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2020 Town Audit & Court AuditTOWN OF GROTON Groton, New York FINANCIAL REPORT For the Year Ended December 31, 2020 RE--,-'-',CE1VE--1'D & FILED Office of the Town Clerk 101 Conger Boulevard, Groton, NY DateA 20 Time 0 AM OApril L. Scheffler, RMC, Groton Town Clerk insero&co Certified Public Accoummnts I Business Advisors The laiglaPst stcrndcrrcl TOWN OF GR 0 TON TABLE OF CONTENTS Independent Auditors' Report 1-2 Financial Statements Balance Sheet - Governmental Funds 3 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 4 Budgetary Comparison Schedule - General Townwide Fund 5 Budgetary Comparison Schedule - General Parttown Fund 6 Budgetary Comparison Schedule - Special Revenue Fund - Highway Townwide Fund 7 Budgetary Comparison Schedule - Special Revenue Fund - Highway Parttown Fund 8 Budgetary Comparison Schedule - Special Revenue Fund - Lighting District Fund 9 Budgetary Comparison Schedule - Special Revenue Fund - Fire Protection District Fund 10 Schedule of Noncurrent Assets, Deferred Outflows of Resources, Noncurrent Liabilities, and Deferred Inflows of Resources 11 Notes to Financial Statements 12-25 ins ro&co Certified Public Accountants I Busviess Advisors INDEPENDENT AUDITORS' REPORT To the Town Board Town of Groton Groton, New York We have audited the accompanying financial statements of each major fund and the aggregate remaining fund information of the Town of Groton, (the Town), as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise a portion of the Town's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Town's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Town's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse audit opinion. INSERO & CO. CPAs, LLP The Highest Standard 1 (800) 232-9547 1 www inserocpa cow Basis for Adverse Opinion on the Financial Statements as a Whole Management has not presented government -wide financial statements, a complete set of notes, or required supplementary information to display the financial position and changes in financial position of its governmental activities. Accounting principles generally accepted in the United States of America require the presentation of government -wide financial statements, a complete set of notes, and required supplementary information. The amounts that would be reported in government -wide financial statements, a complete set of notes, and required supplementary information of the Town of Groton's governmental activities have not been determined. Adverse Opinion In our opinion, because of the significance of the matter discussed in the "Basis for Adverse Opinion on the Financial Statements as a Whole" paragraph, the financial statements referred to above do not present fairly the financial position of the Town of Groton, as of December 31, 2020, or the changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Respectfully submitted, Insero & Co. CPAs, LLP Certified Public Accountants Ithaca, New York September 14, 2021 2 Assets Cash and Cash Equivalents - Unrestricted Cash and Cash Equivalents - Restricted Investments - Unrestricted Due from Other Governments Loans Receivable, Net of Allowance Prepaid Expenses Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities Accounts Payable Accrued Liabilities Total Liabilities Deferred Inflows of Resources Unavailable Revenues Total Deferred Inflows of Resources Fund Balances Nonspendable Restricted Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances TOWN OF GROTON BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2020 $ 15,938 $ - $ 61,368 $ - Special Revenue Funds - $ - $ 77,459 General General Highway Highway Lighting Fire Protection Special Total Townwide Parttown Townwide Parttown District District Grant Governmental Fund Fund Fund Fund Fund Fund Fund Funds $ 319,458 $ 163,160 $ 89,668 $ 501,023 $ 54,813 $ - $ - $ 1.128,122 128,877 - - - - - 43,029 171,906 128,877 - 73,607 - - - - 73,607 - 10,000 - 38,757 - - - 48,757 - - - - - - 23,084 23,084 4,069 - - 7,251 - - - 11,320 $ 452,404 $ 173,160 $ 163,275 $ 547,031 $ 54,813 $ - $ 66,113 $ 19,4569,796 $ 15,938 $ - $ 61,368 $ - $ 153 $ - $ - $ 77,459 1,185 124 6,995 - - - - 8,304 17,123 124 68,363 - 153 - - 85,763 - - - - - - 23,084 23,084 - - - - - - 23,084 23,084 4,069 - - 7,251 - - - 11,320 128,877 - 731,607 - - - 43,029 245,513 77,000 48,000 21,305 539,780 54,660 - - 740,745 225,335 125,036 - - - - - 350,371 435,281 173,036 94,912 547,031 54,660 - 43,029 1,347,949 $ 4529,404 $ 173,160 $ 1639275 $ 547,031 $ 54,813 $ - $ 66,113 $ 1,4561796 See Notes to Financial Statements 3 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 Sources Total Revenues Expenditures General Governmental Support Public Safety Public Health Transportation Economic Assistance and Opportunity Culture and Recreation Home and Community Services Employee Benefits Total Expenditures Excess of Revenues (Expenditures) Fund Balances, Beginning of Year Fund Balances, End of Year TOWN OF GROTON STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2020 See Notes to Financial Statements 4 Special Revenue Funds General General llighway Highway Lighting Fire Protection Special Total Townwide Parttown Townwide Parttown District District Grant Governmental Fund Fund Fund Fund Fund Fund Fund Funds $ 599,172 $ 184,000 $ 541,000 $ 199,500 $ 4,700 $ 145,000 $ - $ 1,673,372 3,841 - - - - - - 3,841 - 91,186 - 218,499 - - - 309,685 2,096 735 - - - - - 2,831 - - 205,423 - - - - 205,423 1,832 514 1,031 1,636 160 - 42 5,215 13,410 13,777 - - - - - 27,187 18,247 - - - - - - 18,247 5 - 12,806 - - - - 12,811 2,739 - 2,501 - - - - 51,240 67,053 25,878 - 182,156 - - - 275,087 708,395 316,090 762,761 601,791 4,860 145,000 42 2,538,939 397,584 270 - - - - - 397,854 29,318 - - - - 145,000 - 174,318 - 163,500 - - - - - 163,500 70,666 - 645,648 454,755 3,126 - - 1,174,195 8,100 - - - - - - 83,100 4,649 32,303 - - - - - 36,952 1,493 57,770 - - - - 38,861 98,124 96,190 19,090 104,343 93,873 - - - 313,496 608,000 272,933 749,991 548,628 3,126 145,000 38,861 2,366,539 100,395 43,157 12,770 53,163 1,734 - (38,819) 172,400 334,886 129,879 82,142 493,868 525926 - 81,848 1,175,549 S 435,281 $ 173,036 $ 94,912 S 547,031 $ 54,660 $ - $ 43,029 $ 1,347,949 See Notes to Financial Statements 4 TOWN OF GROTON BUDGETARY COMPARISON SCHEDULE GENERAL TOWNWIDE FUND FOR THE YEAR ENDED DECEMBER 31, 2020 Appropriated Fund Balances - 19,950 Net Change in Fund Balance $ - $ - Fund Balance, Beginning of Year 3341886 Fund Balance, End of Year $ 4359281 See Notes to Financial Statements 5 Original Final Fay. (Unfay.) Budget Budget Actual Variance Revenues Real Property Taxes $ 59800 $ 5981000 $ 5999172 $ 1,172 Real Property Tax Items 400 400 39841 (759) Departmental Income 1,800 1,800 21096 296 Use of Money and Property 19300 11300 19832 532 Licenses and Permits 131,500 13,500 139410 (90) Fines and Forfeitures 191500 191500 18,247 (11253) Sale of Property and Compensation for Loss - - 5 5 Miscellaneous Local Sources - - 29739 29739 State Sources 60,000 6000 671053 75053 Total Revenues 698,700 698,700 7081395 99695 Expenditures General Governmental Support 4691,433 4881203 3979584 9019 Public Safety 3400 341600 299318 5,282 Transportation 729567 721,567 7006 1,901 Economic Assistance and Opportunity 900 99600 81100 19500 Culture and Recreation 59650 5,830 49649 1,181 Home and Community Services 1,250 11750 11493 257 Employee Benefits 1051600 1069100 96,190 9,910 Total Expenditures 698,700 718,650 60800 1109650 Excess of Revenue and Other Financing Sources Over (Expenditures) and Other Financing (Uses) - (19,950) 1001395 $ 1209345 Appropriated Fund Balances - 19,950 Net Change in Fund Balance $ - $ - Fund Balance, Beginning of Year 3341886 Fund Balance, End of Year $ 4359281 See Notes to Financial Statements 5 TOWN OF GR 0 TON BUDGETARY COMPARISON SCHEDULE GENERAL PARTTOWN FUND FOR THE YEAR ENDED DECEMBER 31, 2020 Fund Balance, Beginning of Year 1291879 Fund Balance, End of Year $ 173,036 See Notes to Financial Statements 6 Original Final Fay. (Unfay.) Budget Budget Actual Variance Revenues Real Property Taxes $ 1849000 $ 1841000 $ 18400 $ - Nonproperty Tax Items 809000 801000 919186 119186 Departmental Income 11800 19800 735 (19065) Use of Money and Property 300 300 514 214 Licenses and Permits 8,050 8,050 13,777 51727 Miscellaneous Local Sources 700 700 - (700) State Sources - - 259878 259878 Total Revenues 2749850 2741850 3169090 41,240 Expenditures General Governmental Support 91863 9,863 270 9,593 Public Health 1639500 163,500 1639500 - Economic Assistance and Opportunity 250 250 - 250 Culture and Recreation 611600 619600 329303 299297 Home and Community Services 631637 63,637 57,770 51867 Employee Benefits 209000 2000 19,090 910 Total Expenditures 3181850 3189850 2729933 459917 Excess of Revenues (Expenditures) (44,000) (44,000) 431157 $ 87,157 Appropriated Fund Balances 4400 449000 Net Change in Fund Balance Fund Balance, Beginning of Year 1291879 Fund Balance, End of Year $ 173,036 See Notes to Financial Statements 6 See Notes to Financial Statements 7 Fay. (Unfay.) Variance (269) 11,806 2,101 13,638 75,275 18,857 94,132 1071770 TOWN OF GR 0 TON BUDGETARY COMPARISON SCHEDULE SPECIAL REVENUE FUND HIGHWAY TOWNWIDE FUND FOR THE YEAR ENDED DECEMBER 31, 2020 Original Final Budget Budget Actual Revenues Real Property Taxes $ 541,000 $ 54100 $ 541,000 Intergovernmental Charges 2051423 205,423 2051,423 Use of Money and Property 1,300 1,300 11031 Sale of Property and Compensation for Loss 11000 1131000 129806 Miscellaneous Local Sources 400 400 21501 Total Revenues 7491,123 7491,123 762,761 Expenditures General Governmental Support 500 - - Transportation 6579923 720,923 6451P648 Employee Benefits 1311200 1231200 104,343 Total Expenditures 794,123 8441123 7491991 Excess of Revenues (Expenditures) (45,000) (95,000) 121770 Appropriated Fund Balances 451000 951000 Net Change in Fund Balance $ - $ - Fund Balance, Beginning of Year 829142 Fund Balance, End of Year $ 949912 See Notes to Financial Statements 7 Fay. (Unfay.) Variance (269) 11,806 2,101 13,638 75,275 18,857 94,132 1071770 TOWN OF GR O TON BUDGETARY COMPARISON SCHEDULE SPECIAL REVENUE FUND HIGHWAY PARTTOWN FUND FOR THE YEAR ENDED DECEMBER 31, 2020 Original Final Fay. (Unfay.) Budget Budget Actual Variance Revenues Real Property Taxes $ 1991500 $ 199,500 $ 199,500 $ - Nonproperty Tax Items 160,000 160,000 2189499 589499 Use of Money and Property 1,000 1,000 11636 636 State Sources 151,800 2059647 182,156 (23,491) Total Revenues 512,300 5661147 6019791 35,644 Expenditures Transportation Employee Benefits Total Expenditures Excess of Revenues (Expenditures) Appropriated Fund Balances Net Change in Fund Balance Fund Balance, Beginning of Year Fund Balance, End of Year 558,300 612,147 454,755 1579392 101,500 1011500 931873 7,627 6591800 7139647 5489628 165,019 (147,500) (147,500) 53,163 $ 2009663 147,500 147,500 See Notes to Financial Statements 8 493,868 $ 547,031 TOWN OF GROTON BUDGETARY COMPARISON SCHEDULE SPECIAL REVENUE FUND LIGHTING DISTRICT FUND FOR THE YEAR ENDED DECEMBER 31, 2020 Original Final Budget Budget Actual Revenues Real Property Taxes $ 41700 $ 41700 $ 49700 Use of Money and Property - - 160 Total Revenues Expenditures Transportation Total Expenditures Excess of Revenues (Expenditures) Appropriated Fund Balances Net Change in Fund Balance Fund Balance, Beginning of Year Fund Balance, End of Year 4,700 5,900 5,900 (1,200) 1,200 it 4,700 5,900 5,900 (1,200) 1,200 See Notes to Financial Statements 9 Fay. (Unfay.) Variance 4,860 3,126 3,126 1,734 $ 1,734 52,926 $ 54,660 160 160 2,774 2,774 2,934 TO WN OF GR O TON BUDGETARY COMPARISON SCHEDULE SPECIAL REVENUE FUND FIRE PROTECTION DISTRICT FUND FOR THE YEAR ENDED DECEMBER 31, 2020 Original Final Fay. (Unfay.) Budget Budget Actual Variance Revenues Real Property Taxes $ 145,000 $ 145,000 $ 1459000 $ - Total Revenues 1459000 145,000 1451000 - Expenditures Public Safety Total Expenditures Excess of Revenues (Expenditures) Net Change in Fund Balance Fund Balance, Beginning of Year Fund Balance, End of Year 14500 1451000 14500 1451000 145,000 145,000 See Notes to Financial Statements 10 TOWN OF GROTON SCHEDULE OF NONCURRENT ASSETS, DEFERRED OUTFLOWS OF RESOURCES, NONCURRENT LIABILITIES AND DEFERRED INFLOWS OF RESOURCES DECEMBER 31, 2020 Noncurrent Government Assets Land Infrastructure Buildings Machinery and Equipment Total Noncurrent Government Assets Deferred Outflows of Resources Pensions Total Deferred Outflows of Resources Noncurrent Government Liabilities Compensated Absences Net Pension Liability Total Noncurrent Government Liabilities Deferred Inflows of Resources Pensions Total Deferred Inflows of Resources See Notes to Financial Statements 11 $ 563,000 46,156 764,008 2,449,532 $ 398229696 $ 355,209 $ 355,209 $ 85,595 526,115 $ 611,710 $ 13,039 $ 13,039 TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note I Summary of Significant Accounting Policies The financial statements of the Town of Groton (the Town) have been prepared in conformity with the accounting principles prescribed by the Accounting and Reporting Manual permitted by the Office of Comptroller of the State of New York to meet the requirements of New York State, and are not intended to be a complete presentation in accordance with accounting principles generally accepted in the United States (U.S. GAAP) established by the Governmental Accounting Standards Board (GASB). The financial statements do not include a Statement of Net Position or a Statement of Activities for the Governmental Activities, prepared on the accrual basis of accounting, or a Management's Discussion and Analysis or other required supplementary information. Under the accrual basis of accounting the Town would have recorded capital assets, net of accumulated depreciation, as well as other long-term liabilities in the government -wide financial statements. The amount of these departures has not been determined. The Town's more significant accounting policies are described below. Financial Reporting Entity The Town, which is located in the County of Tompkins (the County) in New York State (the State), was established in 1817. The Town is governed by Town Law, general municipal laws of the state, 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: fire protection, highway and street maintenance, recreation, public improvements, planning and zoning, and general administration. All governmental activities and functions performed for the Town are its direct responsibility. No other governmental organizations have been included or excluded from the reporting entity. The financial reporting entity consists of the following, as defined by GASB Statement No. 14, "The Financial Reporting Entity," as amended. • The primary government, which is the Town; • Organizations for which the primary government is financially accountable, and; • 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 financial statements to be misleading or incomplete. The decision to include a potential component unit in the reporting entity is based on the criteria set forth in GASB Statement No. 14, as amended. Based on the application of these criteria, there were no component units to include in the Town reporting entity. 12 Note 1 TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Summary of Significant Accounting Policies - Continued Fund Accounting The Town uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. A fund is a separate accounting entity with a self -balancing set of accounts. A supplemental schedule, on the other hand, is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources. The Town records its transactions in the fund types described below: Governmental Funds The Governmental Fund types 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 Fund types. The measurement focus of the Governmental Fund types is based upon determination of financial position and changes in financial position. The following are the Town's Governmental Fund types: • General Funds - (Parttown and Townwide) are the principal operating funds and include all operations not required to be recorded in other funds. Some functions are required to be financed by taxpayers outside the village; therefore, a town with a village must maintain two General Funds. • Special Revenue Funds - Used to account for the proceeds of specific revenue sources legally restricted to expenditure for specified purposes. The following Special Revenue Funds are utilized: o Highway Funds - (Parttown and Townwide) were established pursuant to Highway Law, § 141, and are used to account for revenues and expenditures for highway purposes. Highway Law, §277, requires expenditures for repairs and improvements outside a village be financed by the area outside the village. Therefore, a town with a village must maintain two Highway Funds. o Special District Funds - (Lighting and Fire Protection Districts) Established by the Town to record transactions for operations and maintenance of these activities. o Special Grant Fund - Established by the Town to account for Community Development Block Grants. 13 Note I TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Summary of Significant Accounting Policies - Continued Supplemental Schedule - Supplemental schedules are used to establish accounting control and accountability for noncurrent governmental assets, deferred outflows of resources, liabilities, and deferred inflows of resources. The schedule is not "funds." They are concerned only with the measurement of financial position and not results of operations. Noncurrent Government Assets - Capital assets purchased for general governmental purposes are recorded as expenditures in the Governmental Funds and are capitalized at cost in the noncurrent government assets. Contributed fixed assets are recorded at fair market value at the date of contributions. Capital 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 capital assets, nor has interest been capitalized on general capital assets that are construction in progress. Noncurrent Government Liabilities - Accounts established for the unmatured general long-term debt and liabilities of a government which are not recorded as a liability under another fund. 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, generally 90 days after year end. Material revenues 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. 14 TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note I Summary of Significant Accounting Policies - Continued Basis of Accounting/Measurement Focus - Continued Expenditures are recorded when incurred. The cost of capital assets is recognized as an expenditure when the asset is received. Exceptions to this general rule are: 1) pension costs; 2) expenditures for prepaid expenses and inventory -type items are recognized at the time of purchase; 3) principal and interest on indebtedness are not recognized as an expenditure until due; and 4) compensated absences, such as vacation and sick leave, which vest or accumulate are charged as an expenditure when paid. Supplemental Schedule - Noncurrent government assets are recorded at actual or estimated cost or, in the case of gifts or contributions, at fair market value at the time received. No provision for depreciation is made. Noncurrent government liabilities are recorded at par value of the principal amount. No liability is recorded for interest payable to maturity. 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 of January 1 to March 31 by the Town. The County subsequently enforces uncollected real property taxes. The County pays uncollected real property taxes to the Town no later than May 31. Budget Policies • 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 means of financing for all funds. • After public hearings are conducted to obtain taxpayer comments, no later than November 20, the Town Board adopts the budget. • All modifications of the budget must be approved by the Town Board. • Appropriations lapse at year end. 15 TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note I Summary of Significant Accounting Policies - Continued 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, as they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in the period in which the liability is incurred. Budgetary Basis of Accounting Budgets are adopted annually on a basis consistent with requirements of New York State. Appropriations authorized for the current year are increased by the amount of encumbrances carried forward from the prior year. An annual legal budget is not adopted for the Special Grant Fund, which is one of the Special Revenue Funds. Budgetary controls for the Special Grant Fund are established in accordance with the applicable grant agreements, which cover a period other than the Town's fiscal year. Cash and Cash Equivalents For financial statement purposes, the Town considers all highly liquid investments with original maturities of three months or less as cash equivalents. Vacation, Sick Leave, and Compensated Absences Employees of the Town are granted vacation and sick leave in varying amounts. In the event of termination or retirement, an employee is not entitled to payment for accumulated vacation time. However, sick leave can be accrued up to 960 hours which is payable upon termination or retirement. The value of unused employee sick leave at year end is recorded in the Schedule of Noncurrent Government Liabilities. Payment of sick leave recorded in the Schedule of Noncurrent Assets, Deferred Outflows of Resources, Liabilities and Deferred Inflows of Resources is dependent upon many factors; therefore, timing of future payments is not readily determinable. However, management believes sufficient resources will be made available for the payments of sick leave when such payment becomes due. 16 Note 1 TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Summary of Significant Accounting Policies - Continued Vacation, Sick Leave, and Compensated Absences - Continued Further, 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 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 being 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 if funded from current financial resources and the noncurrent government liability account group for amounts to be paid from future financial resources. Deferred Inflows and Deferred Outflows of Resources The Town has deferred inflows of resources related to unavailable revenue, which is reported only on the Balance Sheet - Governmental Funds. The Town also has deferred inflows and outflows of resources related to the pension on the Schedule of Noncurrent Assets, Liabilities and Deferred Inflows and Outflows of Resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. At December 31, 2020, the Town's deferred inflows of resources related to revenues consisted of in rehabilitation loans receivable. Additionally, the deferred inflows and outflows of resource amounts related to the pensions were determined by actuaries based on their evaluation of the NYSLRS Pension Plan. Fund Balance Classifications The Town follows GASB Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions." Statement No. 54 changes the terminology and classification of fund balance to reflect spending constraints on resources, rather than availability for appropriation. This approach is intended to provide users more consistent and understandable information about a fund's net resources. Constraints are broken into five classifications: nonspendable, restricted, committed, assigned, and unassigned. These classifications serve to inform readers of the financial statements of the extent to which the government is bound to honor any constraints on specific purposes for which resources in a fund can be spent. • Nonspendable - Consists of assets inherently either because of their form or because they prepaid items, inventories, long-term portions held for resale, and endowments principal. 17 nonspendable in the current period must be maintained intact; including of loans receivable, financial assets TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note I Summary of Significant Accounting Policies - Continued Fund Balance Classifications - Continued • Restricted - Consists of amounts subject to legal purpose restrictions imposed by creditors, grantors, contributors, or laws and regulations of other governments and enforced externally; or through constitutional provisions or enabling legislation. Most of the Town's legally adopted reserves are reported here. • Committed - Consists of amounts subject to a purpose constraint imposed by formal action of the government's highest level of decision-making authority, the Town Board, prior to the end of the fiscal year, and requires the same level of formal action to remove said constraint. • Assigned - Consists of amounts subject to a purpose constraint representing an intended use established by the government's highest level of decision-making authority or their designated body or official. The purpose of the assignment must be narrower than the purpose of the General Fund. In funds other than the General Fund, assigned fund balance represents the residual amount of fund balance. • Unassigned - Represents the residual classification of the government's General Fund, and could report a surplus or deficit. In funds other than the General Fund, the unassigned classification should only be used to report a deficit balance resulting from overspending amounts restricted, committed, or assigned for specific purposes. The Town has not adopted any resolutions to commit fund balance. Currently, fund balance is assigned by the Town Supervisor for encumbrances and designations. By resolution, the Town Board approves fund balance appropriations for next year's budget. The Town applies expenditures against nonspendable fund balance, restricted fund balance, committed fund balance, assigned fund balance, and then unassigned fund balance. 18 TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note I Summary of Significant Accounting Policies - Continued Legally Adopted Reserves Fund balance reserves are created to satisfy legal restrictions, plan for future expenditures or relate to resources not available for general use or appropriation. The following reserve funds are available to the Town within New York State. These reserve funds are established through Board action or voter approval and a separate identity must be maintained for each reserve. Earnings on the invested resources become part of the respective reserve funds; however, separate bank accounts are not necessary for each reserve fund. These reserves are reported in the fund financial statements as Restricted Fund Balance. Reserves currently in use by the Town include the following: • Unemployment Insurance Reserve - Used to pay the cost of reimbursement to the State Unemployment Insurance Fund for payments made to claimants where the employer has elected to use the benefit reimbursement method. The reserve may be established by board action and is funded by budgetary appropriations and such other funds as may be legally appropriated. Within 60 days after the end of any fiscal year, excess amounts may either be transferred to another reserve or the excess applied to the appropriations of the next succeeding fiscal year's budget. If the employer elects to convert tax (contribution) basis, any excess of funds over a sum sufficient to pay pending claims may be transferred to any other Reserve Fund. This reserve is accounted for in the General Fund. • Capital Reserve - Capital Reserve is used to accumulate funds to finance all or a portion of future capital projects for which bonds may be issued. This reserve is accounted for in the General Townwide and Highway Townwide Funds. New Accounting Standards The Town adopted and implemented, as applicable, GASB Statement No. 84, "Fiduciary Activities," during the year ended December 31, 2020. Note 2 Cash and Investments The Town's investment policies are governed by state statutes. In addition, the Town has its own written investment policy. Town monies must be deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies located within the state. The Town 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 the state or its localities. Collateral is required for demand and time deposits, as well as certificates of deposit not covered by FDIC insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies, as well as obligations of New York State, its municipalities, and its school districts. 19 TOWN OF GROTON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note 2 Cash and Investments - Continued The written investment policy requires repurchase agreements to be purchased from banks located within the state. Underlying securities must be obligations of the federal government and must have a market value of at least 105% of the cost of the repurchase agreement. Custodial credit risk is the risk that in the event of a bank failure, the Town's deposits may not be returned to it. While the Town does not have a specific policy for custodial credit risk, state statutes govern the Town's investment policies, as discussed previously in these Notes. GASB Statement No. 40 directs that deposits be disclosed as exposed to custodial credit risk if they are not covered by depository insurance, and the deposits are either uncollateralized or collateralized with securities held by the pledging financial institution's trust department or agent, but not in the Town's name. The Town's aggregate bank balances of $1,387,757, including certificates of deposit, are either insured or collateralized with securities held by the pledging financial institution in the Town's name. The Town chooses to disclose investments by specifically identifying each. The Town's investment policy for these investments is also governed by New York State statutes, in addition to the Town's written policy. Investments are stated at fair value and are categorized as either: 1. Insured or registered, with investments held by the Town or by the Town's agent in the Town's name; or 2. Uninsured and unregistered, with investments held by the financial institution's trust department in the Town's name; or 3. Uninsured and unregistered, with investments held by the financial institution or its trust department, but not in the Town's name. At December 31, 2020, the Town had the following investments: Carrying Amount Type of Cost Fair Value Investment Category Certificate of Highway - Townwide Fund $ 731,607 $ 73,607 Deposit (12 month) 2 The Town does not typically purchase investments for a long enough duration to cause it to believe it is exposed to any material interest rate risk. The Town does not typically purchase investments denominated in a foreign currency and is not exposed to foreign currency risk. 20 TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note 3 Loans Receivable and Unavailable Revenues Loans receivable at December 31, 2020 consisted of the following, which are stated at net realizable value: Description Amount Special Grant Fund 2020 Rehabilitation Loans $ 231084 Total $ 2304 The balance of loans receivable of the 2020 rehabilitation loans represents loans with an original principal of $327,850. The loans are forgivable to recipients over a five year period if they meet certain eligibility requirements. During 2020, $64,762 was forgiven, resulting in a loans receivable balance of $23,084 at December 31, 2020. This balance is also reported as deferred inflows of resources -unavailable revenues. Note 4 Noncurrent Government Assets (Capital Assets) Changes in capital assets for fiscal year ended December 31, 2020 are as follows: Balance Balance Beginning End of of Year Additions Deletions Year Land $ 563,000 $ - $ - $ 5639000 Infastructure - 461156 - 469156 Buildings 7451558 191950 11500 7641008 Machinery and Equipment 2,5421522 509000 1429990 214499532 Total $ 3,851,080 $ 116,106 $ 144,490 $ 3,822,696 Note S Current Liabilities Accounts payable consists of amounts owed by the Town for various goods and services. Accrued liabilities represent payroll expense accrued at year end. Note 6 Pension Plan Plan Description The Town participates in the New York State and Local Employees' Retirement System (the System). This is a cost-sharing multiple -employer defined benefit retirement system. The System provides retirement benefits, as well as death and disability benefits. Obligations of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the NYSRSSL, the Comptroller of the State of New York (Comptroller) serves as sole trustee and administrative head of the System. 21 TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note 6 Pension Plan - Continued Plan Description - Continued The Comptroller shall adopt and may amend rules and regulations for the administration and transaction of the business of the System and for the custody and control of its funds. The System 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, 110 State Street, Albany, NY 12244. Funding Policy Plan members who joined the System before July 27, 1976 are not required to make contributions. Those joining after July 27, 1976 and before January 1, 2010 with less than ten years of membership are required to contribute 3% of their annual salary. Those joining NYSERS on or after January 1, 2010 and before April 1, 2012 are required to contribute 3% of their annual salary for their entire working career. Those joining NYSERS on or after April 1, 2012 are required to contribute between 3% and 6%, dependent on salary for their entire working career. Under the authority of the New York State Retirement and Social Security Law, 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 the employer to the Pension Accumulation Fund. The Town is required to contribute at an actuarially determined rate. The required contributions for the current year and two preceding years were: ERS 2020 $ 94,350 2019 931,855 2018 104,465 The Town's contributions made to the System were equal to 100% of the contributions required for each year. At December 31, 2020, the Town reported the following liability for its proportionate share of the net pension liability for the System. The net pension liability was measured as of March 31, 2020. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation. The Town's proportionate share of the net pension liability was based on a projection of the Town's long-term share of contributions to the System relative to the projected contributions of all participating members, actuarially determined. This information was derived from a report provided to the Town by the ERS System. 22 TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note 6 Pension Plan - Continued Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension Pension expense was $199,268 for the year ended December 31, 2020. At December 31, 2020, the Town's reported deferred outflows of resources and deferred inflows of resources related to the pensions from the following sources: Deferred Outflows of Resources Differences Between Expected and Actual Experience Changes of Assumptions Net Differences Between Projected and Actual Earnings on Pension Plan Investments Changes in Proportion and Differences Between the Town's Contributions and Proportionate Share of Contributions Town's Contributions Subsequent to the Measurement Date Total Deferred Outflows of Resources Deferred Inflows of Resources Differences Between Expected and Actual Experience Changes of Assumptions Net Differences Between Projected and Actual Earnings on Pension Plan Investments Changes in Proportion and Differences Between the Town's Contributions and Proportionate Share of Contributions Total Deferred Inflows of Resources 23 ERS $ 30,964 10,593 269,712 43,940 $ 355,209 9,147 3,892 $ 13,039 ERS Actuarial Valuation Date 4/1/2019 Net Pension Liability $ 7,085,218,115 Town's Proportionate Share of the Plan's Total Net Pension Liability 5261,115 Town's Share of the Plan's Total Net Pension Liability 0.0019868% Pension expense was $199,268 for the year ended December 31, 2020. At December 31, 2020, the Town's reported deferred outflows of resources and deferred inflows of resources related to the pensions from the following sources: Deferred Outflows of Resources Differences Between Expected and Actual Experience Changes of Assumptions Net Differences Between Projected and Actual Earnings on Pension Plan Investments Changes in Proportion and Differences Between the Town's Contributions and Proportionate Share of Contributions Town's Contributions Subsequent to the Measurement Date Total Deferred Outflows of Resources Deferred Inflows of Resources Differences Between Expected and Actual Experience Changes of Assumptions Net Differences Between Projected and Actual Earnings on Pension Plan Investments Changes in Proportion and Differences Between the Town's Contributions and Proportionate Share of Contributions Total Deferred Inflows of Resources 23 ERS $ 30,964 10,593 269,712 43,940 $ 355,209 9,147 3,892 $ 13,039 TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note 7 Other Postemployment Benefits The Town provides postretirement healthcare benefits to all employees who retire upon or after attaining at least 20 years of full-time service and who are enrolled at the time of retirement. Currently, there are four retirees who meet those eligibility requirements. The Town pays 25% of the total premium of the Town for medical insurance for retirees until age 65. If retirees attain insurance through a plan not established by the Town, the Town will pay up to $204 per month to each retiree to apply toward retirees' premium cost. Post -employment benefit expenses are recognized as costs are incurred. During the fiscal year, expenses of $9,792 were recognized for post-retirement health care. Note 8 Compensated Absences The Town has compensated absences outstanding as of December 31, 2020 in the amount of $85,595. Compensated absences represent the value of the earned and unused portion of accumulated sick leave. Note 9 Fund Balance Detail At December 31, 2020, restricted and assigned fund balance was as follows: Restricted Assigned Unemployment Appropriated Insurance Capital Fund Total for Next Fund Total Funds Reserve Reserve Balance Restricted Year's Budget Balance Assigned General Townwide $ 10,415 $ 118,462 $ - $ 128,877 $ 77,000 $ - $ 77,000 General Parttown - - - - 48,000 - 48,000 Highway Townwide - 73,607 - 73,607 - 21,305 21,305 Highway Parttown - - - - 178,000 361,780 539,780 Lighting District - - - - - 54,660 54,660 Special Grant - - 43,029 43,029 - - - Totals $ 10,415 $ 192,069 $ 43,029 $ 245,513 $ 303,000 $ 437,745 $ 740,745 Restricted Fund Balances Portions of fund balance are reserved and are not available for current expenditures as reported in the Balance Sheet. The restricted balances and activity for the year ended December 31, 2020 are as follows: 24 Beginning Interest Released/ Ending Restricted Fund Balance Balance Additions Earned Appropriated Balance Unemployment Insurance - General Fund $ 101385 $ - $ 30 $ - $ 10,415 Capital Reserve - General Fund 1389150 - - (19,688) 1181462 Capital Reserve - Highway Townwide 739331 - 276 - 731,607 Loan Funds - Special Grant Fund 815848 - - (38,819) 435029 Total $ 303,714 $ - $ 306 $ (58,5071 $ 245,513 24 TOWN OF GR 0 TON NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 Note 10 Commitments and Contingencies Risk Financing and Related Insurance General Information The Town is exposed to various risks of loss related to, but not limited to, torts; theft of, damage to, and destruction of assets; injuries to employees; errors and omission; and natural disasters. These risks are covered by commercial insurance purchased from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage for the past three years. Note 11 Economic Uncertainty - COVID-19 In March 2020, the coronavirus outbreak was declared a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had, and are expected to continue to have, an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Town operates. While it is unknown how long these conditions will last and what the complete financial effect will be, the Town expects to experience disruptions to its programs, and funding sources, which could negatively impact operating results in future periods. Nki ins ro&co Certified Public Accowitants I Busviess Advisors INDEPENDENT AUDITORS' REPORT Supervisor and Town Board Town of Groton Groton, New York We have audited the books and records of the Town of Groton Justice Courts for the period beginning January 1, 2020 and ending December 31, 2020. We conducted this performance audit in compliance with Government Auditing Standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. New York State (NYS) Town Law §31 states that the Town Justice is responsible for recording and reporting the Court's activities. The Uniform Justice Court Act §2019-A states that the books and records of the Court are the Town's property and the Town is responsible for causing them to be audited. The Town of Groton Justice Courts utilize the cash basis for financial reporting purposes. Unremitted fines are due to the Comptroller of New York State during the month following collection of such fines. Bail is retained by the Town Justice until each particular case is settled. Fines and forfeited bail are paid to the Comptroller of New York State. Unclaimed exonerated bail held for six years becomes property of the Town of Groton. Our audit was made for the purpose of determining whether the Town of Groton Justice Courts of Justice John J. Norman and Justice Arthur Dawson were properly collecting and recording bail, fines, and other charges, as well as reporting and remitting funds to New York State in an accurate and timely manner. The results of our tests indicate, for transactions tested, the Town of Groton Justice Courts of Justice Norman and Justice Dawson complied, in all material respects, with the terms and conditions of the requirements described above. In planning and performing our audit, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of procedures and whether they have been placed in operation. We assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the Town of Groton Justice Courts' collection and recording of bail, fines, and other charges, as well as reporting and remitting funds to New York State in an accurate and timely manner, and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. INSERO & CO. CPAs, LLP l'he Iii -hest Standard 1 (800) 232-9547 1 �vw inserocpa coin Other Matters Recurring Findings Bank Account Cash Reconciliation - Justice Dawson and Justice Norman Findings: During our current year audit, the year end reconciliation for Justice Dawson's account contained an unidentified $741 excess balance that had been carried forward from prior years. Justice Norman's account contained an unidentified $659 excess balance that had been carried forward from prior years. During our prior year audit, we noted these unidentified balances were brought forward from prior years and have remained on the Justices' books. Recommendation: We recommend both Justice Dawson and Justice Norman contact New York State to determine how to handle the unsupported funds in their respective court bank accounts. Timely Bank Deposits - Justice Dawson and Justice Norman Findings: Justice Dawson and Justice Norman did not consistently deposit fine, surcharge, and civil fee payments into their respective court bank accounts timely. Per NYS guidance, all monies should be deposited within 72 hours of receipt. In testing the account of Justice Dawson, 13 of 24 receipts tested were not deposited in a timely manner. In testing Justice Norman's account, 5 of 24 receipts tested were not deposited timely. Justice Norman has taken corrective steps to ensure deposits are taken more frequently throughout the week. While taking into consideration the part-time nature of the Town Justice position and the outside circumstances that made regular business difficult during 2020, Justice Norman recognizes that prompt deposits are in the best interest of the court. Recommendation: We recommend the Justices deposit all funds within 3 business days of receipt issuance regardless of amount. N This report is intended solely for the information and use of the Town Board, Justice Courts, and New York State and is not intended to be, and should not be, used by anyone other than these specified parties. Respectfully submitted, Insero & Co. CPAs, LLP Certified Public Accountants Ithaca, New York September 14, 2021 3 ins ro&co Certified Public Accowitwits I Busi1less Advisors COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE AT THE CONCLUSION OF THE AUDIT Supervisor and Town Board Town of Groton Groton, New York We have audited the financial statements of the Town of Groton (the Town) as of and for the year ended December 31, 2020, and the related notes to the financial statements. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated May 14, 2021. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Matters Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Town are described in Note 1 to the financial statements. During the year ended December 31, 2020, the Town adopted Government Accounting Standards Board (GASB) Statement No. 84, "Fiduciary Activities." Other than the adoption of GASB Statement No. 84, no new accounting policies were adopted, and the application of existing policies was not changed during 2020. We noted no transactions entered into by the Town during the year for which there is a lack of authoritative guidance or consensus. The Town has not adopted Governmental Accounting Standards Board Statement No. 34 as required by generally accepted accounting principles. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the Town's financial statements was compensated absences. Management's estimate of compensated absences is based on key factors and assumptions. We evaluated the key factors and assumptions used to develop the compensated absences estimate in determining that management's estimate is reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statements users. The most sensitive disclosure affecting the financial statements was related to the Town's basis of accounting. INSERO & CO. CPAs, LLP The Highest standard 1 (800) 232-9547 1 www inserocpa.com Town of Groton September 14, 2021 Page 2 The disclosure of "Summary of Significant Accounting Policies" (Note 1 to the financial statements) describes that the financial statements of the Town have been prepared in conformity with the accounting principles prescribed by the Accounting and Reporting Manual permitted by the Office of Comptroller of the State of New York to meet the requirements of New York State, and are not intended to be a complete presentation in accordance with accounting principles generally accepted in the United States (U.S. GAAP) established by the Governmental Accounting Standards Board (GASB). The financial statements do not include a Statement of Net Position or a Statement of Activities for the Governmental Activities, prepared on the accrual basis of accounting, a Management's Discussion and Analysis, or other required supplementary information. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The attached schedule summarizes corrected misstatements of the financial statements. There were no material uncorrected misstatements of financial information detected as a result of audit procedures. Disagreements With Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated September 14, 2021. Management Consultations With Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Town's financial statements or a determination of the type of auditors' opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Town of Groton September 14, 2021 Page 3 Other Audit Findings or Issues As noted in the Independent Auditors' Report, the accompanying financial statements are not presented in accordance with accounting principles generally accepted in the United States of America. We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Town's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. We would like to thank you and your staff for the cooperation and support given to us during the course of the audit. We appreciate the opportunity to be of service to you and look forward to our continued involvement. Restriction on Use This information is intended solely for the use of the Town Board and management of the Town of Groton and is not intended to be, and should not be, used by anyone other than these specified parties. Respectfully submitted, Cm. �At L(.P Insero & Co. CPAs, LLP Certified Public Accountants Ithaca, New York September 14, 2021 Town of Groton Schedule of Corrected Misstatements For the Year Ended December 31, 2020 The following audit adjustments were reviewed, approved, and posted by management. Net Effect of Adjustment on Condition Prior to Adjustment Cause Fund Balance General Parttown Fund Accounts Receivable Understated Unrecorded Activity $ 101000 Total General Parttown Fund Audit Adjustments $ 109000 Highway Parttown Fund Accounts Receivable Understated Unrecorded Activity $ 38,757 Total Highway Parttown Fund Audit Adjustments $ 389757 4 ins ro&co Certified Public Accountmits I Business AdNIS01's MANAGEMENT COMMENT LETTER Town Board Town of Groton Groton, New York In planning and performing our audit of the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Groton (the Town) as of and for the year ended December 31, 2020, in accordance with the auditing standards generally accepted in the United States of America, we considered the Town's internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town's internal control. Accordingly, we do not express an opinion on the effectiveness of the Town's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Town's financial statements will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. During our current year audit, we became aware of certain opportunities for strengthening internal controls and operating efficiency. This letter summarizes our current comments regarding these matters. This letter does not affect our report dated September 14, 2021 on the financial statements of the Town. INSERO & CO. CPAs, LLP Town of Groton September 14, 2021 Page 2 Resolved Finding Deficit Fund Balances Prior Year Finding: During our prior year audit, the approved 2020 budget appropriated fund balance for the Highway Townwide Fund was in excess of available fund balance. The Highway Townwide Fund had $5,713 available to appropriate at December 31, 2019 and $100,000 was appropriated as a revenue source for the 2020 budget. Resolution: The Town has adequate fund balance at December 31, 2020 to support the amounts appropriated in the 2021 budget. This communication is intended solely for the information and use of management, Town Board, and others within the Town of Groton, and is not intended to be, and should not be, used by anyone other than these specified parties. Respectfully submitted, i� Insero & Co. CPAs, LLP Certified Public Accountants Ithaca, New York September 14, 2021