Town’s audit approved

Fri, 01/05/2018 - 8:00am
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“It’s a clean opinion.”

That’s what New Shoreham Town Finance Director Amy Land told the Town Council regarding the annual audit of the town’s financial statements at a recent Town Council meeting. 

With First Warden Ken Lacoste and Second Warden André Boudreau absent, the Town Council unanimously approved (3-0) the audit for the fiscal year ending June 30, 2017, which was conducted by Fall River-based Hague, Sahady & Co., P.C., an independent accounting firm.

After a brief discussion, Councilor Sven Risom made a motion to approve that was seconded by Councilor Chris Willi. 

No representatives from Hague, Sahady & Co. were in attendance, but members of the firm will be attending a special meeting with the Town Council in January to discuss the audit.

An audit is an official inspection of an organization’s financial accounts, or statements, conducted by an independent body to test the accuracy of those statements. Hague, Sahady & Co. conducts an annual audit of the financial statements for the town and the Block Island School.

In rendering its Dec. 20 opinion, the auditors noted that the town’s financials “present fairly, in all material aspects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and aggregate remaining fund information to the Town of New Shoreham, Rhode Island, as of June 30, 2017.” The report also notes that the town handled its accounting with “no instances of non-compliance,” and in “accordance with accounting principles generally accepted in the United States of America.” 

Financial highlights in the report noted that “the town’s total debt increased by $590,775, or 2.3 percent, during the current fiscal year. The key factors in this change were the short term debt obtained to cover the cost of the Block Island Power Company stock acquisition, retirement of principal, and increase in pension liabilities.”

“The town reported a pension liability of $3,155,975 for its proportionate share of net pension liability that reflected a reduction for contributions made by the state.” The town’s proportionate share of the net liability is $3,412,971, while the state’s share is $2,337,384, for a total net pension liability of $5,750,355.

The auditor’s report notes that as of June 30, the town’s net position, or its balance sheet/net worth, is $34,148,998, an increase of $1,632,293 over the previous year. $24,763,957 of that comes from governmental activities, such as real property, state construction aid, etc., while $9,385,041 is derived from business-type activities. 

The auditors noted that, “The unassigned fund balance for the town’s General Fund was $2,219,370, or 16.5 percent of the total budgeted for 2017 General Fund expenditures, and other financial uses of $13,441,769. This amount is available for spending at the Town’s discretion.”

Land told The Times that “per the Town’s Fund Balance Policy: the unassigned general fund balance of the town will be maintained to weather economic uncertainty, quickly address unexpected situations such as natural disasters, to provide sufficient cash flow to avoid the need for short-term borrowing, and to maintain strong creditworthiness.”

The town’s 2017 fiscal year operating and capital budget denotes that $13,441,769 was budgeted in revenue and expenditures for the year. The recommended revenue and expenditures for the 2018 budget is $14,032,776.

The State of Rhode Island’s Annual Supplemental Transparency Portal report, which Land submitted to the Town Council as well, notes that the town’s municipal revenue, as of June 30, 2017, was $13,747,731, while the school’s revenue was $4,999,663. The town’s tax levy collection was $9,192,034, while the meals and beverage and hotel tax netted $832,704 in revenue.

Land said there were no management comments from the auditors regarding the 2017 fiscal year, meaning the town’s financial statements and accounting methods were in compliance with best standards and practices. She said the Town Council hires the auditors to “express an opinion” on the town’s financial statements, which includes an examination of the practices and processes of the Finance Department.