To: Honorable Mayor and Members of Town Council
From: Trish Muller, Finance Director
Title
Presentation: 2015 Comprehensive Annual Financial Report
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. The audit must be performed by an independent firm of licensed certified public accountants. In accordance with this requirement, staff submits for your information and review, the Comprehensive Annual Financial Report (CAFR) of the Town for the year ended December 31, 2015.
A representative from Eide Bailly, LLP will be making a short presentation which will address the following areas:
Annual audit process
ü Eide Bailly, LLP issued a clean or unmodified opinion on the Town’s financial statements for the year end December 31, 2015. In other words, the Town’s financial statements appear fairly stated in all material respects, in accordance with general accepted accounting principles (GAAP).
ü 2015 was the third year Eide Bailly, LLP performed the financial audit for the Town of Castle Rock. We commend them on their thoroughness and their high level of professionalism.
ü During their interim fieldwork, the auditors visited Town departments to document cash handling and revenue streams in detail. The testing and documentation of Town departments will be rotated each year depending on materiality and the complexity of the system.
ü The auditors also worked extensively with Finance staff to document accounting processes and the related controls. These conversations included procedures performed by DoIT, Utility Billing, Sales Tax and various other functions of the Town.
ü In late April 2016, the auditors returned to the Town to test year-end asset, liability and fund balances. In addition, several analytic procedures were performed on significant revenue and expense accounts. There was no adjusting journal entries to the financial statements. In other words, the financials presented to management and council throughout the years are fairly stated and representative of the information given to the auditors for the annual financial statement audit.
Comprehensive Annual Financial Report (CAFR)
ü For the year ended December 31, 2015, the Town had a positive net income for the Town as a whole. (Total revenue collected for all Town Funds combine exceeded budget and no individual fund exceeded budgeted appropriation for the year.)
ü The Town continued to experience improvement in its major revenues during 2015.
ü The CAFR will be submitted to the Government Finance Officers Association for consideration of the Certificate of Achievement for Excellence in Financial Reporting.
Report to Governance
ü As part of the 2015 financial statement audit Eide Bailly, LLP reviewed the Town’s internal control structure and various policies and procedures of the Town. There are 3 levels of comments that are issued by the Auditors;
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 and
o Advisory Comments - suggestions to enhance an existing control structure or procedure.
ü Eide Bailly, LLP had no comments in any category resulting from the audit and communicated this in their Report to Governance.
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
Attachment B: Due to the size of the document, a draft version of the Comprehensive Annual Financial Report (CAFR) for the Town for the year ending December 31, 2015 can be found on the Town’s website at: <http://crgov.com/DocumentCenter/View/14358>