City of Montgomery Hamilton County Regular Audit For
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CITY OF MONTGOMERY HAMILTON COUNTY TABLE OF CONTENTS TITLE PAGE Independent Auditor’s Report ...................................................................................... Under separate cover Prepared by Management: Comprehensive Annual Financial Report ............................................................. Under separate cover Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards ........................................................................................... 1 This page intentionally left blank. INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS REQUIRED BY GOVERNMENT AUDITING STANDARDS City of Montgomery Hamilton County 10101 Montgomery Rd Montgomery, Ohio 45242 To the City Council: We have audited, in accordance with auditing standards generally accepted in the United States and the Comptroller General of the United States’ Government Auditing Standards, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Montgomery, Hamilton County, Ohio (the City) as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated June 26, 2018. Internal Control Over Financial Reporting As part of our financial statement audit, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures appropriate in the circumstances to the extent necessary to support our opinions on the financial statements, but not to the extent necessary to opine on the effectiveness of the City’s internal control. Accordingly, we have not opined on it. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, when performing their assigned functions, to prevent, or detect and timely correct misstatements. A material weakness is a deficiency, or combination of internal control deficiencies resulting in a reasonable possibility that internal control will not prevent or detect and timely correct a material misstatement of the City’s financial statements. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all internal control deficiencies that might be material weaknesses or significant deficiencies. Given these limitations, we did not identify any deficiencies in internal control that we consider material weaknesses. However, unidentified material weaknesses may exist. Compliance and Other Matters As part of reasonably assuring whether the City’s financial statements are free of material misstatement, we tested its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could directly and materially affect the determination of financial statement amounts. However, opining on compliance with those provisions was not an objective of our audit and accordingly, we do not express an opinion. The results of our tests disclosed no instances of noncompliance or other matters we must report under Government Auditing Standards. Corporate Centre of Montgomery, 11117 Kenwood Road, Montgomery, Ohio 45242 Phone: 513‐361‐8550 or 800‐368‐7419 Fax: 513‐361‐8577 www.ohioauditor.gov 1 City of Montgomery Hamilton County Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards Page 2 Purpose of this Report This report only describes the scope of our internal control and compliance testing and our testing results, and does not opine on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed under Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this report is not suitable for any other purpose. Dave Yost Auditor of State Columbus, Ohio June 26, 2018 2 Comprehensive Annual Financial Report City of Montgomery, Ohio Year Ended December 31, 2017 CITY OF MONTGOMERY, OHIO COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2017 Issued by: Department of Finance Katie Smiddy Director DRAFT 6/25/2018 CITY OF MONTGOMERY, OHIO TABLE OF CONTENTS HAMILTON COUNTY, OHIO I INTRODUCTORY SECTION A Letter of Transmittal ............................................................................................. v B List of Principal Officials ................................................................................... xvi C City Organizational Chart ................................................................................. xvii D Certificate of Achievement for Excellence in Financial Reporting....................... xviii II FINANCIAL SECTION A Independent Auditor’s Report ................................................................................ 1 B Management’s Discussion and Analysis ................................................................. 5 C Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ................................................................................... 16 Statement of Activities ....................................................................................... 18 Fund Financial Statements: Governmental Funds: Balance Sheet ..................................................................................................... 20 Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities ..................................................................................... 22 Statement of Revenues, Expenditures and Changes in Fund Balances .............. 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities .......... 26 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis): General Fund ................................................................................................. 27 Fire Protection / EMS Fund ........................................................................... 28 Fiduciary Funds: Statement of Net Position ................................................................................... 29 Statement of Changes in Net Position…. ........................................................... 30 Notes to the Basic Financial Statements .................................................................. 31 DRAFT - i - 6/25/2018 CITY OF MONTGOMERY, OHIO D Required Supplemental Information: Schedule of the City’s Proportionate Share of the Net Pension Liability ...................................................................................................... 74 Schedule of City Contributions ............................................................................... 75 Notes to the Required Supplemental Information ................................................... 76 E Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Financial Statements: Combining Balance Sheet ................................................................................... 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ..................................................................................................... 83 Combining Balance Sheet – Nonmajor Special Revenue Funds ........................ 84 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Special Revenue Funds .......................................... 88 Combining Balance Sheet – Nonmajor Debt Service Funds .............................. 92 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Debt Service Funds ................................................ 93 Combining Balance Sheet – Nonmajor Capital Projects Funds ......................... 94 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Capital Projects Funds ........................................... 95 Individual Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis): Major Governmental Funds: General Fund ................................................................................................. 96 Special Revenue Fund: Fire Protection / EMS Fund ...................................................................... 100 Debt Service Funds: Reserve of Montgomery Bond Retirement Fund ..................................... 101 Vintage Club Tax Increment Fund ........................................................... 102 Capital Projects Funds: Capital Improvement Fund ....................................................................... 103 Downtown Improvement Fund ................................................................. 104 DRAFT - ii - 6/25/2018 CITY OF MONTGOMERY, OHIO Nonmajor Governmental Funds: Special Revenue Funds: Compensated Absences Fund ..................................................................