Annual Audit Report
of the
ILLINOIS MUNICIPAL LEAGUE

 

__________________________/\/\\//\/\ MEYER & VAN METER    CERTIFlED PUBLIC ACCOUNTANTS 215 SOUTH GRAND AVE, WEST SPRINGFIELD, ILLINOIS 62704 • TELEPHONE 217/ 544-0777

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

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

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
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

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
INCREASE (DECREASE) IN WORKING CAPITAL			$ 455,326	$( 11,717)
CHANGES IN WORKING CAPITAL
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
Federal agency securities	________	242,420
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
Fixed assets - net	$   255,574	$188,764

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
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 o£ 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