Report 2018-110 Recommendation 4 Responses
Report 2018-110: City of Lincoln: Financial Mismanagement, Insufficient Accountability, and Lax Oversight Threaten the City's Stability (Release Date: March 2019)
Recommendation #4 To: Lincoln, City of
To comply with state law, Lincoln should immediately discontinue its practice of using restricted funds to subsidize other funds that have year-end deficits and that lack the ability to permanently repay the transfers within 90 days of the close of the fiscal year.
1-Year Agency Response
This recommendation was fully implemented during the 2019/2020 fiscal year with the adoption of the airport interfund loan on June 4, 2019. This was previously reported on, and supporting documentation was submitted.
- Completion Date: June 2019
- Response Date: April 2020
California State Auditor's Assessment of 1-Year Status: Fully Implemented
Lincoln's fiscal year 2018-19 comprehensive annual financial report demonstrates that it has discontinued its practice of using restricted funds to subsidize other funds that have year-end deficits. Lincoln instead used its general fund (a non-restricted fund) to subsidize the year-end deficits in other funds.
6-Month Agency Response
On June 11, 2019, the City Council adopted an interfund loan agreement to address the long-term debt associated with the Airport that was traditionally handled at year-end as a short-term loan. The interfund loan was adopted by Resolution 2019-145.
- Completion Date: June 2019
- Response Date: September 2019
California State Auditor's Assessment of 6-Month Status: Pending
Our audit found that the practice of using restricted funds as described in our recommendation pertained to various funds, including the Airport, Parks PFE, Drainage PFE, Regional Sewer Project, and Fire PFE funds. We look forward to reviewing the fiscal year 2018-19 audited financial statements upon completion of the annual financial audit to verify that Lincoln has discontinued this practice.
- Auditee did not substantiate its claim of full implementation
60-Day Agency Response
The implementation of this recommendation cannot be fully substantiated until the end of the fiscal year.
- Estimated Completion Date: July 1, 2019
- Response Date: May 2019
California State Auditor's Assessment of 60-Day Status: Pending
All Recommendations in 2018-110
Agency responses received are posted verbatim.