Since receiving notice on May 20 from auditors Plante & Moran of several steps that could help the township’s accounting operations run more smoothly, officials at Addison Township have been making a few changes.
“Overall this is a good report,” said Les Pulvert, a representative with Plante & Moran, at a special board meeting on July 21. “The finances are getting more complex. There are some areas for improvement, but they are minor.”
“Besides, there’s always room for improvement in everything.”
A letter from Plante & Moran, dated May 20, 2003, listed those items the auditors felt needed township attention. The biggest item for consideration was the township’s accounting system.
During his presentation, Pulvert stated that although the township’s accounting methods and records have always met the requirements of state law, officials should take the following steps for improvement:
n Make the general ledger system a fully integrated system by tracking the entirety of the township’s financial activity with software.
n Consolidate into the general ledger and show all of the bank reconciliations for those accounts not previously tracked there.
n Maintain in a separate list all building bonds.
The letter also stated that “The implementation of the new fund accounting software purchased by the Township should simplify the financial accounting process and promote a more efficient and effective analysis of financial transactions during the year…”
Township Treasurer Dan Alberty said implementation of the new accounting software began in June and officials are still in the process of changing over the system. Once up and running, the new system will fulfill all of the listed recommendations.
In addition, the new program will assist the township in becoming compliant with the federal government’s GASPY 34, a new financial reporting model that includes tracking a municipality’s capital assets and their depreciation. The auditors from Plante & Moran recommended that “the Township consider the future benefits of added systems capabilities in this area.”
The new accounting system can report the township’s capital assets; however, a separate program will be needed to actually track depreciation. Alberty said the company currently working with the township on the new accounting software does offer a separate program for tracking capital and infrastructure assets, but officials have yet to consider the purchase of any new programs.
Some of the other issues listed by the auditors include depositing cash into the bank more often; moving the township office’s lock box to a more secure location; marking invoices “paid;” making sure the township’s computer system is secure; and looking into “positive pay,” which verifies each check presented to the bank against a file of written checks that is electronically downloaded, as a method of deterring fraud.
To date, the township has begun making more trips to the bank, moved the lock box and designed a “paid” stamp to be ordered. Officials are also looking into whether the township’s bank offers “positive pay” and verifying the security of the computer system.
“It’s been a good couple of years working with the township because you’ve been making the adjustments we’ve recommended year after year,” concluded Pulvert. “And that’s what’s needed to move forward.”
Pulvert also informed the Addison Board of Trustees that the township’s 2002-2003 budget, ending on March 31, 2003, came through with flying colors. He presented trustees with charts showing where the township’s money is coming from, where it is going to and any remaining fund balances.
For this year’s general fund revenue, the township brought in a total of $1,130,107, down about seven percent from last year. The largest portion of the revenue, 42.9 percent, comes from the state. Pulvert warned township trustees to continue following state cuts closely and plan ahead.
Treasurer Alberty told the board that this year the budget took into account a three percent cut back and next year’s will do similar. Also, the township will have the loan on Watershed Park paid back in two years, making another $80,000 a year available.
“We’ve also been holding back on projects and prioritizing to help spread the funds,” Alberty said during the meeting.
Also, the township cut back on expenditures for the year. The general fund expenditures totaled $1,058,929 for a fund balance of $71,178. Almost 75 percent of the township’s spending was on general operational costs.
The township’s special funds also received high marks from auditors. Both the Fire operational fund and the police protection fund were left with comfortable fund balances.
The fire operational fund saw a drastic increase in revenue from $332,429 to $543,412, or about 63 percent due to the recent increase in millage rates and taxable values. Expenditures also went up for the fire department from $328,931 to $374,228, mainly due to salary and wage increases. The remaining fund balance has $461,044 (including the December collection and designated for the upcoming operational year) and $23,284 (undesignated). The fire operational budget will be changing even more over the next couple of year’s as the new fire hall is constructed and made operational.
The police protection fund saw an increase from $548,083 in 2001-2002 to $788,429 for this past year, again due to the increase in millage rates and taxable values. Similar to the fire budget, the police fund saw an increase in expenditures because of salary and wage increases from $681,553 to $729,496. The fund balance stands at $779,940 (including the December collection and designated for the upcoming operational year) and $140,970 (undesignated).
“The township’s financial statements are complete, accurate and done to the rules,” concluded Pulvert. “The township remains in good financial standing.”