MAHOPAC, N.Y. - The town of Carmel has once again received a glowing report in the wake of its annual fiscal audit.
At the Town Board’s June 26 meeting, Alan Kassay, a CPA for O’Connor Davies, which performed the audit, along with town comptroller Mary Ellen Maxwell, gave a presentation highlighting the audit’s most salient points
“The objective of our audit was to obtain reasonable assurance about whether these financial statements are free of material misstatement,” Kassay said. “As part of the scope of our work, we reviewed management’s accounting estimates and the accounting treatment [regarding] all significant accounting matters.
“Our audit approach was directed at the evaluation of all significant aspects of the town’s operations to reduce audit risks to an acceptable level,” he added. “Our primary focus was not on individual transactions and balances but on the financial statements we are opining on taken as a whole.”
O’Connor Davies issued the town an “unmodified (or clean) opinion” for the fiscal year ending Dec. 31, 2018. It’s the top grade the auditors could offer.
Kassay noted that the town has received the Certificate of Achievement for Excellence in Financial Reporting for 26 consecutive years and has maintained its Aa1 rating from Moody’s.
“[Carmel] has a very strong capacity to meet its financial commitments,” the report states.
Kassay said the town was issued a “management letter” that stated the audit noted “no material weaknesses.”
“We issued a management letter to the board; [it stated that] two comments that were reported in 2017 were corrected in 2018,” he said. “One had to do with the dating of cash receipts and the other one had to do with the segregation of duties. There were no material weaknesses [mentioned] in that letter.”
In the presentation, Kassay noted how the town’s fund balance (cash reserves) had grown over the past four years: In 2015 the town’s total fund balance was $5.7 million; in 2016 it was $7.1 million; in 2017 it rose to $8.4 million, and in 2018 it grew to nearly $9 million.
Part of the general fund balance is the unassigned fund balance, what Kassay called “free and clear money” that can be used at the Town Board’s discretion for various expenditures. The unassigned fund balance for 2019 is $3.3 million.
“That’s about 16 percent of the total 2019 appropriations,” Kassay said.
“The state comptroller recommends anywhere from 15 to 20 percent, so you are right there,” he said. “It’s an increase of about $1.2 million since 2015.”
Supervisor Ken Schmitt hailed the audit as good news and said the town will continue to strive to improve its fiscal health.
“Our fund balance is very healthy; our reserves are adequate,” he said. “That is why Moody’s maintained our Aa1 bond rating. We would love to be Aaa…we would love to get there one year. Let’s strive for that; let’s make it our goal. There are not many municipalities around that have that.”
Kassay noted that only “a handful of municipalities in all of Westchester County” have such a rating. But Councilman Jonathan Schneider suggested that Carmel doesn’t have a large enough budget to be considered for the triple-A rating.
Councilman John Lupinacci agreed, saying, “We achieved the pinnacle of where we can get to with an [Aa1] bond rating based on our budget.”
Kassay noted that with a solid bond rating the town can borrow money for things such as capital projects at a “reasonably low-interest rate.”
Maxwell recalled how far the town has come over the past 10 years.
“[Moody’s] did give us a negative outlook in 2009 because our fund balances were going down,” she said. “But we have been able to bring them back up and maintain them.”
Schmitt praised Maxwell for helping to keep the town on a solid financial footing.
“We have an outstanding comptroller who was able to advise and guide the board and we have all worked together collectively,” the supervisor said. “She does an excellent job.”