HomeMy WebLinkAboutAudit Committee - 10/01/2014Town of Mansfield Audit Committee Meeting
October 1, 2014 rf S OFFICE
Meeting Room 2 A/B, Town Hall MA
2 P
Present: Jess Aptowitz—Board of Selectmen, James Bazinet— Finance Committee, Kiera O'N 1,--,_
School Committee, Robert Krentzman — Audit Committee Member, Gary Babin — Mansfield Iviu�io#P�f,�l
Electric Department (MMED) Director, Ken Thomson- MMED Accountant, John Stanbrook -Finance
Director/Town Accountant, William Ross -Town Manager, Robert Brown, CPA—Town External Auditor,
and various other Town officials, members of Bob Brown's auditing staff, and members of the general
public.
Mr. Stanbrook, acting as temporary Chairman for Committee reorganizational purposes only, called the
Audit Committee meeting to order at 6:02pm. Mr. Stanbrook welcomed the newest member of the
Committee (Mr. Krentzman) and informed the Committee that Mr. Krentzman had been duly sworn to his
Audit Committee duties and therefore was able to participate in any voting. Mr. Stanbrook also informed
the Committee that Mr. Ragazzo had called him before the meeting and stated that he was having car
trouble. He may arrive late or even miss the meeting.
Agenda Item No. 1: Discussion and possible vote on Audit Committee reorganization for FY15:
Since Mr. Ragazzo was not yet present, Mr. Stanbrook asked the Committee what action should be taken
on Agenda Item No. 1. It was the pleasure of the Committee to pass over Agenda Item No. 1 until later in
the meeting.
Agenda Item No. 2: Presentation, discussion, and possible vote to release the FY14 Mansfield
Municipal Electric Department's audit:
Mr. Stanbrook, still acting as temporary Chairman, recognized Mr. Brown and invited him to present his
FY14 MMED audit findings. Mr. Brown stated that he was,offering a clean opinion and that there were
no significant deficiencies or material weaknesses found in the audit. He then proceeded through the
audit and touched on the highlights of the audit, including financial performance and comparisons
between FY14 and FY13. Mr. Stanbrook asked a question regarding the FY14 rebate given to MMED
customers and whether that was given in FYI 3.' Mr. Brown answered that the rebate was not given in
FY13 and that was why overall profitability decreased in FY14. Mr, Bazinet asked a question regarding
the time frames needed to issue the MMED audit in a timely fashion. Mr. Babin answered that the drop -
dead date for the MMED audit to be issued is October 28'h. Mr. Babin further clarified that ISO New
England requires MMED financial statements to be submitted within 90 days of the end of every quarter,
but will also accept audited financials at the end of the fiscal year within 120 days of year's end in lieu of
the 90 -day requirement. Mr. Krentzman asked a question regarding the Payment in Lieu of Taxes
(PILOT) that MMED pays the Town and how it is calculated. Mr. Aptowitz responded that the Town has
had several discussions regarding that topic in the past and that there is no hard and fast rationale behind
the $480,000 yearly payment.
Mr. Brown continued his review of the FY14 MMED audit by drawing the Committee's attention to the
Other Post -Employment Benefits (OPEB) discussion on page 5 of the audit. He also mentioned the new
implementation of Governmental Accounting Standards Board (GASB) Pronouncements No. 68 and 71
Page 1
and how they may affect financial reporting in the future. Mr. Stanbrook recognized Finance Committee
Chairman Mr. Schoonveld from the audience and Mr. Schoonveld asked Mr. Brown a question regarding
the funding of MMED's OPEB liability given these two new pronouncements. Mr. Krentzman then
asked Mr. Brown and/or Mr. Babin a question related to what the MMED's rate stabilization fund was
and its purpose. Mr. Babin answered Mr. Krentzman's question to Mr. Krentzman's satisfaction.
Mr. Brown continued his review by explaining the different treatment of unbilled revenue, depreciation,
and the reclassification of the PILOT payment in Mass. regulatory vs. Generally Accepted Accounting
Principles (GAAP) accounting. He then said that there were no adjustments or audit concerns. Mr.
Aptowitz asked a question regarding compensated absences and Mr. Thomson answered that sick pay
accumulation should only count for people that can retire. Mr. Aptowitz also asked Mr. Brown a question
about the legal letters and Mr. Brown responded that he was still waiting for some to be returned. Mr.
Stanbrook then proceeded to ask each Committee member if they had any further questions for Mr.
Brown and Mr. Aptowitz, Mr. Krentzman, and Mr. Bazinet asked further technical questions of Mr.
Brown. Ms. O'Neil did not have any further questions.
Mr. Stanbrook then asked the Committee whether a motion to release the FY14 MMED audit was in
order pending any legal letter confirmations needed by the auditors.
Motion: Mr. Bazinet moved that the Audit Committee accept the FY14 MMED audit as presented by Mr.
Brown pending the receipt of any further approvals needed. Ms. O'Neil seconded the motion. There was
no further discussion. A voice vote was taken.
Vote: Mr. Aptowitz — AYE Ms O'Neil — AYE Mr. Krentzman — AYE, Mr. Bazinet- AYE. The motion
was adopted 4-0.
Agenda Item No. 3: FY14 Town Audit update and completion time -line discussion:
Mr. Stanbrook, still acting as temporary Chairman; gave a brief update on the Town's audit progress. Mr
Stanbrook stated that the Town's Department of Revenue (DOR) representative was coming in on Friday
October 3`d to certify the Town's FY14 balance sheet. After that happened (the DOR review usually
takes about two weeks), Mr. Stanbrook still needed to finish the compilation of FY14 compensated
absences and FYI 4's fixed assets before Mr. Brown could begin his auditing work. Mr. Brown stated
that he was willing to come in and start the audit when those two tasks were completed.
Agenda Item No. 4: Any other matters not known 48 hours prior to the meeting:
Mr. Stanbrook informed the Committee that there were minutes from the last Audit Committee meeting
and that he had forgot to put approval of those minutes on the agenda for tonight's meeting. Approval of
those minutes will be on the next meeting's agenda. Also, Mr. Stanbrook reminded the Committee that
Mr. Brown's auditing contract was up after this year, and that the Committee will have to seek a new
auditing contract for the next three years. Discussion of that process should be an agenda item at a future
meeting.
Reconsideration of Agenda Item No. 1:
Page 2
� r
Mr. Stanbrook, still acting as temporary Chairman, asked the Committee for nominations for Audit
Committee Chairman for FY15 as outlined in the Town's by-laws.
Motion: Ms. O'Neil nominated Mr. Aptowitz for Chairman of the Audit Committee for FY15, and Mr.
Krentzman seconded the nomination. Mr. Bazinet asked a question relating to an exposure draft on
internal controls and the expansion of the Audit Committee's role and membership, and whether that
should be discussed now, but the question was ruled out of order by Mr. Stanbrook as it did not pertain to
the matter currently being considered. There was no further discussion. A voice vote was taken.
Vote: Mr. Aptowitz-AYE, Ms. O"Neil —AYE, Mr. Krentzman-AYE, Mr. Bazinet-NO. The motion was
adopted 3-1.
Mr. Stanbrook congratulated Mr. Aptowitz and then released his temporary Chairmanship to him. Mr.
Aptowitz then temporarily released his Chairmanship to Ms. O'Neil.
Motion: Mr. Aptowitz nominated Mr. Bazinet for Vice -Chairman of the Audit Committee for FY15, and
Ms. O'Neil seconded the nomination. Ms. O'Neil then released her temporary Chairmanship back to Mr.
Aptowitz. There was no further discussion. A voice vote was taken.
Vote: Mr. Aptowitz-AYE, Ms O"Neil —AYE, Mr. Krentzman-AYE Mr. Bazinet-AYE The motion was
adopted 4-0.
Mr. Aptowitz asked the pleasure of the Committee regarding who should hold the office of Secretary. It
was agreed by the Committee that the vote for Secretary should be postponed until the next meeting. Mr.
Aptowitz then set the next meeting's date, time, and place as November 19th, 2014 at 6:OOPM at the
Town Hall. Mr. Aptowitz then asked for a motion to adjourn.
Motion: Mr. Bazinet moved that the Meeting should be adjourned. Ms. O'Neil seconded the motion.
There was no further discussion. A voice vote was taken.
Vote: Mr. Aptowitz-AYE, Ms. O"Neil —AYE, Mr. Krentzman-AYE, Mr. Bazinet-AYE The motion was
adopted 4-0.
Mr. Aptowitz declared the meeting adjourned at 6:55PM
Minutes: John Stanbrook, Finance Director/Town Accountant
Page 3