County of Barnstable, Massachusetts Exit Conference for the Annual Audit June 30, 2013 Presented by: CliftonLarsonAllen Date: May 21, 2014

Barnstable County2 Introduction Today’s process Financial Statements Opinion Financial Summary Federal Awards Programs Management letter Feel free to ask questions as we go

Barnstable County3 Opinion FS OPINION (P.3) – UNQUALIFIED Best opinion available

Barnstable County4 General Fund Balance sheet (p.18) CY – GF Fund Balance - $6.0M (GAAP) Restricted – Statutory Reserve - $297k (2.5% > PY) Restricted – Life insurance - $381k Committed – Continuing appropriations - $1.8M Committed – Employee benefits - $121k Assigned – Encumbrances - $819k Unassigned - $2.6M (up by $1.4M from PY) CY – GF Undesignated F/B is 16.5% of exp-T/O PY – GF Undesignated F/B is 8.0% of exp-T/O

Barnstable County5 Net Change in G/F Balance Budgetary Rev/Exp (p.54-55) Anticipated CY change in F/B - ($3.4M) Carry forward articles and encumbrances - $2.9M Actual CY change in F/B = $1.1M Revenue surplus of $1.0M Deeds excise Expenditure surplus (prior to enc/cfd) - $3.5M $2.6M CY encumbrances/cfd’s

Barnstable County6 Cape Cod Commission Fund Balance (p.18) CY - $2.24M PY - $1.95M Revenue & Exp (p.20) Environmental protection taxes $3.03M Intergovernmental $692k Departmental $185k Transfers in $302k (overhead reimbursements) $3.9M expenditures

Barnstable County7 Septic Loan Program Fund Balance (p.19) CY - $24.4M Nonspendable (Loans) - $15.0M Restricted - $9.4M Revenue & Exp (p.21) Loan Interest = $771k Debt Principal = $614k Debt Interest = subsidized = $808k Proceeds of bonds and notes = $3.4M Transfers out = $747k (transfers to admin fund)

Barnstable County8 Net Assets (p.24) CY Total – $1.6M Capital assets, net of related debt - $362k CY Unrestricted - $1.2M Rev/Exp & Change in Net Assets (p.25) Change in Net Assets = ($114k) Revenue down due to less projects in FY 13 Dredge Enterprise Fund

Barnstable County9 O/S Debt LT Debt (Note 9, p ) O/S LT Debt totals $24.5M All relates to MWPAT debt for the Septic Loan program Debt to be funded by septic loan paybacks

Barnstable County10 OPEB Note 10 (p 46-48) New AV dated 06/30/12 was used as the basis OPEB activity Beginning liability - $8.2M (4 years of OPEB liabilities) FY 13 ARC = $2.1M $804K contributed (pay-as-you-go basis) Increase to Net OPEB Obligation - $1.4M Net OPEB Obligation - $9.5M Total UAAL (06/30/12) - $31.0M UAAL decreased by $3.4M

Barnstable County11 GAO AND OMB A-133 REPORTS Total Federal Expenditures – $2.2M Programs tested as major programs HOME Investment Partnerships Program Highway Planning and Construction AmeriCorps

Barnstable County12 GAO AND OMB A-133 REPORTS NO FINDINGS

Barnstable County13 Management Letter No significant deficiencies or material weaknesses in financial controls 2 comments and recommendations One (1) is informative in nature

Barnstable County14 Management Letter Bank Reconciliations – Mitigation Fund Mitigation Fund bank balance did not agree to the general ledger balance at June 30 Cause – Lack of timely transfers for vendor payments Recommendation Monthly reconciliations within 30 days of month end and timely corrective action

Barnstable County15 Management Letter Pension Accounting and Financial Reporting GASB 68 revises/establishes new FR requirements related to pension benefits Req’d to recognize LT obligation for pension benefits in GW financials Statement 68 will also: More comprehensively measure annual pension costs Place conditions on use of actuarial discount rate Require “entry age” method; each period’s service cost determined by level % of pay (attribution method) Expand disclosures (notes and RSI) NOTE: Statement is not a mandate related to funding NPO Recommendation Management familiarize itself with 68 and prep for imp