Friday, January 12, 2007
Town has cash, assets, borrowing power, say auditors
Funds are up, assets are growing, and there's room to borrow. Those were some of the conclusions of the audit report recently issued by Sullivan, Rogers, and Company, LLC of Burling-ton after auditing Carlisle's books for 2006. "Comments from the auditors were very complimentary and very positive," said Simon Platt of the Audit Committee to the Selectmen on December 19. "We're in a different place from where we were five years ago."
Platt pointed to several indicators the town's finances are moving in the right direction. For example, the undesignated General and Stabilization Fund combined balance increased to $2,874,773, or 13.8% of total revenue. This percentage has been rising over the past five years from 9.3% in 2002. "That's a very positive trend," said Platt. Audit Committee member Deb Belanger agreed, "This is our war chest if we have to respond quickly to the unforeseen."
Another improvement was to the town's total capital assets (town-owned land, buildings, equipment, and infrastructure) which rose $2,164,710 to $21,000,572. Net assets rose by $912,454 to $19,750,430, of which $15,215,637 is unrestricted. State statutes limit borrowing to 5% of available assets, so the town's current regulatory debt limit is $76,538,780. Current bond debt outstanding is $9,540,000 "so we do have the capacity to spend," noted Belanger.
A "Management Letter" from the auditors contained a number of suggestions for improving internal procedures and controls. For example:
• Town cash collections are deposited monthly, which could "increase the risk of theft, misplacement or misap-propriation" as well as causing a lag in cash-flow reporting. It was suggested that these deposits be made weekly.
• A risk assessment program should be implemented to analyze and monitor where assets could be lost or misappropriated.
• The $130,000 deficit for the Chapter 90 account which holds highway funds could be reduced if reimbursement requests to the Massachusetts Highway Department were submitted in a more timely fashion.
• The actuarial value of town retirement commitments will have to be reported starting in 2009.
The auditors had taken a close look at the Carlisle School lunch program and found a number of areas for improve-ment. The software in use was unable to handle prepaid lunches, so manual reconciliation was necessary, which "duplicates effort and is inefficient." Lunch tickets could be pre-numbered to "decrease risk of theft or misuse." In addition, vending machines were not being reconciled. In response, it was noted the software vendor is working with the school to fix the problems, the manual system has been phased out, and lunch tickets will no longer be used. In addition, vending machines will be reconciled and cash reported on a weekly, rather than a monthly basis.
Platt noted there are "some good observations here," and the auditor's suggestions will be implemented. He marveled at the progress the town has made over the past few years in professionalizing the financial functions, "Now we're looking at risk assessment rather than "are the statements correct?"
On the recommendation of the Audit Committee, Sullivan, Rogers, and Company was reappointed as auditors for the next three years at $28,000. The Selectmen then voted to accept the statements and management letter.
© 2007 The