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AUDIT FINDS OREM’S ACCOUNTING IN GOOD SHAPE

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Orem's accounting is in good shape.

That's the word from the annual independent audit, which city officials accepted on Nov. 28.The audit was part of the city's annual financial report, which also included statistics and summaries showing various trends in the city.

Auditors found no material weaknesses in the way Orem's accountants handle their jobs. Some problems were found.

One was that for about two months the city did not use an imprest banking account for payroll. An imprest account is usually empty to prevent people from illegally cashing checks from the payroll account.

Orem officials said they did it while they were changing bank accounts and have returned to imprest accounts.

A second concern was that the recreation and the public works departments did not always turn money they received over to the city each day. City policy and state law say it is best to do it daily, and no later than three working days.

City departments kept money until entire accounts were paid off instead of as the money came in. City accountants will begin periodic spot inspections to make sure the policy is followed more closely.

The report also revealed a few trends in city government. An important trend is that the city is spending increasingly larger subsidies to keep prices down at the city's recreation center. In 1987, the city spent $63,527 in subsidies. In 1989, it spent $144,973 - an increase of about 128 percent.

Revenues for the center have increased $100,000 over the same period, yet declined slightly from last year. However, operating expenses increased more than $200,000 in the same time. The large increases came from maintenance and inflationary costs.

According to city officials, the City Council has grappled with the issue of raising prices or keeping prices low enough for everyone in the community to attend.

Another trend revealed in city finances is that the city's general fund has lost more than $1 million in its reserve. The council, acting in its role as the redevelopment agency, spent that money on land purchases for redevelopment.

The reserve is still more than $1 million, and increased property taxes on the developed property will help return the money, with interest, to the city's reserve.

City officials note that reserves of water, sewer and garbage funds were not used for redevelopment. Phil Goodrich, the director of administrative services, noted in the report that the City Council may want to address the issue of a smaller general-fund reserve.

Finally, the report contained some statistics of interest. City expenditures increased from $8.88 million in fiscal 1980 to $13.36 million in fiscal 1989. Tax revenues increased from $4.14 million to $9.03 million.

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Flaws - and highlights

-Orem accounting is in good shape overall.

-Some small amounts of money were kept out of the bank longer than they should have been.

-The city did not use an imprest account for payroll for about two months.

-The reserves in the city's general fund have decreased. Most of that money was invested for redevelopment.

-City subsidies to the recreation center have increased 128 percent since 1987.

-Tax revenues in the city have more than doubled since 1980.