Maplewood given deadline by State Auditor| [Update 3: 10/20 8:00 AM] ( from Property Tax) published on 10/17/2007
[Updates at end]
According to a October 10, 2007 letter from the MN State Auditor [small PDF] addressed to Ms. Longrie and copying Finance and Administration Manager Mittet, the city has not yet filed the 2006 City Financial Reporting Form with the State Auditor.
The letter warns that if this statutory requirement is not met by October 31, the city will forfeit the December 2007 Local Government Aid (LGA) payment.
We will update when we learn how much that payment is scheduled to be.
[Update 1: 10/18 9:15 AM]LGA
[original title: Maplewood risks forfeiting the December 2007 LGA payment]
According to this report produced by the League of Minnesota Cites, Maplewood is one of many cities that do not receive LGA payments. We have contacted the State Auditor's office to determine what sanction is applied when there is no LGA payment to forfeit.
[Update 2: 10/19 10:00 AN]Office of State Auditor replies
...
The purpose of the Financial Reporting Form is to compare the information on the form to the City's Comprehensive Annual Financial Report, which we have received from the City of Maplewood.
If the City of Maplewood is not scheduled to receive Local Government Aid in 2007, the Office of the State Auditor still encourages the City of Maplewood to submit the Financial Reporting Form for comparison purposes and inclusion in the report on "Revenues, Expenditures, and Debt of Minnesota Cities." The goal of the Office of the State Auditor is to include all Minnesota cities in our report on "Revenues, Expenditures, and Debt of Minnesota Cities."
...
Commentary: This seems to imply that cities receiving LGA put it at risk by not complying, while those that do not receive LGA face no similar risk. Whether or not cities in this category, like Maplewood, comply is then simply a measure of their respect for the rule of law.
[Update 3: 10/20 8:00 AM] A reader responds
A reader responds:
Office of the State Auditor still encourages! is not the rule of law.
Your Commentary: on the cities measure of their respect for the rule of law in this case is unfounded in my opinion.
I generaly don't disagree with your comments however there is no rule of law to be followed here. LGA in some people's opinion, mine included, was unfairly cut to some cities like Maplewood and efforts to restablish the funding has failed in the state legislature. Why should the city spend time to meet the same requirements of the cities that receive funding when it does not receive the funds?
Many many cities protest the requirements in the same way and they still have respect of the rule of law. You generally get all the information on a subject and LGA has a lot of issues and has been debated for many years. My opinion is those cities who have been able to maintain their LGA were lucky. Those that did not made big cuts years ago to offset the loss in funding. This was done way before our current council was involved.
My reply: The reader is correct to remind me to do a better job of presenting of presenting as much information as possible on a question. My comment could also be construed to mean cities should respect the LGA law whether they receive LGA or not. I appreciate the prompting.
Setting aside the question of LGA, which is and should be hotly debated, my reference to respect for the rule of law was aimed at three Minnesota Statutes cited in the Auditor's letter which I did not quote. Those laws deal with the Auditor's right and duty to require financial reporting from cities and for cities to comply. Here are the statutes referenced, with full text:
From Chapter 6 (State Auditor)
6.74 INFORMATION COLLECTED FROM LOCAL GOVERNMENTS.
The state auditor, or a designated agent, shall collect annually from all city, county, and
other local units of government, information as to the assessment of property, collection of
taxes, receipts from licenses and other sources, the expenditure of public funds for all purposes,
borrowing, debts, principal and interest payments on debts, and such other information as may
be needful. The data shall be supplied upon forms prescribed by the state auditor, and all public
officials so called upon shall fill out properly and return promptly all forms so transmitted.
The state auditor or assistants, may examine local records in order to complete or verify the
information.
From Chapter 471(Municipal Rights, Powers, Duties)
471.697 FINANCIAL REPORTS; FILING; CITIES, TOWNS OF 2,500.
Subdivision 1. All operations except some hospitals, nursing homes. In any city with a
population of more than 2,500 according to the latest federal census, or town with a population of
more than 2,500 according to the latest federal census with an annual revenue of (1) $670,500 or
more in 2004, or (2) $670,500 adjusted for inflation using the annual implicit price deflator for
state and local expenditures as published by the United States Department of Commerce in 2005
and after, the city clerk, chief financial officer, town clerk, or town clerk-treasurer shall:
(a) Prepare a financial report covering the city's or town's operations including operations
of municipal hospitals and nursing homes, liquor stores, and public utility commissions during
the preceding fiscal year after the close of the fiscal year. Cities shall publish the report or a
summary of the report, in a form as prescribed by the state auditor, in a qualified newspaper
of general circulation in the city or, if there is none, post copies in three of the most public
places in the city, no later than 30 days after the report is due in the office of the state auditor.
The report shall contain financial statements and disclosures which present the city's or town's
financial position and the results of city or town operations in conformity with generally accepted
accounting principles. The report shall include such information and be in such form as may
be prescribed by the state auditor;
(b) File the financial report in the clerk's or financial officer's office for public inspection
and present it to the city council or town board after the close of the fiscal year. One copy of the
financial report shall be furnished to the state auditor after the close of the fiscal year; and
(c) Submit to the state auditor audited financial statements which have been attested to by a
certified public accountant, public accountant, or the state auditor within 180 days after the
close of the fiscal year, except that the state auditor may upon request of a city or town and a
showing of inability to conform, extend the deadline. The state auditor may accept this report
in lieu of the report required in clause (b). A copy of the audited financial statement along with
any management letter or other written findings or comments by the auditor must be provided to
each city council member and the mayor, or to each town board member, no later than 30 days
after the report is required to be submitted to the state auditor and presented at a scheduled
meeting of the city council or town board prior to October 31 of the year in which the report is
submitted to the state auditor.
A municipal hospital or nursing home established before June 6, 1979, whose fiscal year is
not a calendar year on August 1, 1980, is not subject to this subdivision but shall submit to the
state auditor a detailed statement of its financial affairs audited by a certified public accountant, a
public accountant or the state auditor no later than 120 days after the close of its fiscal year. It may
also submit a summary financial report for the calendar year.
Subd. 2. First class city audits. The state auditor shall continue to audit cities of the first
class pursuant to section 6.49.
Note that 471.698 (FINANCE REPORT, FILE, PUBLISH OR POST; CITIES UNDER 2,500) is also cited in the Auditor's letter but is for recipients in smaller cities.
From Chapter 477A (Local Government Aid)
477A.017 UNIFORM FINANCIAL ACCOUNTING AND REPORTING SYSTEM.
Subdivision 1. Purpose. Sections 477A.011 to 477A.03 are designed to provide property
tax relief to local units of government. In order for the legislature to determine the amounts of
relief necessary each year, the legislature must have uniform and current financial information
from the governmental units which receive aid distributions. This section is intended to provide
that information.
Subd. 2. State auditor's duties. The state auditor shall prescribe uniform financial
accounting and reporting standards in conformity with national standards to be applicable to cities
and towns of more than 2,500 population and uniform reporting standards to be applicable to
cities of less than 2,500 population.
Subd. 3. Conformity. Other law to the contrary notwithstanding, in order to receive
distributions under sections 477A.011 to 477A.03, counties and cities must conform to the
standards set in subdivision 2 in making all financial reports required to be made to the state
auditor after June 30, 1984.
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