ITEM TITLE:
Approval of the 2015 Financial Audit
SUBMITTED BY: Brian Carlson, Finance Director.
FISCAL NOTES:
Expenditure Required: n/a
Unencumbered Balance:n/a
Funding Source: n/a
RECOMMENDATION:
Approve the 2015 Financial Audit
SUMMARY STATEMENT:
This is the third year of the City’s contract with BDO. This year’s audit included two weeks of on-site work in Valdez, and regular status meetings with the Audit Committee, including a “kick-off” meeting with staff and the Audit Committee, arrival/exit meetings each week and a post-audit meeting.
This year’s audit was unusual in that the implementation of GASB 68, Accounting and Financial Reporting for Pensions has caused disputes and delays with respect to the unfunded portion of the PERS liabilities and how this liability is allocated between the State of Alaska and the participating entities. All PERS-participating municipalities operating on a calendar-fiscal year ending December 31 have missed their audit deadline of September 30, owing to the State’s inability to release needed PERS data prior to the deadline. Staff has been in contact with outside agencies (Standard and Poor, Municipal Securities Rulemaking Board) to apprise them of the late filing.
The 2015 Audit contains one significant deficiency, defined as a deficiency or combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. This item pertains to unfiled status reports for the Wastewater Treatment Plant Outfall grant (see: Audit Wrap Up, page 8). Staff has drafted a remediation plan wherein such reports will be overseen by the Comptroller, rather than the departments directly administering the grants.
There were six adjusting entries required, which are detailed in Attachment A of the Audit Wrap-Up.
Staff will prepare a new RFP for three years of audit work, spanning 2016-2018.