To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Trish Muller, CPA, Finance Director
Title
Presentation of the 2021 Annual Comprehensive Financial Report (ACFR) and 2021 Popular Annual Financial Report (PAFR)
Body
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Executive Summary
Colorado state law and the Town of Castle Rock Home Rule Charter require an annual audit of the Town’s financial statements. The goal of an audit is to provide reasonable assurance that the financial statements of the Town are presented in conformity with generally accepted accounting principles. An independent firm of licensed certified public accountants must perform the audit. In accordance with this requirement, staff submits, for Council’s information and review, the Annual Comprehensive Financial Report (ACFR) of the Town for the year ended Dec. 31, 2021 (Attachment B).
A representative from FORVIS, LLP will make a short presentation which will address the following areas:
Annual Audit Process
• FORVIS, LLP plans to issue a clean or unmodified opinion on the Town’s financial statements for the year ended Dec. 31, 2021. In other words, the Town’s financial statements appear fairly stated in all material respects, in accordance with generally accepted accounting principles (GAAP).
• 2021 was the fourth year FORVIS, LLP (formerly BKD, LLP) performed the financial audit for the Town of Castle Rock. The Town commends them on their thoroughness and their high level of professionalism.
• Requirements under OMB Uniform Guidance require an audit to include reporting on major federal award programs when Federal Grant funds received exceed $750,000 during the year. FORVIS, LLC performed the Single Audit (Attachment C) for the Town for the year ended Dec. 31, 2021.
Annual Comprehensive Financial Report (ACFR)
• For the year ended Dec. 31, 2021, the Town had a positive net income for the Town as a whole.
• The Town continued to experience improvement in its major revenues during 2021.
• The Castle Rock Urban Renewal Authority and The Festival Park Commons General Improvement District are included as blended component units, and the Castle Rock Downtown Development Authority and Miller’s Landing Business Improvement District are included as discretely presented component units.
• The Town passed on incorporating adjustments into the 2021 ACFR that were determined to be immaterial, both individually and in the aggregate, to the financial statements as a whole. These adjustments are noted in the Report to Governance (Attachment A) in the Schedule of Uncorrected Misstatements.
• Staff will submit the Annual Comprehensive Financial Report to the Government Finance Officers Association for consideration of the Certificate of Achievement for Excellence in Financial Reporting.
Report to Governance
• As part of the 2021 financial statement audit, FORVIS, LLP reviewed the Town’s internal control structure and various policies and procedures of the Town. Auditors issue three levels of comments:
o Material Weaknesses - most severe level of comment noting that the internal control is not adequate to prevent significant misstatement or fraudulent activities.
o Significant Deficiencies - less severe, however, the internal control system is weak and the financial integrity may be compromised.
o Advisory Comments - suggestions to enhance an existing control structure or procedure.
• FORVIS, LLP reported no Material Weaknesses or Significant Deficiencies resulting from the audit on the Town’s financial statements and communicated this in their Report to Governance (Attachment A).
• There were no findings reported as a result of the testing based on the requirements of the Uniform Guidance.
Popular Annual Financial Report (PAFR)
• The PAFR (Attachment D) provides an overview of the Town’s financial position as reported in the 2021 ACFR.
• Finance staff designs this report as an easily understandable version for the general public and other interested parties.
We would like to thank the Finance staff for their dedicated efforts in the preparation of the financial statements and in the audit process.
Attachments
Attachment A: Report to Governance Resulting from the 2021 Financial Statement Audit
Attachment B: Draft 2021 Annual Comprehensive Financial Report (ACFR)
Attachment C: Draft Single Audit for the Year Ended Dec. 31, 2021
Attachment D: 2021 Popular Annual Financial Report (PAFR)
The Annual Comprehensive Financial Report (ACFR) and Popular Annual Financial Report (PAFR) for the Town for the year ended Dec. 31, 2021 will be available on the Town’s website at: <http://CRgov.com/FinancialReports>