The municipal auditing industry and state government as well as cities and towns are all wrestling with how Other Post-Employment Benefits liabilities are funded each year and reported in annual municipal audits.
Bourne’s liability totaled $115 million at the end of Fiscal Year 2018. The town has created a policy of setting money aside each year and directing it to a special fund for placement against the OPEB total, a practice in line with standard accounting principles.
The Clifton/Larsen/Allen audit firm checks PEB funding each year, as does the Massachusetts Department of Revenue, to assure that the town follows its policy.
CLA’s Chris Rogers assured selectmen and the Bourne Finance Committee June 11 that though the OPEB liability is no longer an auditing footnote, there is no move to force towns to deal with the pesky issue overnight, such as via outright funding, which won’t happen.
As for the overall 2018 audit, Rogers said it is a “clean report” with no findings in its fiscal controls section. There are four issues, however, in the audit’s management letter regarding information technology, OPEB, school department gate receipts and handling of cash receipts.
CLA found there is no formal disaster or continuity development plan in the IT office, no external assessment or system penetration test to ward off ransom-hack attacks, no documented review of user accounts and no overall risk assessment being performed.
As for OPEB, an irrevocable trust was established in 2016. However, it is not classified as a fiduciary fund.
CLA, meanwhile, checked the handling of gate receipts generated at school department events and discovered the money from each event was not deposited with the town treasurer in one week’s time.
Cash receipts, meanwhile, were explored as they pertained to the IT, planning, building and inspections departments. It was determined that derived revenue was not reconciled to the town’s general ledger as should have been done twice a year.
Town Administrator Thomas Guerino says that situation is resolved.
“We’re doing that now,” he said.
Guerino said checks-and-balances are now in place. Finance Committee Chairman Mary Jane Mastrangelo said the town push to electronic permitting will mean fewer cash transactions.