Wednesday, March 3, 2010

Live reporting - audit

1. Presentation of Audit – Melanson Heath & Co.

The audit went well, no adjustments necessary
A significant estimate, an actuarial valuation to calculate the liability
Most readers will look to general and stabilization fund and not pay much attention to this unfunded liability

Page 14, 3rd number in the column
was 3.2 M is now 3.9 M virtually unchanged given the size of the overall operations

Page 16, 1st column, 3rd up from the bottom
$220,000 change in fund balance, given size of the budget this is an insignificant number

Page 16, 2nd column, stimulus money
amount coming in is the same as that expended

Page 18, budget vs actual page
attention to last column of numbers, midway down
total revenue and other sources 2.8 M less
most as result of cuts from 9c cuts of 3.5M
most of the offset was covered by the stimulus funds

effectively washing expenditures off against the stimulus

implemented the new accounting liability
Page 12 - designed to shown a long term perspective balance sheet
Other Post Employment Benefits (OPEB) liabilities, a little over 10 million
was always there but accounting standards are now requiring recognition
unrestricted funds decreased accordingly for this 10 M

management letter, a couple of recommendations
none of these rise to material weaknesses

1 - close some inactive capital project funds

2 - develop a more 'formal' risk assessment process, does assess risk currently, risk assessment is a key management function. department head meetings would be a good place to start this, to formalize this, would be how the Town would respond to this risk. Otherwise a very strong internal control structure

3 - tailings, tracks stale checks, one account has about $44,000 of uncashed checks
vendor no longer providing reconciliation services by end of fiscal year so this account will be closing

McGann - what is OPEB
Scott - described the term, basically retiree health insurance

McGann - what is the tailings account?
Nutting - we have written the checks, they have not been cashed by others

Scott - I don't like to compare clients, we did not need to propose any significant journal entries, we have only 3 minor recommendations, they do not rise to a significant or to a material deficiency

I am not involved in all our firms audits, I think this is a very good audit and much more timely than even two years ago.

Pfeffer - Page 32 do I read that we have
You do have some securities unsecured and unregistered, it is a rather high percentage, the notation is as of one point in time, it can change on a daily basis

Pfeffer - do you consider it dangerous or shocking?
No, there is some risk associated with some risks on investments but nothing unusual

I view some of my role to challenge my clients to not just provide the numbers but to go above and beyond

This year is much better, in 2007, we were here 11 months after the close
Gagner - that was somewhat do to the MUNIS conversion that we had just been completed.

We are not repeating any comments from prior years, this should be an important point to here.

Powderly - do you prepare fiscal statistics so we can compare ourselves to another
No, that would be the role of your fiscal advisors. You could do ten year trend information, largest employers, largest tax payers, etc.

Jones -what would you regard as an excellent goal
Gagner - no recommendations in the management letter

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