2010-01-06 Audit Committee Minutes

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OF R 401 y a i 11 ,.� Audit Committee Meeting � January 6, 2010 200 D Y4. The meeting convened at 7:31 p.m. in the Conference Room, 16 Lowell Street, Reading, Massachusetts. Present were Chairman George Hines and Audit Committee members David Greenfield, Camille Anthony, Steve Herrick, Charles Robinson and Phil Pacino. Also present were Town Accountant Gail LaPointe, Scott McIntire and Eric Demas from Melanson Heath. George Hines called the meeting to order, and asked Scott McIntire to review the annual Audit. McIntire discussed the Town Unreserved Fund Balance stayed level with last years because of the lower revenues and need to use some free cash to support the FY09 budget. Unrestricted Net Assets are lower because this is the first year of recognizing the Other Post Employment Benefit Expense McIntire also reviewed the Town's financial picture, and the Auditor's findings. Recommendations include writing off old outstanding checks more often. Also the Town Clerk and Library should maintain detailed receipt logs and keep records of receipts for 3 years according to the Records Retention laws. After some discussion, the Committee requested McIntire confirm the RMLD footnotes were the same as the final version of the RMLD FY09 Financial Statement Audit, add to the MDA section a sentence explaining the reason expenditures exceeded revenues in FY2009 and add to the management report a list of all areas where detailed cash receipt procedures were tested and reviewed. On motion by Anthonv seconded by Pacino, the Audit Committee voted to allow the Chairman to accent the FY2009 audit report after the above 3 changes have been incorporated into the report by a vote of 5 -0 -1. Hines abstained. The Committee reviewed both the performance of and the proposal for services by Melanson Heath. A discussion ensued of when it is appropriate to change auditors due to staleness, as opposed to unsatisfactory performance. Discussed the fact that the Town is not required to bid for audit services. Some concern was expressed about benefits of bidding in assuring a competitive price. It was pointed out that since Melanson Heath is holding the annual audit cost for FYI 0, 11 and 12 at the FY09 rate of $59,000, their familiarity with the Towns changes to new MUNIS software and the committee's overall satisfaction with the quality of work, it was not unreasonable to maintain their services without bidding. On motion by Anthony seconded by Robinson, the Audit Committee voted to accept the three - year proposal for FY10, 11 and 12 audits of the Town and School End of Year Report by Melanson Heath for a cost of $59,000 per year, by a vote of 6 -0 -0. On motion by Anthony seconded by Robinson, the Audit Committee voted to adjourn at 8:59 by a vote of 6 -0 -0. Respectfully submitted, Gail LaPointe