Audit Wrap-up Town of Morrisville April Adams, CPA Partner October 24, 2017
Client Service Team Role of External Auditor Key Highlights - Results Internal Controls Agenda Significant Audit Areas Financial Results Summary Questions and Comments
Client Service Team Eddie Burke April Adams Relationship Audit Partner Service Audit Partner LeAnn Bagasala Audit Manager Alex Harris Audit Senior Accountant 3
Role of the External Auditor Required Actions Results Communications Policy Changes Plan and Perform Express Opinions on: Procedures -Financial Statements Estimates -Yellow Book Obtain Reasonable -State Compliance Assurance Journal Entries 4
Key Highlights Results Internal Single Other Opinions SAS 114 Controls Audit Matters Unmodified No Significant PAJE for Opinion – Deficiencies or Municipal Prior Period Financial Material Service District Adjustments: Statements Weaknesses Fund CIP OPEB restatement Unmodified No Findings Opinion – Yellow LEOSSA Book Observations: restatement Closure of Water IT Related Shiloh Sewer and Sewer Fund Unmodified Matters CPF restatement Opinion – State Single Audit 5
Internal Controls Financial Statements Significant Journal Entries IT Controls Cycles Payroll Active Data IT Entity Level Cash Receipts Backup & Recovery Cash Disbursements Access & Security (including use of P- Network Security Cards) Cyber Security Budgeting Financial Statement Close 6
Significant Audit Areas Financial Statements Liabilities and Assets and Revenues Other Items Expenses Accounts /Notes Receivable Payroll Cash Revenues Debt Accounts Payable and Accrued Liabilities Capital Assets Net Position Expenses Related Parties Estimates Legal 7
Significant Audit Areas Internal Controls & Compliance – Single Audit State Administrative Controls Monitoring Reports Major • Powell Bill Compliance Matrix Programs Compliance Testing 8
Financial Results General Fund Revenues (thousands) 2016 2017 614 491 1,109 1,143 8,516 8,986 17,909 16,675 1,768 1,841 2016 Total: $28,682 2017 Total: $30,370 Taxes Permits and Fees Intergovernmental Services Sales for Services Miscellaneous 9
Financial Results General Fund Expenses (thousands) 2016 2017 2,231 1,989 8,167 3,542 4,303 8,159 1,618 1,728 5,925 1,148 5,207 1,723 1,458 1,665 2016 Total: $23,121 2017 Total: $25,742 Public Safety Public Works Debt Service Capital Outlay Cultural and Recreation General Government Development Services 10
Financial Results General Fund – Fund Balance (thousands) 2016 2017 7,385 7,133 15,255 15,258 9 40 931 2,246 2,305 2,823 2016 Total: $25,667 2017 Total: $27,718 Restricted Non Expendable Committed Assigned Unassigned 11
Financial Results Cash and Investments (thousands) 2016 2017 3 3 3,882 13,375 33,542 30,135 2016 Total: $34,020 2017 Total: $46,919 Petty Cash Carrying Amounts NC Capital Management 12
Financial Results Capital Assets (thousands) Governmental Activities 2016 2017 1,717 1,814 1,616 2,189 36,675 34,002 62,770 56,506 5,047 11,187 10,616 3,961 10,299 4,125 2016 Total: $113,827 2017 Total: $128,697 Vehicles Equipment Land CIP Buildings Other Improvements Infrastructure 13
Financial Results Long Term Debt (thousands) Governmental Activities 2016 2017 561 895 945 852 3,466 1,603 69 2,012 1,015 19,330 8,982 2016 Total: $12,810 2017 Total: $26,920 Compensated Absences Bonds LEOSA Installment Notes Net Pension Obligation Other Post Employment Benefits 14
Summary Clean Opinion Full Cooperation Journal with Entries Management No Good Significant Internal Deficiencies Controls Identified 15
Questions & Comments? April Adams, CPA Service Audit Partner aadams@cbh.com 919.782.1040 Eddie Burke, CPA Relationship Audit Partner eburke@cbh.com 919.782.1040
TOWN OF MORRISVILLE GENERAL FUND BALANCE ANALYSIS As of June 30, 2017 Changes in Fund Balance Summary (consolidates Municipal Service District & Capital Reserve Funds) Increase / Decrease from 2016 2017 Previous Year Total Fund Balance (Includes Capital Reserves) $ 25,667,275 $ 27,717,701 $ 2,050,426 Non-Spendable: Prepaids 40,263 8,886 (31,377) Restricted: Stabilization by State Statute 4,437,404 4,675,775 238,371 *Subsequent Year's Expenditures (PO Rollover) 1,107,166 1,087,248 (19,918) - Stormwater - - Streets 1,563,938 1,599,108 35,170 (2,240) Police Operations & Activities 24,918 22,678 Committed: General Government Capital (CRF) 602,704 1,902,254 1,299,550 LEO Pension Obligation 328,296 344,103 15,807 Assigned: Subsequent Year's Expenditures (Appropriated) 2,305,000 2,823,000 518,000 Unassigned Fund Balance $ 15,257,586 $ 15,254,649 $ (2,937) General Fund Expenditures $ 23,121,319 $ 25,741,841 $ 2,620,522 Unassigned Fund Balance % of Expenditures 65.99% 59.26% -6.7% Unassigned Fund Balance $ Above 45% Policy $ 4,852,992 $ 3,670,821 $ (1,182,172) Source Notes: Exhibit 3 & Exhibit 4 *PO Rollover is included as part of the stabilization by state statute calculation and is shown separately for comparison 1
TOWN OF MORRISVILLE GENERAL FUND BALANCE ANALYSIS As of June 30, 2017 Historical Comparison (consolidates Municipal Service District & Capital Reserve Fund) 2012 2013 2014 2015 2016 2017 Total Fund Balance (Includes Capital Reserves) $ 13,293,617 $ 14,403,133 $ 17,282,289 $ 21,252,176 $ 25,667,275 $ 27,717,701 Non-Spendable: Prepaids 170,762 4,458 1,383 13,326 40,263 8,886 Restricted: Stabilization by State Statute 1,294,281 1,443,902 3,820,617 3,690,527 4,437,404 4,675,775 * Subsequent Year's Expenditures (PO Rollover) 274,758 526,368 503,794 1,106,219 1,107,166 1,087,248 Stormwater - 78,630 127,750 542,679 - - Streets 71,475 41,336 - 978,545 1,563,938 1,599,108 Police Operations & Activities - - - - 24,918 22,678 Committed: General Government Capital 1,217,294 1,190,373 496,830 747,441 602,704 1,902,254 LEO Pension Obligation 328,296 344,103 Assigned: Subsequent Year's Expenditures (Appropriated) - - 651,460 - 2,305,000 2,823,000 Unassigned Fund Balance $ 10,265,046 $ 11,118,066 $ 11,680,455 $ 14,173,439 $ 15,257,586 $ 15,254,649 General Fund Expenditures $ 20,732,159 $ 22,345,251 $ 23,417,539 $ 24,564,304 $ 23,121,319 $ 25,741,841 Unassigned Fund Balance % of Expenditures 49.5% 49.8% 49.9% 57.7% 66.0% 59.3% Unassigned Fund Balance $ Above 45% Policy $ 935,574 $ 1,062,703 $ 1,142,562 $ 3,119,502 $ 4,852,992 $ 3,670,821 Source Notes: Exhibit 3 & Exhibit 4 *PO Rollover is included as part of the stabilization by state statute calculation and is shown separately for comparison 2
TOWN OF MORRISVILLE CHANGES IN FUND BALANCE DETAIL Budget to Actual - General Fund Variance with Final Budget Percentage 2017 2017 Positive Collected or Final Budget Actual Amount (Negative) Spent Revenues $ 29,136,216 $ 30,265,152 $ 1,128,936 103.9% Expenditures 29,911,820 25,499,593 (4,412,227) 85.2% - Transfers In (Out) (3,961,900) (3,961,900) 100.0% Other Financings sources (uses) Refunding bonds issued 5,108,556 5,108,556 - 0.0% Payment to refunding bond escrow agent (5,016,702) (5,016,701) 1 0.0% Claims/Settlements - - - 0.0% Appropriated Fund Balance $ 4,645,650 $ - $ (4,645,650) 0.0% Excess of Revenue and Other Sources over Expenditures and Other Uses $ 895,514 $ - $ 895,514 Source Notes: Schedule 3 3
TOWN OF MORRISVILLE CHANGES IN FUND BALANCE DETAIL Budget to Actual - Fire Apparatus Capital Reserve Fund Variance with Final Budget 2017 2017 Positive Final Budget Actual Amount (Negative) Revenues $ - $ 5,000 $ 5,000 Expenditures - - - - Transfers In (Out) 652,000 652,000 $ 652,000 Appropriated Fund Balance $ (652,000) $ - Excess of Revenue and Other Sources over Expenditures and Other Uses $ 657,000 $ - $ 657,000 Source Notes: Schedule 4 Budget to Actual - Roadway and Transportation Capital Reserve Fund Variance with Final Budget 2017 2017 Positive Final Budget Actual Amount (Negative) $ 1,753 Revenues $ - $ 1,753 Expenditures - - - Transfers In (Out) 440,000 440,000 - Appropriated Fund Balance $ (440,000) $ - $ 440,000 Excess of Revenue and Other Sources over Expenditures and Other Uses $ 441,753 $ - $ 441,753 Source Notes: Schedule 5 4
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