At the Feb. 13 Live Oak City Council meeting, the council was briefed by its auditor regarding the comprehensive annual financial report for the fiscal year that ended Sept. 30, 2007. This report presented both good and bad news.

The good news was the city’s general fund is in the best financial condition ever. The bad news consisted of two significant deficiencies: Capital asset inventory, repeating from last year’s audit, and the operating bank account was not reconciled to bank records on a timely basis. Software to track capital inventory and to facilitate reconciling records to the bank records has been purchased and is currently being implemented. Reconciliation of financial records and reports has been a problem in the past.

The other bad news consisted of four control deficiencies, being: non-compliance with IRS regulations regarding per diem allowances; investment policy; purchasing policy; and fraud detection and prevention policy. Subsequent to the audit, a purchasing policy was adopted. The others have or are being addressed and will be included on future council agendas.

I am surprised that only the above items were identified because of the turbulence in the finance area in the past two years. With that in mind, I wish to recognize Kathy Schobinger, finance department, for her many contributions, dependability and outstanding performance during this period.

Based on the encumbrance policy implemented by Mark Jackley and Larry Homan, no reserve for encumbrances was needed. Accordingly, our emergency fund increased to $5,060,585 or 8.6 percent, up from $4,659,593 last year. Also, $800,000 was designated for the new public safety building and is not included in the $5,060,585 balance.

Accordingly, the auditor indicated our reserve amounted to 8.7 months average expenditure in fund balance, up from 8.4 percent last year. Overall, the financial picture looks good.

Please note the following upcoming events: Annual Easter Egg Hunt scheduled for 1 p.m. March 16 in Live Oak City Park; the semi-annual “Clean Up, Paint Up and Fix Up” March 17-23, with pick-up commencing March 24; and Park Day April 12.