Loading...
HomeMy WebLinkAbout2018-4-5Minutes for April 5, 2018, adopted June 26 NTG�, , 3 �pN7UC�-F��9 Town of Nantucket ' 'OWN c ` Ca N y Audit Committee 2016 j6h 21 Aft 10: 5 AlEwww.nantucket-ma.gov MINUTES Wednesday, April 5, 2018 4 Fairgrounds Road, Training Room —1:30 p.m. Staff: Libby Gibson, Town Manager; Gregg Tivnan, Assistant Town Manager; Brian Turbitt, Finance Director; Julia Lindner, Finance Analyst; Bob Dickinson, Assistant Town Accountant; Department Heads: Martin Anguelov, Nantucket Public Schools (NPS) Finance; Jamie Sandsbury, Nantucket Memorial Airport Attending Members: Dawn Hill Holdgate, Board of Selectmen (BOS) Chair; David Worth, Finance Committee Chair Absent Members: Jim Kelly, BOS Auditor: Anthony Roselli, Roselli, Clark & Associates (RC&A) by remote call Documents used: Copy May 3, 2017 minutes; FY2017 Management Letter 1. CALL TO ORDER AND ANNOUNCEMENTS C:allcd to Order at 1:30 p.m. APPROVAL111. OF May 3, 2017: Approved by unanimous consent DISCUSSIONOF 1 ' Worth — Asked Mr. Roselli to explain the scope of the audit to be in context with the Management Letter. Roselli — Finished it in September; the award decision is around June and sees no reason the Town won't get it. The Town is growing on the financial level. We got AA+1 rating with Moody, which is just below AAA; Moody's recognizes the Town's financial growth. In last year's management letter, some issues were highlighted for accomplishment in 2017; the entire Town has worked hard to resolve those issues. He believes everything from the past to 2005 is gone and he doesn't expect to see those deficiencies and material weaknesses again. There are only two or three items still open. Turbitt — He looked at the deficiencies and instituted all corrections necessary so that many had been corrected in May. When the books were closed in September, implementations were in place. Roselli — In the past, staff wasn't completing work in time for Mr. Turbitt to do his work; the number of errors have been cut down to items that could be easily corrected at the time of the audit. Worth — Asked if any department or aspect was not audited. Roselli — The Airport issues their own financial statement; we go through a procedural process that is tighter with and more completely due to the Airport's answering to the Federal Government. Enterprise funds are audited by looking at records in the Finance office; we test transactions, billing and collecting, and disbursement. Other municipalities will ask him to do a procedural review of a different department each year; Nantucket doesn't do that. They do procedural review of and cash -handling audit with several departments the handle cash. Hill-Holdgate — Asked if collecting on delinquent accounts should be brought to the Select Board. Turbitt — Reviewing the bylaws and the Charter for a provision on people seeking permits; if it can be done, it would be included. Right now we send notification to all departments that issue permits on delinquent accounts. He has to verify of Boat Excise is included in that or come up with a more stringent policy to collect. A lot of communities don't deal with Boat Excise Tax because it is such a small amount; Nantucket is the opposite where it represents a lot of money, about $30,000 to $40,000; it's a large enough issue to do something about collecting it. Page 1 of 3 Minutes for Apiil 5, 2018, adopted June 26 Roselli He has recommended to other marine communities that the harbor master have the authority not to allow renewal of the moorings or docking. Gloucester does that and have managed to collect about $25,000; their harbotmaster also goes into the marinas to find boats that should be taxed and gets them added to the role. Roselli ere was so much effort put into the Town side of finance that the County side was overlooked; but they were fixed by the time we left after the audit. He doesn't count this as a finding. The changes have been ve fie . Turbitt — Twn Management and I review the trial balances every week; the County is now included' that. Roselli N ted that the County now gets its own stand-alone audit report Roselli e gave NPS their own audit, their own findings; there has been tremendous improvement since our first audit in 2013. The one issue that came up was a transition issue between the Town and NPS treasurers; that has bee a fixed. Turbitt — With reconciliation of Student Activities, each school maintains its own checkbook with a balance; the ovelflovf is put into an agency account on the Town side. When the balance falls below a certain amount, the sch of quests reimbursement from Mr. Anguelov to bring it back up to the authorized level- Explained the recotic Roselli incomep he does 't Roselli revolve Payroll number of The goo I is Worth A Roselli —' GASB'Y74 at GAS Y at they aj process. was one finding that he attributes to a new person overseeing this area and they sought more ins than they should have. This didn't need to be fixed, the school was told not to do it again; this to be an issue in the Fall audit. The new person contacted the Massachusetts Department of Education and learned the correct regards to income applications. were three other items. e is meeting with the Department of Public Works to go over some of the larger issues of -view; we have corrected the issues with cash handling at the scale house. The remaining findings id the Landfill Accounts Receivable balance and how to manage those that aren't collectable. For itional Review, we've cleared those findings. The first part of the list for Stagnant Special Revenue been cleared; that has to do with closed State and Federal grants from years ago. There are still a :agnant Accounts that need to be reviewed; it will take some time since some have large balances. have it all resolved by the end of FY2018. ied for a walk through of the GASBY changes. he Town has complied with GASBY74. The second is GASBY75 will go into play in FY2018. elates to funding the pension plan; GASBY75 relates to the Town's liability in the future. Looking 4, he made recommendations about investment returns; the Town wasn't taking a long-term earn about 7% returns; in around 2030, the Town is going to have the ability to stop funding the t of the pension and limit payment to the normal cost for that year. He also recommended looking >st Employment Benefits (OPEB) for any design changes in regards to deductibles and s to get a more favorable outcome on the liability. These are not required so they aren't findings; orking on a policy that we also want to have adopted by the Airport Commission and Water the way our OPEB liability is structured is by all the funds and we want to be consistent across .e also working on a rewrite of financial policies around OPEB Investments, which are somewhat e did implement Sections 21 through 23 under Chapter 32 in regards to health insurance; we took from having health insurance with Barnstable County in order to have more management control iility. All this will be in place before the FY2018 audit. )out pros and cons related to investing conservatively at 5-6% or being more aggressive and trying Yo on investment returns. where the Medicaid reimbursements for Our Island Home (OIH) fit in. are not part of the single audit. It just relates to Federal single -audit items. Page 2 of 3 Minutes for April 5, 2018, adopted June 26 Turbitt — Last year the Audit Committee voted to accept the auditor's recommendation to cease the single - audit report for OIH and Solid Waste; we've rolled them into the General Fund. It was recommended we take that to Town Meeting to ask to rescind the enterprise authorization; we've decided to move that out a year. Doing that will allow us to see how much these two funds are actually costing the Town. We will be putting that request forward to Town Meeting next year. Worth — He's not a fan of rescinding their Enterprise Fund status. Asked what accounting standards Mr. Turbitt thinks they don't conform to. Turbitt — For Department of Revenue (DOR) purposes they do conform. However, because their operations are not covered by user charges, we see these large annual subsidies. Our auditors recommended it because they meet the threshold on a gap basis. Roselli — These (two enterprise funds) haven't been self-supporting on a consistent basis but have been subsidized by the Town for at least the five years he's been involved. GASBY would question whether or not they are self-supporting Enterprise Funds. If they are consolidated with the General Fund, the Bond Rating benefits because they are clearly departments of the Town. Being self-supporting is one of the three GASBY criteria. Turbitt — It wasn't advanced last year because there was internal discussion whether or not to continue operating them. He believes there are ways to keep them in the operational fore front. We could develop ways to support them. Roselli — He had a difficult time convincing Solid Waste and OIH that the once consolidated as town departments, the Town would continue to support them and that they actually were departments of the Town. Compared them to the Police Department as departments that aren't self supporting. It all boils down to improving the Bond Rating which consolidating them would do by eliminating their debts. Turbitt — RC&A will be here May 7 to set the field work for the FY2018 audit. We will set a goal to come before the Audit Committee sooner than April 2019; the main report should be complete by then but not some of the smaller ones. Roselli — Noted that the audit doesn't end in December because it takes departments, especially the NPS and Airport, to get us their information due to different deadlines. We could discuss the audit before we have their information. Reviewed different aspects that cause the delay in completion of the NPS and Airport audits. We could get a draft management letter out in January. V1. DATE OF f Bt) Adjourn by unanimous consent at 2:34 p.m. Submitted by: Terry L. Norton Page 3 of 3