During the town council meeting held on Monday, Feb. 3, a presentation was made by Nikoleta McTigue of accounting firm Blum Shapiro regarding the results of the town’s fiscal year 2019 audit. The accounting firm issued a clean opinion on the town’s financial statements.
McTigue explained that the comprehensive annual financial report is prepared by town management, who are responsible for preparing the financial statements and to design, implement, and maintain internal control over those statements.
“We do not issue an opinion on the internal controls,” said McTigue, “just on the financial statements.” After performing the audit, Blum Shapiro auditors will issue an opinion on whether or not the financial statements are free of mistakes due to errors or fraudulent activities.
McTigue explained that the report is comprised by two main components; the internal control over financial reporting, and the reports compliance with laws and regulations. In both instances, Blum Shapiro ruled that Plainville’s report did not contain “any material weakness or significant deficiencies.”
The auditor included information from financial statements for fiscal years 2018 and 2019. The total net position of the town as a whole increased from $91.9 million to $103 million. The net position includes all town funds such as the general fund, special revenue funds, and capital projects, but does not include trust and agency funds. McTigue named several items that contributed to the change including capital assets, net pension liability, net other post-employment, and general obligation bonds.
“All governmental funds combined end the year with $16.4 million, and that was an increase of about $1.5 million in comparison to prior year,” said McTigue. She explained that the fund balance in the general fund was $11.8 million and that unassigned fund balance is just shy of $10 million, representing almost 16% of the general fund balance. Revenues, including transfers in, came in $1.1 million more than budgeted, and expenditures, including transfers out, came in $605,000 less than budgeted.
While the firm issued an unmodified clean opinion, there was one “significant deficiency” identified regarding the procurement of funds related to major programs. She explained that procurement policies should be updated to include certain language required by uniform guidance.
“Even though the town did not have any compliance issue based on our audit, the procurement policy was not updated to include all the language as required by the uniform guidance,” said McTigue. “So we gave the final recommendation related to the procurement policy update to be in conformance with uniform guidance requirements related to procurement policy.”
Other Blum Shapiro recommendations dealt with cyber security and fraud risk assessment.
“Those same two topics have been mentioned the past several years and we still look at them the same way but I wonder if there will be a time in the near future where cyber security and risk is something we really should do something about,” said Kathy Pugliese, council chairperson, “and it becomes altogether more important every year as people learn how to do things they shouldn’t be doing, and so how does that affect our operation protecting our financial assets and information?”
Town manager Robert Lee addressed these concerns, saying that the town would have to hire a consultant to oversee the process as cyber security and fraud risk assessment are not currently done in house. And while these topics have been brought before the council in prior years, the town does not currently have the funds to hire a consultant for this work.
The full audit report done by Blum Shapiro will be made available via the town’s website.
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