Town of Blooming Grove

1. Town of Blooming Grove December 31, 2016 PRESENTED BY ANDREW J. ARIAS, CPA, CRFAC

2. Town of Blooming Grove • Government auditing standards • Assessment of internal controls • Compliance with laws and regulations • Financials • Numbers and Note Disclosures • Federal Single Audit required if federal expenditures exceed $750,000 • Required in year funds are expended, regardless of when received • Compliance and internal controls over federal programs • Not required in 2016 • Opinion on the fair presentation of the financial statements to an outside user

3. Town of Blooming Grove • Financial statements • Financials are in comparative format this year because prior year amounts were audited. • Most important statements to review are on pages 50-55 and pages 61-87 • Budget to actual activity by Fund with prior year comparative information • Comparative balance sheets by Fund • Breakdown of activity by individual Districts within the Funds • Full accrual financial statements on pages 10-11 include all combined activity of the Town including long term debt and actuarially calculated figures for pensions and retiree health insurance.

4. Town of Blooming GroveBudget to Actual Activity

5. Town of Blooming GroveFund Balances

6. Town of Blooming Grove • Major operating funds have healthy fund balances • Monitor trends in budget variances • Board should determine target level for fund balances • No statutory limit on fund balance levels • State Comptroller considers 10-20% of annual budget as “reasonable” • Consider funding reserves with excess fund balance before reducing levels • Any increases or decreases to fund balance should be done gradually through the budget process to avoid spikes in the tax levy

7. Town of Blooming GroveBudget to Actual Activity

8. Town of Blooming GroveAddressing Deficit Fund Balances

9. Town of Blooming Grove • Continue to address the fund deficits in Water/Sewer districts through the budget process • One deficit was eliminated in 2016 and three others should be eliminated over the next few years • Must stay within budget to continue progress • All deficit reduction assessments were properly used to reduce the existing deficits

10. Town of Blooming Grove • Reserves • Town currently has no reserved fund balances • Consider setting up and funding reserves • Set aside some of the current fund balance • Fund on a systematic basis through the budget process • Annual funding is included in the budget • Reserves are available for large purchases • Avoids fluctuations in budgets and fund balance • Make sure all activity related to reserves is done properly • Different types of reserves have different requirements for creation, funding and expending

11. Town of Blooming Grove • Internal control and compliance report (page 88) • Required by Government Auditing Standards • No significant deficiencies or material non-compliance noted • Management Letter • Findings and/or recommendations not significant enough to be reported within the audit report • Management responses included in Letter • Minor issues discussed verbally in an Exit Conference with Town Supervisor and Comptroller, and with other personnel during the course of the audit

12. Town of Blooming Grove • Qualified opinion on financial statements • Fixed assets and depreciation (GASB 34) • Must adopt a capitalization threshold • Must have an initial appraisal performed on all capital assets • Clear distinction in the audit report between the two opinions • Qualified opinion on full accrual statements • Unmodified opinion on fund financial statements • Determine whether to have a fixed asset appraisal report performed to eliminate the qualified opinion