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HomeMy WebLinkAboutAudit Comm 10/01/2025Town of Mansfield 6 Paik Rao, Alansfield, Alassmhusetts 02048 R(-CFMI -10 T011V[i C­ Audit Commititbe!_r 10 P 1: in Meeting Minutes October 1. 20251 Present: Mr. Steve Schoonveld, Mr. Jack Cooney and Mr. Saravanan Karuppusamy were present in meeting room 2 A/B at Town Hail. Mr. Kostas Loukos was present via conference call. Also Present: Mr. Joseph Perrier and Mr. Nick Monticello was present along with Ms. Laura Stone from CBIZ. 1. Call to Order Meeting Mr. Monticello called the Audit Committee Meeting to order at S:02 PM. All four members were present. 2. Reorganization Motions: To nominate Saravanan Karuppusamy for Chair. (Schoonveld/Cooney) Roll Call Vote: Cooney — Yes Schoonveld—Yes Loukos—Yes Karuppusamy—Yes Passes 4:0 3. Approval of Meeting Minutes from December 19, 2024 Motion: To approve the meeting minutes of December 19, 2024 as written. (Cooney/Schoonveld) Roll Call Vote: Cooney —Yes Schoonveld—Yes Passes 4:0 4. MMED Audit Review and Acceptance Lou kos—Yes Karuppusamy — Yes Ms. Laura Stone from CBIZ was present and began by stating that they did have an issue with one of the audit reports and they were redoing the OPEB Evaluation and are expecting to have the full MMED Audit ready for October 15". She explained that the data for the report is only done every two years. The payroll decrease caused a further look into the data and it was realized that employees were missing from the data files. The Committee members asked questions and discussed improvements that could be made to ensure accurate data files. Mr. Karuppusamy asked about the pension reports and Ms. Stone noted that that audited reports come from Bristol County Retirement and further noted that PERAC is State wide for public retirement which adds assurance. Ms. Stone continued through her presentation and went through the audit timeline. Ms. Stone then brought the Committees attention to MMED inventory which is not reconciled. The auditors repeated the inventory audit this year and there are still inconsistencies. She noted that the risk of material loss is low due to most items being low cost items, but the inconsistencies remain and those need to be addressed. The purchase of a wire counter was noted, and that the stockroom is more organized, although some items remain unlabeled. Ms. Stone felt this could be resolved by next year and that is what they would like to see. Mr. Pereira commented that MMED has hired a new stock person who is periodically assessing counts to ensure that employees are marking down what they are taking from the inventory. Ms. Stone then spoke about the issue related to Mass Clean Water Trust. She stated that previously the Town entered into a loan for $6M and last year that financing was permanently borrowed instead of a Audit Committee Meeting October 1, 202S Page 1 short-term loan. She stated that the drawdowns occurred in July of 2023 and September of 2024. Mass Clean Water Trust (MCWT) gave the town $2.2M in October 2023. The problem is that the drawdowns can be either state or federal funded but there's no way of knowing unless MCWT tells you. In April 2024, auditors confirmed with MCWT that these were state funded. In June the Treasurer received notice that the funds were now being considered federal funds. Unlike State funds, federal funds need to be audited. The town was not formally noticed until September, after year-end closed so this change didn't get to the SEFA. Ms. Stone stated that ordinarily, any reimbursable grant would be reported in the year fuds were received, such as with FEMA, you would report it in the year received. Since this was tagged initially as state funded and then changed to federal they were unsure how to deal with the lack of notice and SEFA reporting. When the town reached out to the State, the State did not give an opinion. Mr. Monticello informed the Committee that the state said the action that the town chose to take should be put in writing so the State could put it in their files. Ms. Stone recommended that the town put it on the next year's SEFA and management also agreed. Ms. Stone stated that they will do more research to make sure this is appropriate but at this time they feel it is fine and will amend the engagement letter to show that it will be reported in 2025 with an indication that it was never brought to the attention of the preparer. This lack of notification identifies a weakness of controls because it was not disclosed that it would be reported in 2025. Mr. Schoonveld asked how it is usually reported and Ms. Stone explained the process, and noted that this usually only happens with MCWT grants and that it is highly unusual and unlikely to happen again. She noted that what the town should have done was include it in the SEFA package to determine the best course of action and training should take place to ensure that anything flagged as federal funding gets communicated in the SEFA package. The responsibility falls to the person preparing the SEFA. Mr. Karuppusamy asked what the financial impact was and Ms. Stone responded that it has zero impact to the financial statements and it will only impact the SEFA report. Kostas Loukos left the meeting at 6AOPM. S. Discuss Upcoming Field Work for FY2025 Audit Ms. Stone summarized and stated that the audit has a couple issues but otherwise everything is normal. Mr. Schoonveld then asked how the MMED PILOT and how should it be determined and Ms. Stone responded that it is a management decision. Mr. Schoonveld then asked what the value of capital is based on and if capital assets should be part of the calculation and Ms. Stone stated that they look at depreciation, assets, and expenditures to see if there is anything that should have been considered capital. Mr. Schoonveld asked if the building itself get reassessed based on values and Ms. Stone responded that it did not, the value of the building is costless and it does not get revalued or assessed. 6. Any items not anticipated by the Chair 48 hours prior to this meeting There were no items. 7. Adjourn Motion: To adjourn the Audit Committee meeting on October 1, 2025 at 6:4813M. (Cooney/Schoonveld) Passes 3:0 S gnature Minutes prepared by Carrie Champagne Audit Committee Meeting October 1, 2025 t Date Page 2