Page 260 - Saginaw FY22 Adopted Annual Budget

CITY OF SAGINAW, TEXAS

FINANCIAL MANAGEMENT POLICIES
C. Basis of Accounting compared to Basis of Budgeting — Revenues and

expenditures are budgeted on a cash basis which differs in some instances from
the basis of accounting: Compensated absences are not budgeted but are
reported as an expenditure in the accounting system. Depreciation and gains or
losses on assets are not budgeted but are recorded as revenues or expenditures in
the accounting system. For Proprietary Funds capital expenses are budgeted but
at year end are booked as additions to capitalized assets and bond payments are
budgeted as expenses but booked as a reduction to liability at year end.

IV. External Audit
The City shall have its records and accounts audited annually by an outside,

independent auditor and shall have an annual financial statement prepared based
on the audit.

A. The auditors are accountable to the City Council and will have access to
direct communication with the City Council if the City staff is unresponsive to
auditor recommendations or if the auditors consider such communication
necessary to fulfill their legal and professional responsibilities.
B. At least every five years, the City shall request qualifications from qualified

accounting firms, including the current auditors if their past performance has been
satisfactory.

2

254