2019-06-12 Audit Committee Minutes

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Town of Reading r Meeting Minutes 'Jielllto� �,/ Board - committee - Commission - Council: Audit Committee Date: 2019-06-12 Time: 7:00 PM Building: Reading Town Hall Location: Berger Room Address: 16 Lowell Street Purpose: FY18 Audit Results and FY19 Audit Planning Attendees: Members - Present: Erik Burkhart, Mark Dockser, Nick Boiven, Phil B. Pacino, Elaine Webb and Stephen Herrick Members - Not Present: Others Present: Sharon Angstrom and Scott McIntire Minutes Respectfully Submitted By: Sharon Angstrom Topics of Discussion: Mr. Burkhart called the meeting to order and asked the Committee if they had an opportunity to review the minutes from June 13, 2018. Mr. Boivin made a motion to accept the minutes as written which was seconded by Mr. Dockser. The Audit Committee voted 1- 0-3 to accept the minutes as written, only one member, Steve Herrick was present at the last meeting all other abstained. Mr. Burkhart instructed Mr. McIntire to begin the review of the FY18 audit results. Mr. McIntire started by saying that in his opinion the audit went very well. He pointed out that no material journal entries were proposed and that the records are in good working order. He noted that the auditor's opinion is found on pages 1-3 of the financial statements. He stated the opinion is that the financial statements present fairly in all material respects, the financial position of governmental and business-type activities of the Town of Reading. Mr. McIntire then directs the Committee Members to turn to page 4 where the Manager Discussion and Analysis begins. He points out that this section gives a snapshot of the General Fund. It is a great resource as it summarizes the key elements of the General Fund. Mr. McIntire then directs the Committee to turn to pages 15-17. He notes that the Statement of Net Position and The Statement of Activities provide a long-term perspective. He points out on the Statement of Net Position the unrestricted is $-63.6 million for governmental funds -$28.08 million overall with enterprise funds included. The negative balance is attributable to the net pension and OPEB liabilities of $24.4 million (pension) and $60.2 million (OPEB) respectively for governmental and $36.7 million (pension) and $68.8 million (OPEB) with enterprise funds included. McIntire points out that although these liabilities are large they are lower than many of our peer communities. He also comments that the pension liability did not change drastically. The OPEB liability changed drastically due to GASB 75, a new accounting standard that was implemented in FY18, which requires the entire OPEB liability to appear on the Balance Sheet. Prior to GASB 75, only the shortfalls from the OPEB annual required liability were shown on the Balance Sheet. Mr. Page 1 1