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Sheet1 Page 1 FIXED ASSETS AUDIT BACKGROUND: The City's fixed assets are recorded in the General Fixed Assets Group of Accounts for the tax operating funds and on the balance sheet of the enterprise and inter-governmental funds. The City records contributed assets at fair market value rather than nominal values. Detailed asset cost information has been maintained since October 1, 1973, for the Water Utility Fund since October 1, 1975, for the Sewer Utility Fund 1975 for the tax operating funds. The City's financial statements have a qualified opinion because current records do not permit a practical determination of the cost of fixed assets. Also physical counts of fixed assets have revealed material shortages which have required adjustments to the accounts. The main focus of this audit is the custodial responsibilities of the operating departments. The performance of the custodians will be determined by results of scheduled tests concerning recordkeeping and by physical inspections. The Property Section of the Accounting Department is responsible for keeping detailed records of the fixed assets. They are listed by asset group, number and by location. When assets are purchased, the Property Control Section picks up the necessary information from the purchase order. This information is input into the asset control master file and the item appears on the appropriate computer printout. Disposals can be items: stolen (which require a police report), missing, junked, stripped for parts or sold at auction. To delete an asset from the
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