City of La Porte Comprehensive Annual Financial Report 1997

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I I I I I I I. I I I I I I I I . The concept of reasonable assurance recognizes that: (1) The cost of a control should not exceed the benefits likely to be derived; and (2) The evaluation of costs and benefits requires estimates and judgements by management. All internal control evaluation occurs within the above framework. We believe that the City's current internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgeting Controls. In addition, the government maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the govemment's governing body. Activities of the general fund and debt service fund are included in the annual appropriated budget. Project-length financial plans are adopted for the capital project funds. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established by department, within an individual fund. The government also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts lapse at year end. However, encumbrances generally are reappropriated as part of the following year's budget. As demonstrated by the statements and schedules included in the financial section of this report, the government continues meeting its responsibility for sound financial management. General Government Functions. The following schedule presents a summary of general fund and debt service fund revenues for the fiscal year ended September 30, 1997 and the amount and percentage of increases in relation to prior year revenues. Increase Percent Percent (Decrease) of Increase Revenues Amount of Total from 1996 (Decrease ) Property taxes $ 8,510,182 40.17% $ 570,905 7.19% Franchise taxes 1,265,058 5,97 77,482 6.52 Sales taxes 1,394,380 6.58 (36,230) (2.53) Industrial payments 5,802,110 27.38 333,913 6.11 Other taxes 176,871 .83 20,882 13.39 Licenses and permits 243,632 1.15 24,686 11.27 Fines and forfeits 427,305 2.02 73,468 20.76 Charges for services 2,567,400 12.11 128,239 5.26 Intergovernmental 187,333 .88 44,733 31.37 Interest . 589,971 2.78 472 .08 Miscellaneous 28,470 .13 (56,732) (66.59) Total revenues $ 21,192,712 100.00% $ 1,181,818 5.91 5