State of Indiana an Equal Opportunity Employer State Board of Accounts 302 West Washington Street Room E418 Indianapolis, Indiana 46204-2765
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STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINGTON STREET ROOM E418 INDIANAPOLIS, INDIANA 46204-2765 Telephone: (317) 232-2513 Fax: (317) 232-4711 Web Site: www.in.gov/sboa Board of Directors City of Indianapolis 200 East Washington Street, Suite 2222 Indianapolis, Indiana 46204 We have reviewed the audit report prepared by KPMG, LLP, Independent Public Accountants, for the period January 1, 2006 to December 31, 2006. In our opinion, the audit report was prepared in accordance with the guidelines established by the State Board of Accounts. Per the Independent Public Accountants’ opinion, the financial statements included in the report present fairly the financial condition of the of the City of Indianapolis, as of December 31, 2006 and the results of its operations for the period then ended, on the basis of accounting described in the report. The Independent Public Accountants’ report, the Single Audit Report and the Status of Prior Year Findings are filed with this letter in our office as a matter of public record. We call your attention to the twenty-nine findings in the Single Audit Report, on pages 13 through 41. Thirteen of those findings represent significant deficiencies in internal control over financial reporting. Ten of those thirteen represent material weaknesses. The auditors have issued a qualified opinion on compliance with applicable requirements for three of the seven major programs. STATE BOARD OF ACCOUNTS COMPREHENSIVE ANNUAL FINANCIAL REPORT City of Indianapolis, Indiana (Component Unit of the Consolidated City of Indianapolis-Marion County) Year Ended December 31, 2006 Office of Finance and Management I II (This page intentionally left blank) TABLE OF CONTENTS Page(s) I. INTRODUCTORY SECTION Letter of Transmittal VII – XIII Certificate of Achievement for Excellence in Financial Reporting XIV Organization of Local Government and Taxing Districts Introduction XV Form of Government XV - XVI Other Governmental Units XVI - XVII Maps XVII - XVIII Unigov Organizational Chart – Consolidated Government for Indianapolis – Marion County XIX City of Indianapolis Organization Chart XX Schedule of Elected and Appointed Officials XXI – XXII Consolidated City Operations XXIII – XXXII II. FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT 1 – 2 MANAGEMENT’S DISCUSSION AND ANALYSIS – REQUIRED SUPPLEMENTARY INFORMATION 3 – 13 BASIC FINANCIAL STATEMENTS: Government-wide Financial Statements: Statement of Net Assets 15 – 16 Statement of Activities 17 III IV TABLE OF CONTENTS (continued) Page(s) Fund Financial Statements: Balance Sheet – Governmental Funds 18 Reconciliation of the Balance Sheet for Governmental Funds to the Statement of Net Assets 19 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 20 – 21 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 22 Statement of Net Assets – Proprietary Funds 23 – 24 Statement of Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds 25 Statement of Cash Flows – Proprietary Funds 26 – 27 Statement of Fiduciary Net Assets – Fiduciary Funds 28 Statement of Changes in Fiduciary Net Assets – Fiduciary Funds 29 Notes to Financial Statements 30 – 83 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Information: Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund 84 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Federal Grants Special Revenue Fund 85 Schedules of Funding Progress 86 Schedule of Employer Contributions 87 Notes to Required Supplementary Information 88 – 90 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES – OTHER SUPPLEMENTARY INFORMATION Combining Balance Sheet – Nonmajor Governmental Funds by Fund Type 91 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds by Fund Type 92 Schedule of Sub-Fund Assets, Liabilities, and Fund Balance – General Fund 93 – 94 Schedule of Sub-Fund Revenues, Expenditures, and Changes in Fund Balance – General Fund 95 – 96 Schedule of Sub-Fund Revenues, Expenditures, and Changes in Fund Balance – General Fund – Budget and Actual – Budgetary Basis 97 – 100 Schedule of Expenditures by Character – General Fund – Budget and Actual – Budgetary Basis 101 – 112 Combining Balance Sheet – Nonmajor Special Revenue Funds 113 TABLE OF CONTENTS (continued) Page(s) Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds 114 Combining Schedule of Revenues, Expenditures, and Changes in Unreserved Fund Balances – Special Revenue Funds – Budget and Actual – Budgetary Basis 115 Schedule of Expenditures by Character – Special Revenue Funds – Budget and Actual – Budgetary Basis 116 – 118 Combining Balance Sheet – Nonmajor Debt Service Funds 119 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Debt Service Funds 120 Combining Schedule of Revenues, Expenditures, and Changes in Unreserved Fund Balances – Debt Service Funds – Budget and Actual – Budgetary Basis 121 – 123 Schedule of Expenditures by Character – Debt Service Funds – Budget and Actual – Budgetary Basis 124 Combining Balance Sheet – Nonmajor Capital Projects Funds 125 – 126 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Capital Projects Funds 127 – 128 Combining Schedule of Revenues, Expenditures, and Changes in Unreserved Fund Balances – Annually-Budgeted Capital Projects Funds – Budget and Actual – Budgetary Basis 129 Schedule of Expenditures by Character – Annually-Budgeted Capital Projects Funds – Budget and Actual – Budgetary Basis 130 – 131 Combining Statement of Net Assets – Internal Service Funds 132 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets – Internal Service Funds 133 Combining Statement of Cash Flows – Internal Service Funds 134 Combining Statement of Pension Trust Funds Net Assets – Fiduciary Funds 135 Combining Statement of Changes in Fiduciary Net Assets – Fiduciary Funds – Police and Firefighter Pension Trust Funds 136 Schedule of Revenues and Expenditures – Fiduciary Funds – Police and Firefighter Pension Trust Funds – Budget and Actual – Budgetary Basis 137 Combining Statement of Agency Funds Net Assets – Fiduciary Funds 138 Combining Statement of Changes in Assets and Liabilities – Fiduciary Funds – Agency Funds 139 – 140 III. STATISTICAL SCHEDULES (UNAUDITED) Net Assets by Component 1 141 Changes in Net Assets 2 142 – 144 Program Revenues by Function/Program 3 145 Fund Balances, Governmental Funds 4 146 Changes in Fund Balances, Governmental Funds 5 147 – 148 Tax Revenues by Source, Governmental Funds 6 149 Assessed Value and Estimated Actual Value of Taxable Property 7 150 Property Tax Rates - Direct and Overlapping Governments 8 151 V VI Principal Property Tax Payers 9 152 Property Taxes Levied and Collections 10 153 Ratios of Outstanding Debt by Type 11 154 Ratios of General Bonded Debt Outstanding 12 155 Schedule of Direct and Overlapping Debt and Bonded Debt Limit 13 156 – 158 Computation of Legal Debt Margin 14 159 Pledged Revenue Coverage 15 160 Demographic and Economic Statistics 16 161 Principal Employers 17 162 Full Time-Equivalent City Government Employees by Function/Program 18 163 Operating Indicator by Function/Program 19 164 Capital Asset Statistics by Function/Program 20 165 September 30, 2007 To the Honorable Mayor Bart Peterson, Members of the City-County Council, and Citizens of Indianapolis, Indiana I submit to you the Comprehensive Annual Financial Report (CAFR) of the City of Indianapolis (City) for the fiscal year ended December 31, 2006. The City is a component unit of the Consolidated City of Indianapolis – Marion County Reporting Entity. This report was prepared by the Office of Finance and Management. Responsibility for both the accuracy of the data presented and the completeness and fairness of the presentation, including all disclosures, rests with the Controller of the City of Indianapolis. The data, as presented, is accurate in all material respects. It is presented in a manner designed to set forth the financial position and results of operations of the City. Disclosures necessary to enable the reader to gain the maximum understanding of the City's financial affairs are included. The CAFR conforms to the standards for financial reporting of the Governmental Accounting Standards Board (GASB) and the Government Finance Officers Association of the United States and Canada (GFOA). There are three main sections to this report. The Introductory Section includes this letter, the Certificate of Achievement for Excellence in Financial Reporting, a description of the government and related taxing districts, a list of elected officials and the City’s organizational charts. The Financial Section includes the independent auditors’ report, management’s discussion and analysis (MD&A), the basic financial statements for the City, and supplementary information. The Statistical Section includes selected financial and demographic information presented on a multi-year basis. The MD&A can be found beginning on page 3. The City is required to undergo an annual single audit in conformity with the provisions of the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Information related to this single audit, including