HomeMy WebLinkAboutMINUTES Audit Committee 08-15-2017
Town of Estes Park, Larimer County, Colorado, August 15, 2017
Minutes of a Regular meeting of the AUDIT COMMITTEE of the Town of
Estes Park, Larimer County, Colorado. Meeting held in the Municipal
Building in said Town of Estes Park on the 15th day of August, 2017.
Committee: Mayor Jirsa, Mayor Pro Tem Koenig, Trustee Holcomb,
Town Administrator Lancaster, and Finance Director
Hudson, and Assistant Finance Officer McDougall
Attending: Mayor Jirsa, Mayor Pro Tem Koenig, Trustee Holcomb,
Administrator Lancaster, Finance Director Hudson and;
CliftonLarsonAllen LLC representatives Paul Neidermuller
and Eric Miller, and Town Clerk Williamson
Absent: Assistant Finance Officer McDougall
Chair Jirsa called the meeting to order at 8:30 a.m.
2016 CAFR AND SINGLE AUDIT REVIEW.
Review 2016 Management Letter and Single Audit Findings with Auditors
Mr. Neidermuller reviewed the management letter outlining the fact the Town adopted
the provisions in GASB Statement 72 which requires disclosures to be made regarding
fair value measurements, the level of fair value hierarchy, and valuation techniques.
The most significant financial disclosure affecting the financial statements was the
disclosure of $75,000 liability related to future monitoring costs associated with the
environmental remediation, as described in Note 6 of the financial statement. The
auditors did not encounter any difficulties in completing the audit and suggested
adjustments to the staff during the process. Nothing of substance was exposed during
the audit; however, some internal controls were noted, including bank reconciliation
process, inventory reconciliation, and information technology user access. The single
audit identified internal control issues related to the following: 1) Capital assets not
being reported. The Town did not properly record the donation of a $60,000 Hummer
donated by the federal government; 2) Custody of electronic signatures stored on the
shared Finance department drive. Appropriate controls surrounding electronic
signatures shall be developed to ensure electronic signatures are not used in a
fraudulent manner; and 3) Major Federal Program expenditures were incurred by the
Town which are not allowed under the grant agreement entered into by the Town in
which only construction costs were allowed in the amount of $3,220.53. The auditors
pointed out the Town had eight finding in 2015 and only three in 2016. The Town
received an unmodified opinion, a clean opinion, of the audit ending December 31,
2016.
Finance Director Hudson stated Positive Pay, an automated fraud detection system,
has been added to the Town’s bank account. The Town sends a list of all checks to the
bank to be cleared. If the bank receives a check not on the list a call would be made to
the Town to verify the check. The auditors encouraged the Town to take advantage of
all fraud controls offered by the bank.
Attachment B of the audit was reviewed. Emphasis was placed on the need to develop
a bank reconciliation procedure and complete the process in a timely manner. It was
recommended the Town review all outstanding checks and remit checks to the State of
Colorado as unclaimed property. Inventory reconciliation was not available. A
comprehensive report should be completed on an annual basis to ensure inventory
balances are accurate.
Audit Committee – August 15, 2017 – Page 2
The Town’s statement of net position increased significantly in 2016 with the
improvements made to the street infrastructure. The total assets as of December 31,
2016 was $58 million with $49 million in fixed assets. Expenses include the cost to
operate general government services. All services are provided to the community at a
deficit because the charges for services do not offset the cost of the services. The
sales tax revenues are used to offset the deficit. The Town’s unrestricted fund balance
at the end of 2016 was $4.4 million. The auditors expressed a 25% fund balance is
significant and stated no concern with the current reserves.
The Local Marketing District audit did not contain any issues or items for follow through
that was not addressed during conversations in August.
Confirm readiness for August 22, 2017 Town Board Presentation
The Committee requested the auditors present their findings to the Town Board at the
August 22, 2017 meeting and highlight the services, adequate reserves, and outline the
three findings and the corrections made since the previous year’s audit.
CONSIDERATION OF GOING OUT TO BID FOR AUDIT SERVICES FOR 2017 TO
2021. The Committee discussed the option of bidding the audit services because
CliftonLarsonAllen has completed a 5-year agreement to perform the services. Finance
Director Hudson stated staff would develop a review process to create a short list of
RFP responses for the Audit Committee to review and interview. An RFP timeline
would be developed with the goal to have the short list to the Committee by the first part
of October.
There being no further business, Mayor Jirsa adjourned the meeting at 9:37 a.m.
Jackie Williamson, Town Clerk