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August 11, 2015, Finance Committee Meeting. Minutes
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Town of Canton Finance Committee Minutes Voted on: 9-28-1~
Meeting Minutes V ote: 8-0-0
Tuesday, August 11, 2015
Members Present:
Rob Barker, Jim Casamento, Jerry Dorfman, Nichola Gallagher, Dianne Gustafson, Stephanie Leach,
Barbara Saint Andre and Jim Sims.
Members Absent:
Sepp Bergschneider and Tim McKenna.
Guests Present:
Kathy Butters, Town Accountant
Paul Gargano, Manager, Roselli, Clark and Associates
Tony Rosell i, Partner, Rosell i, Clark and Associates
Jim Murgia, Finance Director
Ellen Jones, Finance Committee Secretary
Opening: A meeting of the Canton Finance Committee was called to order by Ms. Saint Andre at 8:00
p.m. on Tuesday, August 11, 2015 in the Community Meeting Room of the Canton Public Library.
A. Approval of Agenda
Chairman Saint Andre reviewed the items on the agenda which included a discussion with the auditors
about the FY14 audit and a discussion of topics for upcoming Finance Committee meetings.
B. Announcements
M r. Murgia announced that the Inspector General's MCPPO Program was offering a 1-day seminar on
November 17 entitled "Boards and Commissions: Responsibilities, Good Governance and What You as
a Member Need to Know". The course, at a cost of $150 per attendee, would cover items such as
fiduciary duties of board members, fraud prevention, public records law, open meeting law and ethics law.
C. New Business
Discussion with Auditors Roselli, Clark &Associates (see meeting handout) —Prior to the Finance
Committee meeting, Paul Gargano, Tony Rosell i and a few members of the Finance Committee attended
the Board of Selectmen's meeting. The purpose of the auditor's attendance at the Finance Committee
meeting was to give the Finance Committee members an opportunity to continue discussing the audit and
to allow them the opportunity to ask questions.
The following items were discussed:
• Cyber liability/fraud insurance — Mr. Murgia was uncertain if the Town had a cyber liability insurance
policy. This policy would fall under the purview of the Town Administrator, Bill Friel, because he
m onitors town liability insurance policies. The cost of a special independent security audit could cost
a pproximately $15,000. Because more towns were falling victim to hackers, Mr. Rosell i
recommended the Town hire a security software specialist to conduct a study.
a Mr. Roselli also made a recommendation that the Town set up a dedicated computer for its on-line
banking transactions. This computer should not have web surfing capabilities. Mr. Murgia stated that
most of the Town's banking transfers were set up as repetitive wire transfers and that anything out of
the ordinary would be confirmed by our banks.
The cost of auditing all departments every year would be too high. The Town Accountant often
makes recommendations or asks the auditors for suggestions as to which departments should be
audited.
School Athletic Fund —The Town Accountant had requested that the auditors review the School
Department's Athletic Fund because there was no detailed back up to receipts that were being turned
over to the Collector/Treasurer's office.
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• Ms. Butters had also recommended that the Auditors review the cash handling process in the Town
Clerk's office.
• Periodic cycle audits are being conducted by the Town Accountant's office. Examples include review
of street opening permits, police documentation for details and Town Clerk license renewals.
• Ms. Butters explained that special details was not a problem anymore and that they are not allowing
the Police department to write off any uncollected details billed. For the last seven months of FY15
the special details have been reconciled. Mr. Murgia stated that balances support the outstanding
invoices to be collected. There is now a report generated by the Police Department that indicates
outstanding balances/list of invoices.
• A Finance Committee member suggested that the Town require that vendors who are repeat
offenders pay up front for the cost of special details. The Town deals mostly with large vendors, such
as Verizon or a contractor who is awaiting for payment from the state.
• If a detail were cancelled, the fallback would be charging the cost of the detail to the Police
Department's overtime budget.
• Fraud Policy —The Board of Selectmen did not accept the fraud policy at their BOS meeting earlier
that night.
• New GASB statements will materially impact the reporting of pension liabilities effective in fiscal 2015.
S&P is aware of this liability and takes this into consideration during their bond rating review.
• Mr. Roselli reviewed the seven criteria that are considered during the bond rating process:
1) demographics (equalized valuation divided by population);
2) income per capita;
3) strong management(a five -year forecast in place with reasonable revenue and expense
assumptions, cash policy, capital improvement policy, investment policy and reserve policy);
4) reserves ratio;
5) budgetary performance (To exceed the budget goal by 5% is a rare situation.);
6) cash versus debt ratio;
7) total debt related to budget revenues.
• NCRS had their actuary conduct a new audit. Canton needed this for the fall to prepare their financial
statements. Mr. Murgia credited NCRS for reacting to the request for this updated information.
• Mr. Murgia stated that the reserves at the end of the year for FY15 were at 15% or Tier 1 and that the
rating agencies viewed the 15% range as very favorably. He also commented that the Town
collected over $4.1 million in excise receipts for FY15 which is higher than the usual $3.6 million
collected in a fiscal year.
The discussion with the auditors ended at approximately 8:50 p.m.
D. Other Business/Open Issues
Discussion of Topics for upcoming Finance Committee Meetings —Some of the topics the Finance
Committee would like to discuss at their future Finance Committee meetings include the following:
• Employee Benefits and how these are budgeted with Human Resource Administrator Jody Middleton.
• School Budget/SPED Costs/budget process for SPED account with the School Committee.
Fixed Costs with the Finance Director, Jim Murgia.
Public Comment —There were no public comments made at the meeting.
Liaisons —There were no liaison reports given at the meeting.
E. Approval of Minutes
A motion made by Mr. Barker to approve the minutes for July 30, 2015 as written was seconded by
Ms. Gustafson. Vote: 6-0-2.
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F. Next Meeting Date: The next Finance Committee meeting would take place at a date to be
determined in the near future.
Adjournment: A motion made by Ms. Gustafson to adjourn the meeting at 9:10 p.m. was
seconded by Ms. Gallagher. Vote: 8-0-0.
Minutes reviewed by: Stephanie Leach
R ectfully submitted,
'
f
\J /
Barb aint Andre
Chair, Canton Finance Committee
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Town of Canton
Finance Committee Meeting —Tuesday, August 11, 2015
List of Meeting Handouts
Please note: These meeting handouts may also be found on the Town's website under the Posted
Minutes section (Laser Fiche).
Agenda (1 page).
Town of Canton —Audit Exit Conference, Roselli, Clark &Associates, August 11, 2015 (12 pages).
Management Letter —Year Ended June 30, 2014 (11 pages).
Single Audit Reports Pursuant to OMB Circular A-133, June 30, 2014 (12 pages).
Anti-Fraud Policy and Response Program (6 pages).
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