1. Town of Bridgewater
Audit exit conference – Town Council/Finance Subcommittee
Roselli, Clark & Associates
December 20, 2016

2. Contents Introduction Economic trends Accomplishments
Other Postemployment Benefits
Other informational items
General findings and recommendations

3. Introduction - What is an audit?
Performed in accordance with GAGAS (Yellow Book).
Requires review of internal control over major transactions.
Requires risk assessment and enhanced procedures in identified material areas.
Clean opinion verse qualified opinion.

4. Economic Trends

5. Economic Trends

6. Economic Trends Reserves have stabilized.
Used $500K of free cash but realized $300K back through positive revenue experience – so slight drop
Conservative forecasting of revenues ($700K)
Motor Vehicle ($400K)
Penalties and interest ($200K)
Other in aggregate ($100K)
Offset by expenditures ($400K deficit)
Snow and ice ($800K deficit amortized over 3 years)
Expenditure turn backs ($400K)
Metrics are approaching State average which could have occurred without the historical seasonal weather issues in 2015.
Continue to work at increasing reserve ratio
Goal is to maintain tier 2 reserve status; tier 1 could be a stretch

7. Accomplishments Maintained reserves as discussed.
Free Cash policy being followed.
Cured debt material weakness from 2014 as well as some other more minor findings (tax recap process, health enrollment review and deminimus tax billings)
Transitioned new Finance Director – plan in place to cure remaining material weaknesses and findings during 2016 and 2017

8. Other PostEmployment Benefits
GASB 45 and GASB 75 – OPEB
$41.2 million future liability; increase of $4.6M from prior study
5% free cash transfer not made
Average age of employees = 47
New OPEB GASB 75 in effect for fiscal 2018

9. NEW PENSION STANDARD GASB 68 implemented in 2015
June 30, 2015 Bridgewater proportionate share of pension liability was $28.5 million
The funding of this liability is in the control of Plymouth County Retirement; to which the Town belongs
Liability will be updated annually and certified by separate audit report which is also new requirement for 2015

10. Other Informational Items
Municipal Data Breaches
Assignment of Tax Title (over $2.0M)

11. General Findings and Recommendations
Cash reconciliation – material weakness
Withholding reconciliation – material weakness
Receivable reconciliation (some improvements)
E-911 grants
Golf Inventory (gross margin issue)
Overlay Balances
Sewer Betterments – municipal modernization act

12. General Findings and Recommendations
Appropriation deficits (1 accounts totaling $6,000)
Human resources function
Performance bond variance and age of performance bonds
Tax title collections (see informational items)