2002-05-13 Audit Committee Minutes

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MINUTES OF AUDIT COMMITTEE MEETING ON May 13, 2002' Berger Room, Town Hall 6:45 p.m. L;-,, d. --2 Ali: 30 Present: Dick McDonald, chairman, Cathy Martin, vice chairman, Camille Anthony, Pete Dahl, Debbie Hattery, staff members Richard Foley and Beth Klepeis, and Brock Romano of auditing firm KPMG Peat, Marwick Note: Pete Dahl left the Audit Committee meeting prior to adjournment to attend a School Committee Meeting. Minutes of the December 3, 2001 meeting were approved with the following addition (in italics) : It was moved by Camille, seconded by Debbie, and voted unanimously that a letter be sent from the Audit Committee to the Police Chief and Town Manager to explain the audit and procedures to be followed and to deal with the management letter suggestions. Brock Romano of KPMG Peat Marwick was present at the meeting to give further suggestions for the issue of special focus for the FY 2003 audit and to ask the Town for a FY 2003 fee increase of 10 % ($4,425) over the contracted amount of $44,250. Brock stated that the area of special focus could be expenses instead of receipts. Expenses such as the waste disposal tipping fee, travel, cell phones, snow plowing, petty cash and sick and vacation time could be reviewed in depth. Discussion ensued. Camille moved and Debbie seconded the motion to have the area focus for FY 2003 on the collection of charges for the community access sticker. Brock explained that GASB 34 has changed the Town's audit considerably. It involves restating the financial statements as well as creating entity statements, management discussion and analysis statements, changes in footnotes, and depreciation of fixed assets. Richard Foley, Town Accountant in Reading, has done the research for implementing GASB 34 and has restated the FY 2001 Financial Statements so that FY 2002 will line up with FY 2002. Brock reported that Reading has not hired a consultant to help in this process, which has cost $50,000 to $100,000 in other communities. Instead, Reading has relied on the Town Accountant. Brock explained that the scope of the audit has changed as KPMG will have to perform an audit of all of the new GASB requirements. Dick McDonald questioned why the request was coming now when KPMG knew of GASB 34 when they bid for the FY 2002 audit. Brock stated that KPMG could cut out the special focus review part of the audit, or would agree to spread the cost over several years in the future. If we failed to agree to the extra charges, he stated that KPMG might not agree to propose to