[OPTIONAL] Cover splash screen that can be displayed at the beginning of an event while people are coming in or logging on. This slide is optional and can be removed if desired.

Village OF HAZEL CREST, IL April 30, 2016 Audit Presentation Title page to include presentation title/topic, speaker, date etc. December 13, 2016

Financial Report Highlights TIF Reports and Other Compliance Reporting Presentation Outline Audit Process Financial Report Highlights TIF Reports and Other Compliance Reporting Report to Board of Trustees and Control Deficiencies Standard content slide with simple bulleted content

Audit Process Section break to provide a visible break between sections of presentation content.

Audit Process Some delays in the current audit year due to accounting department turnover and completion of new pension standards Despite difficulties, management was proactive and helpful throughout the audit process Regular communication with the Illinois Comptroller’s office and extension was filed Final reports will be filed after December 15th (open for compiling some statistical section information)

Audit Timeline Planning discussions in May and June – maintained regular contact with the finance staff and Village manager Preliminary fieldwork – week of May 30th Final Fieldwork – weeks of July 18 and July 25 Significant open items – police pension actuary report – received September 22 - Grant support and single audit determination for 183rd Street Grant Presentation to Board, December 13

Financial Report Highlights Section break to provide a visible break between sections of presentation content.

Financial Report Highlights Opinion (pages 1 and 2) Unmodified (clean) opinion Management is responsible for preparation of financial statements. Our responsibility is to express an opinion. Emphasis of Matter Adopted Governmental Accounting Standards Board (GASB) Statement No. 68, accounting and Financial Reporting for Pensions, an Amendment of GASB Statement No. 27, and Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date Resulted in beginning net position restatements to record the net pension liability associated with IMRF (regular and SLEP), police pension, and fire pension plans

Financial Report Highlights Management’s Discussion and Analysis (pages 3 – 11) High level overview of what occurred at the Village during the year Government-Wide Financial Statements (pages 12 – 13) Full accrual

Financial Report Highlights 2016 2015 Change % Change Significant Changes From the Statement of Net Position (pages 12-13): Governmental Activities – Assets and Deferred Outflows 30,723,394 27,188,155 3,535,239 13.0% GASB 68 implementation increases deferred outflows by $4.4 million, capital assets decrease $1.2 million Governmental Activities – Liabilities and Deferred Inflows 44,524,631 12,852,978 31,671,653 246.4% GASB 68 implementation added $30.7 million of net pension liabilities and $.8 million of deferred inflows Governmental Activities - Net Position 14,335,277 (2,247,474) -13.6% Business Type Activities - Assets 4,945,287 4,841,069 104,218 2.1% Business Type Activities - Liabilities 1,243,471 372,951 870,520 233.4% GASB 68 implementation added $.8 million of net pension liability Business Type Activities - Net Position 3,701,816 4,468,118 (766,302) -17.1%

Financial Report Highlights 2016 2015 Change % Change Significant Changes From Statement of Activities (Page 14): Governmental Activities - total Revenue 16,139,234 13,960,917 2,178,317 15.6% Additional public works grants of $2.3 million, increase of both revenues and expenses Governmental Activities - total Expenses 19,390,972 16,208,391 3,182,581 19.6% Governmental Activities - Change in Net Position (3,251,738) (2,247,474) (1,004,264) 44.6% Business Type Activities - Total Revenue 3,862,009 4,204,740 (342,731) -8.2% Village did not receive any operating grants for water fund Business Type Activities - Total Expenses 4,054,471 3,676,342 (378,126) -10.3% Additional operating expenses in the water fund Business Type Activities - Change in Net Position (192,462) 528,398 (720,860)

Financial Report Highlights 2016 2015 Change % Change Significant Changes Balance Sheet - Governmental Funds (page 15): Total Assets 15,710,251 15,221,012 489,239 3.2% Property tax receivable increased $.5 million Total Liabilities 5,266,172 4,172,173 1,093,999 26.2% Additional payables at year end, deferred property taxes increased by $.5 million Total Fund Balance 10,444,079 11,048,839 (604,759) 5.5% Statement of Revenues and Expenditures - Governmental Funds (page 17): Total Revenues 16,158,634 14,098,494 2,060,140 14.6% MFT Grant funds increased intergovernmental revenue by approximately $1.7 million Total Expenditures 16,763,393 14,042,981 2,670,412 19.0% MFT expenditures increased for grant related projects Other financing sources 12,472 n/a Change in Fund Balance 67,985 (349,370)

Financial Report Highlights Reconciliations between government-wide and fund financial statements on pages 15-18 New Pension Information: Restatement of beginning net position of $25.0 million, covered in note 1 (page 32) Pension footnotes (pages 39-58) and pension required supplementary information (pages 64-70) Net pension liabilities of the Village by plan: IMRF, regular – $3.5 million IMRF, SLEP - $.1 million Police pension – $20.5 million Fire pension – $7.4 million Net pension liability by opinion unit: Governmental Activities – $30.7 million Business Activities (water/sewer fund) - $.8 million Additional Supplementary schedules start of page 67 focusing on budget vs. actual information

TIF Reports Section break to provide a visible break between sections of presentation content.

TIF Reports and Other Compliance Reporting 4 separate TIF financial and compliance reports 167th Street TIF 183rd Street TIF Hazel Crest Proper TIF Cherry Creek TIF No compliance findings No single audit required as federal funds expended were under $500,000 Management confirmed with the State of Illinois that significant street improvement grants received in FY16 were administered by the State and did not require a single audit

Report to Board of Trustees Section break to provide a visible break between sections of presentation content.

Report to Board of Trustees Significant new accounting policies –adoption of GASB 68 and GASB 71 12 Audit adjustments proposed by auditors Significant entries required to properly record grant revenue and expenses for “on-behalf” services received Additional accounts payable identified during testing Entry recorded to record property tax refunds 13 client adjustments were received after start of the audit

Report to Board of Trustees Significant items discussed with management Significant cash balances in the TIF funds Grant reporting requirements for grant administered by the State of Illinois Pension reporting and implementation of GASB 68 and 71 Significant accounting estimates Pension Liabilities Other Postemployment benefits (OPEB) Fair value of investments Depreciation expense

3 levels of control deficiencies reported: Separate letter which communicates control deficiencies during the year ended April 30, 2016 Items may be addressed during or subsequent to year, but are still reported 3 levels of control deficiencies reported: Material weakness Significant deficiency Control deficiency

Significant deficiency Control deficiency Control Deficiencies Material weaknesses Grant monitoring and reporting Year end financial reporting (repeat) Significant deficiency Completion of bank reconciliations (repeat) Control deficiency Policy on manual checks (new) Retention of invoices (new)

[OPTIONAL] If including a question and answer session, this is the preferred splash screen to denote that.