Wednesday, March 16, 2011

Live reporting - Audit report

H. PRESENTATIONS/DISCUSSIONS – Auditor’s Report
Scott McIntyre, Vice President - Melanson

Audit document
http://franklinma.virtualtownhall.net/Pages/FranklinMA_Admin/Audits/Franklin%20Final%20FS10.pdf


audit was good, no material disagreements on transaction applications

Page 12 - long term prospective balence
Net OPEB Obligation
year two of accounting standard, to be fully funded over 30 years
over $15 M, increased
dropped from $8 to $1.5 M as unrestricted assets

page 14 - short term
500,000 draw on operating balance, not unusual for these economic conditions
$5.2 M down about 700,000 (used for capital expenditures)
8% of general appropriation, about where it is supposed to be

revenues came in about 700,000 above forecast, good but in narrow range
expenses under budget, so this creates a positive balance
use of existing cash reserves is not a good thing

Management Letter
close inactive project funds, not fully completed as end of fiscal year but has been fully closed now

Management letter document
http://franklinma.virtualtownhall.net/Pages/FranklinMA_Admin/Audits/FY10%20Franklin%20Management%20Letter%202.pdf

develop a more formal risk assessment process, mentioned before
identify risk areas and respond, formal policies and procedures should be applied
possible areas of risk supplied to Comptroller

outstanding bonds not reconciled to ledger at end of fiscal year, this has been done subsequently

GASB 54 prepare for new standard, mostly terminology
account for raining day funds to be reported in the general financial statements (i.e. stabilization fund)
funds combined only in the audit report, other regulations take precedent to keep them separate

Nutting - can you reconcile the diff between the $15M and the $79M obligation

McIntyre - estimated to be your fully funded liabilities earned by retirees
Accounting standards don't require this to be recognized at once, can take 30 years to fully fund
this liability is not in the general fund, no obligation to actually fund it

$80 M is without a trust fund, if there was a trust fund to be used, the liability would be cut in half

There is a substantial amount of town audits where there are no material disagreements
turn the clock back ten years ago, and I could not have said them same thing
accounting systems and general ledgers have improved

McGann - what condition would you find Franklin in compared to other towns of similar size?

McIntyre - considering debt service and fund balance, those two attributes put you in good company, they like to see between 5 - 10 percent, you are at the upper end. For the debt service, (page 39) it shows how quickly you pay off your long term debt, how much of your debt are you paying off in ten years. you pay off 70% of your debt in 10 years, that is very good, for the enterprise accounts, approx 70% within ten year period, also a very favorable result.

The report will be posted to the website in a couple of days.


Franklin, MA

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