The URL can be used to link to this page

Home My WebLink About1996 Town AuditNolis & Beals Certified Public Accountants Jan E. Nolis, C.P.A. Rick O. Beals, C.P.A. March 20, 1997 Supervisor and Town Board Town of Groton Groton, New York In planning and performing our audit of the general purpose -financial statements of the Town of Groton for the year ended December 31, 1996, we considered the Town's internal control structure to determine our auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on the internal control structure. However, during our audit we became aware of a matter that is an opportunity for strengthening internal controls and operating efficiency. The memorandum that accompanies this letter summarizes our comment and suggestion regarding this matter. This letter does not affect our report dated March 20, 1997, on the general purpose financial statements of the Town of Groton. We will review the status of this comment during our next audit engagement. We have already discussed this comment and suggestion with various personnel, and we will be pleased to discuss them in further detail at your convenience, to perform any additional study of these matters, or to assist you in implementing the recommendation. We would also like to thank those employees who assisted us during our audit for their support and cooperation. Sincerely, Nolis & Beals Certified Public Accountants 212 Front Street - Owego, New York 13827 - Telephone & Fax: (607) 687-4317 P.O. Box 589 • 823 NYS Route 13 - Cortland, New York 13045 - Telephone & Fax: (607) 758-9210 1. Prior years comments All the findings from prior years managements letters have been resolved and implemented by the Town. There were no additional findings for the year ended December 31, 1996. 2. General The books and records of the Town have been well maintained. The internal control structure currently in place provides management with timely and reliable financial information on which desisions can be based. Any questions we had during our audit were quickly resolved. Nolis & Beals Certified Public Accountants Jan E. Nolis, C.P.A. Rick O. Beals, C.P.A. TOWN OF GROTON Report on Audit of Financial Statements For the Year Ended December 31, 1996 212 Front Street • Owego, New York 13827 • Telephone & Fax: (607) 687-4317 P.O. Box 589 • 823 NYS Route 13 • Cortland, New York 13045 • Telephone & Fax: (607) 758-9210 1 Nolis & Beals Certified Public Accountants TOWN OF GROTON Contents Independent Auditors' Report . . . . . . . . . . . . . . . . . 1 Combined Balance Sheet - All Fund Types and Account Groups 2 Combined Statement of Revenues, Expenditures, and Changes in Fund Balance - All Governmental Fund Types . . . . 3 Combined Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget & Actual - General and Special Revenue Funds . . . . . . . . . . . . . . . 4 Notes to the Financial Statements . . . . . . . . . . . . . 5-15 Independent Auditors' Report on Additional Information . . . 16 Combining Balance Sheet - General Fund . . . . . . . . . . . 17 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - General Fund . . . . . . . . . . . . . 18 Combining Balance Sheet - Special Revenue Funds . . . . . . . 19 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Special Revenue Funds 20 Independent Auditors' Report on Internal Control Structure Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards 21-22 Independent Auditors' Report on Internal Contrul Structure Used in Administering Federal Financial Assistance Programs . . . . . . . . . . . . . . . . . . . . . . 23-26 Independent Auditors' Report on Compliance Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards . . . . . . . . . . . . . . . . . . . . . 27 Independent Auditors' Report on Compliance With the General Requirements Applicable to Federal Financial Assistance Programs 28-29 Nolis & Beals Certified Public Accountants TOWN OF GROTON Contents ( continued) Independent Auditors' Report on Compliance With Specific Requirements Applicable to Nonmajor Federal Financial Assistance Program Transactions . . . . . . . . . . 30-31 Independent Auditors' Report on Schedule of Federal Financial Assistance . . . . . . . . . . . . . . . . . 32 Schedule of Federal Financial Assistance . . . 33 Nolis & Beals Certified Public Accountants Jan E. Nolis, C.P.A. Rick O. Beals, C.P.A. Supervisor and Town Board Town of Groton Groton, New York We have audited the accompanying general purpose financial statements of the Town of Groton, New York, as of December 31, 1996, 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 general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States and the provisions of Office and Management and Budget Circular A-128, "Audits of State and Local Governments". 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 general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall general purpose 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 in the first paragraph present fairly, in all material respects, the financial position of the Town of Groton as of December 31, 1996, and the results of its operations for the year then ended in conformity with generally accepted accounting principles. ,s March 20, 1997 Owego, New York ac 212 Front Street a Owego, New York 13827 * Telephone & Fax: (607) 687-4317 P.O. Box 589 • 823 NYS Route 13 -D Cortland, New York 13045 • Telephone & Fax: (607) 758-9210 Nolis & Beals Certified Public Accountants Fiduciary Fund Tvpe Account Groups Trust and General Long -Term Acgencv Fixed Assets Debt $ 16,779 $ 0 $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 21 385, 106 0 0 0 19,444 16, 779 21 385, 106 19,444 0 0 0 0 0 0 0 0 19,444 16, 779 0 0 0 0 0 16,r779 0 19, 444 0 2f385,106 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 21385,106 0 0 0 0 0 0 0 0 0 0 0 21385,106 0 $ 16, 779 $ 21 385,106 $ 19, 444 The accompanying notes are an integral part of these financial statements. -2- F i Nolis & Beals Certified Public Accountants Town of Groton Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types For the Year Ended December 31, 1996 Governmental Fund Types Special Capital General Revenue Projects Revenues and other sources Revenues Real property taxes Real property tax items Nonproperty 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 Other sources Operating transfers Retirement system credits Expenditures General government support Public safety Public health Transportation Economic assistance and opportunity Culture and recreation Home and community services Employee benefits Other uses Operating transfers Revenues and other sources over $ 298,969 $ 390,600 $ 5,118 0 1, 007 0 2,575 0 6, 116 0 8, 771 83, 036 13, 358 0 41841 0 1, 797 0 484 1f300 27f427 73r970 0 219f581 370r463 768f487 27, 047 25f280 (6, 377) 0 391,133 793,767 201, 944 0 14, 060 61f000 54, 000 0 39,593 495f013 11r775 0 17, 973 0 31f600 220, 306 23,500 321156 394,445 808,475 0 0 (under) expenditures (3, 312) (14, 708 ) Fund balances, beginning of year 117,356 203,756 Fund balances, end of year $ 114, 044 $ 189r048 $ The accompanying notes are an integral part of these financial statements. -3- 0 0 0 0 0 691 0 0 0 0 0 0 !OWN 0 0 0 0 0 0 0 0 0 0 0 52, 327 (51, 636) 64, 446 12, 810 Nolis & Beals Certified Public Accountants Governmental Fund Types Special Revenue Variance Modified favorable Budqet Actual (unfavorable) $ 390, 600 $ 390, 600 $ 0 0 0 0 0 0 0 0 0 0 0 0 0 70, 420 73,183 21763 0 0 0 0 0 0 0 0 0 0 400 400 62f466 73f970 11, 504 2,258 2,258 0 525,744 540,411 14, 667 25r280 25,280 0 0 0 0 551,024 565j691 14, 667 0 0 0 61, 000 61,000 0 0 0 0 539,313 495, 013 44,300 0 0 0 0 0 0 3, 011 0 31011 41, 400 32, 156 9, 244 644,724 588, 169 56,555 (93, 700) (22, 478) S 71, 222 93, 700 0 0 71770 0 203,756 $ 0 $ 189,048 The accompanying notes are an integral part of these financial statements. -4- Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements Note A. 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 Town's accounting policies are described below. 1. Reporting entity The Town of Groton, which was established in 1817, is governed by the 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 overall operations. The Town Supervisor serves as chief executive officer and chief fiscal officer. The following basic services are provided by the Town: fire protection, highways and streets, recreation, public improvements, planning and zoning, and general administration. 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 consists of (a) the primary government which is the Town of Groton (b) organizations for which the primary government is financially accountable, and (c) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's general purpose financial statements to be misleading or incomplete as set forth in GASB Statement 14. The decision to include a potential component unit in the Town's reporting entity is based on several criteria set forth in GASB 14 including legal standing, fiscal dependence, and financial accountability. Based on the application of these criteria, no other organizations have been included or excluded from the reporting entity. -5- Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements ( Continued) Note A. Summary of significant accounting policies ( continued) : 2. 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 regulations, restrictions or limitations. The various funds are summarized by type in the general purpose financial statements. The following fund types and account groups are used: Governmental funds are those through which most governmental functions of the Town 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 of Groton's governmental fund types: a. General fund The general fund is the principal operating fund and includes all operations not required to be recorded in other funds. The general fund, town outside village is used to record transactions which are required to be a charge on the area of the town outside the village. b. Special revenue funds These funds account for the proceeds of specific revenue sources that are legally restricted to expenditure for specified purposes. The following Special Revenue Funds are utilized: ZZ Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements (Continued) Note A. Summary of significant accounting policies (continued) 2. Fund accounting ( continued) b. Special revenue funds (continued) - Highway Funds - (Townwide and Parttown) established pursuant to Highway Law, Section 141, and used 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. - Special District Funds - (Lighting District and Fire Protection District) are used to record transactions for operations and maintenance for these activities. - Risk Retention - established for unemployment reserves held by the Town for reimbursement to the state for claims filed by former employees. - Special Grant Fund - used to account for Community Development Block Grants. C. Capital projects funds The capital projects fund is used to account for and report financial resources to be used for the acquisition, construction or renovation of major capital facilities, or equipment. Fiduciary fund type a. Trust and agency funds These funds account for money and/or property received and held in the capacity of trustee, custodian or agent. These include agency funds. -7- Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements (Continued) Note A. Summary of significant accounting policies (continued) 2. Fund accounting ( continued) Account group. Account groups are used to establish accounting control and accountability for 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 results of operations. a. General fixed assets account group These funds account for land, buildings, improvements other than buildings, and equipment utilized for general government purposes. b. General long-term debt account group These funds account for all the long-term debt of the Town. 3. Basis of accounting Governmental funds Governmental funds are accounted for on the modified accrual basis. Under this basis, revenues are recognized when received except for revenues which are susceptible to accrual (measurable and available to finance current operations) and revenues of a material amount that have not been received at the normal time of receipt. Such revenues are accrued when earned. In those instances where expenditures are the prime factor in determining eligibility for State and Federal grants, revenues are recognized when the expenditures are incurred. Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements ( Continued) Note A. Summary of significant accounting policies (continued): 3. Basis of accounting (continued) Expenditures are generally recognized when liabilities are incurred. Exceptions to this general rule include: (a) prepaid expenses are not recognized; (b) accumulated unpaid vacation and sick pay are not accrued and the non-current portion of retirement expense is not recognized until billed and paid; (c) principal and interest on indebtedness is recognized when due. Fiduciary funds Fiduciary Funds, such as trust and agency fund transactions are accounted for on a modified accrual basis. Account groups General fixed assets are recorded at actual cost or estimated cost, with the exception of land and buildings, which are recorded at appraised value 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. 4. Property taxes Real property taxes are levied annually by the Town of Groton no later than January 1, and become a lien on January 1. Taxes are collected during the period January 1 to May 31. Uncollected real property taxes are subsequently enforced by the County of Tompkins in which the Town is located. An amount representing uncollected real property taxes transmitted to the County for enforcement is paid by the County to the Town no later than May 31. Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements (Continued) Note A. Summary of significant accounting policies (continued) : 5. Budgets and budgetary accounting Budget policies - The budget policies are as follows: a. No later than October 5, a tentative budget is submitted by the budget officer 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. d. Appropriations lapse at year end. 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 the Governmental 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. 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. Budgetary controls for the special grant fund are established in accordance with the applicable grant agreement which covers a period other than the Town of Groton' s fiscal year. -10- Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements (Continued) Note A. Summary of significant accounting policies (continued) : 5. Budgets and budgetary accounting (continued) Budget basis of accounting (continued) Consequently, the budgets for this fund have been excluded from the Combined Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual. In addition, the Risk Retention Fund has been excluded from the Combined Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual, because there is no legally adopted annual budget. The following schedule reconciles the difference between the two statements. Fund Balance Fund Balance Beginning Expendi- End of Year Revenues tures of Year Total for funds included in budget comp- arison $ 167f929 $ 565, 691 $ 588r169 $ 145, 451 Funds not in- cluded in budget comp- arison Special grant 27,928 227,835 220,306 35,457 Risk retention 7.899 2.4.1 -Q.. 84 140 Total special revenue funds $ 203,756 $ 793,767 $ 808,475 $ 189,048 6. Property, p lant 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 asset account group. Contributed fixed assets are recorded at fair market value at the date received. -11- Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements (Continued) Note A. Summary of significant accounting policies (continued) : 6. Property, plant and equipment - general (continued) 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 of Groton. 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 assets construction in progress been capitalized. 7. vacation and sick leave and compensatory absences: 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 time. However, sick leave can be accrued up to 720 hours which is payable upon termination or retirement. The value of unused employee sick leave at year-end has been recorded in the General long -Term Debt Account Group. Payment of 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 sick leave when such payment becomes due. In addition, the Town recognizes a liability for vesting sick leave and other compensated absences with similar characteristics and additional salary -related payments as employees earn benefits and to the extent it is probable that the Town will compensate the employees for the benefits through cash payments (which may be conditioned on the employees' termination or retirement), rather than be taken as absences due to illness or other contingencies. The liability for compensated absences is calculated at rates in effect as of the balance sheet date and is recorded in the governmental funds is as much as it will be funded from current financial resources, and the general long-term debt account group for amounts to be paid from future financial resources. -12- Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements (Continued) Note B. Cash and investments: The Town of Groton's investment policies are governed by State of New York statutes. In addition, the Town of Groton has its own written investment policy. The Town of Groton's monies must be deposited in FDIC -insured commercial banks or trust companies located within the state. The Supervisor is authorized to use demand accounts and certificates of deposit for operating purposes. 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 and time deposits and certificates of deposit 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. The written investment policy requires repurchase agreements to be purchased from banks located within the state. The underlying securities must be obligations of the Federal government. Deposits and investments at year-end were entirely collateralized by Federal Deposit Insurance or by collateral held by the Town of Groton's custodial bank in the Town of Groton's name. In the financial statement all deposits including certificates of deposit are carried at cost plus accrued interest. Note C. Summary of changes in general fixed assets: Balance Balance 12/31/95 Additions Deletions 12/31/96 Land $ 563,000 $ 0 $ 0 $ 563,000 Buildings 730,059 0 0 730,059 Machinery & Equipment I a 080, 691 104 f 4 80 93, 124 1f 0 92 , 047 $2,373,750 $ 1.04, 480 $ 93,124 $2,385,106 Note D. Other receivables: Other receivables at December 31, 1996 consisted of the following, which are stated at net realizable value. The Town has deemed the amounts to be fully collectible. -13- u 11 Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements (Continued) Note D. Other receivables (continued) : Fund Descries Amount Special Grant Rehabilitation loans 5 126.961 Note E . Employees' retirement: Plan description The Town of Groton participates in the New York State and Local Employees' Retirement System (ERS). 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 State comptroller is sole trustee and administrative head of the System. The Comptroller shall adopt and may amend rules and regulations for the administration and transaction of the business of the Systems and for the custody and control of their funds. The Systems issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to the New York State and Local Retirement Systems, Gov. Alfred E. Smith State Office Building, Albany, New York 12244. Funding policv The System is noncontributory except for employees who joined the New York State and Local Employees' Retirement System after July 27, 1976 who contribute 3% of their salary. Under the authority of the NYSRSSl, the Comptroller shall certify annually the rates expressed as proportions of payroll of members, which shall be used in computing the contributions required to be made by employers to the pension accumulation fund. The Town of Groton is required to contribute at an actuarial determined rate. The required contributions for the current year and two preceding years were: 1996 $1382 1995 628 1994 561 -14- Nolis & Beals Certified Public Accountants Town of Groton Notes to Financial Statements (Continued) Note E. Employees' retirement (continued) The Town's contributions made to the System were equal to 100 percent of the contributions required for each year. Since 1989, the System's billings have been based on Chapter 62 of the Laws of 1989 of the State of New York. This legislation requires participating employers to make 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. Local governments were given the option to prepay this liability. The Town of Groton elected to make the full payment on December 15, 1989. 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. Note F. Long-term debt The Town of Groton has compensated absences outstanding as of December 31, 1996 in the amount of $19,444. Compensated absences represents the value of earned and unused portion of accumulated sick leave. Note G. Fund equity -reserves The following reserves existed at December 31, 1996 for the following purposes: Fund Pure Amount General Encumbrances $ 24,551 General Dog Control 1 General Retirement system credits 8f699 Highway Encumbrances 3,011 Risk retention Unemployment reserve 81140 Capital projects Highway equipment 12,810 $ X7,2.12 -15- Nolis & Beals Certified Public Accountants Jan E. Nolis, C.P.A. Rick O. Beals, C.P.A. 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 1996 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 17 through 20 is 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. �r- March 20, 1997 Owego, New York -16- 212 Front Street • Owego, New York 13827 • Telephone & Fax: (607) 687-4317 P.O. Box 589 a 823 NYS Route 13 • Cortland, New York 13045 - Telephone & Fax: (607) 758-9210 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 1996 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 17 through 20 is 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. �r- March 20, 1997 Owego, New York -16- 212 Front Street • Owego, New York 13827 • Telephone & Fax: (607) 687-4317 P.O. Box 589 a 823 NYS Route 13 • Cortland, New York 13045 - Telephone & Fax: (607) 758-9210 1 1 1 1 1 1 1 Nolis & Beals Certified Public Accountants Town of Groton Combining Balance Sheet General Fund December 31, 1996 See independent auditors' report on additional information. -17- Townwide Parttown Total Assets Unrestricted cash $ 910,021 $ 23,564 $ 114,585 Due from other governments 204 0 204 Prepaid expenses 12,200 678 12,878 103f425 24f242 127f667 Liabilities and fund equity Liabilities Accounts payable 13,213 165 13,378 Accrued liabilities 245 0 245 13r458 165 13,623 Fund balances -reserved Encumbrances 24,551 0 24r551 Excess dog control revenues 1 0 1 Retirement system credits 8,699 0 8, 699 Total fund balances -reserved 33,251 0 33,251 Fund balances -unreserved Appropriated - ensuing year's budget 20,000 5,000 25,000 Unappropriated 36,716 19,077 55,793 Total fund balances -unreserved 56,716 24,077 80,793 89f967 24,077 114,044 $ 103,425 $ 24,242 $ 127,667 See independent auditors' report on additional information. -17- Nolis & Beals Certified Public Accountants Parttown Total Modified Budget Actual Modified Budget Actual $ 91,771 $ 91, 771 $ 298f969 $ 298,969 0 0 4, 250 5, 118 1, 000 1, 007 1, 000 1, 007 150 594 11350 2f575 375 626 5f975 6, 116 1, 000 11638 81500 8, 771 21300 3, 560 81800 13, 358 0 0 4, 050 41 841 0 0 1, 750 1f797 0 0 0 484 0 0 46,000 27,427 96r596 99f196 380f644 370f463 27,047 27,047 0 0 0 (6, 377) 96,596 99f196 407r691 391f133 145 145 237r402 201, 944 0 0 15,040 14, 060 54,000 54,000 54,100 54,000 0 0 40,149 39,593 0 0 11,775 11,775 10,153 10,098 18,653 17,973 33,051 29f160 36,776 31f600 41247 3r469 33,796 23, 500 101,596 96,872 447r691 394, 445 (5,000) 2, 324 (40, 000) (3,312) 51000 0 404,000 0 $ 0 2, 324 $ 0 (31 312 ) 21,753 117,356 $ 24,0_77, $_ 114,044 See independent auditors' report on additional information. -18- Nolis & Beals Certified Public Accountants Special Grant Fund $ 35,457 $ 0 126r961 162,418 Risk Retention 8, 140 $ 0 0 8f140 Total 199, 507 0 126,961 326,468 0 0 81702 0 0 11758 126, 961 0 126, 961 126,961 0 137r421 0 0 3, 011 0 8,140 81140 0 8,140 11,151 0 0 11,000 35f457 0 166,896 35,457 0 177,896 35f457 8r140 189, 047 162, 418 $ 8, 140 $ 326,468 See independent auditors' report on additional information. -19- I I I I I I Nolis & Beals Certified Public Accountants Fire Protection Lighting District District Subtotal Budget Actual Budget Actual Budget Actual $ 6,000 $ 6, 000 $ 61, 000 $ 61,000 $ 390, 600 $ 390, 600 $ 0 652 0 0 70,420 731183 0 0 0 0 62,466 73,970 0 0 0 0 21258 21258 0 0 0 0 0 400 61000 6f652 61,000 61,000 525,744 540,411 0 0 0 0 25,280 25f280 61000 61652 61,000 61,000 551,024 565,691 0 0 61, 000 61,000 61, 000 61000 4, 770 0 0 539,313 0 0 0 0 31011 0 0 0 0 41,400 6, 000 41770 61,000 61,000 644,724 0 1, 882 0 0 (93, 700) 0 0 0 0 93, 700 0 11882 $ 0 0 $ 0 11,260 0 $ 13, 142 $ 0 Special Risk Grant Retention Total Actual Actual Actual 0 $ 0 $ 390,600 9,612 241 83,036 0 0 73,970 217,323 0 219,581 900 0 11300 227,835 241 768,487 0 0 25,280 227,835 241 793,767 61,000 0 0 61,000 495,013 0 0 495,013 0 220,306 0 220,306 32,156 0 0 32,156 588, 169 220,306 0 808f475 (22f478) 7f529 241 (14, 708) 0 0 0 0 (22r478) 7,529 241 (14, 708) 167f929 27,928 7t899 203f756 $ 145, 451 $ 35f457 $ 8,140 $ 189,048 See independent auditors' report on additional information. -20- Nolis & Beals Certified Public Accountants Ian E. Nolis, C.P.A. Rick O. Beals, C.P.A. INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED 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, 1996, and have issued our report thereon dated March 20, 1997. We have conducted our audit in accordance with generally accepted auditing standards and "Government Auditing Standards", issued by the Comptroller General of the United States, and the provisions of Office Management and Budget Circular A-128, "Audits of State and Local Governments." Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. 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 internal control structure policies and 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 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 structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. -21- 212 Front Street - Owego, New York 13827 • Telephone & Fax: (607) 687-4317 P.O. Box 589 -1 823 NYS Route 13 • Cortland, New York 13045 - Telephone & Fax: (607) 758-9210 Nolis & Beals Certified Public Accountants In planning and performing our audit of the general purpose financial statements of the Town of Groton, for the year ended December 31, 1996, we obtained an understanding of the internal control structure. With respect to the internal control structure, 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 in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. 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. A material weakness is a condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors and 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. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. However, we noted certain matters involving control structure and its operation that we have reported to the management of the Town of Groton, in a separate letter dated March 20, 1997. This report is intended for the information of the Town's management and Town Board and applicable federal, state, local and other funding sources. This restriction is not intended to limit the distribution of this report, which upon acceptance by the Town of Groton's Town Board is a matter of public record. March 20, 1997 Owego, New York _22_ Nolis & Beals Certified Public Accountants Jan E. Nolis, C.P.A. Rick O. Beals, C.P.A. 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, 1996, and have issued our report thereon dated March 20, 1997. We have conducted our audit in accordance with generally accepted auditing standards and "Government Auditing Standards", issued by the Comptroller General of the United States, and the provisions of Office Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments." Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit for the year ended December 31, 1996, we considered the internal control structure of the Town of Groton, in order to determine our auditing procedures for the purpose of expressing our opinions on the general purpose financial statements of the Town of Groton, and to report on the internal control structure in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated March 20, 1997. 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 -23- 212 Front Street • Owego, New York 13827 • Telephone & Fax: (607) 687-4317 P.O. Box 589 • 823 NYS Route 13 • Cortland, New York 13045 • Telephone & Fax: (607) 758-9210 Nolis & Beals Certified Public Accountants costs of internal control structure policies and 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 financial statements in accordance with generally accepted accounting principles, and that federal financial assistance programs are managed in compliance with applicable laws and regulations. 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 structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories: A. Cycles of the entity' s activity - Treasury or financing - Revenue/receipts - Purchases/disbursements - External financial reporting - Payroll/personnel B. Financial statement caotions - Cash and cash equivalents - Receivables - Payables and accrued liabilities - Fund balance C. Accounting applications ' -24- - Billings - Receivables - Cash receipts - Purchasing and receiving - Accounts payable - Cash disbursements - Payroll - General ledger ' -24- Nolis & Beals Certified Public Accountants D. Controls used in administering comol i anc e with laws and recr lat ions General requirements - Davis - Bacon Act - Cash management - Political activity - Civil rights - Federal financial reports - Allowable costs/cost principles - Drug -Free Workplace Act - Administration requirements - Relocation assistance and real property acquisition Specific regi1irement-s - Types of services allowed or unallowed - Eligibility - Reporting - Cost allocation - Special requirements For all of the internal 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. During the year ended December 31, 1996, the Town of Groton, had no major Federal financial assistance programs and expended 1000 of its total Federal financial assistance under the following nonmajor Federal financial assistance program: U.S.Department of Housing and Urban Development - Community Development Block Grant - Small Cities We performed tests of controls, as required by OMB Circular A- 128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material non-compliance with specific requirements, general requirements, and requirements governing claims for advances and reimbursements and amounts claimed or used for matching that are applicable to each of the Town of Groton' s nonmajor programs, which are identified in the accompanying Schedule of Federal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion. -25- Nolis & Beals Certified Public Accountants Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operations that we consider to be material weaknesses as defined above. However we also noted certain matters involving control structure, its operation and other matters that we have reported to the management of Town of Groton, in a separate letter dated March 20, 1997. This report is intended for the information of the Town's management and Town Board and applicable federal, state, local and other funding sources. This restriction is not intended to limit the distribution of this report, which upon acceptance by the Town of Groton's Town Board is a matter of public record. March 20, 1997 Owego, New York 1 -26- Nolis & Beals Certified Public Accountants Jan E. Nolis, C.P.A. Rick O. Beals, C.P.A. INDEPENDENT AUDITORS' REPORT ON COMPLIANCE BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED 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, as of and for the year ended December 31, 1996, and have issued our report thereon dated March 20, 1997. 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 financial statements are free of material misstatement, we performed tests of the Town's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the general purpose financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our test disclose no instances of noncompliance that are required to be reported under Government Auditing Standards. This report is intended for the information of the Town's management and Town Board and applicable federal, state, local and other funding sources. This restriction is not intended to limit the distribution of this report, which, upon acceptance by the Town of Groton's Town Board is a matter of public record. March 20, 1997 Owego, New York _27_ 212 Front Street • Owego, New York 13827 - Telephone & Fax: (607) 687-4317 P.O. Box 189 • 821 NYS Route 13 • Cortland, New York 13045 - Telephone &. Fax: (607) 758-9210 Nolis & Beals Certified Public Accountants Jan E. Nolis, C.P.A. Rick O. Beals, C.P.A. INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH THE GENERAL REOUIREM_ENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS Supervisor and Town Board Town of Groton Groton, New York We have audited the general purpose financial statements of the Town of Groton, as of and for the year ended December 31, 1996, and have issued our report thereon dated March 20, 1997. We have applied procedures to test the Town of Groton' s compliance with the following requirements applicable to its federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance, for the year ended December 31, 1996: - Davis - Bacon Act - Political activity - Civil rights - Cash management - Federal Financial Reports - Allowable costs/cost principles - Drug Free workplace - Administration requirements - Relocation assistance and real property acquisition Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments' Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Town of Groton' s compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the Town of Groton, had not complied, in all material respects, with those requirements. Also, the results of our procedures did not disclose any immaterial instances of noncompliance with those requirements. -28- 212 Front Street Owego, New York 13827 - Telephone & Fax: (607) 687-4317 P.O. Box 589 • 823 NYS Route 13 • Cortland, New York 13045 - Telephone & Fax: (607) 758-9210 Nolis & Beals Certified Public Accountants This report is intended for the information of the Town of Groton's management and Town Board and applicable federal and state agencies. 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. March 20, 1997 Owego, New York —29— 0 11 n Nolis & Beals Certified Public Accountants )an E. Nolis, C.P.A. Rick O. Beals, C.P.A. WIN R -9-k Supervisor and Town Board Town of Groton Groton, New York We have audited the financial statements of the Town of Groton, as of and for the year ended December 31, 1996, and have issued our report thereon dated March 20, 1997. In connection with our audit of the general purpose financial statements of Town of Groton, and with our consideration of Town of Groton' s internal control structure used to administer federal financial assistance programs, as required by Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments, " we selected certain transactions applicable to certain nonmajor federal financial assistance programs for the year ended December 31, 1995. As required by OMB Circular A-128, we have performed auditing procedures to test compliance with the requirements governing types of services allowed or unallowed; eligibility; reporting; cost allocation, and special test and provisions that are applicable to those transactions. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on Town of Groton's compliance with these requirements. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Town of Groton had not complied, in all material respects, with those requirements. Also, the results of our procedures did not disclose any immaterial instances of noncompliance with those requirements. -30- 212 Front Street • Owego, New York 13827 • Telephone & Fax: (607) 687-4317 P.O. Box 589 • 823 NYS Route 13 - Cortland, New York 13045 ' Telephone & Fax: (607) 758-9210 Nolis & Beals Certified Public Accountants This report is intended for the information of the Town of Groton's management and Town Board and applicable federal and state agencies. 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. March 20, 1997 Owego, New York -31- 1 Nolis & Beals Certified Public Accountants Jan E. Nolis, C.P.A. Rick O. Beals, C.P.A. INDEPENDENT AUDITORS' REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE Supervisor and Town Board Town of Groton Groton, New York We have audited the general purpose financial statements of the Town of Groton, as of and for the year ended December 31, 1996, and have issued our report thereon dated March 20, 1997. These general purpose financial statements are the responsibility of the Town of Groton's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We have conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments." Those standards and OMB Circular A-128 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 general 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. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Town of Groton, taken as a whole. The accompanying Schedule of Federal Financial Assistance is presented for purposes of additional analysis and is not required part of the general purpose financial statements. The information in that schedule has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. March 20, 1997 Owego, New York -32- 212 Front Street - Owego, New York 13827 - Telephone & Fax: (607) 687-4317 P.O. Box 589 - 823 NYS Route 13 • Cortland, New York 13045 - Telephone & Fax: (607) 758-9210 Nolis & Beals Certified Public Accountants Town of Groton Schedule of Federal Financial Assistance For the Year Ended December 31, 1996 Federal Grantor/ P roaram T it le Federal CFDA Number DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Community Development Block Grant - Small Cities 14 .219 $ 217,323 $ 220,306 See independent auditors' report on schedule of federal financial assistance. -33- Nolis & Beals Certified Public Accountants Jan E. Nolis, C.P.A. Rick O. Beals, C.P.A. Supervisor and Town Board Town of Groton Groton, New York We have audited the books and records of the Town of Groton's Justice Court for the period beginning January 1, 1996 and ended December 31, 1996. Our audit was made in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States (1994 edition) which set the audit standards for performance audits and, accordingly, we included such procedures as we considered necessary in the circumstances. Town Law Section 31 states that the Town Justice is responsible for recording and reporting the Court's activities. The Uniform Justice Court Act Section 2019-A states that the books and records of the Court are the Town's property and that the Town is responsible for causing them to be audited. Our audit was made for the purpose of determining whether the Town of Groton's Justice Court was properly collecting and recording bail, fines, and other charges, as well as reporting and remitting funds to the State in an accurate and timely manner. In planning and perfoming our audit of the books and records of the Town of Groton's Justice Court for the year ended December 31, 1996, we obtained an understanding of the internal control structure. With respect to the internal control structure, 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 in order to determine our auditing procedures for the purpose of expressing our opinion on the Town of Groton's Justice Court's books and records, and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. The results of our tests indicate that for the transactions tested, the Town of Groton's Justice Court substantially complied, in all material respects, with the terms and conditions of the requirements described above. This report is intended for the information of the Town Board, management and New York State. However, this report is a matter of public record and its distribution is not limited. March 20, 1997 Owego, New York 212 Front Street - Owego, New York 13827 - Telephone & Fax: (607) 687-4317 P.O. Box 589 - 823 NYS Route 13 - Cortland, New York 13045 • Telephone & Fax: (607) 758-9210