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Home My WebLink About1990 Town AuditTOWN OF GROTON Groton, New York TOWN OF GROTON DECEMBER 31, 1990 TABLE OF CONTENTS Independent Auditors' Report ................................... 1 CombinedBalance Sheet ......................................... 2-3 Combined Statement of Revenues, Expenditures and Changesin Fund Balances ...................................... 4-5 Comparative Operating Statement for the General andSpecial Revenue Funds ..................................... 6-7 Notes to Financial Statements .................................. 8-17 Independent auditors' Report on Additional Information ......... 18 Combining Balance Sheet - General Fund ......................... 19 Combining statement of Revenues, Expenditures and Changes in Fund Balances - General Fund ....................... 20-21 Cor_bining 3alance Sheet - Special Revenue ...................... 22-23 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Special Revenue .................... 24-25 Independent Auditors' Report on Internal Control Structure Related Mat�;.--ers Noted in a General Purpose Financial Statement Audit Conducted in Accordance with Government Auditing Standards ................................. L5-0-7 Independent Auditors' Report on Compliance with Laws and Regulations Based on an. Audit of the General Purpose Financial Statements Performed in Accordance :with Government Auditing Standards Issued by the GAO ............... 28-29 Schedule of Noncompliance with Laws and Regulations - PriorYear .................................................... 30 11 Frederick J. Ciaschi, C.P.A. John H. Dietershagen, C.P.A. 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. Debbie A. Conley, C.P.A. Reginald E. Malley, C.P.A. Supervisor and Town Board Town of Groton Groton, New York Ciaschi Dietershagen PSchaufler rAL, Mickelson Certified Public Accountants and Consultants INDEPENDENT AUDITORS' REPORT We have audited the accompanying general purpose financial statements of the Town of Groton, as of December 31, 1990 and for the year then ended. These general purpose financial statements are the responsibility of the Town's management. Our responsibility is to express an opinion on these C:) purpose 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 general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the genera's purpose 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, 1990, and the results of its operations for the year then ended in conformity with generally accepted accounting principles. May 17, 1991 Ithaca, New York — 1 — CORTLAND ITHACA WATKINS GLEN 18 Tompkins Street Terrace Hill 221 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 COMBINED BALANCE SHEET DECEMBER 31, 1990 ASSETS Cash Other Receivables Due from Other Funds Fixed Assets (Net) Provisions to be Made in Future Budgets Restricted Cash Due from State and Federal Governments Prepaids - Retirement TOTAL ASSETS Governmental Special General Revenue $ 433 ,005 $ 2261789 32300 26,489 10,000 20,878 27,258 $ 510,930 12 ,410 $ 249,199 LIABILITIES, DEFERRED REVENUES AND EQUITY Liabilities Accounts Payable $ 52898 $ 81424 Accrued Liabilities 3,608 Notes Payable Other Liabilities Due to Other Funds 15,035 Long -Terry Liabilities Agency Fund Liabilities Retainage Payable Total Liabilities 5,898 272067 Deferred Revenues - Retirement 27,258 Equity Investment in General Fixed Assets Fund Balances - Reserved Trusts Special 22488 61601 Total Reserved 2,488 6,601 Fund Balances - Unreserved Appropriated -Ensuing Year's Budget 161,500 143,000 Unappropriated 313,786 729531 Total Unreserved 4753286 215,531 Total Equity 477,774 2229132 TOTAL LIABILITIES, DEFERRED REVENUES & EQUITY $ 510,930 $ 249,199 See Independent Auditors' Report on Additional Information - 2 - Fiduciary Fund Types Fund Type General Account Groups Capital Long -Term Projects Agency Fixed Assets Debt $ 342909 $ 17,075 $ $ 1,720,910 $ 342909 $ 17,075 $ 1,720,910 $ 8x369 51860 15,594 8$96 1$481 23,920 29,780 172075 8,396 1,720,910 5,129 5,129 5,129 11720,910 $ 34,909 $ 17,075 $ 1,720.910 $ 8,396 - 3 - TOWN OF GROTON COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE FISCAL YEAR ENDED DECEMBER 31, 1990 Governmental Special REVENUES AND OTHER SOURCES General Revenue Revenues Real Property Taxes $ 306,056 $ 320,302 Real Property Tax Items Non -Property Tax Items Departmental Income Intergovernmental Charges Charges for Services 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 and Other Sources Over (Under) Expenditures and Other Uses Fund Balances, Beginning of Year Fund Balances, End of Year 4,532 4,580 32,398 6,570 2,681 911 10, 234 82 , 052 450,014 450,014 180,288 9,501 43,551 29,231 17,201 29,477 13,112 331,167 331,167 118,847 358,927 $ 477,774 $ See Independent Auditors' Report on Additional Information - 4 - 103,866 76,793 500,961 500,961 50 , 000 559,496 222335 631,831 631,831 (130,870) 353,002 222,132 Fund Types Capital Projects 3,061 3,061 3 2061 48,053 48,0053 48 , 053 (44 , 992 ) 50,121 5,129 - 5 - TOWN OF GROTON COMPARATIVE OPERATING STATEMENT FOR THE GENERAL AND SPECIAL REVENUE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1990 General Fund REVENUES AND OTHER SOURCES Modified Budget Actual Revenues Real Property Taxes S 306,510 $ 3062056 Real Property Tax Items 22500 45532 Non -Property Tax Items Departmental Income 1,750 42580 Intergovernmental Charges Use of Money and Property 132000 32,398 Licenses and Permits 59500 6,570 Fines and Forfeitures 1,350 2,681 Sale of Property and Compensation for Loss 911 Miscellaneous Local Sources 10,234 State Aid 56,000 825052 Federal Aid Total Revenues 3862610 4502014 Other Sources Operating Transfers TOTAL REVENUES AND OTHER SOURCES 3869610 4502014 EXPENDITURES AND OTHER USES Expenditures General Government Support 2725485 1802288 Public Safety 12,200 91501 Health 43,700 439551 Transportation 302560 29,231 Culture and Recreation 223450 172201 Home and Community Services 495700 293477 Employee Benefits 26,200 131112 Debt Service (Interest) Economic Assist & Opportunity 9,315 82806 Total Expenditures 466,610 3313167 Other Uses Operating Transfers TOTAL EXPENDITURES AND OTHER USES 466,610 331,167 Revenues & Other Sources (Under) Over Expenditures and Other Uses $ (80,000) 118,847 Fund Balances - Beginning of Year 358,927 Fund Balances - End of Year $ 477,774 See Independent Auditors' Report on Additional Information - 6 - 635404 Special Revenue Fund Types Variance Variance Favorable 50 , 000 50 , 000 Favorable (Unfavorable) Modified Budget Actual (Unfavorable) $ (454) $ 3201302 $ 320,302 $ -0- 2,032 2,830 19,398 765322 103$866 27,544 1,070 1,331 712,250 631,831 805419 911 10,234 263052 70,948 76,793 5,845 63,404 4675572 5005961 33,389 635404 467,572 5002961 33,389 92,197 2 , 699 50 , 000 50 , 000 -0- 149 1,329 6323050 559,496 723554 5,249 20, 223 13,088 303200 22,335 7,865 509 1353+43 712,250 631,831 805419 1355443 712,250 631,831 809419 $ 198,347 $ (244,678) (1301870) $ 113,808 353,002 $ 222,132 - 7 - TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1990 Note 1 - Summary of Significant Accounting Policies The financial statements of the Town of Groton have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the government's accounting policies are described below. A. Reporting Entity The Town of Groton, vhich was erected in 1865, is governed by Town Law and other general municipal laws of the State of New York, and various local laws. The Town Board is the legislative body responsible for the overall operation, the Town Supervisor serves as Chief Executive Officer and Chief Fiscal Officer. The Town provides the following principal services: fire protection, 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 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 and McLean Fire Protection Districts. These districts are funded by means of a tax on the real property situated within the districts. Services for fire protection are contracted with the Groton Fire Department, Inc. All governmental activities and functions performed for the Town of Groton are its direct responsibility. No other governmental organizations have been included or excluded from the reporting entity. The financial reporting entity includes organizations, functions, and activities over which elected officials exercise oversight responsibility. Oversight responsibility is determined on the basis of financial interdependency, selection of governing authority, designation of management, ability to significantly influence operations and accountability for fiscal matters. B. Basis of Presentation - Fund Accounting The accounts of the Town are organized on the basis of funds or account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for within a separate set of self -balancing accounts that comprise its assets, liabilities, fund balance, revenues and expenditures which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special =9� TOWN OF GRO'-ON NOTES TO FINANCIAL STATEIAENTS (CONTINUED) DECEMBER 31, 1990 regulations, restrictions and limitations. The various funds are summarized by type in the financial statements. (Certain funds of the Town are utilized to account for resources derived from, and/or expenditures applicable to an area less than the entire: Town.) The following fund types and account groups are used: 1. Fund Categories a. Governmental Funds - are those through which most governmental functions are financed. The acquisition, use and balances of expendable financial resources and the related liabilities are accounted for through Governmental Funds. The measurement focus of the Governmental Funds is based upon determination of financial position and changes in financial position. The following are the Town's Governmental Fund types: 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. General Fund Town Outside Village Used to record transactions which are required to be a charge on the area of the Town outside the village. 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: Highway Funds - (Townwide and Parttown established pursuant to Highway Law, Section 141, to account for revenues and expenditures for highway purposes. Hijhwav 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. Special District Funds - (Lighting District and Fire Protection District) are used to record transactions for operation and maintenance. Risk Retention Fund Established for unemployment reserves held by the Town for reimbursement to the state for claims filed by former employees. This is a dollar for dollar reimbursement. Capital Projects Fund Used to account for capital improvements financed from current monies transferred from other funds, federal and state grants and proceeds of obligations. 9 - TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1990 b. Fiduciary Funds - used to account for assets held by the local government in a trustee or custodial capacity. Agency Funds Used to account For those funds held in trust and subsequent distributions, transmittal or release to other governments, individuals or to other funds. 2. 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 14ixed Assets Account Group Used to account for land, buildings, improvements other than buildings, and equipment utilized for general government 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 the vested sick time accrued at December 31, 1990. C. Basis of Accounting/Measurement Focus Basis of accounting refers to when revenues and expenditures and the related assets and liabilities are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus. Measurement focus is the determination of what is measured, i.e. expenditures or expenses. Modified Accrual Basis - all Governmental Funds are accounted for using the modified accrual basis of accounting. 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 of the current period. :Material revenues that are accrued include real property taxes, state and federal aid, sales tax and certain user charges. If expenditures are the prime factor for determining eligibility, revenues from federal and state grants are accrued when the expenditure is made. - 10 - u TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1990 Expenditures are recorded when 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. 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 crovernmental funds are CDP accounted for in the General Long -Term Debt Account Group, rather than governmental funds. D. Property Taxes Town real property taxes are levied annually on January 1, and become a lien on that date. Taxes are collected during the period January 1, to January 31, at face value and from February 1, to May 31, with interest added. The Town Receiver of taxes collects all real estate taxes for Town and County purposes. The Town Receiver distributes the collected tax money to the Town Supervisor prior to distributing the balance collected to the County on June 1. The Town thereby is assured of 100% tax collection. Responsibility for the collection of unpaid taxes rests with the County. Uncollected tax 'Liens are sold annually by the County. E. Budgetary Data 1. Budget Policies - The budget policies are as follows: a. No later than October 5, the budget officer submits a tentative budget to the Town Board for the fiscal year commencing the following January 1. The tentative budget includes proposed expenditures and the proposed means of financing for all funds. b. After public hearings are conducted to obtain taxpayer comments, no later than November 20, the Town Board adopts the budget. C. All modifications of the budget must be approved by the Town Board. However, the Town Supervisor is authorized to transfer certain budgeted amounts within departments. TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31 , 1990 2. Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded for budgetary control purposes to reserve that portion of the applicable appropriations, is employed in all funds. Encumbrances are reported as reservations of fund balances since they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in the period in which the liability is incurred. 3. Budget Basis of Accounting 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 carried forward from the prior year. F. Property, Plant and Equipment - General Fixed assets purchased for general governmental purposes are recorded as expenditures in the governmental funds and are capitalized at cost in the General Fixed Assets Account Group. Contributed fixed assets are recorded at fair market value at the date received. Fixed assets consisting of certain infrastructure type improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage, and lighting systems, have not been capitalized. Such assets normally are immovable and of value only to the Town. Therefore, the purposes of stewardship for capital expenditures can be satisfied without recording these assets. No depreciation has been provided on general fixed assets, nor has interest on general fixed asset construction in progress been capitalized. G. Unemployment Insurance As of January 1, 1978, Town employees are covered by unemployment insurance. The Town has chosen to discharge its liability to the New York State Unemployment Insurance Fund by means of the benefit reimbursement method. This is a dollar -for -dollar reimbursement to the Unemployment Insurance Fund for the benefits paid to former employees and charged to the Town's account. The Town is exempt from federal unemployment insurance tax. H. Compensated Absences The Town of Groton employees are granted vacation and sick leave in varying amounts. In the event of termination or upon retirement, an employee is not entitled to payment for accumulated vacation. However, each employee can accrue up to 720 hours of sick leave which is payable upon termination or retirement. - 12 - TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1990 The value of unused employee sick leave at year-end has been recorded in the general long-term debt account group. Payment of the sick leave recorded in the general long-term debt account group is dependent upon many factors, therefore, timing of future payments is not readily determinable. However, management believes that sufficient resources will be made available for the payments of vacation when such payments become due. Note 2 - Detail Notes on All Funds and Account Groups A. Assets 1. 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 coimnercial banks or trust companies located within the State. The Supervisor 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 and school districts. 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. All deposits including certificates of deposit are carried at cost or cost plus accrued interest. They consisted of: ---Balances Per Bank --- Balance Per Interest Noninterest Reconciling Financial Fund Bearing Bearing Items Statements Depository General -A $ 304,303 $ 55,159 $ (6)284) $ 353,178 1st National -B 781876 951 79 , 827 1st National Trust & Agency 173699 (624) 17,075 1st National Risk Retention 6,601 6,601 1st National Highway -DA 154,463 40,832 (5)624) 189,671 1st National -DB 19,757 83452 28,209 1st National Lighting 2,202 106 21308 1st National Capital Projects 393082 (4)173) 34,909 1st National Total Cash Balances 605,284 123,199 $ (16,705) $ 711,778 FDIC Insured 100,000 100,000 Uninsured 505,284 23, 199 Collateralized 505,284 233199 Uncollateralized $ -0- $ -0- 13 - TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1990 2. Changes in Fixed Assets A summary of changes in general fixed assets follows: Balance Balance Type 1/1/90 Additions Deletions 12/31/90 Land $ 83,003 $ -0- $ -0- $ 831003 Buildings 620,586 483502 6691088 Machinery & J Equipment 862,105 237,200 130,486 9683819 $1,565,694 $285,702 $130,486 $1,720,910 B. Liabilities 1. Pension Plans The Town of Groton participates in the New York State and Local Employees' Retirement System. This is a cost sharing multiple public employer retirement system. Obligations of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law (NYSRSSL). 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 benefits and optional methods of benefit payments. All benefits generally vest after ten years of credited service . The NYSRSSL provides that all participants in the 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 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 employer's from employees' paychecks and are sent currently to the Employees' Retirement System. Employee Groups Covered Nearly all Town of Groton employees are eligible for membership in the system. All employees employed in a full-time position who commenced employment after June 30, 1976 are mandatory members. The total payroll for all employees of the Town of Groton for fiscal year 1990 was $260,333 attributable to employees covered by the Employees' Retirement System. Payments Due the System and Funding Status Through 1988, the system billed all participating employers by May 31, each year. Billings were based on salaries paid during the system's fiscal year which ended on 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. 14 - TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1990 In 1989 and future years, the system's billings are based on Chapter 62 of the Laws of 1989 of the State of New York. This legislation requires participating employers to begin making payments on a current basis, while amortizing existing unpaid amounts relating to the system's fiscal years ending March 31, 1988 and 1989 (which otherwise were to have been paid on June 30, 1989 and 1990, respectively) over a 17 -year period, with an 8.75% interest factor added. The payment covering the system's fiscal year ended March 31, 1990 and the full amount due for 1988 and 1989 were paid December 31, 1989. December 15, will be the payment date for amounts due on each succeeding year's liability. Any under or over payment of the estimate paid for the system's fiscal year ended March 30, 1990 will be included in the succeeding December 15, payment. The actuarial cost method used by the system to determine the annual contributions from employees through March 31, 1990 was the aggregate cost method. Under this method the excess of the actuarial liabilities over the actuarial assets was funded by employees as a level percentage of salary over the current members' future working lifetimes. Subsequent to the system's March 31, 1990 fiscal year end, the Legislature amended the Retirement and Social Security Law (Chapter 210) mandating a change to a modified projected unit cost method (PUC) for the fiscal year ending March 31, 1991. The new method utilizes a rolling amortization period for any difference between actuarial assets and actuarial accrued liabilities. Approximately 17% of such differences is recognized each year. The legislation also allows the reduction of the annual amortization payment by any yearly surplus due to the rolling amortization. In addition, the legislation required a retroactive change in the actuarial smoothing method for the years ended March 31, 1989 and March 31, 1990 from a four year smoothing to a five year smoothing. The anticipated effect of these changes for the year ending March 31, 1991 is that the Employees' Retirement System contributions will generally be zero. The anticipated long-term affect is that employer contributions will be, for a t ime , less than they would have been under the aggregate method, but it is anticipated that future contributions will exceed those under the aggregate cash method. The total pension liability for services rendered by covered employees of the Town of Groton during the current fiscal year includes $1,889 employers share and $4,960 paid by employees as a current contribution, representing 0.73% and 1.91%, respectively, of the covered salaries paid. The total unpaid liability at the end of the fiscal year was S -O-. — 15 — TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1990 The Pension Benefit Obligation (PBO) of credited projected benefits is a standardized disclosure measure of the actuarial 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 retirement system does not make separate measurements for individual employers. The PBO of credited projected benefits at March 31, 1990 for the Employee's Retirement System, determined through an actuarial valuation performed as of that date, is $36.97 billion. The net assets available to pay benefits at that date is $40.7 billion. The Town's employer contribution requirement was less than 1% of total contributions required by all employers participating in this system. Historical trend information showing the progress in accumulating sufficient assets to pay benefits when due is presented in the Annual Financial Report of the system. Additional detailed information concerning the system may also be found in the Report. 2 Long -Term Debt a. The Town of Groton had the following noncurrent liabilities: O Compensated Absences: represents the value of earned and unused portion of the liability for compensated absences in the amount of $8,396 which is recorded in the General Long -Term Debt Account Group. b. The following is a summary of changes in long-term liabilities for the period ended December 31, 1990: Compensated Absences Balance 1/1/90 $ 73712 Additions 684 Deletions -0- Balance 12/31/90 $ 3,396 The addition to compensated absences is shown at net since it is impracticable to determine the amounts separately. C. Interfund Receivables and Payables Interfund receivables and payables at December 31, 1990 were as follows: Interfund Interfund Fund Receivables Payables Highway $ 103000 $ 15,035 Capital Projects General -A Trust and Agency Total 26,489 $ 36.489 - 16 - 5,860 15 ,594 36.489 TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1990 D. Fund Balance Reserves 1. General Fund The reserve of $2,488 in the General Fund represents revenues in excess of expenditures for dog control. 2. Special Revenue Fund The reserve of $6,601 in the Risk Retention Fund is for unemployment. The Town reimburses the state dollar for dollar on any claims filed agains t the Town. Note 3 - Contingent Liabilities The Town engaged a general contractor to build the Town Hall and garage. During 1989, while the building was in the process of being completed, this contractor filed for Chapter 11 bankruptcy. The amount in the retainage payable account represents the payable to this contractor. The Town feels that their potential liability to this contractor will be negligible. Additionally, mechanic's liens totaling $62,636 have been filed against the property containing the Town Hall and the Town Barn. These liens resulted from the general contractor's liability to pay the sub -contractors for the work done on the Town Hall. The bonding company is expected to pay the amount of the liens and, therefore, the liability to the Town is negligible. - 17 - INDEPENDENT AUDITORS' REPORT ON ADDITIONAL INFORMATION Supervisor and 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 1990 appears on page 1. That audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. Additional information included on pages 19 through 2. -5 in 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. May 17, 1991 Ithaca, New York See Independent Auditors' Report on Additional Information - 19 - TOWN OF GROTON COMBINING BALANCE` SHEET GENERAL FUND DECEMBER 31, 1990 ASSETS Townwide Parttown Total Cash $ 353,178 $ 79,827 $ 4333005 Other Receivables 3,300 3,300 Due From Other Funds 26,489 261489 Due From State and Federal Governments 20,878 20,878 Prepaid Retirement 27,258 27,258 TOTAL ASSETS $ 431,103 $ 79,827 $ 510,930 LIABILITIES, DEFERRED REVENUES AND EQUITY Liabilities Accounts Payable $ 5,823 $ 75 $ 51898 Accrued Liabilities Due To Other Funds Total Liabilities 5,823 75 5,898 Deferred Revenues - Retirement 27,258 27,2513 Fund Balances - Reserved Special 2,488 25488 Total Reserved 2,488 21488 Fund Balances - Unreserved Appropriated -Ensuing Year's Budget 115,000 46,500 161,500 Unappropriated 280,534 33,252 313,786 Total Unreserved 395,534 79,752 475,286 Total Equity 398,022 79,752 477,774 TOTAL LIABILITIES, DEFERRED REVENUES & EQUITY $ 431.103 $ 79,827 $ D-10,930 See Independent Auditors' Report on Additional Information - 19 - TOWN OF GROTON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GENERAL FUND FOR THE FISCAL YEAR ENDED DECEMBER 31, 1990 EXPENDITURES AND OTHER USES Expenditures General Government Support Townwide REVENUES AND OTHER SOURCES Budget Actual Revenues Health 200 Real Property Taxes $ 240,710 $ 2392534 Real Property Tax Items 22500 41532 Departmental Income 750 685 Intergovernmental Charges Home and Community Services 600 Use of Money and Property 102000 272463 Licenses and Permits 52500 62570 Fines and Forfeitures 1,350 2,681 Sale of Property and Compensation for Loss Other Uses 911 Miscellaneous Local Sources Operating Transfers 102234 State Aid 522400 75,401 Total Revenues 313,210 368,011 Other Sources Expenditures and Other Uses $ (45,000) Operating Transfers Fund Balances, Beginning of Year TOTAL REVENUES AND OTHER SOURCES 313,210 3682011 EXPENDITURES AND OTHER USES Expenditures General Government Support 269,885 1799968 Public Safety 123200 99501 Health 200 51 Economic Assistance and Opportunity 92315 8,806 Transportation 303560 295231 Culture and Recreation 122250 125201 Home and Community Services 600 314 Employee Benefits 232200 11,413 Debt Service (Interest) Total Expenditures 3583210 2513485 Other Uses Operating Transfers TOTAL EXPENDITURES AND OTHER USES 3585210 251 ,485 Revenues and Other Sources (Under) Over Expenditures and Other Uses $ (45,000) 1162526 Fund Balances, Beginning of Year 281,496 Fund Balances, End of Year $ 398,022 See Independent Auditors' Report on Additional Information - 20 - Parttown Total Budget Actual Budget Actual $ 65,800 $ 663522 $ 3063510 $ 3061056 2,500 42532 1 , 000 3,895 1 , 750 4 , 580 3,000 4,935 13,000 32,398 5,500 63570 1,350 23681 911 10,234 3,600 63651 56,000 82,052 733400 82,003 386,610 450,014 73,400 82,003 386,610 450,014 21600 320 272,485 180,288 12,200 92501 43 , 500 433500 435700 433551 93315 8,806 303560 29,231 10,200 53000 22 , 450 17,201 495100 295163 49 , 700 29 , 47 7 3,000 15699 26,200 13,112 1083400 793682 4663610 331,167 1089400 79,682 $ (35,000) 2,321 771431 $ 79,752 4663610 3313167 $ (80,000) 118,847 358 , 927 $ 477,774 - 21 - TOWN OF GROTON COMBINING BALANCE SHEET SPECIAL REVENUE DECEMBER 31, 1990 ASSETS Cash Other Receivables Due From Other Funds Due From State and Federal Governments 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 Townwide $ 189,671 10,000 Highway Lighting Parttown District $ 28,209 $ 2,308 12,410 $ 199,671 $ 40,619 $ 8,424 3,608 15,035 27,067 125,000 47,604 172,604 172,604 18$000 22,619 40,619 40,619 2,308 2,308 2,308 2,308 199,671 $ 401619 $ 21308 See Independent Auditors' Report on Additional Information - 22 - Fire Protection District $ $ Risk Retention $ 6,601 $ 6,601 6,601 6,601 6,601 $ 6,601 Total $ 2262789 10,000 122410 $ 249,199 8 ,424 3,608 15 5035 27 , 067 6,601 6,601 1433000 72,531 215,531 222 ,132 $ 249.199 - 23 - TOWN OF GROTON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FOR THE FISCAL YEAR ENDED DECEMBER 31, 1990 Highway Highway Townwide Parttown REVENUES AND OTHER SOURCES Budget Actual - Budget Actual Revenues Real Property Taxes $ 180,500 $ 1802500 $ 85,052 $ 852052 Real Property Tax Items Departmental Income Intergovernmental Charges Use of Money and Property 711000 99,382 55000 42162 Sale of Property and Compensation for Loss Miscellaneous Local Sources State Aid 70,948 76,793 Federal Aid Total Revenues 2511500 279,882 161,000 166,007 Other Sources Operating Transfers TOTAL REVENUES AND OTHER SOURCES 251,500 227/9:882 161,000 166,007 EXPENDITURES AND OTHER USES Expenditures General Government Support Public Safety Transportation 446,000 376,844 181,300 1782995 Culture and Recreation Home and Community Services Employee Benefits 25,500 182584 41700 39751 Debt Service (Interest) Total Expenditures 471,500 395,428 186,000 182,746 Other Uses Operating Transfers TOTAL EXPENDITURES AND OTHER USES 47.15500 395,428 1862000 182,746 Revenues and Other Sources (Under) Over Expenditures and Other Uses $ (220,000) (115,546) $ (25,000) (16)739) Fund Balances, Beginning of Year 288,150 571358 Fund Balances, End of Year $ 172.604 $ 40.619 See Independent Auditors' Report on Additional Information - 24 - Fire Lighting District Protection District Risk Retention Total Budget Actual Budget Actual Budget Actual Budget Actual $ 4,750 $ 4,750 $ 50,000 $ 50,000 $ $ $ 320,302 $ 320,302 4,750 4, 750 4,750 4,750 4,750 $ -0- 4,750 50,000 50,000 4,750 50,000 50,000 503000 505000 3,657 3,657 505000 503000 39657 50,000 50,000 322 322 765322 1035866 70,948 76,793 322 322 4673572 5003961 322 322 467,572 500,961 50 , 000 501000 632,050 559,496 30 , 200 22 , 335 712,250 631,831 712,250 6319831 13093 $ -0- -0- $ 322 322 $ (244.678) (130)870) 13215 -0- 6,279 353,002 $ 2,308 $ -0- $ 6,601 $ 222,132 - 25 - Frederick J. Ciaschi, C.P.A. John H. Dietershagen, C.P.A. 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. Debbie A. Conley, C.P.A. Reginald E. Malley, C.P.A. Ciaschi Dietershagen pSchaufler r,_AL Mickelson Certified Public Accountants and Consultants INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE RELATED MATTERS NOTED IN A GENERAL PURPOSE FINANCIAL STATEMENT AUDIT CONDUCTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Supervisor and 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, 1990, and have issued our report thereon dated May 17, 1991. We condijcted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit of the general purpose financial statements of the Town of Groton for the year ended December 31, 1990, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure. The management of the Town of Groton is responsible for establishing and maintaining an internal control structure. 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 an internal control structure 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 general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, 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. - 26 - CORTLAND ITHACA WATKINS GLEN 18 Tompkins Street Terrace Hill 221 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 nor the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories: CYCLES OF THE TOWN'S ACTIVITY Treasury or financing Revenue/receipts Purchases/disbursements External financial reporting Payroll For all of the control categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. We noted certain matters involving the internal control structure and its operation that we considered to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure, that, in our judgement, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. Books of Account The general ledger for the Agency Fund was not balanced for the year. Additionally, the bank account for the General Fund was not balanced for the last three months of the year. Without balancing the general ledger and all cash accounts, proper recording of revenues and expenditures will not be possible. All bank accounts and general ledgers should be balanced on a monthly basis. A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. This report is intended for the information of management and the Town Board. This restriction is not intended to limit the distribution of this report, which is a matter of public record. May 17, 1991 Ithaca, New York 27 - ft�l�c�<� Frederick J. Ciaschi, C.P.A. John H. Dietershagen, C.P.A. 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. Debbie A. Conley, C.P.A. Reginald E. Malley, C.P.A. Ciaschi Dietershagen Schaufler AL Mickelson Certified Public Accountants and Consultants INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS BASED ON AN r.UDIT OF THE GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ISSUED BY THE GAO Supervisor and 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, .1990, and have issued our report thereon dated ;`•say 17 .1 1991. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. Compliance with laws, regulations, contracts, and grants applicable to the Town of Groton is the responsibility of the Town's :management, As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Town of Groton's compliance with certain provisions of laws, regulations, contracts, and grants. However, it should be noted that our objective was not to provide an opinion on overall compliance with such provisions. The results of our tests indicate that, with respect to the items tested, the Town of Groton complied, in all material respects, with provisions referred to in the preceding paragraph. With respect to items not tasted, nothing came to our attention that caused us to believe that the Town of Groton had not complied, in all material respects, with those provisions. In addition, we noted instances of noncompliance in our 1989 report that have been resolved as described in the attached schedule, 28 CORTLAND ITHACA WATKINS GLEN 18 Tompkins Street Terrace Hill 221 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 This report is intended for the information of management and the Town Board. This restriction is not intended to limit the distribution of this report, which is a matter of public record. May 17, 1991 Ithaca, New York 29 TOWN OF GROTON SCHEDULE OF NONCOMPLIANCE WITH LAWS AND REGULATIONS PRIOR YEAR - DECEMBER 31, 1990 REPORT FINDINGS In our audit report for the year ended December 31, 1989, we noted the following instances of noncompliance: Investment Policy In our previous year's audit we noted that the Town had not established its own investment policy. Although the Town has not adopted such a policy, all of the investments are made in accordance with New York State law. Budget Overexpenditures During our 1989 audit report it was noted that there was a budget overexpenditure of $40,000 in the interfund transfers. During our current audit, no overexpended budget items were noted. Cash Management In 1989 the Town's investments were undercoIlateral ized. During the current year the Town was adequately collateralized. Annual Financial Report Update Document During our 1989 audit we noted that the client failed to complete the Capital Project portion of the Annual Financial Report Update Document (AUD) filed with the State of New York. During the current year's audit, the full AUD was filled out previous to the beginning of our fieldwork. - 30 -