2012 Drug Task Force Auditr
NORTHWEST METRO DRUG TASK FORCE
New Hope, Minnesota
AUDITED FINANCIAL; STATEMENTS
For the Year Ended December 31, 2012
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NORTHWEST METRO DRUG TASK FORCE
TABLE OF CONTENTS
APPOINTED OFFICIALS AND ADMNISTRATIO
INDEPENDENT AUDITOR'S REPORT ...................................................... ............................... 2
BASIC FINANCIAL STATEMENTS
Balance Sheet — Statement of Net Position ...................................................... ............................... 5
Statement of Revenues, Expenditures and Changes in Fund Balance —
Statementof Activities ................................................................................... ............................... 6
Statement of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual General Fund. 7
Notes to the Financial Statements .................................................................... .......................:....... 8
REPORT ON LEGAL COMPLIANCE ......................................................... ............................... 12
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NORTHWEST METRO DRUG TASK FORCE
APPOINTED OFFICIALS AND ADMINISTRATION
December 31, 2012
Appointed Officials
Tim Fournier
Rich Stanek
Stacy Carlson
Steve Smith
Mike Goldstein
Stephanie Revering
Kevin Benner
Administration
Sgt. Jon Hunt
Capt. Scott Slawson
Position
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Board Chair - New Hope
Board Member - Hennepin County
Sheriffs Office
Board Member - Golden Valley
Board Member - Robbinsdale
Board Member - Plymouth
Board Member - Crystal
Board Member - Brooklyn Center
Commander
Coordinator/Fiscal Agent
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INDEPENDENT AUDITOR'S REPORT
Administrative Board
Northwest Metro Drug Task Force
New Hope, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and the major
fund of Northwest Metro Drug Task Force, New Hope, Minnesota, as of and for the year ended
December 31, 2012, and the related Notes to the Financial Statements, which collectively comprise the
Task Force's basic financial statements as listed in the Table of Contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Task Force's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 1
our audit opinions.
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Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and the major fund of Northwest Metro Drug
Task Force, New Hope, Minnesota, as of December 31, 2012, and the respective changes in financial
position thereof, and the budgetary comparison for the General Fund for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Implementation of GASB 63
As discussed in Note 9 to the financial statements, the Task Force has adopted the provisions of the
Governmental Accounting Standards Board (GASB) Statement No. 63, Financial Reporting of Deferred
Ou flows of Resources, Deferred Inflows of Resources and Net Position.
Other Matters
Omitted Required Supplementary Information
Management has omitted the Management's Discussion and Analysis that accounting principles
generally accepted in the United States of America require to be presented to supplement the basic
financial statements. Such missing information, although not a part of the basic financial statements, is
required by the GASB who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. Our opinion on the
basic financial statements is not affected by this missing information.
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KERN, DEWENTER, VIERE, LTD.
Bloomington, Minnesota
May 30, 2013
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NORTHWEST METRO DRUG TASK FORCE
BALANCE SHEET - STATEMENT OF NET POSITION
December 31, 2012
ASSETS
Cash
Cash Seizures
Capital Assets:
Equipment
Less Accumulated Depreciation
Total Capital Assets,
Net of Depreciation
Total Assets
LIABILITIES/FUND BALANCE
Liabilities
Accounts Payable
Due To Other Governments
Pending Forfeitures
Total Liabilities
Fund Balance
Unassigned
Total Fund Balance
Total Liabilities and Fund Balance
NET POSITION
Net Investment in Capital Assets
Unrestricted
Total Net Position
Total Liabilities and Net Position
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Statement of
General Fund Adjustments Net Position
$ 500,368 $ - $ 500,368
141,551 - 141,551
171,607 171,607
(152,386) (152,386)
- 19,221 19,221
$ 641,919 $ 19,221 $ 661,140
$ 6,963 $ - $ 6,963
23,893 - 23,893
141,551 - 141,551
172,407 - 172,407
469,512 (469,512) -
469,512 (469,512) -
$ 641,919
19,221
19,221
469,512
469,512
488,733
488,733
$ 19,221 $ 661,140
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The Notes to the Financial Statements are an integral part of this statement. 5
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NORTHWEST METRO DRUG TASK FORCE
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE -
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2012
REVENUES
Intergovernmental
Seizures and Forfeitures
Miscellaneous Revenues
Total Revenues
EXPENDITURES/EXPENSES
Salaries and Benefits
Building Rent
Supplies and Evidence
Insurance
Professional Fees
Training
Utilities
Repairs and Maintenance
Buy Fund Expenditures
Miscellaneous
Depreciation
Total Expenditures/Expenses
Excess of Revenues Over
(Under) Expenditures/Expenses
OTHER FINANCING SOURCES
Proceeds from Sale of Capital Asset
Net Change in Fund Balance/
Net Position
FUND BALANCE/NET POSITION
Beginning of Year
End of Year
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Statement of
General Fund Adjustments Activities
$ 66,432
$ -
$ 66,432
89,621
-
89,621
1,896
-
1,896
157,949
-
157,949
80,517
-
80,517
40,195
-
40,195
48,595
(10,307)
38,288
9,438
-
9,438
7,649
-
7,649
5,816
-
5,816
14,135
-
14,135
13,284
-
13,284
10,301
-
10,301
24,275
(21,950)
2,325
-
16,934
16,934
254,205
(15,323)
238,882
(96,256)
15,323
(80,933)
11,530 - 11,530
(84,726) 15,323 (69,403)
554,238 3,898 558,136
$ 469,512 $ 19,221 $ 488,733
The Notes to the Financial Statements are an integral part of this statement.
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NORTHWEST METRO DRUG TASK FORCE
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STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL -
GENERAL FUND
For the Year Ended December 31, 2012
REVENUES
Intergovernmental
Seizures and Forfeitures
Miscellaneous Revenues
Total Revenues
EXPENDITURES
Salaries and Benefits
Building Rent
Supplies and Evidence
Insurance
Professional Fees
Training
Utilities
Repairs and Maintenance
Buy Fund Expenditures
Miscellaneous
Total Expenditures
Excess of Revenues Over
(Under) Expenditures
OTHER FINANCING SOURCES
Proceeds from Sale of Capital Asset
Net Change in Fund Balance
FUND BALANCE
Beginning of Year
End of Year
Variance with
Original and Final Budget
Final Budget . Actual Over (Under)
$ -
$ 66,432
$ 66,432
-
89,621
89,621
-
1,896
1,896
-
157,949
157,949
112,000
80,517
(31,483)
42,000
40,195
(1,805)
40,000
48,595
8,595
10,500
9,438
(1,062)
12,000
7,649
(4,351)
5,200
5,816
616
16,300
14,135
(2,165)
23,000
13,284
(9,716)
11,000
10,301
(699)
1,200
24,275
.'23,075
273,200
254,205
(18,995)
(273,200)
(96,256)
176,944
-
11,530
11,530
$ (273,200) (84,726)
$ 188,474
554,238
$ 469,512
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The Notes to the Financial Statements are an integral part of this statement. 7
NORTHWEST METRO DRUG TASK FORCE
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2012
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
Northwest Metro Drug Task Force (the "Task Force's was established by a joint powers agreement
between the following governmental units through their respective law enforcement agencies: Hennepin
County, the Cities of Golden Valley, Robbinsdale, Plymouth, Crystal, New Hope and Brooklyn Center
Police Departments. The purpose of the Task Force is to provide a comprehensive and multi
jurisdictional effort to reduce drug trafficking and eliminate local street level drug dealers through the
coordination of law enforcement agencies within its jurisdiction. The Task Force Administrative Board,
comprised of one designated official from each named agency, is responsible for the operations of the
Task Force.
The financial statements of the Task Force have been prepared in conformity with accounting principles
generally accepted in the United States of America. Accounting policies adopted by the Task Force
reflect practices common to similar organizations. The more significant accounting policies are
described below.
For financial reporting purposes, the Task Force's financial statements are not included within the
member Cities' financial statements because the Task Force is not a component unit of the Cities. In
addition, the Task Force has no component units.
B. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the provider have
been met.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
Task Force considers revenues to be available if they are collected within 60 days of the end of the
current period. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, expenditures related to claims and judgments are recorded only when payment is
due.
C. Seized Assets
Monetary and nonmonetary assets are seized as the result of drug busts and sting operations. Seized
monetary assets are reported as seized cash at the date of seizure on the accompanying Statement of Net
Position with an offsetting pending forfeiture liability. Once the monetary assets are officially forfeited,
they are recorded as forfeiture revenue. Seized nonmonetary assets are not reflected on the Statement of
Net Position until forfeited or sold.
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NORTHWEST METRO DRUG TASK FORCE
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2012
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NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Budgetary Data
The Task Force adopts an annual budget based upon grant funds, member matching funds and money
made available from other sources. The joint powers agreement specifies procedures regarding the
adoption of the General Fund budget. The budget is effective January 1 of each year and is adopted on a
basis consistent with accounting principles generally accepted in the United States of America.
E. Fund Equity
In the fund financial statements, governmental funds report various levels of spending constraints.
• Nonspendable Fund Balances — These are amounts that cannot be spent because they are not in
spendable form or they are legally or contractually required to be maintained intact.
• Restricted Fund Balances — These are amounts that are restricted to specific purposes either by
a) constraints placed on the use of the resources by creditors, grantors, contributors, or laws or
regulations of other governments or b)imposed by law through constitutional provisions or
enabling legislation.
• Committed Fund Balances — These are amounts that can only be used for specific purposes
pursuant to constraints imposed by the Board by resolution.
• Assigned Fund Balances — These are amounts that are constrained by the Association's intent to
be used for specific purposes, but are neither restricted nor committed. Assignments shall be
made by administration on the Board's direction.
• Unassigned Fund Balance — These are residual amounts in the General Fund not reported in any
other classification.
F. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenditures/expense during the
reporting period. Actual results could differ from those estimates.
NOTE 2 — DEPOSITS AND INVESTMENTS
Cash balances of the Task Force are invested to the extent available in various accounts authorized by
Minnesota Statutes. As of December 31, 2012, cash was comprised of deposits at a commercial bank.
The Task Force does not have formal policies in place specifically to address custodial credit risk and
interest rate risk for deposits or investments.
Minnesota Statutes require all deposits with financial institutions be collateralized in an amount equal to
110% of deposits in excess of Federal Deposit Insurance Corporation (FDIC) insurance.
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NORTHWEST METRO DRUG TASK FORCE
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2012
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
Custodial' Credit Risk — Deposits: Custodial credit risk is the risk that in the event of bank failure, the
Task Force's deposits may not be returned to it. As of December 31, 2012, the Task Force's bank
balance was fully insured through FDIC or pledged collateral.
NOTE 3 — CAPITAL ASSETS
Capital assets, which include property, plant and equipment, are reported in the government -wide
financial statements and include equipment and vehicles with a historical cost greater than $ 5,000.
Such assets are recorded at historical cost. The costs of normal maintenance and repairs that do not add
to the value of the asset are not capitalized.
Equipment of the Task Force is depreciated using the straight -line method over the estimated useful
lives of three to five years.
Capital asset activity for the year ended December 31, 2012, was as follows:
Governmental Activities:
Beginning
Balance
Ending
Increases Decreases Balance
Capital Assets being Depreciated:
Equipment
Less Accumulated Depreciation:
Equipment
Governmental Activities Capital
Assets, Net
$ 189,240
$ 32,257 $ 49,890 $ 171,607
185,342 16,934 49,890 152,386
$ 3.898 $ 15.323 $ - $ 19,221
NOTE 4 — RELATED PARTY TRANSACTIONS
The Task Force utilizes personnel assigned to the Task Force by certain members of its member
agencies. Under the terms of the grant application approved by the Task Force Committee, member
agencies assigning officers to the Task Force are reimbursed a portion of the officer's salary and
benefits. For the years ended December 31, 2012, the Task Force reimbursed member agencies
$ 80,517 for personnel assigned to the Task Force. In addition, the Task Force utilizes other personnel
and resources of its member agencies without charge in the performance of its duties. The value of
services provided was not determined and, accordingly, such amounts are not reported in the
accompanying financial statements.
NOTE 5 — RISK MANAGEMENT
The Task Force is exposed to various risks of loss related to torts: theft of, damage to and destruction of
assets; errors and omissions and natural disasters. In order to protect against these risks of loss, the Task
Force purchases commercial insurance through the League of Minnesota Cities Insurance Trust
(LMCIT), a public entity risk pool. This pool currently operates common risk management and
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NORTHWEST METRO DRUG TASK FORCE
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2012
NOTE 5 — RISK MANAGEMENT (Continued)
insurance programs for municipal entities. The Task Force pays an annual premium to the LMCIT for
its insurance coverage. The LMCIT is self sustaining through commercial companies for excess claims.
The Task Force is covered through the pool for any claims incurred but unreported, however, retains risk
for the deductible portion of its insurance policies. The amounts of these deductibles are considered
immaterial to the financial statements.
During the year ended December 31, 2012, there were no significant reductions in insurance coverage
from the prior year. Settled claims have not exceeded the Task Force's commercial coverage in any of
the past three years.
NOTE 6 — .OPERATING LEASES
The Task Force entered into a lease agreement on June 13, 2008 with Standal Properties, Inc. for the
period of August 1, 2008 through July 31, 2013 for 4,500 square feet of a 24,100 square foot building.
Base rent of $ 125,042 is payable in monthly installments of $ 1,940 for the first 36 months, and $ 2,300
for the last 24 months of the lease term. In addition, the Task Force is required to pay $ 172 per month
for 60 months to amortize the cost of installing an air system in the building. The lease agreement also
states that the Task Force must pay 18.67% of all taxes, assessments, maintenance, and water and sewer
charges related to the building. Total lease expense for the year ended December 31, 2012 was
$ 40,195. Future minimum lease payments to the end of the lease are as follows:
Year Ending
December 31, Amount
2013 $ 17,307
NOTE 7 — NONMONETARY ASSETS
The Task Force held nonmonetary assets at December 31, 2012 with an estimated fair market .value of
$ 17,800, these assets are not recorded within the financial statements until sold upon forfeiture and the
proceeds deposited.
NOTE 8 — SUBSEQUENT EVENTS
The Task Force has evaluated subsequent events through May 30, 2013, the date which the financial
statements were available to be issued.
NOTE 9 — CHANGE IN ACCOUNTING PRINCIPLE
For the year ended December 31, 2012, the Task Force implemented GASB Statement No. 63. This
action resulted in the establishment of categories outside of assets and liabilities titled deferred outflows
and deferred inflows. The Statement also retitled Net Assets as Net Position.
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REPORT ON LEGAL COMPLIANCE
Administrative Board
Northwest Metro Drug Task Force
New Hope, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America, the financial statements of the governmental activities and the major fund of Northwest Metro
Drug Task Force, New Hope, Minnesota, as of and for the year ended December 31, 2012, and the
related Notes to the Financial Statements, and have issued our report thereon dated May 30, 2013.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State
Auditor pursuant to Minn. Stat. § 6.65, contains six categories of compliance to be tested: contracting
and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and
disbursements, and miscellaneous provisions. Our audit considered all of the listed categories, except
that we did not test for compliance with the provisions for public indebtedness because the Task Force
has no issued and outstanding debt for the year ended December 31, 2012.
In connection with our audit, nothing came to our attention that caused us to believe that the Task Force
failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Political
Subdivisions. However, our audit was not directed primarily toward obtaining knowledge of such
noncompliance. Accordingly, had we performed additional procedures, other matters may have come to
our attention regarding the Task Force's noncompliance with the above referenced provisions.
This report is intended solely for the information and use those charged with governance and management of
the Task Force and the State Auditor and is not intended to be and should not be used by anyone other than
these specified parties.
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KERN, DEWENTER, VIERS, LTD.
Bloomington, Minnesota
May 30, 2013
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