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HomeMy WebLinkAboutAudit Committee - 02/26/2015RE C 1VED Town of Mansfield Audit Committee Meeting �',; r .¢ February 26, 2015 Meeting Room 3 AB, Town Hall 2M FFD 25 P ?: 5 i Present: Jess Aptowitz — Board of Selectmen, James Bazinet— Finance Committee, KiJrzQ'I' iI School Committee, James Ragazzo— Audit Committee Member, Robert Krentzman F` iA0dJt'Cidirrd1tfee 1 Member, John Stanbrook—Finance Director/Town Accountant, William Ross—Town Manager, Sean Desorcy—Town External Auditor's staff, Peter Paliulis, CPATownExternal Auditor-� staff, Michael Ahern—DPW Public Buildings Manager, and various other Town officials and members of the general public. Chairman Aptowitz requested a motion to open the meeting at 6:04PM. Motion: Mr. Bazinet moved to open the meeting. Mr. Krentznaan seconded the motion. There was no further discussion. A voice vote was taken. Vote: Mr. Aptowitz—AYE Mr. Bazinet—AYE Ms O'Neil — AYE Mr. Ragazzo—AYE Mr. Krentzman — AYE The motion was adopted 5-0. Mr. Aptowitz asked the Committee informally if there were any objections to skipping to Agenda Item No. 4. Hearing no objections, Agenda Item No. 4 became the first item of business. Agenda Item No. 4: Discussion of FY14 Sewer/Water receivables issues as uncovered in the FY14 Town audit: Mr. Desorcy explained the nature of sewer and water receivables variances that were uncovered during the FY 14 audit. The sewer and water departments need to use some sort of control worksheet and internally reconcile the commitments, abatements, refunds, and corrections within the department and then produce a monthly reconciled report to then give to Mr. Stanbrook to use during his reconciliation to the General Ledger. Some sort of control worksheet needs to be generated by the department to reconcile the amounts within the department. Mr, Ross agreed that he thought that this had to be reconciled and that he needed to meet with DPW Director Lee Azinheira to get this problem resolved. Mr. Krentzman stated that he felt that the Committee should put this agenda item on the next meeting's agenda as a follow-up to get an update. Mr. Ross stated that in the past the Town Accountant's office has done most of this work, but the proper way for this problem to be solved is to have the sewer and water department staffs reconcile their own amounts monthly. Mr. Aptowitz stated that the numbers were not material and there was no finding in the Town audit. Other discussion related to the next steps to take followed on this topic. Agenda Item No. 5: Review and possible vote to accept the FY14 Town Audit as prepared by the Town's external auditors Mr. Paliulus explained that there were no significant deficiencies or material weaknesses uncovered in the Town's audit. He referred to Page 11 of the audit and pointed out that in FY 15, the Town's pension benefits liabilities will be put fully on the Town's balance sheets and that will negatively affect the Town's governmental activities fund balance. Approximately $33 million of pension liabilities will come on the books in FY 15. In FY 17, when the Town's unfunded Other Post -Employment Benefits (OPEB) Page 1 liabilities come on the books, the Town will have a large negative governmental activities fund balance. Mr. Ragazzo asked a question related to what steps the Town should take, and Mr. Aptowitz asked audience member Mr. Frank DelVecchio whether bond ratings agencies are aware of these two developments. Mr. DelVecchio responded that the ratings agencies are aware of both the upcoming pension obligation booking and the OPEB booking and that the agencies will factor in the liabilities when making their ratings. Mr. Aptowitz asked Mr. Paliulis where Mansfield ranked in regards to trying to fund OPEB obligations and Mr. Paliulis responded that Mansfield's funding level was among the highest of the towns that his firm audits. Mr. Ross explained that the Town's upcoming OPEB valuation may be significantly reduced due to changes in MEDEX plans offered to Town's retirees. Mr. Ross also stated that unfortunately, FYI 6's pension assessment increased due to the County's decision to try to pay down its pension unfunded liability a year early. Chairman Aptowitz requested a motion to accept the Town's audit for FY 14. Motion: Ms. O'Neil moved to accept the Town's auditfor FYI 4. Mr. Ragazzo seconded the motion. There was no further discussion. A voice vote was taken. Vote Mr. Aptowitz AYE Mr. Bazinet—AYE Ms O'Neil — AYE Mr. Ragazzo—AYE,_ Mr. Krentzman — AYE The motion was adopted 5-0. Agenda Item No. 6: Review and possible vote to accept the FY14 A-133 Single Audit as prepared by the Town's external auditors Mr. Desorcy explained the purpose of the A-133 audit and explained the finding in the audit. The School Department had charged a federal grant for services that were rendered before the grant's eligibility dates. Ms. O'Neil stated that she was unaware of this finding. Mr. Desorcy continued that the expenditures were related to Special Education bus services and the costs were approximately $3,700. The finding was not a material weakness or a significant deficiency. Mr. Krentzman stated that this should not be repeated and that this mistake needed to be rectified as soon as possible. Mr. Ragazzo stated that the School Department deals with a large amount of transactions and this was an isolated incident. The School Department has had findings on this audit in the past, but they were all non -monetary in nature until this year. This year is the first time it was a monetary -related finding. Chairman Aptowitz requested a motion to accept the Town's single audit for FYI 4. Motion: Mr. Krentzman moved to accept the Town's single audit for FY14. Mr. Ragazzo seconded the motion. There was no further discussion. A voice vote was taken. Vote Mr. Aptowitz AYE Mr. Bazinet—AYE Ms O'Neil — AYE Mr. Ragazzo—AYE, Mr. Krentzman — AYE The motion was adopted 5-0. Mr. Ragazzo asked Mr. Desorcy if there was a management letter, and Mr. Aptowitz said that it was not required. Mr. Aptowitz then stated that he wanted to present the audits to the Board of Selectmen soon. Mr. Aptowitz will try to put the acceptance of the audits on the Board of Selectmen's agenda at a time to be determined. Page 2 Agenda Item No. 7: Discussion of creating an Invitation for Bid (IFB) or Request for Proposal (RFP) to procure the Town's external auditing firm for the auditing years FY15-FY17. Mr. Aptowitz asked about the methods of how to procure the next contract for the external auditing firm, and said that Mr. Ross and Mr. Stanbrook should just go out and vet the firms themselves. Mr. Ahern said that auditing services are exempt from the procurement laws under Mass. General Laws Chapter 3013, but if the Town chooses to bid the project under Ch. 3013, the Town must follow the procedures in the law. Mr. Ahern then outlined the Request for Quotations (RFQ) and the Request for Proposals (RFP) processes. Mr. Ahern suggested an informal rather than formal RFP process where the Town outlines a scope of services and then sends it to prospective vendors. Mr. Ragazzo suggested that the scope of services needs to be more detailed than a mere outline of the services to be performed. Audience member Mr. Steven Schoonveld suggested that the RFP should contain the minimum qualifications that the Town seeks and then the RFP should be sent it to companies that are known to be able to provide those services. Mr. Aptowitz suggested that the RFP should be sent out to at least six companies. The entire Committee agreed that this should be the next course of action. No formal vote was taken. Mr. Aptowitz asked the Committee informally if there were any objections to skipping back to Agenda Item No. 1. Hearing no objections, Agenda Item No. 1 became the next item of business. Agenda Item No. 1: Review and possible vote to accept the Audit Committee Meeting minutes of March 12, 2014. Mr. Aptowitz asked the members for any comments or changes to the minutes as provided. There were no changes. Chairman Aptowitz asked for a motion to accept the minutes as presented. Motion: Ms. O'Neil moved to accept the Audit Committee Meeting minutes of March 12, 2014, Mr. Ragazzo seconded the motion. There was no further discussion. A voice vote was taken. Vote Mr. Aptowitz AYE Mr. Bazinet—ABSTAINED Ms O'Neil — AYE Mr. Ragazzo—AYE, Mr. Krentzman — ABSTAINED The motion was adopted 3-0. Agenda Item No. 2: Review and possible vote to accept the Audit Committee Meeting minutes of November 19, 2014. Mr. Aptowitz asked the members for any comments or changes to the minutes as provided. There were no changes. Chairman Aptowitz asked for a motion to accept the minutes as presented. Motion: Mr. Krentzman moved to accept the Audit Committee Meeting minutes of November 19, 2014. Mr. Bazinet seconded the motion. There was no further discussion. A voice vote was taken. Vote Mr. Aptowitz—AYE Mr. Bazinet—AYE Ms O'Neil — ABSTAINED Mr. Ragazzo— ABSTAINED Mr. Krentzman — AYE The motion was adopted 3-0. Agenda Item No. 3: Accept nominations and possible votes for the office of Audit Committee Secretary for FY15. Chairman Aptowitz called for nominations for Audit Committee Secretary for FYI 5. Mr. Bazinet nominated Mr. Ragazzo for the position of Audit Committee Secretary. Ms. O'Neil seconded the motion. Page 3 This nomination was the only one put forth. After this nomination, Mr. Aptowitz closed the call for nominations. Motion: Mr. Bazinet moved to appoint Mr. Ragazzo to the position of Audit Committee Secretary for FY15. Ms. O'Neil seconded the motion. There was no further discussion. A voice vote was taken. Vote: Mr. Aptowitz— AYE Mr. Bazinet—AYE Ms O'Neil— AYE Mr. Ragazzo—AYE, Mr. Krentzman — AYE The motion was adopted 5-0. Agenda Item No. 8: Other matters not known 48 hours prior to the meeting. Chairman Aptowitz stated that there were no other matters that needed to be discussed. Chairman Aptowitz called for a motion to adjourn. Motion: Mr. Ragazzo moved to adjourn. Mr. Bazinet seconded the motion. There was no further discussion. A voice vote was taken. Vote: Mr. Aptowitz—AYE Mr. Bazinet—AYE Ms O'Neil — AYE Mr. Ragazzo—AYE, Mr. Krentzman — AYE The motion was adopted 5-0. Mr. Aptowitz declared the meeting adjourned at 6:58PM. Minutes: John Stanbrook, Finance Director/Town Accountant Page 4