Plodzik & Sanderson CPAs have completed the 2021 Town of Barrington financial audit. This was their second year auditing the Town’s financials.
The thorough work of the Office of Financial Administration throughout 2021 resulted in few audit entries, most of which were ‘audit driven’. The auditor’s noted that the Town has a ‘clean report’. This is the best category you can be in for an audit.
On page 2 of the Management Letter, you will read “Significant Risks Identified”. The auditors are required to identify any significant risks that could impact various audit areas (cash, receivables/revenue, AP/expenditures, payroll, etc.). The identification of those risks does not mean that they exist, just that they may exist. Based on their assessment of those possible risks, it will determine what audit procedures they will perform. As part of the new auditing standards, it’s now required to communicate to those charged with governance (i.e., the Select Board) the significant risks that were identified as part of the audit process.
The auditor’s Management Letter lists audit findings on pages 4 and 5. I have summarized them below. You will notice a few repeat comments. Some of which have an asterisk indicating a work in process. During a second-year audit, the auditors can take a deeper dive into the Town of Barrington’s process’ and recommend changes they feel are beneficial to the Town.
- Financial Close and Reporting Policies and Procedures* (repeat comment)
*The policy was adopted by the Select Board at the May 9, 2022 meeting. financial_close_and_reporting_policy_20220428.pdf (nh.gov)
- IT Policies and Procedures* (repeat comment)
- *At the time of the audit and ongoing, the auditors noted that the Town has created a Technology Committee that will satisfy this audit recommendation. As noted on page 4 of the Management Letter “It was noted that as of the date of the audit, the Town has created a technology committee that will be involved with planning and strategically evaluating the Town’s current and future technology infrastructure needs, staying abreast with industry trends, providing guidance for data security, data backup, and data recovery, and advising on the Town’s long-term strategic goals.”
- Trustees of Trust Funds – Principal and Income Allocation (repeat comment)
The auditor noted that the combination of principal and interest for Trustee accounts is inconsistent with the requirements of the State reporting. As a result of this finding and noted in the prior year memo, the Office of Administration will continue to work with Trustees of the Trust Funds to remedy this finding.
- Trustee Library Disbursements (repeat comment)
The auditor noted concerns with the library purchasing gift cards without established procedures and invoices not having proper approvals for non-appropriated funds. The Office of Financial Administration continues to work with the library staff and library trustees to ensure the understanding that non appropriated expenditures are to be treated and approved in the same manner as appropriated expenditures are.
- Review and Reaffirmation of Town Policies
The auditors noted that the Town’s investment policy has not been updated since 2019. The Office of Financial Administration will work with the Trustees and Select Board to annually review and approve the investment policy per RSA 31:25 and RSA 41:9.
- Review and Reaffirmation of Town Policies
The auditors noted that some of the Town’s policies haven’t been updated in a few years. The Office of Financial Administration will work with the Select Board to review and reaffirm the Town policies.
- Access to Governmental Records and Meetings
- The auditors noted that the meetings for the Trustees of the Trust Funds were not documented. The Office of Financial Administration has informed them that their meetings need to be posted, held in a public place and the minutes must be available within five days after the meeting.
The auditors noted that in the grants fund should be reviewed to ensure that grant receivables and revenues are properly recorded. Because of this finding, the Office of Financial Administration will work on developing a procedure to post revenue receivables in this fund.
- Payroll and Fringe Benefits
- The auditors noted the payroll and fridge benefits posting to the general ledger need to be reconciled to applicable invoices. The Office of Financial Administration will continue to work on a process to reconcile payroll and benefits posted the general ledger to satisfy this recommendation.
Please do not hesitate to contact the Office of Financial Administration with any questions or concerns about the 2021 financial audit.