HomeMy WebLinkAbout2002-05-13 Audit Committee MinutesMINUTES 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
perform future audits in Reading. He stated that local auditors might be cheaper,
but probably would not be as well accepted by bond rating agencies.
The Audit Committee had a lengthy discussion of their role vis a vis the Reading
Municipal Light Department. Since the RMLD audit is part of the Town's audit,
the Committee thought that they should have more oversight. The question was
posed as to whether the Audit Committee could have a member from the RMLD. It
was stated that this would require a Town By Law change. It was suggested that
the Town should require the RMLD to have the same auditing firm as the Town.
Brock stated that many other Light Departments do have the same auditor as their
towns. Dick McDonald will seek an opinion from Town Counsel through Peter
Hechenbleikner. Pete Dahl moved and Camille Anthony seconded a motion to ask
Pete Hechenbleikner to get a legal opinion as to whether the Audit Committee can
oversee RMLD. The motion was voted affirmatively 5 to 0.
The Audit Committee reviewed the management letter for the 2001 audit.
Several items (comments regarding the Recreation and Police Departments)
from the 2000 audit were not all cleared. Cathy Martin moved and Camille
Anthony seconded a motion to request the presence of the Recreation Director and
Police Chief at the next Audit Committee meeting. The motion was approved 4 to 0.
It was decided that the next Audit Committee meeting will be June 10th at 7:30 p.m.
It was requested that copies of management letters for the last several years be
included.
Cathy Martin moved and Debbie Hattery seconded a motion to adjourn. The
motion was voted 4 to 0 affirmatively and the meeting adjourned at 7:55 p.m.
Respectfully submitted,
Elizab th W. Klepeis, Fi ance Director