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Home My WebLink About1988 Town Auditaa TOWIJ OF GROTON Groton, New York Financial Report December 31, 1988 � z E � Y � � ry � ,� �~ � � b� � `"°. a �� „sem' .y •. - 54 � Y'F _ x•�-� - jj r - w v 4K .36k`< Opt 9 y a w x _ fir:;^ of t Claschi Dletershagen Schavfler Mickelson h 8r Certified Public Accountants and Consultants y � e TOWN OF GROTON TABLE OF CONTENTS Independent Auditors' Report ........................................ I Report on Compliance with Laws and Regulations Based on an Audit of the General Purpose Financial Statements Performed in Accordance with the Standards for Audit Issued by the GAO 0.00000 II Schedule of Noncompliance with Laws and Regulations - Current Year .. III Schedule of Noncompliance with Laws and Regulations - Prior Year ease IV Report on Internal Controls Based Solely on a Study and Evaluation Made as Part of an Audit of the General Purpose Financial Statements ....................................... V -VI Audit Recommendations............................................... VII Combined Balance Sheet ............ .................................. 1-2 Combined Statement of Revenues, Expenditures and Changes in Fund Balances ........................................... 3-4 Comparative Operating Statement for the General and Special Revenue Funds .......................................... 5-6 Notes to Financial Statements ....................................... 7-13 Independent Auditors' Report on Additional Information .............. 14 Combining Balance Sheet - General Fund .............................. 15 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - General Fund ............................ 16 Combining Balance Sheet - Special Revenue ........................... 17-18 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Special Revenue ......................... 19-20 V/ Ciaschi Frederick J. Ciaschi, C.P.A. Dietershagen John H. Dietershagen, C.P.A. Schaufler Craig L. Schaufler, C.P.A. Jerr E Mickelson C PA Mickelson Y . , John E. Little, C.P.A. Thomas K. Van Derzee, C.P.A.* Cornelia H. Hill Debbie A. Conley, C.P.A. Dennis G. Jones, C.P.A. Patrick S. Jordan, C.P.A. Reginald E. Malley, C.P.A. Patricia C. Steele, C.P.A. Blixy K. Taetzsch, C.P.A. Francis E. Welch, C.P.A. 'Admitted to New York State Bar Town Board Town of Groton Groton, New York Certified Public Accountants and Consultants Terrace Hill Ithaca, New York 14850 607-272-4444 INDEPENDENT AUDITORS' REPORT We have audited the general purpose financial statements of the Town of Groton as of and for the year ended December 31, 1988, as listed in the table of contents. These financial statements are the responsibility of the Town's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Town of Groton, as of December 31, 1983, and the results of its operations for the year then ended in conformity with generally accepted accounting principles. December 11, 1989 Ithaca, New York Z CORTLAND ITHACA WATKINS GLEN 18 Tompkins Street Terrace Hill 211 N. Franklin Street Cortland, New York 13045 Ithaca, New York 14850 Watkins Glen, New York 14891 607-753-7439 607-272-4444 607-535-4443 Frederick J. Ciaschi, C.P.A. John H. Dietershagen, C.PA. Craig L. Schaufler, C.P.A. Jerry E. Mickelson, C.P.A. John E. Little, C.P.A. Thomas K. Van Derzee, C.P.A.* Cornelia H. Hill Debbie A. Conley, C.P.A. Dennis G. Jones, C.P.A. Patrick S. Jordan, C.P.A. Reginald E. Malley, C.P.A. Patricia C. Steele, C.P.A. Blixy K. Taetzsch, C.P.A. Francis E. Welch, C.P.A. Ciaschi Dietershagen Schaufler Mickelson Certified Public Accountants and Consultants Terrace Hill Ithaca, New York 14850 607-272-4444 "Admitted to New York State Bar REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS BASED ON AN AUDIT OF THE GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH THE STANDARDS FOR AUDIT ISSUED BY THE GAO Town Board Town of Groton Groton, New York We have audited the general purpose financial statements of the Town of Groton for the year ended December 31, 1988, and have issued our report thereon dated December 111, 1989. Our audit was made in accordance with generally accepted auditing standards and the standards for financial and compliance audits contained in the Standards for :audit of Governmental Organizations, Programs, Activities, and Functions (1988 edition), issued by the U.S. General Accounting Office, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The management or the Town of Groton is responsible for the Town's compliance with laws and regulations. In connection with our audit referred to above, we selected and tested transactions and records to determine the Town's compliance with laws and regulations, noncompliance with which could have a material effect on the general purpose financial statements of the Town. The results of our tests indicate that for the transactions tested, the Town of Groton complied with those laws and regulations referred to above, except as described in the attached schedule. Those instances of noncompliance were considered by us in evaluating whether the general purpose financial statements are presented fairly in conformity with generally accepted accounting principles. With respect to transactions not tested, nothing came to our attention to indicate that the Town of Groton had not complied with laws and regulations other than those laws and regulations for which we noted violations in our testing referred to above. December 11, 1989 Ithaca, New York II CORTLAND ITHACA WATKINS GLEN 18 Tompkins Street Terrace Hill 211 N. Franklin Street Cortland, New York 13045 Ithaca, New York 14850 Watkins Glen, New York 14891 607-753-7439 607-272-4444 607-535-4443 TOWN OF GROTON SCHEDULE OF NONCOMPLIANCE WITH LAWS AND REGULATIONS CURRENT YEAR - DECEMBER 31, 1988 REPORT FINDINGS The following were items noted during our audit of compliance with laws and regulations of the Town's general purpose financial statements. Investment Policy The Town of Groton has not established or adopted a written investment policy. Every Local governmental unit should have a written investment policy approved by the governing board. Such written investment policy should include: The official designated by the governing board to make investment transactions. The approved list of depositories and trading partners with investment units. The type of records and controls that are required to safeguard the investments. The main objectives of a written investment policy are to provide reasonable assurance: That assets are safeguarded. That investments will mature when cash is required to finance operations. That there will be a competitive rate of return on investments. The investment policy should comply with statute and be periodically reviewed and revised as necessary to reflect changes in available investment opportunities and market conditions. Budget Overexpenditures General Fund During the current audit the budget was overexpended in health and interfund transfers by $40 and $170,000, respectively. Although the expenditures were approved by the Board, the budget was not amended to reflect the approved expenditures. Special Revenue Fund During the current audit the budget was overexpended in interfund transfers by $155,309. Although the expenditures were approved by the Board, the budget was not amended to reflect the approved expenditures. Cash Management During the audit process we discovered that there was not an adequate amount of securities held as collateral by the Town's bank to fully collateralize cash on deposit at December 31, 1988. The FDIC guarantees bank accounts up to $100,000, thereafter, a request must be made of the bank for additional collateral to secure the Town's cash. Cash balances at December 31, 1988 totals $1,114,507, however, only $1,078,519 was secured by securities held as collateral and FDIC insurance or $35,988 of undercollateralized deposits. We strongly recommend that the Town take measures to ensure that their bank holds an adequate amount of securities to fully collateralize their cash on deposit with the bank. General We recommend that the areas of noncompliance be reviewed and corrective action be implemented to preclude further occurrence of noncompliance with laws and regulations . III TOWN OF GROTON SCHEDULE OF NONCOMPLIANCE WITH LAWS AND REGULATIONS PRIOR YEAR - DECE4BER 31, 1987 REPORT FINDINGS The following items of noncompliance were noted during our audit of compliance with laws and regulations of the Town's general purpose financial statements for the year ended December 31, 1987. Investment Policy During our previous year's audit we noted that the Town had not adopted a written investment policy. The Town still has not adopted an investment policy as of December 31, 1988. Compensated Absences During our previous year's audit we noted that the Town had not reflected compensated absences on the financial statements nor computed the amount that should have been accrued. The Town had not accrued for compensated absences at December 31, 1988. However, compensated absences were computed and reflected in the long-term debt group of accounts. Accrual Basis of Accounting During our previous year's audit we noted that the Town used the cash basis of accounting. During the current year the client had properly accrued for accounts payable and accrued liabilities. IV fl 11 Frederick J. Ciaschi, C.P.A. John H. Dietershagen, C.P.A. Craig L. Schaufler, C.PA. Jerry E. Mickelson, C.P.A. John E. Little, C.P.A. Thomas K. Van Derzee, C.P.A.* Cornelia H. Hill Debbie A. Conley, C.P.A. Dennis G. Jones, C.P.A. Patrick S. Jordan, C.P.A. Reginald E. Malley, C.P.A. Patricia C. Steele, C.P.A. Blixy K. Taetzsch, C.P.A. Francis E Welch C.P.A. Ciaschi Dietershagen Schaufler �1., Mickelson Certified Public Accountants and Consultants Terrace Hill Ithaca, New York 14850 607-272-4444 REPORT ON INTERNAL CONTROLS BASED SOLELY ON A STUDY AND EVALUATION MADE 'Admitted to New York State XS PART OF AN AUDIT OF THE GENERAL PURPOSE FINANCIAL STATEMENTS Town Board Town of Groton Groton, New York We have audited the general purpose financial statements of the Town of Groton for the year ended December 31, 1988, and have issued our report thereon dated December 11, 1989. As part of our audit, we made a study and evaluation of the system of internal accounting control of the Town of Groton to the extent we considered necessary to evaluate the system as required by generally accepted auditing standards and the standards for financial and compliance audits contained in the U.S. General Accounting Office Standards for Audit of Governmental Organizations, Programs, Activities, and Functions (1988 edition). For the purpose of this report, we have classified the significant internal accounting controls in the following categories: CYCLES OF THE TOWN'S ACTIVITY Treasury or financing Revenue/ receipts Purchases/disbursements External financial reporting The purpose of our study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessary for expressing an opinion on the Town's financial statements. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole or on any of the categories of controls identified above. The management of the Town of Groton is responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of a system are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any system of internal accounting control, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. V CORTLAND ITHACA WATKINS GLEN 18 Tompkins Street Terrace Hill 211 N. Franklin Street Cortland, New York 13045 Ithaca, New York 14850 Watkins Glen, New York 14891 607-753-7439 607-272-4444 607-535-4443 Our study and evaluation made for the limited purpose described in the first paragraph would not necessarily disclose all material weaknesses in the system. Accordingly, we do not express an opinion on the system of internal accounting control of the Town of Groton taken as a whole or on any of the categories of controls identified in the first paragraph. However, our study and evaluation disclosed no conditions that we believe to be a material weakness. This report is intended solely for the use of management and the Town Board and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which, upon acceptance by the Town Board, is a matter of public record* December 11, 1989 Ithaca, New York VI TOWN OF GROTON AUDIT RECOMMENDATIONS DECEMBER 31, 1988 We have audited the financial statements of the Town of Groton for the year ended December 31, 1988, and have issued our report thereon dated December 11, 1989. As part of our audit, we made a study and evaluation of the system of internal accounting control to the extent we considered necessary as required by generally accepted auditing standards. The purpose of our study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessary for expressing an opinion on the Town's financial statements. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole. The Town's administrative personnel are responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and judgments by Town personnel are required to assess the expected benefits and related costs of control procedures. The objectives of a system are to provide Town personnel with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with Town personnel's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles and those principles prescribed by the State of New York. Because of inherent limitations in any system of internal accounting control, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Our study and evaluation made for the limited purpose described in the first paragraph would not necessarily disclose all material weaknesses in the system. Accordingly, we do not express an opinion on the system of internal accounting control of the Town of Groton taken as a whole. Our study did disclose the following additional conditions which we want to bring to your attention. Invoice Cancellation During our testing of the cash disbursements cycle we noted that the invoices were not properly cancelled when payment was made. We strongly recommend that the Town purchase a "paid" stamp. The Town should mark the invoices paid with reference to check amount and date when payment is made. We noted two instances where an invoice was paid twice, but later corrected. This "paid" stamp procedure should prevent duplicate payment of invoices in the future. General These comments and suggestions are offered for your consideration with a positive and helpful intent on our part. We would like to thank the staff for their cooperation during the course of the audit. December 11, 1989 Ithaca, New York VII TOWN OF GROTON COMBINED BALANCE SHEET DECEMBER 31, 1988 Governmental Special ASSETS General Revenue Cash $ 3619100 $ 445,653 Other Receivables 29500 Due from Other Funds Fixed Assets (Net) Provisions to be Made in Future Budgets Restricted Cash Materials & Supplies Inventory Prepaids TOTAL ASSETS $ 3631600 $ 445,653 LIABILITIES, DEFERRED REVENUES AND EQUITY Liabilities Accounts Payable $ 81,042 $ 4,320 Accrued Liabilities Notes Payable Other Liabilities Due to Other Funds Bond and Long -Term Liabilities Agency Fund Liabilities Total Liabilities 81042 f 49320 Deferred Revenues Equity Investment in General Fixed Assets Fund Balances - Reserved Trusts Special 49202 59972 Capital Reserve Total Reserved 4,202 5,972 Fund Balances - Unreserved Appropriated -Ensuing Year's Budget 659000 185,000 Unappropriated 286,356 250,361 Total Unreserved 3511,356 435,361 Total Equity 3JD , 558 4415333 TOTAL LIABILITIES, DEFERRED REVENUES & EQUITY $ 363,600 $ 445,653 See Independent Auditors' Report on Additional Information - 1 - Fiduciary Fund Types Fund Types General Account Groups Capital Long -Term Projects Trust & Agency Fixed Assets Obligations $ 2683,693 $ 11586 $ $ 1,171,253 399062 $ 268,693 $ 1,586 $ 1,171,253 $ 39,062 39,062 20 , 000 1,586 20 ,000 11586 39 ,062 1,171,253 248.1693 248,693 248,693 1 ,171, 253 $ 268,693 $ 1,586 $ 1,171,253 $ 39,062 - 2 TOWN OF GROTON COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE FISCAL YEAR ENDED DECEMBER 31, 1988 Governmental Special REVENUES AND OTHER SOURCES General Revenue Revenues Real Property Taxes $ 2849074 $ 279,552 Real Property Tax Items 3,598 Non -Property Tax Items 423,072 Departmental Income 2,276 Intergovernmental Charges Charges for Services 169,683 Use of Money and Property 301,277 Licenses and Permits 63,209 Fines and Forfeitures 51565 Sale of Property and Compensation for Loss 133,508 Miscellaneous Local Sources 21,609 State Aid 832155 Federal Aid 29160 Total Revenues 417,763 Other Sources Operating Transfers 59309 TOTAL REVENUES AND OTHER SOURCES 423,072 EXPENDITURES AND OTHER USES Expenditures General Government Support 169,683 Public Safety 7,002 Health 369640 Transportation 271,196 Culture and Recreation 133,508 Home and Community Services 279127 Employee Benefits 159896 Debt Service (Interest) 29160 Operating Expenses Interest Expense Economic Assist & Opportunity 89405 Total Expenditures 3079617 Other Uses Operating Transfers 170,000 TOTAL EXPENDITURES AND OTHER USES 4779617 Revenues and Other Sources Over (Under) Expenditures and Other Uses (54,545) Fund Balances (Deficit) and Surplus, Beginning of Year 4109103 Fund Balances and Surplus, End of Year $ 355,558 S See Independent Auditors' Report on Additional Information - 3 - 110,694 8,652 74,323 473,221 473,221 39,500 3979699 25,557 462,756 155,309 618,065 (144,844) 586,177 441,333 Fund Types Capital Projects 711 711 320,000 320,711 32,018 32,018 288,693 (40 , 000 ) 248,693 - 4 - TOWN OF GROTON COMPARATIVE OPERATING STATEMENT FOR THE GENERAL AND SPECIAL REVENUE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1988 REVENUES AND OTHER SOURCES Revenues Real Property Taxes Real Property Tax Items Non -Property Tax Items Departmental Income Intergovernmental Charges Use of Money and Property Licenses and Permits Fines and Forfeitures Sale of Property and Compensation for Loss Miscellaneous Local Sources State Aid Federal Aid Total Revenues Other Sources Operating Transfers TOTAL REVENUES AND OTHER SOURCES EXPENDITURES AND OTHER USES Expenditures General Government Support Public Safety Health Transportation Culture and Recreation Home and Community Services Employee Benefits Debt Service (Interest) Economic Assist & Opportunity Total Expenditures Other Uses Operating Transfers TOTAL EXPENDITURES AND OTHER USES Revenues & Other Sources Over (Under) Expenditures and Other Uses Fund Balances - Beginning of Year Fund Balances - End of Year General Fund Modified Budget Actual $ 2845074 $ 2849074 21,000 39598 19660 29276 89500 309277 51500 69209 15350 5,565 22,700 2,609 449000 832155 347,084 417,763 412,084 5,309 3479084 423,072 243,313 1699683 89500 79002 36,600 369640 27,228 279196 169200 139508 28,100 272127 22,700 159896 209700 2,160 81743 89405 412,084 3079617 170,000 412,084 4779617 $ (65,000) (54,545) 410,103 $ 355,558 See Independent Auditors' Report on Additional Information - 5 - 73,630 Special Revenue Fund Types Variance Variance Favorable Favorable (Unfavorable) Modified Budget actual (Unfavorable) $ -0- $ 279,552 $ 279,552 $ -0- 1,598 616 419000 25,557 159443 21,777 40,000 110,694 709694 709 4,215 557 , 969 462 , 7 56 95 , 213 (1709000) 8,652 89652 2,609 557,969 618,065 (60,096) 39,155 58,417 74,323 15,906 70,679 377,969 473,221 95,252 5,309 $ 441,333 75,988 3771,969 +73,221 95,252 73,630 39,500 39,500 -0- 1 ,498 (40) 32 477,469 3971699 799770 2,692 973 6,804 419000 25,557 159443 18,540 338 104 , 467 557 , 969 462 , 7 56 95 , 213 (1709000) 155,309 (1559309) (65,533) 557,969 618,065 (60,096) $ 10,455 $ (180,000) (144,844) $ (35,156) 586,177 $ 441,333 - 6 - TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS DECEMBER 31 , 1988 Note 1 - Summary of Significant Accounting Policies A. Reporting Entity The Town of Groton (which was incorporated in 1865) is governed by the Charter of the Town of Groton, the municipal law and other general laws of the State of New York, and various local laws and ordinances. The Town Board, which is the legislative body responsible for the overall operation of the Town, consists of a Supervisor and four Councilmen. The Supervisor serves as Chief Fiscal Officer and the Town Clerk serves as Chief Recording Officer. The Town provides the following principal services: public safety (fire protection and ambulance service), transportation (streets and highways), recreation, planning and zoning, general administration and public improvements. Street lighting is provided by the Town Board in two separate areas of the Town called lighting districts. It is funded by means of a special ad valorem tax on the real property situated within each district. Fire protection for certain areas of the Town outside the village is provided by the Town Board via the Groton Fire Protection District. This district is funded by means of a special ad valorem tax on the real property situated within the district. The furnishing of fire protection for the area of Town around the hamlet of McLean is not a Town function. Instead, it is the responsibility of the fire commissioners who constitute the governing board of the McLean Fire District whose boundaries are partly within the Town of Groton and partly within the Town of Dryden* Fire commissioners are elected by the qualified voters living within the district. Fire district operations, including the financing thereof through real property taxation, are carried out at the direction of the fire commissioners, and the Town has no oversight or managerial responsibility therefor. The fire district is not considered part of the Town's reporting entity. B. Basis of Presentation The accounts of the Town are organized on the basis of funds or account groups, each of which is considered a separate accounting entity. These funds and account groups are based upon the requirements of Generally Accepted Accounting Principles (GAAP) as well as the New York Uniform System of Accounts of Towns. The operations of each fund are accounted for within a separate set of self -balancing accounts that comprise its assets, .liabilities, fund equity, revenues and expenditures or expenses. Governmental resources are allocated to and accounted for in individual funds based upon the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions and limitations. The various funds are grouped in the financial statements in the following fund types and account groups: - 7 - Governmental Funds: 1. General Fund To account for revenues (i.e., general tax and other from state, federal and local sources) which are not required by law or other provision to be accounted for in other funds and which finance the basic governmental functions provided by the Town. 2. Special Revenue Funds Utilized to account for revenues derived from specific sources which are required by law or regulation to be accounted for in separate funds. Special Revenue Funds include the following: a. Highway Funds - (Town -wide and outside village) established pursuant to Highway Law, Section 141, to account for revenues and expenditures for highway purposes. Highway Law, Section 277 requires that expenditures for repairs and improvements be financed by the area outside the village. Therefore, a town with a village must maintain two highway funds. b. Special District Funds - (Lighting District and Fire Protection District) are used to record transactions for operation and maintenance. 3. Capital Projects Fund Used to account for financial resources to be used for the acquisition or construction of major capital facilities. Fiduciary Fund 1. Trust and Agency Funds Used to account for those funds held in trust or as agent for subsequent distribution to other governments, persons or funds. Account Groups Account groups are used to establish accounting control and accountability for the Town's general fixed assets and general long-term debt. The two account groups are not "funds". They are concerned only with the measurement of financial position, and not with the results of operations. General Fixed Assets Account Group This group of accounts is established to account for all land, buildings, improvements, and equipment utilized by the Town for Town purposes. General Long -Term Debt Account Group This group of accounts is established to account for all long-term debt and other obligations of the Town. Long-term indebtedness includes obligations such as bonds, and bond anticipation notes. Other obligations included: unbilled retirement liabilities, any vested or accumulated vacation and/or sick leave, etc. in future budgets. C. Basis of Accounting The Town maintained its records on the double -entry basis of accounting prescribed by the State Comptroller, as set forth in the Uniform System of Accounts for Towns. Town funds are accounted for on the modified accrual basis, under this basis of accounting, revenues are recorded when measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities for the current period. Material revenues that are accrued include real property taxes, state and federal aid, and certain user charges. Expenditures are recorded when the fund liability is incurred except that: a. Expenditures for prepaid expenses and inventory type items are recognized at the time of the disbursements. b. Principal and interest on indebtedness are not recognized as an expenditure until due. c. Compensated absences, such as vacation and sick leave which vests or accumulates, are charged as an expenditure when paid. See Note 1-H. d. Pension costs are recognized as an expenditure when billed by the State. See Note 2-B-1. Account Groups General fixed assets are recorded at actual or estimated cost or, in the case of gifts and contributions, at the fair market value at the time received. No provision for depreciation is made. General long-term debt liabilities are recorded at the par value of the principal amount. No liability is recorded for interest payable to maturity. Long-term liabilities expected to be financed from governmental funds area accounted for in the General Long -Term Account Group, rather than governmental funds. D. Property Taxes Town real property taxes are levied annually on January 1, and become a lien on April I. Taxes are collected during the period January 1, to January 31, at face value and from February 1, to May 30, with interest added. On May 31, the list of unpaid taxes is sent to the County Treasurer and the taxes are relevied on the County Tax Roll on January 11, of the following year. E. Budgetary Data The budget policies are as follows: 1. Budgets are adopted annually on a basis consistent with generally accepted accounting principles. Appropriations authorized for the current year are increased by the amount of encumbrances, if any, carried forward from the prior year. 2. The supervisor, as budget officer, files a tentative budget with the Town Clerk by September 30. It is submitted by the clerk to the Town Board by October 5, for their review and modification and, upon their approval, it becomes the preliminary budget. 3. A public hearing thereon must be held on or before the Thursday immediately following general election day. The preliminary budget as submitted or amended must be adopted by November 20. 4. The Town Board may amend the budget as necessary during the year. Unexpended appropriations lapse at the end of the year. Encumbrance accounting is not used. - 9 - F. General Fixed Assets General fixed assets purchased are recorded at cost as expenditures in the respective fund at time of purchase. Such assets are accounted for in the General Fixed Asset Group of Accounts. Fixed asset values are shown on the combined balance sheet for the fiscal year ended December 31, 1988 and are reported at cost or estimated cost. G. General Longi -Term Indebtedness a. General Long -Term Indebtedness Bonds and bond anticipation notes issued are recognized when issued. b. Retirement The Town participates in the New York State and Local Employees' Retirement System. These are cost sharing multiple public employer retirement systems. Obligations of employers and employees to contribute the benefits to employees are governed by the New York State Retirement and Social Security Law. The systems offer a wide range of plans and benefits which are related to years of service and final average salary, vesting the retirement benefits, death and disability benefits and optional methods of benefit payments. All benefits generally vest after ten years of credited service. The NYSRSSL provides that all participating employers in each system are jointly and severally liable for any actuarial unfunded amounts. Such amounts are collected through annual billing to all participating employers. Generally, all employees, except certain part-time employees, participate in the systems. The systems are noncontributory except for employees who joined the Employees' Retirement System after July 27, 1976 who contribute 3% of their salary. Employee contributions are deducted by employers from employees' paychecks and are sent currently to the Employees' Retirement System. Nearly all Town of Groton employees are eligible for membership in the systems. All employees employed in a full-time position who commenced employment after June 30, 1976 are mandatory members. Through 1988, the systems billed all participating employers by May 31, each year. Billings were based on salaries paid during the system's fiscal year which ended March 31, of the previous calendar year, and in accordance with funding requirements determined by the system's actuary. Employers were required to remit payment in full by June 30. After June 30, amounts not paid would accumulate interest at 8% per annum. At December 31, 1988 unbilled amounts due to the system are recognized in the General Long -Term Debt Group of Accounts. H. Compensated Absences Full time employees earn from one to three weeks vacation leave per year depending on length of employment. Vacation leave must be taken in the year it is earned or it is forfeited. Sick leave is earned at the rate of one day for every two months of employment. Unused sick leave may be accumulated and is convertible to cash upon termination of employment. The monetary value of accumulated unused sick leave is $5,988 and is reflected in the long-term debt group of accounts. 10 - I. Interfund Transfers During the course of operations, the Town has transactions between funds, including expenditures and transfers of revenues to provide services and construct assets. Note 2 - Detail Notes on All Funds and Account Groups A. Assets I. Cash and Investments The Town of Groton investment policies are governed by State statutes. In addition, the Town of Groton has its own written investment policy. Town of Groton monies must be deposited in FDIC insured commercial banks or trust companies located within the State. The Clerk -Treasurer is authorized to use demand accounts and certificates of deposit. Permissible investments include obligations of the U.S. Treasury and U.S. Agencies, repurchase agreements, and obligations of New York State or its localities. Collateral is required for demand deposits and certificates of deposit at 105% of all deposits not covered by Federal Deposit Insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State and its municipalities. Deposits and investments at year-end were entirely covered by Federal Deposit Insurance or by collateral 'held by the Town's custodial bank in the Town's name. They consisted of: Fund General & Special District Highway Capital Projects Risk Retention Trust & Agency FDIC Insured Uninsured Collateralized Undercollateralized II. Changes in Fixed Assets Interest Bearing $ 345,638 440,154 265,693 5,972 5,284 1,062,741 1001000 962,741 926,753 $ 35,988 Noninterest Bearing $ 29,655 179483 3,042 -0- 1,586 51,766 51,766 A summary of changes in general fixed assets is as follows: Balance Balance Type 1/1/88 Additions Deletions 12/31/88 Land $ 83,003 $ -0- $ -0- $ 839003 Buildings 2429302 -0- -0- 2422302 Machinery & Equipment 780,170 91,469 25,691 845,948 $1,105,475 $91,469 $ 25,691 $1,171,253 B. Liabilities I. Pension Plans The Town of Groton participates in the New York State and Local Employees' Retirement System. The system is a cost sharing multiple public employer retirement system. The system offers a wide range of plans and benefits which are related to years of service and final average salary, vesting of retirement benefits, death and disability. All benefits generally vest after ten years of service. The New York State Retirement and Social Security Law provides that all participants in each system are jointly and severally liable for any actuarial unfunded amounts. Such amounts are collected through annual billings to all participating employers. Generally, all employees, except certain part-time employees, participate in the system. The system is non-contributory except for employees who joined the system after July 27, 1976, who contribute 3% of their salary. The payroll for employees for the Employees' Retirement System for the year ended December 31, 1988 was $206,310. Contributions for 1988 are billed on the basis of salaries paid during the systems fiscal year ending March 31st. Contributions are made in accordance with funding requirements determined by the actuaries of the systems. The amounts billed by the systems during 1988 related to salaries paid from April 1, 1986 through March 31, 1987. These contributions represented 3% for employees. It is the policy of the Town to fund pension costs as billed by the systems. Unbilled costs representing employer's contributions owed aggregated $33,074. This amount has been reflected in the General Long -Term Debt Account Group since it will be redeemed from future resources or budgets. The pension benefit obligation is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases estimated to be payable in the future as a result of employees service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to help users assess the system's funding status on a going concern basis, assess progress made in accumulating sufficient assets to pay benefits when due and make comparisons among public employees retirement systems and employers. The system does not make separate measurements of assets and pension benefit obligations for individual employers. The pension benefit obligation at March 31, 1987 for the Employees' Retirement System, as a whole, determined through an actuarial valuation performed as of that date, was $28.8 billion. The system's net assets available for benefits on that date were $32.7 billion. The Town of Groton employer's contribution requirements for the systems year ended March 31, 1987 was .less than 1% of total contributions required of all participating entities. Historical trend information showing the progress in accumulating sufficient assets to pay benefits when due is presented in the annual report of the system. Additional detailed information concerning the system may also be found in this report. 12 - 13 - II. Indebtedness The following is a summary of maturity indebtedness: a. Changes Type of Date of Interest The changes in December 31, 1988 the Towns's are summarized indebtedness during as follows: the year ended Land Purchase Bond Anticipation Note 12/26/88 12/26/89 5.40% $ 20,000 Balance Balance a. Unreserved 1/1/88 Additions Deletions 12/31/88 designated as the Bond Anticipation Notes $ 40,000 $ -0- $ 203,000 $ 20,000 year as required Due to Retirement Systems 319264 15810 -0- 33,074 Compensating Absences 45615 1,373 -0- 51988 $ 75,879 $ 3,183 $ 20,000 $ 59,062 - 13 - I . Maturity The following is a summary of maturity indebtedness: Type of Date of Interest Purpose Indebtedness Issue Maturity Rate Total Land Purchase Bond Anticipation Note 12/26/88 12/26/89 5.40% $ 20,000 III. Fund Balance a. Unreserved General Fund - The amount of $65,000 has been designated as the amount estimated to be appropriated to reduce taxes in the subsequent year as required by Section 1318 of the Real Property Tax Law. - 13 - INDEPENDENT AUDITORS' REPORT ON ADDITIONAL INFORMATION Town Board Town of Groton Groton, New York Our report on our audit of the general purpose financial statements of the Town of Groton for the year ended December 31, 1988 appears on page I of this report. That audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The additional information included on pages 15 through 20 of this report is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. December 11, 1989 Ithaca, New York - 14 - TOWN OF GROTON COMBINING BALANCE SHEET GENERAL FUND DECEMBER 31, 1988 ASSETS Total Town Wide Part Town Cash $ 3619,100 $ 292,428 $ 68,672 Other Receivables 2,500 2,500 TOTAL ASSETS $ 363.600 $ 294,928 $ 68.672 LIABILITIES, DEFERRED REVENUES AND EQUITY Liabilities Accounts Payable $ 81042 $ 81042 $ Accrued Liabilities Total Liabilities 89042 89042 Fund Balances - Reserved Special 4,202 4,202 Total Reserved 4,202 4,202 Fund Balances - Unreserved Appropriated -Ensuing Year's Budget 65,000 401,000 25,000 Unappropriated 286,356 242,684 43,672 Total Unreserved 3519356 282,684 689672 Total Equity 3559558 286,886 689672 TOTAL LIABILITIES, DEFERRED REVENUES & EQUITY $ 363,600 $ 294,928 $ 68,67"? See Independent Auditors' Report on Additional Information - 15 - TOWN OF GROTON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GENERAL FUND FOR THE FISCAL YEAR ENDED DECEMBER 31, 1988 REVENUES AND OTHER SOURCES Total Town Wide Part Town Revenues 71002 79002 Real Property Taxes $ 284,074 $ 230,774 $ 53,300 Real Property Tax Items 3,598 31598 Departmental Income 2,276 784 19492 Intergovernmental Charges 13,508 81508 59000 Use of Money and Property 30,277 223,308 71969 Licenses and Permits 6,209 6,209 11230 Fines and Forfeitures 51565 51565 Sale of Property and Compensation for Loss 307,617 2385079 69,538 Miscellaneous Local Sources 2,609 29048 561 State Aid 83,155 7 9 , 496 3 , 659 Total Revenues 417,763 350,782 66,981 Other Sources Operating Transfers 55309 5,309 (2,557) TOTAL REVENUES AND OTHER SOURCES 423,072 3567091 669981 EXPENDITURES AND OTHER USES Expenditures General Government Support 169,683 169,658 25 Public Safety 71002 79002 Health 36,640 140 36,500 Economic Assistance and Opportunity 8,405 81405 Transportation 275196 27,196 Culture and Recreation 13,508 81508 59000 Home and Community Services 271,127 344 26,783 Employee Benefits 15,896 14,666 11230 Debt Service (Interest) 29160 29160 Total Expenditures 307,617 2385079 69,538 Other Uses Operating Transfers 170,000 1705000 TOTAL EXPENDITURES AND OTHER USES 477,617 4085079 69,538 Revenues and Other Sources (Under) Expenditures and Other Uses (54,545) (51,988) (2,557) Fund Balances, Beginning of Year 410,103 338,874 71,229 Fund Balances, End of Year $ 355,558 $ 286,886 $ 68,672 See Independent Auditors' Report on Additional Information - 16 - TOWN OF GROTON COMBINING BALANCE SHEET SPECIAL REVENUE DECEMBER 31, 1988 ASSETS Cash Other Receivables Due from Other Funds TOTAL ASSETS LIABILITIES, DEFERRED REVENUES AND EQUITY Liabilities Accounts Payable Accrued Liabilities Due to Other Funds Total Liabilities Deferred Revenues Fund Balances - Reserved Special Total Reserved Fund Balances - Unreserved Appropriated -Ensuing Year's Budget Unappropriated Total Unreserved Total Equity TOTAL LIABILITIES, DEFERRED REVENUES & EQUITY Highway Highway Total Town Wide Part Town $ 445,653 $ 3809908 $ 581,065 $ 445,653 $ 380,908 $ 58,065 $ 4,320 $ 49320 $ 41,320 41,320 5,972 5,972 185,000 160,000 259000 2501,361 2169588 339065 4359361 3761,588 58,065 441,333 3769588 589065 $ 445,653 $ 380,908 $ 58,065 See Independent Auditors' Report on Additional Information - 17 - Federal Revenue Lighting Sharing District $ $ 708 $ -0- $ 708 $ Fire Protection District $ -0- Ri s k Retention $ 5,972 $ 5, 97? 5,972 5,972 708 708 708 5,972 -0- $ 708 $ -0- $ 5,972 TOWN OF GROTON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FOR THE FISCAL YEAR ENDED DECEMBER 31, 1988 REVENUES AND OTHER SOURCES Revenues Real Property Taxes Real Property Tax Items Departmental Income Intergovernmental Charges Use of Money and Property Sale of Property and Compensation for Loss Miscellaneous Local Sources State Aid Federal Aid Total Revenues Other Sources Operating Transfers TOTAL REVENUES AND OTHER SOURCES EXPENDITURES AND OTHER USES Expenditures General Government Support Public Safety Transportation Culture and Recreation Home and Community Services Employee Benefits Debt Service (Interest) Total Expenditures Other Uses Operating Transfers TOTAL EXPENDITURES AND OTHER USES Revenues and Other Sources Over (Under) Expenditures and Other Uses Fund Balances, Beginning of Year Fund Balances, End of Year Highway Highway Total Town Wide Part Town $ 279$552 $ 169,000 $ 67 ,052 110,694 98,760 112361 81652 89652 74,323 74,323 473,221 276,412 152,736 4739221 2769412 152,736 39,500 3971,699 253,916 1405119 259557 15,855 7,285 4621,756 269,771 1471404 155,309 1509000 618,065 4192771 147,404 (1442 844 ) (143,359) 5,332 586,177 5195947 529733 $ 441,333 $ 376,588 $ 58,065 See Independent Auditors' Report on Additional Information - 19 - Federal Fire Revenue Lighting Protection Risk Sharing District District Retention $ $ 4,000 $ 39,500 $ 258 315 258 41000 39,500 315 258 41000 39,500 315 395500 3,664 2,417 39664 39,500 21417 51309 51309 3,664 39,500 29417 (59051) 336 -0- (2,102) 51051 372 -0- 8,074 $ -0- $ 708 $ -0- $ 5,972 - 20 -