A summary of audit was presented to the Little Falls Council members at their July 11 workshop meeting, by Charles Cuccia, business administrator, where a resolution was passed for the corrective action plan for the 2016 annual audit.
Based on the calendar year of 2016, Cuccia presented findings from the report, which included a list of comments and recommendations as well as a correction action plan, which outlines the actions the town will take to correct the findings and prepare in accordance with federal and state requirements.
"Each year an annual audit is required to be made by our independent auditor and it has been delivered to us and the council is required to review the findings," Cuccia said. "All the numbers are as of Dec. 31, 2016. The audit is on filed at the township clerk's office for public inspection."
Cuccia said that the audit report, "did not identify any deficiencies in internal control over compliance to be a material weakness."
"In our opinion, the Township of Little Falls complied in all material respects, with the types of compliance, requirements that could have a direct and material effect on each of the major federal programs for the year needed Dec. 31, 2016," he noted.
While the 2014 audit had 14 comments and recommendations, the 2015 audit had 10 comments and recommendations.
"The 2016 audit had seven comments and recommendations," he explained. "There are four repeating comments and the new comments will be addressed this year."
According to Cuccia, the cash equivalents in the audit report stand at $4,424,950. The fund balance is $797,886.
"We had an excess of revenues over expenditures at $637,956," he said. "Asset to liability ratio is 1.72 to 1, which puts us in a very good financial position."
He also discussed amounts under the General Capital Fund. The township's cash position stands at $811,239, and other assets at $29,667,753. Bonds and notes stand at $21,215,000. Improvement authorizations are $5,217,612. Other liabilities and reserves stand at $4,046,380.
"Under the Debt Analysis, our statutory limit is at $56,902,866, and our outstanding and net debt issue is $23,229,156," he added. "The remaining borrowing power is $33,673,710."
Cuccia also said that the township received an "AA" rating from Standard and Poor's, the financial services company provides research and analysis on stocks, bonds and commodities.
"The rating implies that the township has a very strong capacity to meet its financial commitments," he added.
Additionally, Cuccia addressed the corrective action plan, which was filed by the local government as required. Among the items included is a response is that internal controls over encumbrances be reviewed and enhanced to ensure approved purchase orders are encumbered prior to the awarding of the township's general capital fund contracts.
"At this time, the township has centralized its finance department and has control over the purchasing and disbursing cycle," he noted. "All disbursements require a purchase order be processed in order to prepare a check for disbursing. Contracts will now be encumbered at the time of award."
Another finding requires general ledgers be reconciled to subsidiary ledgers, inter-funds and bank reconciliations.
"The township will provide a more formal reconciliation between the general ledger and its subsidiary ledgers," he said.
During the July 24 Township Council meeting, Cuccia gave an update on the corrective action plan by stating he began to make the reviews in order to create the list of items that needs to be addressed for the next workshop meeting session.