1. PRESENTATION OF THE ANNUAL AUDIT FOR THE YEAR ENDED JUNE 30, 2015
TOWN OF LA PLATA, MARYLAND
January 8, 2016

2. Agenda Auditor’s Responsibility Auditor’s Opinion
Auditor’s Report on Internal Control
SAS 114 Communication
Presentation of Financial Statements
Financial Highlights
Future Considerations
February 27, 2016

3. Auditor’s Responsibility
Express opinions on the Town’s financial statements.
Perform procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management.
Evaluate the overall presentation of the financial statements.
January 8, 2016

4. Auditor’s Opinion The Honorable Members of the Town Council
Town of La Plata, Maryland
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, the aggregate remaining fund information, and the budgetary comparison for the General Fund of the Town of La Plata, Maryland (the "Town"), as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the Town's basic financial statements as listed in the index.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
January 8, 2016

5. Auditor’s Opinion - Continued
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town, as of June 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison for the General Fund for the year then ended in in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Change in Accounting Principle
As discussed in note 11 to the basic financial statements, the City changed its method of accounting for employee pension plans in the year ended June 30, 2015, as required by the provisions of Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions, and Governmental Accounting Standards Board Statement No. 71, Pension Transition Contribution Mead Subsequent to the Measurement Date. Our opinion is not modified with respect to this matter.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 6-15 and the schedules of the Town’s proportionate share of the net pension liability and pension plan contribution on pages be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town's basic financial statements. The budgetary information is presented for purposes of additional analysis and is not a required part of the basic financial statements.
January 8, 2016

6. Auditor’s Opinion - Continued
The Detail Schedule of Revenues - Budget and Actual - General Fund and the Detail Schedule of Expenditures - Budget and Actual - General Fund are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such supplementary information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2015, on our consideration of the Town of La Plata, Maryland’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town of La Plata, Maryland's internal control over financial reporting and compliance.
Baltimore, Maryland
December 21, 2015
January 8, 2016

7. Auditor’s Report on Internal Control
To the Town Council Town of La Plata, Maryland We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, the aggregate remaining fund information, and the budgetary comparison for the General Fund of the Town of La Plata, Maryland, as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the Town of La Plata, Maryland's basic financial statements, and have issued our report thereon dated December 21, Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Town of La Plata, Maryland's internal control over financial reporting ("internal control") to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of La Plata, Maryland's internal control. Accordingly, we do not express an opinion on the effectiveness of the Town of La Plata, Maryland's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified
January 8, 2016

8. Auditor’s Report on Internal Control - Continued
Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town of La Plata, Maryland's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Baltimore, Maryland December 21, 2015
January 8, 2016

9. SAS 114-Communication with Those Charged with Governance
This communication reflects those matters that are, in our professional judgment, significant and relevant to the responsibilities of those charged with governance in overseeing the financial reporting process.
All significant transactions have been recognized in the financial statements
Management’s estimates used to prepare the financial statements are reasonable
Financial statement disclosures are clear and consistent
Uncorrected misstatements determined to be immaterial to the financial statements
No disagreements with management regarding reporting or auditing requirements
January 8, 2016

10. Presentation of Financial Statements - June 30, 2015
Management Discussion & Analysis (pg )
Government-wide Financial Statements (pg )
Economic resources measurement focus and accrual basis of accounting (pg )
Governmental Fund Financial Statements (pg )
Current financial resources measurement and modified accrual basis of accounting (pg )
Proprietary Fund Financial Statements (pg. 24 – 27)
Accrual basis of accounting (pg. 31)
Notes to the Financial Statements (pg. 28 – 54)
Supplemental Information (pg. 56 – 62)
January 8, 2016

11. Financial Highlights -Management Discussion & Analysis (pg. 6 -15)
Executive summary of fiscal year
operations (pg. 6)
Discussion of changes from prior years operations
Net position (pg. 8)
Capital assets (pg. 13)
Long term debt (pg. 14)
January 8, 2016

12. Financial Highlights -Net Position
January 8, 2016

13. Financial Highlights -Capital Assets
January 8, 2016

14. Financial Highlights -Long Term Debt
January 8, 2016

15. Financial Highlights - GFOA Best Practice Appropriate Level of Unassigned Fund Balance in the General Fund
The adequacy of unassigned fund balance in the general fund should be assessed based upon a government’s own specific circumstances. Nevertheless, GFOA recommends, at a minimum, that general-purpose governments, regardless of size, maintain unassigned fund balance in their general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures. The choice of revenues or expenditures as a basis of comparison may be dictated by what is more predictable in a government’s particular circumstances.
In practice, a level of unassigned fund balance significantly lower than the recommended minimum may be appropriate for states and America’s largest governments (e.g., cities, counties, and school districts) because they often are in a better position to predict contingencies and because their revenues and expenditures often are more diversified and thus potentially less subject to volatility.
January 8, 2016

16. Financial Highlights - General Fund – Fund Balance
Unassigned Fund Balance (pg. 19)
General Fund
Fiscal
Unassigned
Months of
Year
Fund Balance
Expenditures
2015
$ ,956,403
$ 6,224,133 14
2014
6,184,213
6,698,655 11
2013
6,715,389
5,456,738 15
January 8, 2016

17. Financial Highlights - Components of General Fund – Fund Balance
Millions
January 8, 2016

18. Financial Highlights - Town’s Ability to Pay Short Term Liabilities
June 30, 2015
$ 13,290,967 =
16.59
$ ,107
June 30, 2014
$ 12,050,502
8.29
$ 1,453,126
June 30, 2013
$ 12,591,743
7.21
$ 1,747,315
January 8, 2016

19. Future Considerations -Comprehensive Annual Financial Report
CAFR’s consists of the following sections
Introductory section
Financial section
Statistical section
GFOA’s Certificate of Achievement for Excellence in Financial Reporting
Encourage and assist state and local governments to go beyond the minimum requirements of GAAP
To encourage preparation of CAFR’s that evidence the spirit of transparency and full disclosure
To recognize individual governments that succeed in achieving that goal
Not to assess the financial health of participating governments, but rather to ensure that users of their financial statements have the information they need to do so themselves
January 8, 2016

20. Future Considerations -Budget Presentation
GFOA’s Distinguished Budget Presentation Awards Program
To encourage and assist state and local governments to prepare budget documents of the very highest quality
To encourage and assist state and local governments in meeting the guidelines established by the National Advisory Council on State and Local Budgeting and the GFOA’s best practices on budgeting
To recognize individual governments that succeed in achieving that goal.
January 8, 2016

21. Future Considerations -Popular Annual Financial Report
GFOA’s Popular Annual Financial Reporting Awards Program
To encourage and assist state and local governments to extract information from their CAFR to produce high quality popular annual financial reports
Designed to be readily accessible and easily understandable to the general public and other interested parties without a background in public finance
To recognize individual governments that are successful in achieving that goal.
January 8, 2016

22. Future Considerations -Fraud Tip Line
“The Network” – anonymous reporting hotline
Employees are able to report misconduct and government is able to securely and reliably capture their reports.
Confidential reports via phone and the web
January 8, 2016

23. Effect of the Implementation of GASB Statement No. 68
Net pension liability – $ 2,102,677
Deferred outflow of resources – pension related - $ 287,293
Deferred inflow of resources – pension related - $ 230,152
Adjustment to restate beginning of net position – ($ 2,042,104)
January 8, 2016

24. GASB statement which require implementation in future fiscal periods
GASB Statement No. 72 “Fair Value Measurement and Application,” will be effective for the Town beginning with its year ending June 30, 2016.
GASB Statement No. 73 “Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB 68 and Amendments to Certain Provisions of GASB Statements 67 and 68,” Will be effective for the Town beginning with its year ending June 30, 2016.
GASB Statement No. 76, “The Hierarch of Generally Accepted Accounting Principles for State and Local Governments,” will be effective for the Town beginning with its year ending June 30, 2016.
January 8, 2016