Paonia trustees unanimously approved to accept the 2017 town audit. The board received the draft audit at an Oct. 23 budget discussion and audit presentation by Russell White with Rubin Brown.
The unmodified, or "clean" opinion is the highest rating the town can have, said White. It means that the town follows general accepted accounting standards. The town "does a great job of breaking this information down to the various funds," said White.
The audit reflects total town assets of $19,294,343 based on the full-accrual (corporate) system of accounting, total liabilities of $5,480,338, deferred outflow of resources (pension) of $79,122, and total deferred inflow of resources of $100,926, for a total net equity position of $13,792,201. "That's really good for a town, a small community like this to have an equity position of plus $14 million, approximately."
The net position of the town rose between Jan. 1 and Dec. 31 by $1,159,478. Of that, $502,000 is based on the sale of three parcels of land off of Highway 133 in unincorporated Delta County near the town wastewater treatment plant.
The General Fund balance net increase in 2017 of $24,000 marks the second consecutive year the fund has increased. In two years the fund has increased by just over $110,000, said White. "We're trending the right way."
In the Enterprise Funds, the audit reflects the transfer of approximately $1.79 million in remaining government project funds into the water fund as capital assets, marking completion of the $5.7 million water distribution system upgrade project. With government grants, explained White, funds must be held in a government funds account until the related project is complete.
The town spent $853,849 in federal grants in 2017. Entities spending more than $750,000 in a single year are required to undergo a single audit. The audit includes some 14 grant-applicable compliance requirements auditors must test for, said White.
In the compliance report, auditors found a material weakness. In using federal funds, explained White, nonfederal entities are prohibited from contracting goods or services or from making sub-awards to parties that are suspended or debarred or whose principals are suspended or debarred.
In contracting services for water projects, the town was required to check the Excluded Parties List of vendors database, and to document the search. Since the town can't prove it referred to the database, the government considers it not done, said White. None of the contractors in the database were awarded contracts, "so everything is okay," said White. "But they did not document that process." Had a vendor been on the list, "That would have been a big deal."
The 2017 audit and single audit are available for review at Town Hall, and on the town website, townofpaonia.com, under the "Government" tab.