Wayland's FY11 Financial Audit 'Went Well'

In its first year auditing Wayland’s finances, Melanson, Heath & Company proposed “No significant audit adjustments” as a result of the firm’s work.

Melanson, Heath & Co., representative Scott McIntyre joined the Wayland Board of Selectmen’s meeting Monday night to report on the results of the town’s FY11 audit.

“The audit went well,” McIntyre said. “What I mean by that is that when we came in here, the books and records were in good working order. All key balance sheet accounts were well reconciled. The most important thing I can tell you is that the audit went well.”

McIntyre said the firm does recommend some reclassification of expenses in order to better align with Governmental Accounting Standards Board (GASB) guidelines.

He told selectmen there were two “significant financial events” for the Town of Wayland in 2011: Some changes to GASB rules and the Massachusetts School Building Authority grants and expenditures in which the town was involved.

The GASB rule changes, McIntyre said, are primarily geared toward creating consistency among states and include, for example, renaming the “unreserved fund balance” to the “unassigned fund balance.”

McIntyre said the auditors did note that Wayland’s 10-year amortization for governmental debt is “a bit low.” About 56 percent of governmental debt is scheduled to be paid off within the next 10 years; however, McIntyre said, he would generally expect to see that percentage in the mid-70s.

“I think the percentages are a little bit skewed,” McIntyre explained. “One, a lot of the debt was issued here in FY2011, and part two is you do have a 25-year pay out.”

McIntyre said he often sees 20-year pay outs, and recommended town officials be prepared to note the details he believes “skew” the percentages when the ratings agencies seek information to set their ratings.

Melanson, Heath & Co., did make four recommendations for the Town going forward. Those recommendations include: establishing additional receivable accounts in the general ledger, expanding trust fund accounting, posting revenue budgets in the general ledger and improving capital project fund year-end cut-off procedures.

Town Administrator Fred Turkington noted that several of these recommendations have already been implemented and steps are being taken to implement others.

According to a letter submitted to Melanson, Heath & Co., on behalf of the selectmen, Wayland has already established additional receivable accounts, implemented a purchase order system for capital projects, and added budgeted revenues to the general ledger.

The letter states that Wayland is in the process of satisfying the trust fund recommendation which asks the Town “to create separate funds rather than simply segregating into separate accounts monies set aside for stabilization, insurance reserves, OPEB liabilities, cemetery perpetual care, and various trust funds within the MUNIS financial management system,” according to the letter.

Selectmen Joe Nolan asked McIntyre how Wayland compared to other communities he had seen.

“When you look at your financial position with other Aaa’s, you’re right there,” McIntyre said, noting that it was technically beyond the scope of his work to make that judgment. “I think that your financial statements are where they need to be for a Aaa.”

The full report, Melanson, Heath & Co.'s recommendation letter, and the Board of Selectmen’s letter responding to the recommendations are available on the Town of Wayland website.