~--­--

• • CITY OF MACEDONIA

SUMMIT COUNTY DECEMBER 31, 1006 ANO 1995

Table of Cont$ntll

El~ orrtclala and Administrative Personnel

Index of Funds

Report of Independent Accountants

Combined Sta1em&nt of cash RE>Ceipts. cash DlsbUrsements, and Changes In Fund C8sl'I Balances· All Govemmental Fund Types and Similar Flduclaiy Funds For the Year Ended Oecembet' 31 .. 199ti

Combined Statement of CaSh Receipts, Cash Dtsbursemen.~. and Changes In Fund C8sh Balances - All Proprietary Funo 1'ypes and Similar Flduclaiy Funds For ttle Year Ended December 31, 1996

Combined Statement ot Cash Receipts, Cash Dl&t>ursements, and Changes In Fund Cash Balances • All $ovemrnen1al Fund Typos and Similar Fiduciary Funds For tl'le Year Ended December 31. 1995

Combined Statement ot Cash Receipts, Cash Olsbursemonts, and Changes In Fund Cuh Batnncea -AU Proprietluy Fu!'ld Typos and Similar Fiduciary Funds For1he Year Ended December 31. 1995

Combined Statement Of Cash Receipts - Budget and Actual For the Year Ended December 31, 1996

Combined Statement or Cash Ols!:>ursements - Budget and Actual For tha Year Encled December 31, 1996

Coml:>lned Statement of Cash Reoelpts • Budget and Actual For tl'le Year Ended December 31, 1995

Combined Statement of Cash Disbursements - Budget and Actual For the Year Ended December 31, 1995

Notes 10 1he Flnanclai Statements

Supplemental Oma - Schedules ot Federal Financial Assistance

Reports of Independent Accountants Baaed on an Audit ?erformed In Accordance wltl'I Government Auditing Standards

Co1npllance at the Flnanclal Statement Level Internal Control Structure at tho (ntlty Level

Reports of lndftl)enctent Accountants Based on an Audit Performed In Acool'danca wltl'I Office of Management and 81.'(lget Circular A·128

General A9Qu1rements • All Federal Programs Specific Requirements • NOl'lmajor Federal Programs Internal Control - All Federal Programs

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(I)

Ql)-(WI)

2-3

,

4

7

8

10

12·20

32 33

34-36

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' CITY OF MACEDONIA

SUMMl':J' COUNTY P699 Valloy Vie'# Road Macedonia, Ohio 44056

ELECTED OFFICIAi.$ ANO ADMINISTRATIVE PERSONNEL AS OF DECEMBER 31. 1996

ELECTED OFFICIALS

NAME TITLE TERM SURETY

Joseph Mlgllorlnl Mayor 1/1196. 12/31/00

· Mike Menhart Member 1/1/96. 12/31.IOO

Janet Tulley Member 111196 - 12131199

Nleholas Molnar Member 1n194.12131197

Jim Lawton Member 111/94-12/31197

Barbara Komuc MembH 1/'1194-12/31197'

AnnaHejduk Member 111194- 12i'31/97

.ADMINISTRATIVE PERSONNEL

NAME TITLE TEAM SURETY

Thomas OILo:no Finance Olroctor Continuous

Statytory Looat C9umsQ!

Joseph W. Diemert 1360 SOM Center Road Mayfield Heights, Ohio 44124

(A) Cincinnati Insurance Company (B) Covers period

(A)

(I}

AMOUNT PERICO

AMOUNT PERIOD

$50,000 (B)

-~· ... ·· _ ..

~-··· .... ::::-- -

. City ar Maoadonla Summlt'County

Index of Fundi

GOVERNMENTAL FUNP JYPE5; ' •· •, ... I'\·•'

. GtMrjt EyQdlvpO; General.Fund .. , .. · ,.,.. ~ ..•.

' H' •' " I,,,.. • ,,I ' ' •

~" Blvgnuti fund J".Ypts· Str89t Constructlon,·Mall'lt8n&noe, and Ropalr Fund

\

· Sm1ll Highway Fund·. ' PermlulYe Ue»nae :ru:. !=und :· . Panel.and· RecrN.tiortfund . Wataf·Malnt&nanoe and Expans.lon Fund Fire Operating L8ll)' Fund Vehlcl .. l.IC9n8e·:T'.-X·Fund Pollot P90aion-Tran.t« Fund Clty tncome.;T.ali.Fund Drug;-1 . .aw Enforoement Fund l..aw Enfofcement Education. Fund Community Development Bloclc Grant Fund DARE. Program Fund Milyor'a Court Computer Fund Lea1/8rancl'l Wa.~e Management Fund FAJ.R. Program Fund

,Debt Service Fund Types: a.n.rat Obllgatlcn Bond R61lrement Note Fund Special Aaaoaameni Bond Retirement Fund Cit,i Hall Conab'uction Bonda Fund Water Main Construction Note Fund Highland Road Sewer Note Fund Fire Cepaftmont Apparatus Note Fund · 1001· ROllCI Resurlaclng Note Fund

Caojtal Prclectl Fund~ Capital Improvement Note Fund OrlflwOod UM Extension Project Fund State Aout9 82 Widening (Phase 1} Fund 1995/199ffAoad Projects Fund Safety $tll'Vlce Facility Fund BrookpcintStonn Wawr Improvement Fund Manor House Renovation Fund Highland POll'lte Parkway Projeet Fund Highland Road Widening (Phase 1)

eBOPBlETABV fUNO mes·

EQ!eror!H Fu(!d Iype1; Nordonla Hill$ Fun Ffitlval Fund

(II)

...

• The Honorable Mayor and M81T1ber.s o1 Council City o1 Maeeelonia Maoedonla. Ohio 44056

STA.TE OP 0HJo OPna Of THE' At.TDrroR

JIM P!rrRO, AUDrl'OR OP STAn:

Report of lnd91Mndent Accounblnta

1111t.1~s­P.O.lbc ll40 Cclumbw. Ohb 4.1216-1140

T~61~14. ~.om.

~ 6l~u90·

We havo audited tho accompanylng financial statements of the City of MaceclOnla. Summit County, (the City) as -:if and tor the )'81.lrs endocl December 31, 1996 and 1995. ThoM financial statemerrts are the responslbllltyo1 ttie City's l'Ulnagement. Our rosponslblllty Is to express an opinion on these financial &tatemonts basod on our audits.

Wo concluc:tod our audits In aecon:lanoo w!th generally aCCGrptod audltlng standards and µwmmem ~Kina Sta!lda«l~. Issued by the Comptroller Goneral of tho United States. Those stanclardS l'OCIUlre that we plan and perftlrm the audits to obtain reasonable assuranco about wl'lethor tho flnanelal S1atoments aro 1roe of material misstatement An audit lncludos examining, on a tnst basis, evidence suppcrtlng the amounts and disclosures In tho financial stataments. An audit also Includes assessino the accounting principles used and slgnHlcant estimates made ty management. as well as ovaluatlng the overall financial atatomont prosontatlon. Wo believe that our audits provide a rnasonable basis for our opinion.

A..-i dl&eusaod In Noto 1, the City propares Its financial statomentn on the cash basis of aecountlng, which Is a comprehensive basis of accounting other than generally accoptad accounting principles.

In our opinion, tho financial statements roforred to at>ovo present fairly, In all material respects. the combined fund cash bl:t:ances of tho City, as of Oocembltr 31, 1996 ond 1995, and Its combined cash receipts and cash disbur:iements for thG years t!'IOn ended on the basis of accounting described In Note 1.

1n accordanoe wtttl Govemmem Au~ltlOQ WOndards, we hove also Issued a roport dated October 6, 1997 on our eonsleleratlon of tt'le City's Internal control Stl'Uct'.ire and a report dated October 6, 1997 on rts compllanee with laws and rogulattons.

Our audits woro made for the purpose of forming an opinion on the 11Mnclal statements of tho City taken as a whole, The accompanying 1996 and 1995 Schedules of FOOoral Financial Assistance are presented for the purposes of additional analysis and are not a requlrOd part of tho financial statements. The lnformatlen In tho schedules has oeen sub;ected to the auditing Procedures applied In the audits of the financial sta'lements and. in our opinion, Is fairly prosented In all rnatetlal resP"CtS in roiatlon to the financial statements taken as a whale.

October 6, 1997

1

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•

cn·y OP MACEDONIA SUMMIT COUNTY

COMOL"lED ST A'l'EME.'ll'I' OP CASH RP..c:EIPTS, CASH DlSBURSC."li?NrS, AND CHANGES JN J'IUND CASH BALA.'lCES ·ALL CiOVER.'lMENTAL FUND TYPES A.'ID SL"lll.AR FIDUCIARY FUNDS

FOR THE YEAR E."IDED DECEMBER 31, 1996

Spoclal (' '""1'111 ~U('

Cuib IQlelpUI: Loail W.01 Sl.:21.,314 $3,(1()3.9' 1 lnlcr~tal 364.606 !528.Z17 Spocial UllCllilUCllll 0 0 Qw\'Oll f ot JICr'Yicca 100,43!1 Z?9.S30 flioe., Ucen.c1, and permill 293.647 10,098 MilOOIJllll«>l.la '?Qm ,, 1'.11

Toou eub rocelptio Z.05?,174 4,404,J:5

Cub di1bW'ICmenta: Current:

Seclll'iry or pcnona and property l.68~.807 160,7!19 Public health llCl"iocl 97,646 0 l.ei1ure tlme activltica 0 31:.4113 Com.immity <'llvironment :!l'),4(;0 0 BlMiic utillly ICl'VNleti 493,902 90-3&3 Tran,portatioo :SS.!164 370,4!11 Geocral go~t l,)47,S37 80,30:

Debt Service: Redemption or princl pol and inten:llt 0 0

Capit.111 outlay lNO '.'i !l'il

Tollll caah di~bul'JCmcmtB 4{'1JR 1~ 11mop'1R

TOUIJ caah l"lCeip!JI oYer/(under) caab di1bllniemen11 (Z.031!.IC!2) 3.3JU.097

Other financing &ooeipll/(dl1bul'lement1): ~ Crom llllle or public debt:

Slllc of bond1 0 0 Salo of llOICtl 0 0

Tt'llll'lfen-in ~.478 l!SJ..340 Adv811CC4-in !l,000 0 Tt11nafcn-out (269,400) (:',4!1"'..,337) J\dYllllCe..OUt 0 (S,100) Other llOlll'COll 0 0

Toial othct finlll!Cing tt1Celpw(di1buniemcn11) I ,9;.li,07K Q,:!™r~

&ce.iii; or awi ma:ipll and other financing raoeipta O\lel'f(undcr) caah di•bUl'lemcnD ond other financing diabuncmenl/j (IOZ.744) 178.000

Pund wh balancea. J1niwy I, 1996 ~1Q.:'~ p!'l;nm

Fund cmll bllanoea, Dec.cm~ JI, 1'196 111 fl,!'IM Sl~~.'!ltl

The notoa art11 an Integral part of the financial .iatement11 2

Dcbl Service

$86,:?32 0

103,798 0 0 0

l90,0JO

0 0 0 0 0 0

1,142

76!1.13!1 0

7M'r17

(S76.247)

c 236.ooo 3!13,713

0 0 0

!CN9 71 ~

13.466

'.IO 771

S441:37

... _, -...........

,.. ...... r• ... •'' •

(Memorandum Onl;i:2

Coplllll l.;Jtpendldtle Project• Tru•! Tn111l

$0 $0 $4,911,,496

3118.ZSZ 0 l.;?81,104 47,130 0 l~.9"..JI

0 1,431 . 331,39S 0 0 303,74!1

11.'l,4~ li'.\QQ :!-4'.\ 4114

560,893 7,1130 7.~1!13

76,53Z. 0 l,?Zl,091\ 0 0 97,646

:79 3,0l!S 'JCS,777 , . 0 0 219,460 -- S4,757 0 6~9,041

94.971 0 720,986 0 0 l,4::?8,9KZ.

3,IJK,JK6 0 3.903,3~1 ~.~o.~·~. 0 '.\,2S6,lilll

ti,l'il Sr<: l'2 '.'OIS lMOf,9".JI

(6.054,619) 4,1115 {!1,:S0,77!1)

3,Z64,711 0 3.Z64.71 I !1,900,043 3 6,136,043 1,!114,0!ll 10,400 4.3:?9.983

196,949 0 Wl,949

-:::-=~-:-· (6;!1,906). 0 (4,337,6.SS) (191,849) 0 (196,949)

0 1 7!16 1756

10 Oti7 9Q9 l::?,1~ Q '.\QQ ll!IO

4,013r1K1 16,971 4,119,0'l!I

M'.\ 4'.'7 l:'i'.:',';!HO 1~m1

S4,6'7ti,1117 ~l(iQ,Z.:'i~ S'.'i, 1fi9,0Q6

3

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' I ,

' ' I

f -..

CITY OF MACED01'1A SUMMIT COU:-.'TY

COMBL'llED STATEMENT OP CASH RECEIPTS, CASH DISBURSEME.,"TS, AND CHA."IOES L"1 FtJ CASH BALANCES· AU. PROPRIETARY FtJND TYPB.S AND SIMILAR FIOUOAR.Y J:o'1JNDS

FOR 'rHF. YEARe.'DED O~ER3!.19% (M~DlCll'lmdum

Onl:z:~

8mo.'\l]!it1e Agencv Total

Operating caah RICCipa: ChaQ,'Cll fl'!' liCl'YiCCll so S!S,.566 SlS,$66 Fines, liccn-. llllcl pcnni tll 22,Q3S 48,72Q 71664

Total operating cub rcc::c.ipt11 :?2,93~ 64,:9:S 87.2.,;u

Operating cub di~lli: Gencnal govmimcnt 0 48,729 48,729 Public hcaltb !ICl'Yioe> 0 13,68!1 13,68!1 Contractual ~CCII 14,:37 0 14,:!37 Supplictl end lllldcriu111 6W) 0 fi.7~

Tola! operating calih dh1bunementll 2! O:l6 ti;414 83,4SO

Opcnrtini; income l,900 l,881 3,781

Non-opel'8.ting CMb rcccipu: , Other non-opcruting revenue11 0 14.'i,899 l4S,899

Non-operating caab diKbUl'llCIDClltll: Other non..openuing c.ll disbuncrnentli 0 176,647 176 647

ExCC811 of re.x:ipta OY«/(undcr) dillbul'llementi; bef~ inu:rfund b'lln~feni and advllDOCll 1,900 (28,867) (].6,967)

TranRf~·in 8,000 0 8,000 Advmicett-iD 0 0 0 Trnn1fen;.out (340) 0 (340) AdVMce5-0UI (S,000) 0 (S,000)

Net callh n:ceipl:l over/( under) Cllb diiblll'liCIJlClltll 4j6{) (ZR,867) ~107)

FuDd ca.'h balanOCll, Janlllll)' 1, 1996 22A34 ~1.m 280,006

fund Cllllb bll.IWlce~. Docembc:t 31. l 996 S2fi,QQ4 5221!.70~ S2.."iS,6'Xl

4

" ~· ' .

...

CTI'Y OF MACEDONIA SUMMIT COUNTY

COMBINED STATEMENT OP CASH RECEIP'i'S. CASH DISBURSEMENTS, A..\'D CHA.'llCiES IN FUND CASH BA.LANCES• AU. OOVEAA'MENTAL FUND 'rYPeS AND SLWI..AR. PrDtJCIARY r'UNDS

FOR nm YEAR BNDED DECEMBER 3 t, 199S

Cull roccip11: Local IUeS U!t.c:qOYCl'nlllCOtal Special~UI

Charge$ for llCl'Yicea Floe11, 1Jc:en11e11, and pormita Mi110ellaneou1

Cull dlabllniemcnta: Cum:nc

Sccuri ty or pctlk'llll Ind property Public llealth 11CrVicca. l.liilW'C time activ1tica Comreunity environmont Buie utility acrvicea Trunt1Polrtat.I011 Cenerlll &;OYCmrncnt

Debt Service: Rodemptlon or prlnclPQJ and ln!e:-:51:

Capillll outl.iy

Toca! cull roccipta ovc:r/(undcr) cnib dl•bunemenlli

Other financing ~iptl'l(dllibunemeni.): l'rococd• from lllllc or public debt:

Sale of llonda Sale of 001e1

Traruif m-in Advmcoa-in TnwJfcn.-out AdvancC1'-Qllt OthcrllllCK

ExcoilJI o( CA•h rotcipu and other finno.:ing .roooiptll over/( under) <:ai;h di•l:iunoenicnts llJld other financini; diahurlll!men111

Fund cull MlADcM.Dcccmber31, 1995

C".encrai

S1,0S4.421 406.81.!I

0 103,063 313,490 IOI 416

1. 979,:<r.!

1,643.27K 93,l\l\O .

0 Z22.7'8 480,984 140,301

1,.220,063

0 1!1 Tl~

'.\K170'.\Q

(l.837,834)

0 0

~063,869

!l,000 (:30,000)

0 0

1 K'.\K lll\Q

1,0.'.IS

218,217

£!1Q,2~:!

Special R~uc

$3,377,856 277,!ISO

0 217,611

l.z?C'r n 10KO

3.K97,673

13!!.129 0

308,$611 0

71,445 34?,716 -;;;:..,4J".: ... ~

0 S~l~

996 '.\44

:.901..129

0 0

21~

IS.JOO (3,l;u.848)

(24.000) 0

... ::·1i,~iC/,0410

(l?,720)

~000

($ 1 !l.'r.!O\

The notes are an Integral pan of the financial statements 5

.Debt. Service>

$7S,878 0

6)4,258 0 0 ()

710.130

0 0

.0 0 0 0

996

~l!l.274 0

'2,'216.~I)

(1J()6,134)

!'76.000 . 494,000

349,833 0 0 0 0

l41Q K'l'I

(lki.301)

11707.!

:f.I0,77i

,.

,, · ... ' ··,.

' ''· ~·. ·:.' .· (MClllOl'lllldlol'!I

Onl:i:l Clpital Expendable ProiciCU Trull Tni.I

... ,·,.

~ so $0 $4J()8,154 . .

l,.,!1()4 0 1119,169 0 0 634,.:,K 0 l,Ol;:I :111,68'7 o. 0 31.a,766 .... ' : 37~:S ...... 7 O'.I'.\ tffl~ ' ' " . ': "

.... 1n..a79,.·. K,047 6,767,S'.19 .• ·.·•

.• :.,.\ ... ..... . ·, , ..

707 0 l,'llC.114

' 0 0 93,880· 16 2,796 311.3t!l 0, ... 0 :22,7:'!11

.. 0 0 :'!52,4:!9 2:1,644 0 709,660

0 .. . .. 0 l,296,.160

... ... l,617,637 0 3,83:,911

I•,"'

1.90t>.~'36 1 RI'.\ ·'~"I

1m110

'.\,7.w;;;wo 4 '609 107ll0l!OZ

. OS73.862) 3,4311 (4,013,064) ... ' . ~. '

.. 0 0 576.000

3,010,000 0 3,!!04,000 " ..

'I•' l,O:H,93$ 10,000 3,66K,I37

18:;849 ' . 0 ::?03,149 •, ~ ... ... . ... ,. ......... ~ ... __ ... ,_, ... ". ·-··· ................ ,...,. • " J~ I•

022.789) 0 (3,67:1,637) (174,149) 0 (198,149)

I) 0 0

'\;~7.W 10000 4m7~

l:S3,9M 13,4'.IK 64,436

~4~2 1'.\R R4'.\ 9ll~ !1114

$663,4'.17 $1~:!1~80 $1.~0:!1

', '.

·' ,.

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crrY OF MACl:."OONlA SUMMIT COUNTY

COMBU-.'EO STATE.\'!E.'ll'J' OF CASH RECEIPTS· BUDGEI' A."10 ACTUAL AU. GOVER..'IMENTAL. PROPRtET ARY. A.'\'D SIMll..A.R FIDUCIAR.Y FUr.'D TYPE.5

FOR THE YEAR ENDED DECEMBER 31. 1996

Fund Typc!I: Budget Actual v lll'ianCI!

CoYCl'Dmcntnl Cieneral Spcci161 Rcvcoue Debt Service Capiml Projects

Propri~ Entcll'priRe

Fiduciaiy Expmd.ablc Tni1t

Towl11 (Momorandllm Only)

S4.1S7,674 $4,264,7.52 4,461.883 4,6SS,46S

762,057 m,743 10,693.224 11.436,648

20,000 30.935

:?0400 10'-.IK6

~0.11 !1.2'.IR ~1.187.~'.ll

The notes are an integral part of the 11naneial stataments 8

$107,078 19J.S82 17,687

743,.c4

I0,93S

£414l

SI ,072,20'.1

CI1Y OPMAOIDONIA · SIJMMrt COUNTY

COMBINED STA'IEMENT OF CASH.DISBURSEMENTS.• BUOOE'1:A.'IJD ACTUAL ALL CiOVERNMENTAL. PROPRIETARY,.A.,'D·s:MJLAR. FIDUCIARY.FUND TYPES·

FOR 'DIE YEAR..E.NOOD DECEMBER 31, 1996.,

ihe notn·ara.an ln1egral part of the·financlal statements 9

" .. '

CITY. OF MACEl>Ol\'lA SUMMIT COUNTY

COMBINED STATE.\fiTh'T OF CASH DISBURSEMENTS· BUDGET Al\'D ACT'UAL ALL GOVERNMENTAL. PROPRIETARY, AND SIMILAR FIDUCIARY Fl]ll.'D TYPES

FOR THE YEAR ENDED DE~MBE'R. 31. 1995

Fund Typctt1:

Govcnuncnllll Genc::rnl Sfl"Cial Revenue Debt Service Cnpillll Projcctl

Pmprictaey Enterpri!IC

Fiduciary Expct>dllble Trust

Totah1 (Memorandum Only)

lludger Actual Vario.nee

$4,009,583 $4,047,039 ($37,456) 4,:44,0~7 4,143,192 100,845 2.216,l:'i: Z.:16.270 (18) 2,770,926 4,243,278 (1,47"..,3S2)

33.888 33,888 0

4,609 4,t'iOQ 0

s J '.\,Z7Q .:!Q~ S14,6XM,276 C~l.4"K.QRn

The notes are an integral part of the ftl'lanclal statemanis ,,

'" . "

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CITY OF MACEDONIA SUMMIT COUNTY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1006 ANO 1995

1. SUMMARY OF SIGNIFICANT ACCQUNI!NG eoLICIES

A. DES.CBIPilON OF THE EN1"!IX

Tho City Of Macedonia Is a body pelltlc and corporate established tor the purpose to exercise the rights and privileges conveyed to it by the cons1ltutlon and laws Of the State Of Onlo. The Clty ls a charter city and oporatos unoer a council-mayor form of govomment.

For financial reporting pull)OSes, the City ot Macodonia Includes all funds, aaenc:los, !:>oards and commissions ovor wt1ich tho City oxerclsos overal:;iht rospenslblltty. GASB 14 and GASS Codification Section 2100 <laflno thG reporting entity, Which Is dotormlned on the basis of the scopo of public service and tne City's 111blllty to slgntflcantty Influence ciperatlons, select the govemlng authority, deslgnate management, and partlelpate In fiscal management On tnls basis, the reporting entity of the City of Macedonia Includes pellce and fire protection, a municipal court, swet maintonanco. parks and 1'8C!'G&lion, hoalth, ambulance and general admlnll;tratlve sorvlcos.

Management believes 1he financial statements Included In .this teport represoot.all of 1he funds of tne City ov&r whleh the City officials haw tho abl!lty to exerc!so direct operating contra!.

B. B,o\SIS OF ACCOUNTING

Tho City of Macodonla prep11ros Its financial statt:tments on a basl'J of cash rectilpts and dl&bt.irsements. Consequonuy, certain revonuos and tne mlated assots are recognized When received ratnertnan wnen earned. and cer1Dln expenditures aro recognized whon paid rather tr.an wtw>n tne obl~on Is Incurred. A general fixed asset group and long.tenn debt aroup of accounts aro not n9COlded on tno financial statements unoor tho basis of accounting used. By virtue Of onio law, the City Is required to maintain the encumbrance method Of accounting and to make appropriations.

C. INVESTMENTS

Investment procedures are restrictod by the provlslono of tho Revised Code. Purchased lnvestmonts are valued at cost and are neither charged wnen purchased nor credited at the time Of'redemptlon to their respecti\'e fund balances. Interest earned Is recognized and recorded when received,

0. FUNp ACCOUNTING

Tho City maintains Its accounting records In accordance with tho pnnclples of "fund" :iccountlng. Fund accountlna Is a concopt developed to moet tne noeds Of govemmental ontitlos In Which logal or other rostralnts require tho ~rdlng cf 51)8Ctfk: receipts and disbursements. The transactions ot each fund aro renected In a solf·balanclng group cf accounts, an accounting enti!y which stands separato from the activities reported in other funds. TM restnet1on11 assoc:latod wttn each typo of fund are as follows:

12

Cl'T"V OF MACEDONIA SUMMIT COUN'N

NOTES TO n..E FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31. 1996 AND 1995

1. SUMMARY OE Sl.GNIEICANT ACCOUNTING PQL!CIES <CONTINUED\

GOVERNMENTAL FUNQS

,Geperal fund

The General Fund Is the geneial opetating fund Of tl'le City. It Is u&OCI to account tor all flnanclal resources except ttioao required by law or contract to be accounted for In another fund.

Special Revenue Funds

To account for tho proceuds Of upeclfle revenue sources (othGr than-expenclilble trusts. or ma)Or capital projects) that are legally restricted to disbul'$Gmer:ts for speclfied pul'J)OSGS.

~bt Soivlce fUoQS

To account for the accumulation of resources for, and ttio payment cf. genaral long-lerm debt principal, Interest and relatod costs. According to governmental accounting principles. the debt llOIV!ce tund accounts for the payment of long-term debt for govemmental funds only. Under on1o law, the debt ser..ioe fund might also be uaQd to acoount for the payment of the longoten'n debt of proprlotftry tunda ilnd tho sl'lot1-torm debt of both governmental and propriGtary fundll.

C®lta! pro!octs Euncts

i<> account for flMnc:lal resources to be used for the acquisition or construction of majer capital facllltles (other than ttlo3e financed by Propnam.ry i:und$ and Tru3t Funds).

Egndab!e Irust Funds . . Trust funds are used to account for resources restrlded by legally binding trust agreeman!S. It tl'le a~reement does not require the City to maintain the corpus of the 1rust, the funel Is c!asslfled as an expendable 11ust fund.

PAOPBIETABV FUND&

El')lerortse Fynds

To account for operations (a) that are financed and operated In a manner slmUar tc private custness ente~rlSfls - wl'lere the intent of the ~Ing body Is mat tl'le cos1z of providing gOOds and services to the general public on a continuing basis be financed or recovered prtmartty throu~h user charges; or (b) where the governing bOdy has decided that periodic determination of revenues earned. expanses Incurred. ancVor net Income is appropriate for capital maintenance, public policy, management control. accountability or other purposes.

F!DUCIABV EUNpS

Agency Euns:!:i

To "ccount for asseui held by a govemmental unit as an agent for Individuals, private orpanlzatlons, other govemmental units, nndlor other funds.

13

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CITY OF MACEDONIA SUMMIT COUNiY

NOTES TO TME FINANCIAL STATEMENTS FOR THE YEARS ENDED O::CEMBER 31, 1996 ANO 1995

1. SUMMARY OE ;?IGN!FICANT ACCOUNT!NG PQLl((IES CCON]NUEP

E. ~EJ'ARYPRQCESS

~. B•Jd®!

A budget of estimated cash rec:elpta and dllSbUrsements Is submitted to the county auditor, as secretaty of the Coumy Budget Commission, by July 20 of each year, for the penod January i to December 31 Of <Jie following year.

2. Est!mated Rosou™

The County Budgot Commission certifies ~ actions to the Clty by September 1. As part of th!s cartlflcatlon. tho City receives 1hc offlclal certificate of estimated resources which states tt'IO projec!ed receipt& of oach fund. On or about Janua:y 1, this certificate Is amended to Include Mo/ unencumbered balances trom tho preceding yliMll'. Prior to December 31, the City must revise Its budget so that tho tctnl can1emlJ\ated expondlturos trom a runes during the ensuing fiscal yoar wlll not exceed the amount stated In the cortlflCate of estimated resouroos. The revised budget then serves as the basis for tiie annual appropriation moasure. BudQmacl roeelpts as ahown on the accompanying financial statements do not Include January 1. 1996 or iws unencumbered fund balances. However, these fund balances are available for appropriations.

3. 6Qproprlntl2ns

A temporary appropriation measure to control c:a»h dlsbursoments may be paued on or abOut January 1 of oach yoar for tno period January 1 to March 31. An annual appropriation measure must bo pasaod by Aprll 1 of eaeh year for the period January 1 to December 31. The appropriation measure may be amendod or supplementod · during tl'le year as new Information becomes available. Appropriations may not exceed estimated resouroes.

4. Encum!2mnces

The City la requlrod to u&e the encumbranco method or acooun1!ng by virtue of Ohio law. Under this system, purchase orders, contracts. and other commitments tor thG expenditure or funds are recorded In order to roservo the portion of the appllc:able appropriation •

At the close of eaetr fiscal yoar, !ha unencumbered balance of each appropriation reverts to tho respective fund from which It was apl)l'Ol)rlated and becomes subject to MUre appropriations. The oncumbffred appropriation balance ia cal'Ti8d forward to tho9 succoedlng fiscal year and nood not oe roappropriated.

F. PROPEff!"V. PLANT AND EQUIPMENT

Fixed assetS acq1.1lred or constructed. for general govemmental service are recorded as expenditures. Depreciation Is not recorded for tl'IOse fixed assets.

14

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CITV OF MACEDONIA SUMMIT COUNTY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENOEO DECEMBER 31, 1996 ANO 100:>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CCONTI~m

G. ,6iCCUMULA!ED UNPAID VACAI!ON ANO SICK PAV

Accur:iulatecl unpaid vacation and sick pay aro not accrued under the cash basis of accounting described in Noto 1. At. Oocember 31, 1 OQti, menagemont estimates that $314,434 in sick lfHlve and $54,500 In vacation leave l'lllve beon accumulated by the employees o! 11'19 City. All leave wlU either be abfilOtt)ed by time off from v..ork, or within certain limitations, be paid to the eml)IOyeeL It Is not practlcablo to determine 1he actuarial value of these benefits a:s of December 3i. , 996.

H. IQTAL CQLUMNS ON FINANCIAL $T.".TEMENTS

Total COiumns on !tie financial stntemon1s are captioned "Memorandum Only" to Indicate that they llf9 presented only to faclllta1e flnanclal analysis. This dam Is not comparable. 10 a consolidation. lnterfundotype eliminations have not been made 1n the aggregation of 1hl• dllta.

2. PQQ!.i="O CASH ANQ lfSYE$Th1ENTS

The City maintains a cash and Investment pool u!Hld by all funds except ~.Municipal Court Fund. Eacn fi;nd type's portion of this pool ts displayed on tne Combined Statement of Cash Receipts, Cash Olsbursemonts, and Changes in Fund Cash Balanees. The cash assets of tho MunlClpal Court Fund are held separately by tho City.

~eaulremonts

Ohio law requlreo the ciasslflc.ntlon Of monoys held by thO City Into three categerlss, which determines the typo of lnvosb1ronts Which can be made. Categoiy 1 consists of •acttve• mon.ys, those moneys requlrod to be k0f)t In a •easn• or •near-cash" status for lmmGOJate use by the City. Such moneys must be maln1alned either as ca&h In tt'lo City treasuiy or In depository accounts paynDle or wtthdrawable on demar.<I, Including negotiable order of withdrawal (NOW) accounts.

Category 2 consists of •inactive" monies, 1hOse 1¥10neys not 1'$qUlrod 1or u:oe within the cul'T8nttwo year period of designation of deposltorleS. tnactlYO moneys may tie depOslteCI or invested only as certificates of deposit maturing not late:' than the end of the current period Of designation Of doposltorles.

Category 3 consis1s of "Interim" moneys, those moneys which are not needed tor Immediate use but which will be needed before the end Of the current period of del)Osltorles. Interim moneys may be Invested or deposited in the following llOCUritles:

1. Bonda, notos, or other obllgetlons of or guaranteed by the !;.4:" .. 'tda.618.tos, or those for which the lalttl of the Untted States Is pledged tor the payment of principal and lnterttst

2. Bonds, nctes, CIGbentUres, or other obligatlOr.s or socurltles Issued by any federal government agency, or the Export-!mport Bank of Washington;

3. Repurehasa agl'ellments In the securities enumerated abolle;

4. Interim deposits In t!'le ollglble lnst!Mlons app~/ing for Interim monies:

15

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CITY OF MACEOONIA SUMMIT COUNTY

NOTES TO THE FINANCIAt. STATEMENTS FOR iHE YEARS ENOE.O DECEMBER 31. 1996 ANO 1995

3. pear OBLIGATIONS

Debt outstanding at December 3i. i 996 consisted of the follov.ing:

Special Assessment Bonds Principal Outstanding lnt91'8st Rate 4.5% to 6.25%

General Obligation Bonds Principal Out:danding Interest Rate S.25% tO 0.05%

Bond Anth:ipatlon Notes Principal Outstanding Interest Rate 4. i 5% to 4. 70".4

Truck Lease-Purchase

Total

$1,230,211

3,031,000

6,i36,043

26.585

$10423 839

The special assessment bOnd procll9dc wero used tor various stteet lml)l'OYementa wttn!n the City 'that have bOon assetWed against the affected propor1y owners.

"!'ho outstanding general obligation bonds constst of construet1on Issues. General ob!!gatlon bonds aro direct obllgatlens of the City for which Its full faith, credit and resourcos are pledgod and are payable from taxes levied on all taxable property In the City.

Tho ~Ulndlng bond anticipation note proceec:lt were used for construction and maintenance or th9 Clty'a roads, Installation « sewor lines, construet\on or t:'le City's safety mm1lco 1aclllty and ~ the purchaso o1 a fire truck.

Amortization of the above debt. lncluctlng lnto!'est. is schodi.:19CI as tollows:

Special General Bond Vttar ending Assessment Obligation Anticipation ~ Bonds ~ ~ .I.ml

i997 $293,000 $75.878 $295.890 $14,490

1998 282.080 416,507 448.655 i-i .• 490

1999 271,525 416,488 4i8,363 0

2000 104,833 415,544 638,298 0

2001 101 ,852 4~5.771 619,465 0

Subsequent 537,500 2.343.109 6.814.69i Q Total $].590:880 $4.Q8il.39Z !2,235~ $28.ft80

17

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CITY OF MACEOONIA SUMMIT COUNTY

NOTES TO THE FINANCIAL. STATEMENTS FOATHE YEARS ENDED DECEMBER 31. 1906ANO1995

4. PAOPEBD' TAX

Real property taxos are levied on a:Jsessed Vftlues Whld'I equal 35% of aDPralsed value. The county audttor reappraises all real property every six years wilh a sel«tnnial ul)date. The last update was completed for tax year 1996.

Real proporty taxa.. become a lien on all non-exempt real property locateid In :he county on January 1. Real property taxes aro i;iayable annually or semiannually. If paid annually. payment Is due December 31; If paid semiannually, tho first payment Is due Oocembm' 31 with the remainder payable by June 20 of the following year. Undor cortaln circumstances. state statute permits later payment dates to be established.

The full tax rate apptlod 10 real propertyfortt'le fiscal years ended December :31. 1996 and 1995 was $9. 1 O per $1 .ooo of a'50ssed valuation. After adjustment of lhe rate tor lnftatlonary Increases In propeny valuea, the effoct!ve tax rate was $5.32 and $5.36 per $1000 of~ valuation tor real property classllled as resldentiallagrlcultural and SS.ZS and $5.08 per $1 ,000 of assessed valuation for 1111 other real property.

Real property owners• tax bills aro further reduced by homHtoad and rollback Cleduct!Ons, when applicable. The amount of those homestead and rollbllek reductions Is reimbursed 10 lhe City by lhe State of Ohio.

Owners of tangible personal property are required to file a list ot such property, Including costs, by April 30 of each year. The property lu assessod for tax purposos at varying statutory percentages of cost The tax rate applied to tangible personal property for thO fiscal years ended December 31, 1996and1995 _was $9.10 per $1000 of assessed valuation.

Real Property- Valuation ReeldentlaVAgrlcultural CommerelaVlndustrlal ·

Tangible PorsoMI Property- Valuation

1996

General 29.339,950 Public UUlltles 26.848.350

Total Valuatlon

~ $101,019,440

41,140,590

25.032,856 19.593.320

The Summit CoYniy Treasurer collects prof)IWty tax on behalf of all taxing dlstrlds within the county .. The Summit County Auditor periodically remlla to Iha tBldng dlstrlets their porUO!'IS of ttie taxes collected. ·

5. LOCf\~ INCOME TAX

This locally levied tax of 1.s•k Is applied to gross SJJ.larias, wages and other personal service compensa1lon earned by residents both in and out of the City of Macedonki and to earnings of nonresidents (except certain transients) earned In the City. It also applies to the net Income ot organizations that conduct bl.lsloess wltl'lln th& City of Macedonia. Tax recelpts are credited to the City Income Tax Fund and amounted 10 $3.376,385 and $3, 17':,289 In 1996 and 1995, respectively. ·

18

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CITY OF MACEOONlA SUMMIT COUNTY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995

6. INSURANCE

7.

6.

. ,,•'

The City maintain& comprehenslve lrn»urance oovemge witt'l l)rlvate carriers for real property, bUllding contents, and vehlclels. Vehicle pollcieS tnclUde llal>lllty coverage for t>odlly Injury and property damage. · Real pl'Of*tY and contents are fully Insured.

EHec:llve· May .,i, 1"92, the .Cit'/ establlllhed ·a self.funded Health. Beneftt. Plan., Tho plan.ls admlnlst91'9d, by Managed Care of Amer1Ga, Inc. . and Is funded entirety ~ the City. The City la responsible 1or the flrst $12,000 of tlaims per individual. The City Is Insured by Commercial Ufe Insurance ComPM'f fol' Claims In excess ot'Sizooo per Individual, effectilte Jitnuaiy 1, ioos.ttvough D«:ember 31, 1996. The contract Is amended and renewed each year. ·

BEDAEMENTCQMM!TMENIS ,, •• , ··:~ t \

The Public employe0~ Retiremont System of Ohio (PERS) Is a state oporatod. cost-sharing, multll)l6 employer public employeo retirement system. Full·tlmo permanent employ(les of the Chy belOng to PERS. PERS proyldes retlremont beneflta10 employeoa Who are eligil)lft to nitlre bued upon ye11ra of aeivico., PERS.also provides Guivivor and disability benefits to vosted employet;s. ..

' ' ' . ' . ~· .. Employees contribute 8.5% of their gross salary. The employer mo.tchlng sl'lat'G is 13.55% of gross salary. Tne penaalOn contribution requirement.tor the City lot the yaara ended Oecember.31 .. 19D6 al'ICI 1995 wu $360,01.1 and $320,731 which:cons1sted.of $.143,478 and $122,'1'19 from.employees and $216,533 and si 98,011 from the employer. The required percentages for employer and employee cor.tr1butlons for 1007 remained the same.

Police and Are employees are COVOl'OCI by tho Police and Firemen's Disability Pension Fund. Pr.illce and firemen contribute .10%.of 1helr gross wag.and the City matx::ties this wtth a con1l1butlon eciual to 24%· of fil9nlen'a ,salary. and 19,5•,4 of pollc9men's gross wages. The penslOn contribution requirement for 1he City for the year ended Cecember 31, 1996 and 1995 wu ~.406 and S 216,622whleh consisted of $77,881 and $71.ZZ4 from ~mpl~s and Si45,52S and $145,398. from the employer. The required percentages for employer and employee conllibutlons for 1997 remained the same.

EMPLOXEE~ Ql;FERRED COMPEt)SAJlON PROGRAM

Employees of the City or IV.acedonla may elect to participate In the Ohio Public Employees Oeferred Compctnsmlon Program andfor tho Aetna Life Insurance and Annultj Company's deferred compensation program. Under these programs, employ!Mts elect to have a portion of their pay c"lferred until a fut\lre time, usually aftor retirement. The de!::ra.:l pay and any Income eameCI on It Is not subject to Income taxation until actually received tJy tt'le eml)loyee.

As (lf December 31, 1996, fund:s on deposit with the Ohio Public EmplOyees Deferred Compensation Board totaled $55,981. and funds on depOslt with the Aetl'ltl Insurance Company tQtafee ~.669. Under the terms of the dOferred compensation plan agreement, '1ese funds are the property of the City, although the&e amounts are not renectect In the accompanying financial statements. Also not refloct«ld In such Slatements Is a liability to 1he employees participating In th9 plan, eQual In amount :o the funds on del)Osit. Participating emoloyees are gonoral aedltors of 1he City with no prefef'entlal clelm to tho deferred funds. ·

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CITI' OF MACEDONIA SUMMIT COUNTY

SCHEOUl.E OF FEDERAi. FINANCIAi. ASSISTANCE (CASH BASIS)

FOR THE YEAR ENOEO DECEMBER 3i, 1996

21

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· RECEIPTS

$0 (B)

2!5,000

$25,000

OISB:.JRSEMENTS

$31,059 (A)

25,000 ., ..... -•

$56,059

...... .. ... ..

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CITY' OF MACEDONIA SUMMIT COUNTY

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE (CASH BASIS)

FOR THE YEAR ENDED DECEMBER 31, 1995

FEDERAi.. GRANTOR/ FEDERAL PASS TMFIOUGH GRAN"!'OR CFOA PROGRAPJ Trn.E NUMBER

U.S. Department of Housing and urt>an 0eve1oement Pa$S&d through Summit County

Departml?nt ot Planning and Economic Development

Commun!ty Development Block Grant 14.218

U.S. Deparnnent of Justice

CopsGra:it 16.710

Total Federal Assistance

(A) Nonmajor program ·tested under 50% rule (B) Reimbursement rec&Ned In 1997

23

PASS-THROUGH GRANTOR'S NUMBER

B-95-Uc-39-000

95-CF-WX·3949 ·

PROGRAM ORAWARO. AMOUNT

$131,700

75,000

RECEIPTS DISBURSEMENTS

so (8) $52,883 (A)

25,000 25,000

$25,000 m.883

-.f'~·· :.:. : .. ~:.

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STATE ()P OH10

OP1'1c:n OP THI? Auorro1t

JIM PlmlO, AUDITOR OP STATE

911 C...t llc-1 s-1'.0. °"" ·~140 CoiWN>w. Olw. 4.1:1l6"l 140

T..i.phorw 61~4 ao:>-2112-0370

Jlacalmlle 61~90

Report of Independent Acco41ntama on Compliance tit tlM Financial S .. twm. It L.wf

The Honorable Mayor and MembGrs Of Council City of Macedonia Macedonia, Ohio 44056

we havo audited the financial statements of the City of Macodonla, Summit County, (the City) aa of and for the years ended Docembor31, 1996and1995, and have issued our report thereon dated Odober6, 1997.

we conducsed oUr audits In accordance with gonorally accepted audltlng-mtlnd:.-:15 and~ , Stnoclott1s. Issued by the Comptrollor General of the Unlted States. Those S1andarda require that we plan and perform the audits to obtain reuonable assurance about whothor the financial statements are free ot material misstatement.

Compliance with laws, regulations, contracts, and grants applicable to tho C!ty Is tl'lo responslblllty of the managemont of tho City. A:J part of obtaining roMC>Mblo a:JSuranco about whothor tho financial statcmonta are tnM of material mlsstntemont, we portormod tests ol the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audits of the financial S1atoments was not to ;:>rovlde an opinion on overall compliance wit:'! such provisions. Accordingly, we do not OXl)l'8SS such an opinion.

The 1'9SUlts of our fe8ta disclosed th9 following Instances ~f noncompliance that are required to be reported herein under Gwmment Ayd!tjng StaQdarcts •. !toms preceded by an asterisk C-) are repeated from the prior audit.

Cltat!(?n:;

i. Ohio Rev. Code Section 5705.41 (0) states thllt no subdivision shall r:-.alo;e any contract or order any EIXl)endlturo Of rnonoy unless the oortlfleate of the fiscal oftloer Is attached. The fiscal officer must C8l'tlty ttlat ttie amount roc:iulred to moot such commitment has boen laW1ully appropriated and Is In the treasury or in the process of ccllectJon to the credit of an appropriate tune, free from ar:y prevlOus oncumbrances.

The required certificate was not attached to any of tho purchase or contract transactlonn examined.

2. Ohio Rev. Code Soctlon 149.43 requires that public dOC'.imonts be mado avallable 1or lnspec:tion.

The Fun Fest drawing tleketstubs forcalondoryears 1996 and 1995, the calendoryear 1995 Fun Fest . craft and food booth applleationS, and 2 out ot 8 calender year 1996 Fun Fest craft and fOOd booth appllcatlDns wore not available for Inspection.

3." Ohio Admln. Code Soctton i 17-6-01 states tliat cltleis al'9 required- to report In accordance with generally accepted accounting principles. ·

The City elected not to report In accorcs.nce wtth generally accepted accounting pr.nctples as of and 1or the years ended December 31, 1996 and 1995.

25

City Of Macedonia Summit Counly R&;:IOrt of lnd"1)91'10ent Accountants on Compliance at the Financial Statement Level Page2

4. Ohio Rev. Code Section 9.38 mqulres that a publle 01ficlal other than a state otricer, employee, or agent. ahall depoolt all public monies recelved by him with the treasurer of the public Offloe or properly designated depository One$ every twenty-four consecutive hours.

5.

The Income Tax Oopartment, Parka & Recreation t)ei)artment. BuHdlng Oef)artment and the Mayor'& Court did not deposit all public monies received with 1he fiscal officer or a designated deposltCMy wlelln a twonty-four hour period.

Ohio Rev.~ Section 5705.41 (B) prohibits a Sl.lbdlvfslon from making an e>cpenclituro unless It l'laa been properly appropriated. The following funds were found to have e>ependltures which elCCMded approprlatlor.s:

ms General Fynd Typo: . General Fund

1995 CMltal Promew fynd Types: Hlgl'lland Polnte ParkWay Pro)ed Fund Highland Road Widening (Phase I) Fund

1996 SQtcial Reyenue Fund Tyoe: City Income Tax F=und

1996 Qtbt Seivice Fun¢ Types: Highland Road Sewer Note Fund Flra Department Apparaws Note Fund

1996 ~ap!tal ProlectJ Eu!ld Types: DriftWOod Lane ExtenSIOn Project Fund 199~996 Road Projects Fund Safety Service Facility Fund Highland Pointe Parkway Project Fund Highland Road Wloonlng (Phase I) Fund

.flrld!ngs for Recoverv

1. The City held a rame In 1996. The total expected amount of proceedS from 1he rame was $2,-403. This amount was calculated based on the total number of raffle ticket stubs, and Included stubs that could.~ not be located. The actual amount of prooeeds deposited and recorded ais raftb tleket revenue wu $2,097, leaving $306 unaccounted for.

In accorc::lance with the forgoing faets, and pursuant to Ohio Rov. Code Section 117..28, a i:indlng for Recovety for public money COiiected but not accounted for Is hereby issued ag~ John Houser, Parks and Recreation Dlroc:tor, In the amount of three hunclt9cl sbc dollars ($306) and In favor of the City o1 Macedonia.

26

·--·:·. Cl1y ot Macedonia Summit County

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Report of lnclependent AcCOuntants on Compliance at tho Flnanclal Statoment Level Page3

2. The City also held a raffle In 1995. Paymonts In the amount of $94.97 were made from the proceeds rrom the sale of raffle tJckots, but no documentation of tho naturo 01 the.10 payments could be provided Dy the City.

Jn accordance with the forgoing tacts, and pursuant to Ohio Rev. Code Soctlon 117.28. a Finding for Recovery Is hereby Issued against John Houser, Parka and Rec:reotton Olrec!Or, In the amount of ninety-four dollars and 97 cents ($94.97) and In favor of the City of Macedonia.

3. A ~yment In the amount of $100 was made from receipts collected by the City for registrations 10 play Doskett>all. No documentation of tl'lo nature of thO expenditure could bo provided by tne City.

In .accordance with the forgoing facts, and pursuant~ Ohio Rev. Code Section 117.28, a Finding tor Recovery ts hGfeby Issued against John Houser, Parks and Recreation OlrtldOl', In t'le amount of one hundred dollars {$100) and In favor of the City of Macedonia.

We considered these Instances of noncompllance In forming our opinion on whether the City's financial statements &re presented fairly, In all material re1i1pects. In conformity wlll'I the cash baSls of accounting, and tt'lls report does not affect our report datad October 6, 1997, on thoso flnanclal statements.

Wo aloo notOd certain OthOI' Instances Of noncompllanco and certain other matters Involving the lntemal control . structure that we have reported to the management of ttle City In a separate letter dated Oetct:>er 6, 1997.

This report Is Intended for U'le information of management ar.d Council. However, this report is a matter of public record and Im distribution Is not limited •

October6, 1997

27

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• S'tA:rE OF OHIO Ol'PICE or THE Auorroa

JIM PE'rRo, AtJOrTOR Oii STATE

u 6-t Blood sa-t p .o. BID< 1140 Colwnbuo, °""' 4TZ16-ll.O

T.i.phoM 61~ ... -f10D.2112-«m0-·· ..

~6~

~of Independent Accountants on the lntltmal Control Structure at the Enttty Uwl

il'le Honorable Mayor and Members of Council City of-Macedonia Macedorila, Ohio 44056

We have.audited lhe financial statements of tho City of Macedonia, Summit C,,uoty, (the City) as of and for 1t1e years ended 06cember31, 1996and 1005, and navo IS$ued our report thereon datecl October6, 1P97.

We conducted our audlta In acoordanoe with generally accepted auditing standards and GQ.'tmJ'll'Mflt 81tdltlng Stnnctaros. laaued by the Comptr0ller General of the United Statos. Thoae standards require that WG plan and porform t!':et audtts to obtain reasonable asaurance about wt"...,iher the financial statements are tree or material mlssui.tement.

The managament of the City is responsible for establishing and maintaining an Internal control structl.lre. In tulfllllng this responsiblllty, estimates and judgmontll by managl!lmont are roqulrod to assess the expected benefits and related costs o: Internal control structuro policlos and proeeduras. The ObjectJves or an internal control structure are to provtcso management with reasonable, out not absolute, assuranca that ass<lts are safeguardQCI against loss from unauthorized USl'I or disposition, ar~ that transactions are exocutod In accordance with managemenrs authonzation and recordOd property to permit the preparation of financial statements In accordance with the cash basis of acco1mttng. Bec:ause of lnhoront limitations In any Internal control structure, errors or lrregularltles may nevertheless occur and not be d&toc:ted. Also, pro)edlon of any evaluation of the s"J\lcturo to future periods is subject to the risk that proceoures may oocome inadequate becauoe of changes In conClltions or that the effectiveness of the design and operation of policies and

.•. • . procodure:i may doterlorato.

_... ... ;:.,.,......-·

In planning and performing our audits of tho financial statomonta of the City for the years ended December 31, 1996 and 1995, we obtained an uncierstandlng of the lntomal control stn.lcturo. With respect'll:I the Internal control structure, we obtained an understanding of tho design of relovant policies and procedures, and whothel' they have been placed in operation, and wo assessod control risk In order to detefmlne our auditing procoduros !or the purposo of expressing our opinion on tho financial statements and not 10 provldo an opinion on the internal control structure. Accordingly, wo do not express such an opinion.

Wo noted certain matters involving the Internal control structure and Its operation that we consider to be reportable conditions undor standards established by the American lnstttute of Certlfiod Public Accountants. Reportabie conditions involve matters coml~ to our a.ttontion relating to significant deficiencies in the design -or operation of the Internal control structure that. In our judgement. could adversely affect the entity's ability to l'GCOl'd, piocass. summartz9, and roport flnancial data consistent with the assertions Of management In the tlnanclal statemtll'lts.

28

Cny of Macedonia Summit County Report Of Independent Accourrtants on the Internal Control Structure at the Entity Level Page2

Beoortab!e CoQditloni;

1. Purchase order amounts were not posted against appropriations or errtured into the ll)'Stem until th9 time of payment. This could result ln oxpenclituros oxcoedlng appropriations.

Purchase orders shou!d t>e posted against appl"O$)riatlons at the time the City Incurs an obllgatiOn to purchase ~ or services, not at tt.o time of payment. ThlS provides financial decision makem with current, accurate information about the unappropriated balancos of oach tune!.

2. TOO amount of money actually collectod and deposited for1he Fun Fest rame and drawing tickets was not roconciled to the amount which should haw beon colloctod. This could result In monies being collactod but not deposltod Into the City's accounts.

Arter each rame and drawing, the amount of mol'IO'/ which was collocted and deposited should be reconciled to the amount or money which shOuld have boorl eollectod. The amount or money which should have been collected can bo calculated by multiplying tho numbOr of tickets sold by tne price Of each ticket. A copy Of the reconclllatiOn shOuld be Initialed by the preparer and rotalned by the City.

3. Pronumberod books of Fun FGst tlckots wore dlstrlbutod to the' various Individuals who-were to sen them. The City did not rocord the names of the !ndlvlduals who ft'ICOived the books of 11ckets. Also, the books of tickets were not issued In sequential order. These situations resulted In the Clty being unable to account for all monies rocelVod from tne sale of Fun Fest tickets.

A log, which matches the tleke! books lasuod with the pel'IOl'l who received them and the numbers of any tickets retumoc:t as unsold, should bo maintained by the City. Tlckot books also should be lssuod sequonUally. This would aid the City In accounting for all proceeds from th& sale of Fun Fest tickets.

4. Paymttnts, which amounted to $94.97 In calonder yoar 1995, were made from tne proceeds Of mnta tlckot sales prtorto tne proceeds being deposited Into the City's accounts. There was no supporting documentat:on for the payments. This rosulted In monies being collected but unaccounted for Dy the City.

The gross proceeds of the Fun Fest raffle should be deposited wlttl the Flnanoi- Director, and any related disbursements should be made by tho Finance Olroctofs olflce.

5. Although the City Council monitored expenditures, there was no evidence that Iha City Council monitored the other financial actlvltlo5 and records of the City. Failure to monitor 1he financial records contributes to a tono of Indifference which could result In employees not usl~ due care during the course of their work. In an environment where one pel'50n Is solely responsible for lhe maintenance and preparation or proelomlnantly all financial records, lack of adequatl9 monlt:>rtng by an Independent party could allow errors and Irregularities to remain undetected tor a significant amount of tlmo. This decreases thO rollablllty of thO financial records.

The City Councn should consldOr ostablishlng an audit committee to lnteraet wlth thd City's Independent audl~rs and to monttor thi9 flnanctal record!!!, or consldor modlfylrtg too respornolblllties or the Finance Committee to Include theso duties. In addition, Counell should consider establishing pollctos ancl procedures whieh specify the financial information that the Finance Director should submit to the Council monthly. Such Information should Include monthly bank reconclllatlons,

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City Of Macedonia Summit County Report at Independent Accountants on the Internal Control Structure at the Entity Level Pago3

monttity financial lltl:ltements, a. racolpt and dlSbursemem ledger, 4n appropriatlOn !tll'Ws report which show& appropriations and eix;:>endltures, an lnvefitment ledger, a monthly report o1 Mayor's Court activity, etc. This will Improve the rellabUlty of tho financial statemonu by allowing for timely detoction of e1TOrs ane! lrrogularltles and eS1abllsh a tone In the organization wrilch emphasizes th& Importance of reliable financial records.

e. The soccer end basketball regiStratlons were not malntalned on me. This could have resulted In monle!. being collected, but not deposited Into the Clt</s accounts.

At the end of each day, tJ'loa amount of the soc:er and baskotball registration fees collected $h0uld be reconciled to the amount that should have been collected. This amount CM be calculated by multiplying the fee listed on the registtatlOn by the number of registrations. The reconcillatlon shOuld be Initialed by the preparer and retalnod by tho City. Also, a roster of eaeh activity lShou!d be propared by the coaches and compared to thO registrations to ensuro that all proceeds aie acoounlod tor.

7. The City did not maintain documontation of the Individual transactlons that wore presented In total as reoonclling Items on the monlhl'/ bllnk reconclllatlons. This could have resulted In a lou of accountability over City bank accounts.

e.

9.

The Cty shoulC: maintain a detailed list of all Items that are used as reconciling Items when performing the montht/ bank rcconclllatlons. This would provide additional accountablllty owr the City's bank accounts.

· During calender years 1996 and 1995, the City had negattw bank t>atances at var:ous times and· had Issued several non-sufflclent funds (NSF) Che<:ks, Including one In the amount or $473,814 during 1996. All or these checks were honored by 1he bank. As a result of these conclltlOns, the City had to pay approximately $430 In bank chargea during 1996. The negative bank balanees and NSF checks Indicate a tack of monltorlno or the City's flnancer.o.

In order to avoid negative fund balances and the rosultlng NSF checks and bank Charges, the City should Implement monitoring controls over the City's cash flow and financial records, such as the timely preparation and review of bank reconciliations and making bank deposils on a dally basis.

The Income Tax Clerk. Mayor's Court Cieri< and other departments did not receive a monthly financial 3tatus report trom the Finance Director. This resulted In the various departments being UnablO to reconcue their subsidlaty ledgers to thEI City's ledgors.

Montnty flnanclal status roports should be glvon to tho Income Tax Clerk. Mayor's Court Clerk and all City Dopartment Heads each monlh and then 1'9COnciled with thelr auDsldlary records ao that any tHTOl'U may be detected and oomJCtecl In a timely rnannor, The Income Tax Clerk. Mayor's Court Cieri< and the Oepartment Head (or a doslgnee) ahould Initial and date the reconc:Ulatlon once It tiaa boon reviewed tor accuracy. Tho reoo!Y.:lllatlon ohOuld be maintained on flltf to holp establish accountablllty.

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City of MaeedOnla Summit County Report of Independent Accountants on the Internal Comror Stl\lcture arthe Entity Level Page4

~ o. The Finance Oej)artment did not lesuo a receipt to either the Building ~!'?tor the Parks and Recroation Oepartmer:t wheln 1t'9'f presented their dally receipts to the Finance Cel)artment. This could re&ult Jr, monk'ts being unaccounted for by the City.

The Flnanoe Department should Issue a pronumbered receipt for all monies rec:elved. All City employees who deposit monlet. with the Finance Department should reciuest a ns:elpt at 1t'ie time that the monies are deposited.

A material weakness Is a reportable condition In whlc:h the design or operation of one or more of ttie speciflc: Internal control structure elements does not reduce to a relatlvo!y low level the risk that etr0rs or Irregularities In amounts that would be material In rolatlon to tno flnanclal statements being audited may occur and not be detected wlttlln a timely l)eriod by employees In the normal course of performing their assigned functions.

Our consideration of the lntomal oontrol structure woul~ not nacesaarlly dlSCIOao all mattonl In the Internal control structure that might be reportablo conditions and, aocordlngly, would not necessatlly dlocloae all reportablo conditions that are also conalderod to be matorlal waaknesr;es as defined above. However, we noted tl'l8 following matter Involving the Internal control structure and Its operation that we conaidarto be a material weakness as claflned above. Thii> condition was considered In determining the nature, timing, an extent of the procedures to be performed In our audit of the flnanc:lal statements of tho City for the years ended 0ec:emt)01' :3~. 1996 and 1995.

Material Woakne?s

The City rec:elvod many donations throughout tho year, Including cash donations for the purchase of a new truck which was the prlzo In a ra111o held during Fun Fest. These donations wero not acknow1edged In the minutes. This resultud in donations being accepted without the acknowledgment or City Council.

Donations should be acknowledged by Council and recorded In the City's record of l)l'OC8$Cllngs so that Council can better monitor the use and disposition of donatlorn;. The minutes should reflect the donor, If not anonymous, the amount. naturo and Intended use of tho donation. Tho mlnuttts should also reflect any restrictions 'that the dot'lor has placed upon tho use or disposition of the donation.

We also noted cenaln other lnstancca of nonoomcllance and cenaln other matters Involving 1t1o internal control structure that we have report9d to the management of the City In a separate letter elated Oc:tOb8r 6, 11)97,

This report Is Intended tor tho Information of management and Council. However, this report Is a ma1lel' Of public record. and hs Clistrlbutlon 111 not limited.

" October 6, , 997

31

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• ST>o.TZ OP OH10 OPl'ICE OF THE Aut>ITOR

]IM PlmtO, AUDITOR OP STATit

1111.llMl- lllUlld ~ I' .o. llolll 1140 Collln\b\Mo. Ohio 43216-1140

T.i.pilOIW 61~' l!00..282.o:rn>

PecaimlJ. 6.14""66-4490

Allport Of lnd9pendent: Accountllnt. on Compliance With tt. Gtnwal R9qull'9IMl'lts Afll)l!Qble to F«ler8t FIMncllll Anlstance Progt'llms

The Honorable Mayor and Members of Council City of Macedonia Macedonia, Ohio

We have audttoel the 1tnanclal statomonta of tho City of Macodonia, Summit County, (trig City) as of and for the years ended Oecember 31, 199e and 1995, and have lasuod ourl'Oj)Orttl'ler90n oated OctoberG, 1997 •

•• · We have appllad procedures to test the City's compliance with the following reQutrements applicable to Its 1'XSet'a! financial aaaistance programs. which are idttntlfied In the Schedules of Federal Flnanc:lal Assistance, for the years ended Oecember 31, 1996 and 1995.

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Polltieal Ac11vity Davis-Bacon Ad Civil Rights Cash Management FOOeml Financial Repcrts Allowable COstslCOSt Prtnelpies Drug Freo Worlq)laoe Act

Our procedures went limited to the applical>le procedul'Gl.I deseribod In the Office of Management and Budget's Compl!once SyPP!ement tor Slnafe Audits ot State and Local owromeom . Our procedures went substantlalty less In scope than an audit. the objec:tlw or which Is the exprosslon or an opinion on the City's compliance with the requirements Hstoel In the preceding paragraph. Ac:cordlngl'/, we do not e;iq:i~ss 11uc:h an opinion.

Wlt.1-t respect to the Items tested, thO results of these procedures disclosed no material lnstanoos of noncompliance wltl'l ttie requirements fisted in the second pamgraph ct this report. Wlth respectto Items not tested, nothing came to our attention that caused us to believe that the City had not complied. In all material respects, with those rec;iulrements.

HOWEIVQr, we noted certain lmmatorlal Instances of noncompliance and certain Immaterial matters lnvoMl"l'1 the Internal control strudlJre ttlat we have reported to the managament of the Clty In a separate lener da!od October6, i9Q7,

Thq, report la lntendl'>d for tho Information of managemont and Council. However, thii; NPOrt Is a matter of public record and Its distribution Is no llmltacl.

October6, 1997

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ST.A'n! OP 0HJO ORien OF THI? AUDITOR

J?M Pln'JtO, AUOl'IOR OP STATE

88 t-1 nro.d ~ r.o. Doi< 11..0 . Colim~Ohlo "3216oU40

T.!ephone 61~4 80().l324J70

p~ 61~90

Report of lntiependent Accountlinta on Compllenot with Spectftc Requlfementa Applk:llblm 10 Nonm9jor Federlil Flnanc:llll Aulstance Progrmn Tranwtlons

The 11onorabla Mayor and Members of Council City of Mecedonla Macedonia, Ohio

Wo t1ave audited the 11nenclal sta~ments of ttio City of Macedonia. Summit County, (the Chy) aa of and for the years ended Oecember31, 1996 and 1995, and havo lsauod our rOl)Ortthereon datod October6, 1997.

In connection with our audit of ttio financial statoments of the City and with our consideration of the City's control structure usact to administer federal financial assistance programs, as requlrocl by O!flce of Management and BUdget Circular A•128, 8Ydl!3 ot State •od l.ocal GMmmoms. we selectOO certain transactions appllcable to certain nonmajor federal flnancl.sl asslstance prograills for tne years ondod Deeember31, 1996and1995. As reciulrod by OMS Circular A•128, wo have performed auditing procedures to test compliance with the requlremonts govemlng types of services allowed or unallowed, eligibility, and matching that aro applicable to thOoo transactions. Our procedures wore subntantlally leGS In scope than an audit. the objective of which Is the exprosslon of an opinion on thO City's compliance with these roQulroments, Accordingly, we do not oxpross such an opinion.

With rospect to the Items testod, tho results of thoso procoduros disclosed no matorial Instances of noncompliance with the teQulrements llstod In tl'le preceding paragraph.· With respect to Items not tested, nothing came to our attention that ceUIJOd us to bollevo that tho City had not coml)lied, ln all monarial ro51)ecis, with these requirements. However, the results of our procedures dlsclostld an Immaterial Instance or noncompliance wl1h L>iose requlmments, which Is ~scribed below,

Scnedu!o of finding

The Chy did not maintain the required Community Oriented· Policing Sorvlco (COPS) local matching share records. Thi!> was an oversight on tho part of tne Cit/.

The COPS Grant Owners Manual, Section Ill, teQulres records of the local matching &hate to be mtdntalned by the grantee. The records should clearly shew the source of tho matching funds, the amount of the matching funds and when the matcl'll~ funds wero con!rlbutod. By not complying with the grant agreement. tho City could potentially lose future federal financial assistance.

Howover we noted C011Dln lmmatorllll instRnces of noncompllaneo and COl'hlln Immaterial matters Involving the Internal control strueturo that wo have ropcl'led to tho management of the Chy In a separate letter dated October6, 1997.

This report ls Intended for the Information of man:igeme and CoiJncll. However, this report Is a matter o1 public record and its distribution Is limited.

October 6, 1997

33

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• STA.Tl! OP OHIO ChrPJCE OP nm AUDrroR.

]IM l'm:RO, AUDITOR 01' STAn!

M EMt llrcMd SU...t P.O. BoK 1140 . ::olwnbuo,Ohlo 43:16-1140:

Telo!phoM bl'"41i6-4.'Slo& ~-0310·

P...c.lmJJcr 614-466-4490

Report of lnd9pendent AcWunt. on the lnhlmlll Contfol Struc:Wre UMd In Admlnlat.rlng F.-... . FlMnc:llll Aalmnoe Psvgrama

The Honorable Mayor and Membefa of Councll City ·Of Macedonia Macodonla, Ohio

We have audited tho financial statements of the City o1 Macedon!a, Summit County, (the City) as of and for the years ended December 31. i 996 and i 995, and have lssuod our report thereon dated October 6, i 997.

We conducted our audits In .accordance with generally acceptod audltln;;i stanclarcl.<;; Govomment Aud!tlng .StAQC!a!ds. Issued by the Comptroller General of the Un!PJd States: and omoe Of Management and Budget Circular A-128, Audits ot State and LQ:ldll Govemments. Those standardS and OMS Circular A·128 require that we plan and pertorm the audl1S to obtain reasonable assurance about whether the ~nanclal :>tatements aro 1roo Of material mlsstawmont

In planning and per1ormlng our audits for tho yoars onc:ed Oecomber 31. i 006 and 1005, wo consldemd ttie lntornal control structu111 ot tno City ln Ot'dor to determine our auditing procedures for the pufl)OSO Of e)Cpresalng our opinion on the City's financial statemonts and to report on the Internal control structure In accordance with OMB Circular A·12B. This report addresses our consideration Of Internal control structure policies and procedures rolevant to compllanoe with requirements appUcable to fedeml financial assistance programs. Wo heve addrosaed Internal control structure policies and procedures relevant to our audits or !he financial statomonts In a separate report datod October 6, 1997.

'Tho management of the City l:s responsible tor ostabllchlng and maintaining an lntemal control structure. In fulfilling 1t11s rosponslblllty, estimaton and judgemonts by management aro roqulrod to ~a tho expected benoflts and related costs of Internal control structure policies and procoduros. The objoctlves or an Internal control structuro aro to prcvldo IT'anagomont with reasonablo, but not absoluto, assuranoo tnat assets aro i;ateguarded against loss trom unauthorized use or disposition, that transac:tlons are executed In accordance with management's authorization and rocorded properly to permit the preparation Of the financial statoments In accordance with the cash basis of accounting, and that federal financial assistance programs are managed in compliance with appllcablo laws and rogulatlons. Because of Inherent limitations ln any Internal control structure, errors, irregularities, or Instances ot noncompliance may l'lellertheless occur and not be detected. Also, projection of any evaluation of the structure to Munt pet1ods Is subject to the risk that prooedures may become Inadequate because of changes In conditions or that the e1lectlvenesa of the design and oporatlon Of polleles and procoduros may doterlorato.

For tho purposo Of 1tlls report. wo have claooified the slgnlflet\nt Internal control structure policies and procedures used In admlnl::;terlng fodoral financial aulstance programs Into the following categories:

ACTIVITY CYCLES lntetgovemrnontal Financial Assistance Purcl'laslng Payroll

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City of Macedonia Summit County Report of Independent AccoUmants on the Internal Control Structure Used In Administering Federal Financial Assistance Programs Page2 .

OENERAL REQUIREMENTS Pclltlcal Activity Davi.Bacon Act CMI Rlgnts Cash Management Federal Financial Reports Allowable Costs/Cost Princlplea Orug Free Workplace At:;t.

SPECIFIC REQUIREMENTS Typos of Setvlces Allowed or Unuttowod EllQibUlty MalChlng

For all of the Internal control structure categories listed abOve, we obtained an understanding of 1he design of relevant rx>licle3 and procedures and determined whether they have been plllced In operation, and we assesaed control rl&k.

During the yoor ended December 3i, i 996 and i WS, the City had no major feoderal financial assistance prosrams and expendecl SSo/. and 68%, respectively, of le total federal financial assistance unde:r ttie Community Devolopmefi Block Grant.

We performed tests of controlc, as required by OMB Circular A·i2a. to evaluate ttle effectiveness of the dsslgn and operaUon of lntomal control 8tn.lctU1'0 policies and procedums that wo have consldored relevant to ;>roventlng or detecting material noncompliance with specltlc ro<;ulrements, general reQulrements, ¥nd roqulrumenta governing claims for advances and relmburMments that are apptlcable to the aforomentloned nonmajor program. Our prococ:tures wero less Jn sc:ope than would l:le necessary to render an opinion on these internal control structuro policies and procedure::. Accordlngly, wo do not oxpreS5 :;uch an e>plnion.

Oc.ir consldoratlon of the Internal control structuro policies and proeoduros used In administerlrY.1 federal flnancldl assistance would not necessarily disclose All matters In tho lntomal control structure that mlgh: constltlJl'.e material VJeaknesses undsr standards established by the American lnstltute of Certlfiod Public AcCOuntants. A material woaknoss Is a condition In which 1he design or oporatlon of cme or more of the lntemal control structure elements does not reduce to a relatively IOw level tho risk that noncompll2nce with laws and '9Qulations that would bo materilll to a federlll financial assistance program may occur and not be detsc:ted within n timely period by employees In the normal course of pertonnlng their assigned functions. We noted no n'llltters Involving the Internal control strl.lcture and Its operations that we consider to bl! material weaknesses as defined abOve.

However, we noted oertaln Immaterial lnstar.ces of noncompliance and certain Immaterial matter$ lnvoMng the Internal control strudure that we have rvported to 1hG management of tho City In a separase »tter cla1ed OctObM ts, i997.

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Cl~· of Macedonia Summit County Ret:ort of Independent Accountants on tt'le lntemal Control Structure Uaed In Administering Federal Financial A!slStance Programs Page3

Thia report Is Intended for the lnfonnatlon 01 management and Council. However, thlfl !'9POrt Is a matter of public records, ttnd !ts distribution Is not limited.

October 6, 1997

36

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STATE OP Omo . OPPic:E OP THn AUDITOR

JIM PBnO, AIJDl'IOlt OP STATE

CITY OF MACEDONIA, SUMMIT COUNTY

CLERK'S CERTIFICATION

MEMtem.dS-P.O.Bott 1140 Colwmb....Ohlo 432lMl40.

Tlllep'- 61'M6/i-Ul4 ~.cm

~ 61+466-4490

Thlo la 11 true and corNCt copy of lhe NPOrt which la required to be ftled In the Ofllce of the Auditor of State purawint to SectJon 117..28, RevfMd ~ Md which Is ttled In Columbua. Ohio.

NOV 181997 Date:. _________ _

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STA.Tl? OF OH10 1111 r.- lll'Dtd s­r.o. Dok 1140

•

• OITICB OP THE AUDITOR Col~ Ohio 43216-1140

JIM I'E'rHO, AlJQlTOR 01" STATE

The. Honorable Mayor and Members of Council City Of MaQOdon1a MaC$C!Onla, OhlO 44056

T~61~4

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~....caimilo! 6l~QO

In aocordance with Qovemment Auditing Staodar;Qs. we haw audltod the financial statements of the City ot Macedonia, Summit county, (the City) a~ of and for the yoars ended December 31. 1996 and 1995, and have lasuod our report thereon dated October 6, i 997.

~moment Audltjno Stpodcirds also reQulre that we describe the scope ot our testlng or compliance with· laws and regulations and lnternlll controls and report any lrregularitlo!t, Illegal acts, other material nonoompliance and reportable conditions In lntomal controls. We have lsti1uod reports dated Octobor 6, 19117 on compliance and tho Internal control structure reQulrod by Qavemment Aydltlna $tandaml as or and 1or the years ended Oeoembor 31, 1996 and 1995.

In addition to tile matters we communicated to you In thO reports described aboYe, we are submitting for your consideration the followlna comments on trio City's lntomal control structure and noncompllaneo citations. These comments reflect mattors that. whllo In our opinion do not represent material Instances of noncompllanc:e or reportable Internal control structuro cond1tlons. wo believe represent matters for whlC'.1'1 lmprovemants In compllance or Internal controls or operational otfleleneles might be aehlovecl. Due· to the llml1ed nature of our audit. we have not fully assessed thoJ cost·blllnotlt relationship l'lf Implementing the recommendations suggosted below. Howevor, these comments reflect our continuing desire to a!Jalst your government. It you h11ve questlons or coneomt regarding tl'leso commoms. pleue do not hesitate to contact us.

This, f91X>rt la Intended 1or the Information Of the COunell and management. Howovor, this repcrt Is a public l'IK'Ord and Its distribution le not limited.

Octclber 6, 1997

JIM PETRO Auditor of State

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City of MaOOdOnla Report to Management Page:Z

Cltatlons

1, Ohkt Rev. Code Soctlon 124.38 stab.15 that employOOs shall fumlsh a wr1tten, signed statoment 10 dOCument the use of sick leave.

Tho :reciulred written &18tements woro not always on f!lo.

2. Ohio Rev. Code Soctlon 117.38 states that annual financial statement3 shall be flied with the Auditor of State within nlntity days after the clOse of the fiscal year. Section 117.38 also provides that the chief fiscal oflieer shall publish the annual report In ~ newspaper published In the polltlettl subdivision or taxing dlslrlct. This '8dion also p~:ldes that any public lnstlMJon or taxing district whose flMnclal report was not flied at the time required by this section shall pay 10 the Auelltor of State twenty-five dollars ($25) for each day the report Is not ft!ed attor the · filing date.

Thei-o was no Clocumenta1l0n that the City flied Ins calender year 1995 and 1996 annual financial statements with ttle Auditor of State or published such statements.

3. Ohio Revised Code Section 149.43 states that public documents shall bo mado available '/or inspection.

Tht'I <:lty did not maintain tho Utlllty Department records lndlCatlng 1he number of customers, 1tlCI monthly f9l)OrtS

of the Utility Department, or tne reglstratlon11 for soccer and ba:1ke1ball activities.

4. OhlO Revi&OCI Code Section 149.39 states that the City records commisslon Is to meot once 8"8f'y six months, and upon call of the chairman.

The City Records Commission did not meet In calender years 1996or1995.

5. Ohio Rev. Cod~ Section 733.40 states that at1he first regular meeting of the !eglslatlve auttiorlty each month, the meyor shaU submit a fi.111 statement of all money received by him.

The Mayor did not report 1tle Mayor's Court financial actMty to Council.

6.

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City of ~ldonla · Report to Management Page3

7. Ohio Rev. Code Section 5705.39 statlJS 1hat tho total appropriat)on from each fund sNIL not exceed the total Mttmat.d revenue of that fund.·· Appropr'btionn·OxceedeC:l !1'18 amount certified as ava1iabie revenue by 1lle ·

,,

2.

3.

· . ~ commlaalon In the following funds: · · · '' ' . ·1'. . ·, ''''.·· .. ~ Sooc!a! 8IYJtnut Eund Typu: '

. · ·i P..,,,laaNe UcenM-T.x Fund ~ : .Fire ()peratk'Yo» Levy Fund

••• .,·,,:·.: •• 1

· ,. ·.lm CWa! p!'9jeCt! fund Types: .... State Route 82Wldenlng (Phase I) Fund

· Brookpoint.Storm Waw lmpnMtment.S:und

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Recommm112!m

·.I I o

Various Fun ·Fest reeon1I were maintained ·by volunteef'S whll$.other Fun .Fest mcoros went maintained by the .Part<a and Recreation Director. This resulted In the Fun Fest records bel~:clfflcult to locate. ·

Fun Feat record• attould be maintained In a central lccatlon by tl'ltt peraon reGl)OnAible for tho activity.

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'The~Cltycontracted with outak» vendors 10 provide camlval-typo rlCles for the Fun Feat. The 01.1alde vendors used 1l'lelr own prenumbDfed tlekets and subsequently provided a list to the City of the 1:.'eglnnlng and ttndlng numbers of the tlclcets.ao!Q and the amount Charged fQ!' 1he tic"'81s. Mathematical·errors were dlacowred on the 1996.llstof ride proceeda-that.wu provided by the outside venc:or, and the ticket numbers were.not consecutive. Alac1, the dally bGglMlng and ending tlCket numbers were not vorlfled by the Ctty. This could result In the City not receMng the total monies due under me terms of the contract. ·

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'The. llatJng of tickets sold provided. by the outside YllndOr ahOuld.be recalculated by a City emp!Oyee. Al&o, the beQ.mnlng and onctlng ticket numbers shOuld be verified dally by a City employee,

" ' ~·. . . ... . ' . Ave of me eight .xatnlned Fun Fest receipts wore not depOGlted In the bank within 24 houra. Thia could rnult In tl'le IOs8 of lntel'8st revenue to lhe City.

, I ' ,•

. Receipt$ aoould be deposited In the bank witnln 24 heurs. .

The. Income 1ax returns whlCh Indicated that a payment had been received from the taxplil.yer were not referenoed to trie corresponcllng receipt or batch number. In ordet'io verity a payment tD the return, the hlltofy report had to· be ;itlnted·and·a·recaJcutat!on wal'necesaary. Thia could allow errors In the recording of Income tax revenues to . go c,;1ndetecled. '

" . ln·ordftr 10 allow the matching of Income tax.retums and .payments, the returns shouk:! Indicate a batchlreoolpt nurr.lber. the amount of the payment, w!'N.lttler the payment was made by check or cash,· and the dahl received.

5. The' Finance. Oll'9CIOr hU yt'lt to submit· at least tllxty-calender·year :1995 Income tax flies to the City Law Oil-.c!or for collec:tlon. This could teSUlt ln·lost ~ue to the City.

' ' ~ • .. "' 1• . , ' 11 o• ' ' : • ' 'w "I ' •', ',•I - ...... 'o , , ,': , !• ' \, •

'fhe,Flnance Olrwctor &hoUld rwlew all delinquent Income tax flies at least qUMrtertyand promptly submit .them .to the I.aw-Director for collection.

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City Of Mactldonla Report to Managemont Page6

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f!geral BQ:COmmendanon

The City does not maintain a separate fund or cost ::enter for federal receipts and disbursements.

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The Finance Dlrec:tol' should account for each federal crant In a separate fund or cost center ao that federal transactions are ldenllflable on the City's ledgers. ·

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