Auditors Give Unqualified Clean Opinion; Find Discrepancies in Ed Budget

The town’s auditors, CCR, presented their review of Brookfield’s 2010-11 financial statements to the Board of Finance (BOF) at their January meeting, awarding “unqualified clean opinions” for all of the town’s fiscal units. The auditors did discover some discrepancies in the recording of education grants, however these issues were minor and can be easily resolved in the future through better communication between the and .

The auditors, represented at the BOF meeting by CCR partner Robert Howard, manager Jill Danyliw and supervisor Kimberly Cyr, explained to the BOF that there was a “significant deficiency in reporting on the Board of Ed side,” specifically with regard to certain grant reports that were filed. The auditors worked backward to correct the books, as the errors resulted in “material adjustments that affected the general fund,” Howard said, though not in a significant way.

The reporting deficiencies largely “had to do with the Board of Ed and the town communication,” Danyliw explained. “The Board of Ed made their adjustment [after receiving the grant] but didn’t communicate it to the town.”

“This was not an issue of money being overspent or anything of that nature?” BOF member Ron Jaffe asked the auditors, which they confirmed.

“It may have been reported on one side, the Board of Education, and not the town,” Danyliw clarified, “Not that it wasn’t recorded at all.”

“When we went and tested those expenditures, they were valid,” Howard concurred, merely not reported accurately.

This issue is one that the auditors reported seeing in other towns, as well.

Howard suggested that the town begin a monthly reconciliation of accounts between the schools and town, gradually weaning to quarterly and possibly annually as the method of accounting is verified as reliable.

The town’s net assets — the town’s capital and fiscal assets against its liabilities — increased by $1.3 million during the fiscal year 2011, bringing the net assets to approximately $42.5 million above its liabilities.

The general fund balance as of June 30, 2011 (the end of fiscal year 2010-11) totaled $4,229,362, or about 7.6 percent of expenditures allocated in the 2010-11 budget. The original 2010-11 budget called for the general fund to break even, however, according to the auditors, there was an increase of $220,000 to the fund balance.

“The benchmark is between 5 and 15 percent,” Howard said, stating that the upwards goal should be to have the general fund balance “sufficient to cover two months of operating expenses,” though that standard is not currently required by the rating agencies.

According to BOF Vice Chairman Irv Agard, two months of operating expenses would represent about 15 percent of the budget.

“That percentage is really just a guideline,” Howard said. “You might intentionally keep it low because you’re trying to keep taxes low,” he added, suggesting that, “9 [percent] is great… if you can get 10 percent in Connecticut, that’s great.”

“The audit went very smoothly,” he said, smoother than in years past.