05.b Close EDA Checking Account
Staff Report
Date: March 6, 2024
For: Kyle Morell, City Administrator
From: Colleen Firkus, Treasurer
Subject: EDA Checking account
Background:
The report below was presented to the Scandia EDA on January 9, 2023. The Board at that time
voted unanimously to close the EDA account effective immediately. The City Council never
followed this recommendation with a motion. Therefore, the account remains open, and the
request of the City Treasurer to close the account remains before the EDA Board.
Original Report:
The EDA has had a separate checking account and checks since 2014. In 2021, when I got into a
balancing issue that lasted six months, part of the solution was to create a separate cash
account for each checking and investment account to track debits/credits separately from the
main cash account 10100.
This worked very well for a time, except for the EDA account. Anytime a credit card is used for
an EDA event or supplies, the charge would go against the main cash account 10100 with all the
other credit card expenses. Or a check is written, and the wrong cash account is chosen while
processing the check. This would make it necessary to do a journal entry to move the
expenditure to the correct cash account and do a bank transfer between the two checking
accounts. Since I would often not be aware of the expenditure until the following month while
balancing, it became necessary to record expenses and revenue in transit for the month. Or I
would forget to do the bank transfer, and the journal entry would be in a separate month from
the actual activity between the two checking accounts.
Abdo, Eick & Meyers, who helped me straighten out the original mess in 2021, said it is cleaner
to keep separate cash accounts for each checking and investment account. However, making
journal entries and transfers between accounts has been causing unnecessary work.
I recommend continuing to track EDA expenditures and revenues in their 225 Fund but using
the main cash account and closing the EDA checking account starting in January 2023.