Katherine Yuen, CPA Partner Independent Auditor’s Presentation Audit Results For Fiscal Year Ended June 30, 2017 Katherine Yuen, CPA Partner

Background Code of Ordinances 3.20.140 - Oversight, annual audit and public report. “Annually the town council retains an independent auditor to conduct an audit of and provide audited financial statements for all of the town's financial activities.”

Background (Continued) Who We Are? In businesses since 1979 In municipal auditing since 1987 Current auditees: Municipal entities > 150 Cities/towns > 50 Auditees that produce CAFRs > 40 Independent of the Town

Annual Audit What we performed: In progress: Audit of Town’s financial statements Appropriation Limit calculation AUP Audit of TDA grants In progress: Single Audit

Annual Audit (Continued) Conducted according to auditing standards general accepted in the USA and Government Auditing Standards issued by the Comptroller General of the United States of America. Results: Audits – Unmodified (i.e.. Clean) Opinions Appropriation Limit calculation AUP – No exception noted

Comprehensive Annual Financial Statements Background: Basic Financial Statements follow the standard set forth by the Governmental Accounting Standards Board (GASB) Government Financial Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting Program New major fund – Construction in Progress Fund

Financial Highlights – Entity-wide Net Position $47.6m Composition: 86% in net investments in capital assets ($41m) 9% in restricted ($4m) 5% in unrestricted ($2m)

Financial Highlights – Entity-wide (Continued) Net Position at 6/30 2017 2016 Change Net Investment in capital assets $41.1m $37.3m $3.8m Restricted $4.2m $5.4m ($1.2m) Unrestricted $2.3m $1.5m $0.8m Total $47.6m $44.1m $3.5m “…GFOA recommends, at a minimum, that general-purpose governments, regardless of size, maintain unrestricted budgetary fund balance in their general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures……” – Appropriate Level of Unrestricted Fund Balance in the General Fund, approved by GFOA September 2015

Financial Highlights – Entity-wide (Continued) Net position to liability ratio: 3 to 1 Major liabilities: Long-term debt $7.9m ($350k decrease from 6/30/16) Net pension liability $5.2m ($1.4m increase from 6/30/16) No OPEB liability

Financial Highlights – General Fund Fund Balance $7.0m $310k decrease from 6/30/16 Composition: Committed $2.6m Assigned $2.0m Unassigned $2.4m

Memorandum on Internal Control and Required Communication Definitions: Control Deficiencies -- Material Weakness vs. Significant Deficiencies Other Matters

Memorandum on Internal Control and Required Communication (Continued) SD 2017-01 - Service Organizations Monitoring SD 2017-02 - Investment Policy Compliance

Memorandum on Internal Control and Required Communication (Continued) OM 2017-03 - General Fund Budgets and Available Fund Balances OM 2017-04 - Policy on Uncollectible Receivables OM 2017-05 - Cross Training of Cash Receipts Function OM 2017-06 - Recommendation on Best Practice Documentation of the Budget Policy Rotation of Check Signers

QUESTIONS? “We are in the business to help our clients succeed”