STATE BOARD OF ACCOUNTS 302 West Washington Street Room E418 INDIANAPOLIS, INDIANA 46204-2769 ANNUAL FINANCIAL REPORT 2008 CITY OF GARY LAKE COUNTY, INDIANA TABLE OF CONTENTS Description Page Schedule of Officials .......................................................................................................................... 3 Independent Auditor's Report on Financial Statements and Supplementary Schedule of Expenditures of Federal Awards .................................................... 4-5 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards ............................................... 6-7 Basic Financial Statements: Government-Wide Financial Statements: Statement of Activities and Net Assets – Cash and Investment Basis ................................. 8 Fund Financial Statements: Governmental Funds: Statement of Assets and Fund Balances and Receipts, Disbursements, and Changes in Fund Balances – Cash and Investment Basis – Governmental Funds ............................................................................................ 9-10 Proprietary Funds: Statement of Assets and Fund Balances and Receipts, Disbursements, and Changes in Fund Balances – Cash and Investment Basis – Proprietary Funds .................................................................................................. 11 Fiduciary Funds: Statement of Additions, Deductions, and Changes in Cash and Investment Balances – Fiduciary Funds .................................................................. 12 Notes to Financial Statements ........................................................................................................... 13-36 Required Supplementary Information: Schedules of Funding Progress .................................................................................................. 37 Schedule of Contributions From the Employer and Other Contributing Entities ......................... 38 Budgetary Comparison Schedules .............................................................................................. 39-44 Supplementary Information: Combining Schedule of Assets and Fund Balances and Receipts, Disbursements, and Changes in Fund Balances – Cash and Investment Basis – Other Governmental Funds ............................................................................................................. 45-60 Combining Schedule of Assets and Fund Balances and Receipts, Disbursements, and Changes in Fund Balances – Cash and Investment Basis – Sanitary District Funds ........................................................................................................................ 61-63 Combining Schedule of Assets and Fund Balances and Receipts, Disbursements, and Changes in Fund Balances – Cash and Investment Basis – Internal Service Funds ....................................................................................................................... 64 Combining Schedule of Additions, Deductions, and Changes in Cash and Investment Balances – Pension Trust Funds ....................................................................... 65 Combining Schedule of Additions, Deductions, and Changes in Cash and Investment Balances – Agency Funds .................................................................................. 66-68 Schedule of Capital Assets .......................................................................................................... 69 Schedule of Long-Term Debt ...................................................................................................... 70 Other Reports ..................................................................................................................................... 71 -1- TABLE OF CONTENTS (Continued) Description Page Audit Results and Comments: Overdrawn Cash Balances ........................................................................................................ 72 Budgets and Appropriations ...................................................................................................... 72-74 Accounts Payable Vouchers (Claims) ....................................................................................... 74-77 Credit Cards and Travel ............................................................................................................ 77-79 Public Works Project – General Services Building .................................................................... 79-80 Pay Rate Changes .................................................................................................................... 80 Salary Ordinance ....................................................................................................................... 80-83 Payroll Reports .......................................................................................................................... 83 Employee Service Records ....................................................................................................... 83-85 Capital Asset Records ............................................................................................................... 85-86 Official Bonds ............................................................................................................................. 86 Temporary Transfer of Funds .................................................................................................... 87 Temporary Transfers of Funds at the Sanitary District .............................................................. 87-89 Garbage Collection Contract and Fees ..................................................................................... 89-90 Gary Sanitary District Contracts ................................................................................................ 90-91 Gary Sanitary District Collection of Amounts Due ..................................................................... 91 Gary Sanitary District Emergency Public Works Projects ......................................................... 91-92 Gary Sanitary District Travel Expense ...................................................................................... 92 Gary Sanitary District Video Recording Contract ...................................................................... 92-93 Police Department Deposits ...................................................................................................... 93 Overpayment of Severance Pay ................................................................................................ 93-94 Park Department Fees .............................................................................................................. 94 Park Department Untimely Deposits ......................................................................................... 95 Park Department Internal Controls ............................................................................................ 95 Park Department Lack of Contract ............................................................................................ 95 Emergency Medical Services No Write-Off Policy .................................................................... 95-96 Economic Development Commission and Redevelopment Authority Did Not Organize .......... 96 Lease Rentals at the Redevelopment Department ................................................................... 96-97 Metro Center Ledger of Receipts, Disbursements, and Balances ............................................ 97 Metro Center Bank Account Reconciliations ............................................................................. 97 Metro Center Receipt Activities ................................................................................................. 97-98 Metro Center Leases ................................................................................................................. 98 Police and Fire Pension Death Benefit ...................................................................................... 98 Lack of Information in Fire Pension Board Minutes ................................................................... 99 Summary of Travel Exepenses of Elected Officials .................................................................. 100-101 Supplemental Audit of Federal Awards: Independent Auditor's Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance With OMB Circular A-133 ........................................................ 104-105 Schedule of Expenditures of Federal Awards ........................................................................... 106-109 Notes to Schedule of Expenditures of Federal Awards ............................................................. 110 Schedule of Findings and Questioned Costs ............................................................................ 111-117 Auditee Prepared Schedules: Summary Schedule of Prior Audit Findings ........................................................................ 118-126 Corrective Action Plan ......................................................................................................... 127-134 Exit Conference ................................................................................................................................ 135 Official Response ............................................................................................................................