Friday, April 23, 2004
Positive trends noted by town auditors
"There are some good trends here," said Chris Rogers of Sullivan, Rogers and Co., independent auditors, as he presented the results of the town audit to the Selectmen on April 13. For the first time in several years the auditor's opinion was "unqualified" and Rogers pointed to growth in town net assets, improved timeliness in financial reporting, and a better financial management structure as evidence "you're moving in the right direction."
In presenting pages of reports and statistics, Rogers pointed to a number of positive trends. Reserves are up by 8.8% and "that's really good in this economy." Noting that credit rating agencies particularly look at this number, he advised, "Keep that trend going in the future." He also indicated Carlisle's "revenue growth is higher than growth in expenses, and that's another good trend."
Although recent changes to government reporting standards have made historic comparison difficult, the report indicated Carlisle's net assets are healthy, totaling $27,588,552 of which $3,737,445 are "unrestricted." The second number, which is of particular interest to credit agencies, excludes encumbered assets such as Chapter 90 or CPA funds that can't be used to liquidate liabilities. Debt service is 11% of revenue, a number Rogers called "not high, but not real low." As some debt is being retired, this number may fall next year.
Asked by Selectman Chair Tim Hult for areas of concern, Rogers struggled to think of any, finally noting that rising costs of employee benefits have sideswiped a number of communities. Comparing Carlisle's overspending on this item by $19K with towns that overspent by "as much as a half million," Rogers concluded that, while we're not in trouble yet, "make sure there's enough in the budget for health insurance that's rising 20 to 30% per year."
Financial operations examined
"I like the direction the financial operation is headed," Rogers said as he introduced the management letter accompanying the report. He pointed to improvements in "financial integration" and "timely cash reconciliation" and praised the "vision of where the finance department is going." A new structure for the finance department was put in place this year which for the first time introduced a director of finance.
The management letter pointed to a number of concerns with the maintenance of the general ledger and chart of accounts. Financial Director Larry Barton said changes are being made to better integrate town accounts, "This time next year it won't look the same." He noted the comments underline the importance of the accounts receivable software module, which will be requested at Town Meeting May 3.
The letter recommended an auditing committee to review internal procedures and controls, though Rogers noted "the appointment of a financial director is a huge help." Other comments included the need for reporting changes to conform to new government requirements and a reminder the Library Board of Trustees must submit timely annual reports. Rogers said these areas did not constitute "internal weaknesses or reportable conditions."
As the presentation concluded, Hult extended "thanks to Larry [Barton] and Priscilla [Town Accountant Priscilla Dumka] for their hard work this year. It all seems to be going in the right direction," he said again.
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