HomeMy Public PortalAbout05-31-2012 BFO Committee reportTown of Watertown
Committee of the Budget & Fiscal Oversight
Meeting: May 21, 2012
Report: May 31, 2012
The Committee convened at 7 pm on May 21, 2012. Present at the meeting were Vincent Piccirilli,
chair; Angie Kounelis, vice -chair; Cecilia Lenk, secretary; Town Manager Michael Driscoll, Town
Auditor Tom Tracy; Treasurer Phyllis Marshall; Frank Biron and Erica Lussier from Melanson Heath
and Company. The purpose of the meeting was to review the FY2011 Independent Auditors' Report of
the Town's finances, including federal grants awarded to the School Department.
Mr. Biron presented FY2011 audit report and audited financials (copies of the report, audited financials,
and management letter are available separately). Key points were:
• The town received a clean opinion with no exceptions in accordance with generally accepted
accounting principles (GAAP). This opinion in the best auditors' opinion the Town can receive
and indicates the Town is doing a good job managing its budget and finances.
• The Town is doing a good job of receiving taxes and liens.
• The Town had total assets, including capital assets, of $159.9M.
• Total long term debt (bonds payable) was $44.7M.
• At the close of FY11, total Town assets exceeded liabilities by $93M.
• The Town had an unreserved fund balance of $6.9M (6.8% of budget) in the general fund, and
$1.2M in stabilization funds (1.2%). Free cash totals 8% of the budget (same as last year's
8.1%). Bonding agencies want to see free cash percentages in the range of 5-10%. This shows
the Town is able to maintain surpluses through difficult economic conditions.
• Water and Sewer Enterprise Funds are in a strong position.
Ms. Lussier reviewed the management letter. There are no material weaknesses or deficiencies in the
Town's finances. There are three recommendations from the prior year's audit that still need to be
implemented, including:
• Integrate compensated absences accounting for both Town and School staff into the Town's
financial systems.
• Establish a receivable write-off policy. These include uncollectable ice rink, police detail, and
other miscellaneous receivables.
• Improve accounting and monitor activity over Police Detail Agency Fund.
A review of three Federally funded education programs within the School Department indicated that
payroll documentation was needed for all three programs. The auditors indicated that student activity
accounts are currently not audited annually.
The Committee voted unanimously to recommend to the Town Council that School Department student
activity accounts be audited annually.
The Committee voted unanimously to recommend approval of the FY2011 Audit to the Town Council.
The Committee also voted unanimously to recommend to the Town Council that Melanson Heath and
Company be authorized to proceed with the FY2012 audit as outlined in their current contract.
The meeting adjourned at 8 pm.
Prepared by Cecilia Lenk