Agenda - 04-18-2017 - 8-a - Minutes

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10 1 Joel Black resumed the PowerPoint presentation: 2 3 Federal Awards — Significant Deficiency 4 2016-006 Monitoring Controls over 1571 Reporting 5 Sound internal controls require that all financial and performance reports be reviewed in details 6 by a knowledgeable person independent of the preparation process to ensure the accuracy and 7 the completeness of the reports. This review should include both the verification and validation 8 of the information included within the report, but also the accuracy of the information within the 9 report. The reviewer should be able to verify the source information to the supporting sub- 10 ledger information to ensure the valuation of the information included in the reports, the 11 accuracy of the data, and the completeness of the information. During our testing of the 12 preparation of the monthly 1571 report, as required by the North Carolina Department of Health 13 and Human Services, we noted the County does not have sufficient controls in place to perform 14 the necessary monitoring reviews to properly identify, summarize, and prepare the reports. By 15 not having a detailed review of the report preparation and submission, the County is exposed to 16 the risk of errors being included in the report. As the aggregation of information is very manual, 17 with little direct monitoring controls, the County is at risk for errors to occur in the monthly 18 reporting of federal and state expenditures and services. This report also provides information 19 for the preparation of the County's schedule of expenditures of federal and state awards and 20 any errors in this report would also result in an error to that schedule — see further discussion in 21 finding 2016-005. 22 23 • New GASB Pronouncements- Implemented This Year 24 o Statement No. 72, Fair Value Measurement and Application, provides guidance 25 on the measurement of fair values of certain accounts — most notably 26 investments. Due to the nature of the County's investments, no significant 27 change was required. 28 o GASB Statement No. 76, Hierarchy of Generally Accepted Accounting Principles 29 for State and Local Governments, provides guidance on the authoritative 30 literature which should be utilized in applying GAAP to state and local 31 government financial statements. No significant change for the County. 32 o GASB Statement No. 79, Certain External Investment Pools and Pool 33 Participants, provides for the accounting of the value of external investment 34 pools (such as the North Carolina Capital Management Trust) at amortized cost, 35 as opposed to fair value, if the pool meets certain requirements. The North 36 Carolina Capital Management Trust— cash portfolio meets these criteria and 37 reports the value of its investments at amortized cost— and thus the County 38 reports its investment in the investment pool at amortized cost. This did not 39 result in a change in value for the County. 40 41 • New GASB Pronouncements for Future Years 42 o GASB Statement No. 73, Accounting and Financial Reporting for Pensions and 43 Related Assets That Are Not within the Scope of GASB Statemenet 68, and 44 Amendments to Certain Provisions of GASB Statements 67 and 68, brings 45 standards for recording the Total Pension Liability (similar to the requirements of 46 GASB Statement 68)for plans not covered by that standard. This requirement 47 will be applicable for June 30, 2017. This should affect the reporting of the 48 County's Law Enforcement Officer's Special Separation Allowance. 49 o GASB Statement No. 74, Financial Reporting for Postemployment Benefits Plans 50 Other Than Pension Plans, enhances note diclosures and RSI for OPEB plan