Agenda - 04-19-2007-1 - Laserfiche WebLink

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Establishment of an internal auditing function could result in substantial benefits to the County in terms of strengthened internal control and increased efficiency. Some benefits of an internal audit function are as follows: • Strengthening the County's internal controls over assets and increasing the reliability of the accounting records. • Reducing the time spent by management in the development of County procedures. • Increasing assurance that County policies are being adhered to and that departmental procedures and controls are being reviewed objectively. • Ensuring that each department is accounting and reporting in a consistent manner and that they operating in accordance with management's wishes • Making procedural reviews to determine that the various departments are operating efficiently. • Providing an excellent training ground for future secondary and top management positions. The current plan is to present the internal audit function for discussion by the Board at the April 19, 2007 budget work session'on new positions and compensation. Governmental Accounting Standards Board (GASB) Statement 45 Another issue briefly discussed during the Annual Audit Report presentation was the potential impact on the County's financial statements resulting from the implementation of GASB Statement 45 otherwise known as other post employment benefits (OPEB). The OPEB impacting the County is in the form of the health insurance benefits provided to retired County employees. At the time the December presentation, financial impacts were unknown since the actuarial calculations had not been completed. We recently received the calculations from the actuary and are providing the information as an attachment to the memorandum. Implementation of GASB 45 on the County financial statements is required for the fiscal year ending June 30, 2008. The two aspects of the liability associated with this initiative include reporting the accrued actuarial liabilities and the annual required contributions. The accrued actuarial liabilities as reported on the attached schedule are $84,540,825. This amount will be disclosed in the notes to the financial statements. The annual required contribution, $8,829,704, is the liability to be reported on the balance sheet for the government-wide financial statements. The good news is that neither of the numbers will be reported on the general fund balance sheet as impacting total general fund fund balance. Additionally, there is no current requirement that the County fund this liability. Based on discussions with the LGC and other finance officials, the Bond rating agencies will not look to downgrade issuers for reporting the unfunded liability, however, they will be asking the questions about the issuer's plans on addressing the liability in the not to distant future.