, if the property developer does not perform or sell it to someone who will, the property will foreclose.

• Clyne and McArdle will meet with state legislators this week to discuss issues facing cities statewide: discussion of marijuana legislation, conversations about public safety after numerous levies failed statewide, and national efforts to eliminate tax-exempt municipal bonds. "People in D.C. think it only helps upper-income folks," McArdle said about the bonds. "We have to remind them that it saves us money, at all levels, and saves our people and citizens lots of money."

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