Annual Audit Report
of the
ILLINOIS MUNICIPAL LEAGUE
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MEYER & VAN METER | CERTIFlED PUBLIC ACCOUNTANTS
215 SOUTH GRAND AVE, WEST
SPRINGFIELD, ILLINOIS 62704 • TELEPHONE 217/ 544-0777
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H E MEYER 1948 - 1971
W H VAN METER - RETIRED
V L WEATHERFORD 1948 - 1984
W H McCUE
H G LEE
B A DeCOURCY
D A SMITH
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Accountants' Report
Illinois Municipal League:
We have examined the consolidated balance sheet of the Illinois Municipal League as of December 31, 1986 and 1985, and the related consolidated statements of revenue, expenses, and changes in fund balance and changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the financial statements referred to above present fairly the consolidated financial position of the Illinois Municipal League as of December 31, 1986 and 1985, and the results of its consolidated operations and the changes in its financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis.
Meyer & Van Meter
June 17, 1987
Springfield, Illinois
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1986 AND 1985
| 1986 | 1985 |
ASSETS | | |
CURRENT ASSETS | | |
Cash | $ 48,157 | $ 74,317 |
Temporary cash investments (Note 2) | 1,276,105 | 902,520 |
Accrued interest | 786 | 5,049 |
Accounts receivable | | |
Loan program fee (Note 4) | 128,640 | |
Insurance service charges | 15,350 | 12,938 |
Affiliate | 10,766 |
Other | 7,678 | 28,751 |
Prepaid pension expense (Note 5) | 10,000 | 10,000 |
Other | 3,802 | 3,487 |
Total current assets | 1,490,518 | 1,047,828 |
FIXED ASSETS (Notes 1-c and 3) | 255,574 | 188,764 |
LOAN PROGRAM FEE RECEIVABLE (Note 4) | 370,011 | |
PREPAID PENSION EXPENSE (Note 5) | 80.000 | 90.000 |
TOTAL ASSETS | $2,196,103 | $l,326,592 |
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LIABILITIES AND
FUND BALANCE |
CURRENT LIABILITIES |
Accounts payable | $ 12,676 | $ 8,934 |
Unearned Income: | | |
Dues | 153,951 | 170,959 |
Advertising | 3,404 | 3,552 |
Other | 1,212 | 434 |
Total current liabilities | 171,243 | 183,879 |
FUND BALANCE | 2,024,860 | 1,142,713 |
TOTAL LIABILITIES AND FUND BALANCE | $2,196, 103 | $ 1,326,592 |
CONSOLIDATED STATEMENT OF REVENUE,
EXPENSES AND CHANGES IN FUND BALANCE
YEARS ENDED DECEMBER 31, 1986 AND 1985
| 1986 |
1985 |
REVENUE |
Membership dues | $ 319,495 | $ 324,713 |
Illinois Municipal Review: |
Advertising | 31,697 | 30,570 |
Subscriptions | 1, 880 | 1,728 |
Foreign fire insurance service charges | 261,056 | 201,688 |
Conferences | 189,584 | 217,854 |
Publications | 19,616 | 30,367 |
Interest on invested funds | 106,564 | 126,867 |
Services and facilities fee (Note 6) | 300,299 | 178,266 |
Loan program fee (Note 4) | 731,250 | |
Other | 63 | 145 |
Total revenue | 1,961,504 | 1,112,198 |
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EXPENSES |
Salaries - excluding legal services | 280,755 | 274,776 |
Payroll taxes and contributions to
Illinois Municipal Retirement Fund | 74,202 | 47,854 |
Automobile maintenance | 1,479 | 1,499 |
Office supplies | 20,804 | 14,665 |
Office expense | 83,980 | 79,860 |
Travel | 41,543 | 58,960 |
Postage | 22,618 | 29,014 |
Memberships | 980 | 499 |
Insurance | 28,409 | 28,662 |
Illinois Municipal Review | 74,385 | 77,578 |
Conference expense | 178,005 | 180,832 |
Legal services | 101,466 | 100,564 |
Publications | 32,814 | 13,705 |
Dues - National League of Cities | 27,088 | 27,081 |
Library | 3,965 | 1,181 |
Accounting and auditing | 21,993 | 19,407 |
Depreciation | 30,329 | 25,279 |
Meetings and committees | 54,537 | 37,963 |
Other | 5 | 252 |
Total expenses | 1,079,357 | 1,019,631 |
EXCESS OF REVENUE OVER EXPENSES | 882,147 | 92,567 |
FUND BALANCE - BEGINNING OF YEAR | 1,142,713 | 1,050,146 |
FUND BALANCE - END OF YEAR | $2,024,860 | $l,142,713 |
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CONSOLIDATED STATEMENT OF CHANGES
IN FINANCIAL POSITION
YEARS ENDED DECEMBER 31, 1986 AND 1985
| 1986 | 1985 |
SOURCES OF FUNDS |
Operations: |
Excess of revenue over expenses | $ 882,147 | $ 92,567 |
Add (deduct) items not involving
working capital this period: |
Depreciation | 30,329 | 25,279 |
Loan program fee | (370,011) |
Pension expense | 10,000 | ________ |
Total sources of funds from operations | 552,465 | 117,846 |
USES OF FUNDS |
Additions to fixed assets | 97,139 | 39,563 |
Prepaid pension expense | ________ | 90,000 |
Total uses of funds | 97,139 | 129,563 |
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INCREASE (DECREASE) IN WORKING CAPITAL | $ 455,326 | $( 11,717) |
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CHANGES IN WORKING CAPITAL |
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INCREASES (DECREASES) IN CURRENT ASSETS |
Cash | $( 26,160) | $(155,459) |
Temporary cash investments | 373,585 | 111,091 |
Interest accrued | ( 4,263) | ( 5,461) |
Accounts receivable | 99,213 | 26,946 |
Other | 315 | 10,773 |
Increase (decrease) in current assets | 442,690 | ( 12,110) |
INCREASES (DECREASES) IN CURRENT LIABILITIES |
Accounts payable | 3,742 | ( 5,029) |
Unearned income | ( 17,156) | 4,636 |
Other | 778 | ________ |
Increase (decrease) in current liabilities | ( 12,636) | ( 393) |
INCREASE (DECREASE) IN WORKING CAPITAL | $ 455,326 | $( 11,717) |
September 1987 / Illinois Municipal Review / Page 19
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1986 AND 1985
1. SIGNIFICANT ACCOUNTING POLICIES
a. Principles of consolidation. The financial statements include the
accounts of the Illinois Municipal League (League) and its wholly-owned
subsidiary, the Illinois Municipal League BuiIding Corporation.
b. Income recognition. Dues are considered earned pro data over the dues
c. Property and depreciation. Property is carried at cost. Depreciation
is provided on the straight-line method over the estimated useful lives
of the assets.
d. Investments. Investments are carried at amortized cost.
2. TEMPORARY CASH INVESTMENTS
The temporary cash investments approximate market value and consist of the
following:
| 1986 | 1985 |
Certificates of deposit | $ 306,223 | $425,100 |
U. S. Treasury bills | 519,882 | 235,000 |
U, S. Treasury note subject to
bank repurchase agreement | 450,000
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Federal agency securities | ________ | 242,420 |
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Total | $l,276,105 | $902,520 |
3. FIXED ASSETS
Fixed assets at December 31 are as follows:
| 1986 | 1985 |
| Land | $ 49,865 | $ 21,740 |
Building | 175,995 | 129,120 |
Furniture and equipment | 96,240 | 84,572 |
Automobiles | 62,512 | 61,270 |
Total | 384,612 | 296,702 |
Accumulated depreciation | 129,038 | 107,938 |
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Fixed assets - net | $ 255,574 | $188,764 |
See Note 8 for building purchased In 1987.
4. POOLED MUNICIPAL LOAN PROGRAM
In 1986, the League commenced sponsorship of the Illinois Municipal League Pooled Municipal Loan Program which provides low cost financing to the League's member municipalities. The League, acting as the Program Administrator, is to represent: the Village of Woodridge by coordinating the process of making loans and managing the Program.
Upon the initial funding of the Program in 1986, the League earned a fee of $731,250. Of this amount, $232,599 was received in 1986 and the balance is expected to be collected from the bank trustee as follows: $128,640 in 1987 and $370,011 in 1988. In addition, the League is to receive an annual administration fee based on the amount of outstanding loans to participants. No such loans were outstanding as of December 31, 1986.
5. PENSION PLAN
The League is a participating member of the Illinois Municipal Retirement Fund (IMRF) which covers substantially all employees. The pension expense was $48,563 for 1986 and $31,873 for 1985. In addition to the funding of the pension costs accrued, the League elected to fund an additional $100,000 in 1985. The prepaid pension contribution is being amortized to future periods since such prepayment reduces future funding requirements of the plan. The following summarizes the League's obligations at December 31, 1986 and 1985 as provided by actuaries for IMRF:
| 1986 | 1985 |
Present value of total pension
obligation | $1,211,998 | $1,025,994 |
Assets accumulated in IMRF
toward this requirement | 988,715 | 786,784 |
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Present value of future
contributions required | $ 223,283 | $ 239,210 |
The assumed rate of return used to compute the above was 7%. At December 31,1986, the prior service cost portion included in the present value of future contributions required was $142,632 and this unfunded liability, including interest, is being funded over ten years. Information regarding present values of vested and non-vested plan benefits is not available.
6. RELATED PARTY TRANSACTIONS
The League provides services and facilities to a related organization, the Illinois Municipal League Risk Management Association. The Association, which has a common board of directors with the League, is an unincorporated not-for -profit association that provides a cooperatie program of self-insurance for participating Illinois municipalities. The League's fee is based on contributions and interest earned by the Association. The method by which the fee is computed was changed in 1986, resulting in a reduction oŁ approximately $60,000.
7. INCOME TAXES
The League is exempt from income taxes and therefore no provision for income taxes is required.
8. SUBSEQUENT EVENT
In May 1987, the League purchased a new headquarters building in Springfield, Illinois for $380,000. Improvements are to be made to the building during 1987 and 1988 at an approximate cost of $850,000.
Page 20 / Illinois Municipal Review / September 1987
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