Planning District Commission Exec Committee   11/4/2021

Mr.

And Ms. Wilkinson.

I'm here.

Wonderful.

Yes, this meeting of the Thomas Jefferson Planning District Commission is being held pursuant to Code of Virginia Section 2.2-3708.2, which allows a public body to hold electronic meetings when the locality in which it is located has declared a local state of emergency, and the catastrophic nature of the emergency makes it impracticable or unsafe to assemble a quorum in a single location.

And the purpose of the meeting is to provide for the discharge of its lawful purposes, duties, and responsibility.

This meeting has been held via electronic video and audio means through Zoom online meetings and is accessible to the public with closed captioning and there will be an opportunity for public comment during that portion of the agenda.

Notice has been provided to the public through notice at the TJPDC offices, to the media, website posting and agenda.

The meeting minutes will reflect the nature of the emergency that the meeting was held by electronic communication means and the type of electronic communication means by which the meeting was held.

All right, I'm going to jump right in.

First, I want to thank the Executive Finance Committee for being here tonight.

I know in years past, we were able to do this in advance of an in-person meeting and have dinner together.

And I hope that we can get back to that very soon.

But I'd like to welcome David Foley, who is CPA with Robinson Farmer Cox, that you all know, and Don Reed, our Director of Finance.

In the report that I sent along to you all, there was about, you know, just over five page manager's report that has details of changes from FY20 to FY21, as well as differences between budgets and actuals.

But really the star of the show tonight is going to be David Foley, who is going to, I'm going to turn it over to him so he can walk through the report and then we can end with a discussion or any questions you have.

and I want to make sure to leave a little bit of time at the end for a sincere bout of gratitude for Don for his work on yet another round of successful audit.

Okay, thank you all.

Thank you.

Good to be with you all here this evening.

So we have completed the audit for the commission's FYI

fiscal year ending June 30, 2021 and we have issued our draft audit report and would like to go through that with you all.

Before I get into the report though, just a brief overview of the audit that we do for the commission.

Really there's three main pieces to the audit that we do.

One is, of course, we audit the financial statements to make sure that the Commission's financial statements are prepared in accordance with

Generally Accepted Accounting Principles.

And then in addition to just auditing the financial statements themselves as part of the audit, we look at and review the internal controls the commission has over its financial reporting.

So we'll look at what controls are in place and in certain areas, we'll test those controls to see that they're operating as they were designed.

And then the third piece of the audit is the federal compliance piece.

So for the major federal grant programs that the Commission has, OMB provides a compliance supplement that provides a whole list of compliance requirements that the Commission has to

So those are kind of the three main pieces of the audit.

that we do for the commission.

So as such, we'll see when we go through the audit report, there's actually three different reports from us that communicate the results of that to you all.

And if I can, I should be able to share my screen.

Okay.

Okay, so I'll start first in the report.

I'll go over those, the three opinions that go over the results of the audit.

The first starts on PDF page five, the report, and this is our independent auditors report.

And in this report is where we state we did

form an audit of the commission's financial statements.

This report talks about management's responsibility for the financial statements, which management is responsible for the preparation and fair presentation of the financial statements.

This report talks about our responsibilities as auditors, which we are to an express opinion on the commission's financial statements.

of those dates that we did perform our audit in accordance with generally accepted auditing standards.

And then at the top of page two is the opinion that we have issued on the commission's financial statements, which we have issued an unmodified opinion on the commission's financial statements, which the unmodified opinion is the cleanest opinion an auditor can give on the set of financial statements.

Basically an unmodified opinion means that the commission's financial statements have been prepared in accordance with generally accepted accounting principles.

So a clean opinion over the financial statements.

The other two reports from us are in the back of the report.

And if we go to, go to,

Page 66.

This is back in the compliance section.

So a report back here, this is our report over the commission's internal controls over financial reporting.

This report was clean as well.

We noted node

Smith.

So just a couple of examples of that.

One is, you know, as part of the audit, it's typical when we go through an audit that we'll find items in the financials that

So that the financials are prepared in accordance with generally accepted accounting principles.

And as in prior years with the audit, this audit, again, we had no audit adjustments were required.

Part of the audit.

So in the fact that the Commission's financials are adjusted and reported as they should be prior to the audit, again, I think shows the strength of the finance team and the controls that it has in place.

If you didn't have controls, the proper controls in place, that could lead to misstatements in the financial statements.

The other kind of example about internal control over financial reporting and speak to the strength of the Commission's finance, these financial statements, when we come on site, the Commission has these financial statements.

We'll come in the the low the

Clients will have their books and maybe have their books adjusted or we may have some adjustments, but then we kind of assist with preparing the financial statements based on their adjusted trial balances where the commission actually prepares these financial statements.

So again, I think that speaks to the strength of the finance team.

And

So that, again, a clean report over internal controls.

And the third report from us is on PDF page 68.

This is our

Report over the Commission's compliance with its major federal grant programs.

This report was clean as well.

No significant deficiencies or material weaknesses were noted in the Commission's compliance with its federal grant programs.

Also, no items of non-compliance were noted as part of the audit.

So again, all three reports from us that are included in the

Audited financial statements were clean.

Also, in addition to the three clean reports, we also noted no other items related to internal control or other matters that needed to be reported in a separate management letter.

So again, a very clean audit for the commission this year.

So those are the three reports from us.

Next, I'll start with the financial statements themselves.

So if we go back to PDF page 15, this is where the financial statements start.

So these first two financial statements that are included in the

the audit report.

These statements are on what is called the full accrual basis.

So these statements include capital assets, all the pension and OPEB information, any debt, that's all included in these numbers.

So the first financial statement is the statement in that position, exhibit one,

And so this statement reports assets, deferred outflows, liabilities, deferred inflows in that position.

And this is at the end of the fiscal years of June 30th, 2021.

You see total current assets for the commission were 1.2 million.

And we had non-current assets of 307,000, which includes a net pension asset.

as well as the capital assets, equipment, vehicles and such.

Total assets of 1.5 million.

And we have some deferred outflows related to pension and OPEB, 79,000.

Current liabilities for the commission,

and then 420,000 in current liabilities for the commission.

And then have to report the ability for the group life, which is related to VRS.

Also compensated absences are included.

And then

some deferred inflows of 29,000.

And then down at the bottom is the net position at the end of the fiscal year for the commission, a total of 1.1 million.

Then that's further broken down between what was invested in capital assets, restricted, which is the net pension asset, and then unrestricted of 832,000.

and again, these are the full accrual statements.

The next financial statement is the statement of activities.

Again, this is full accrual.

So these expenses include depreciation expense as well as the effect of the net pension asset and also the OPEB liability related to group life.

and so shows the expenses and lists that by program, a little over 4 million and then shows the operating grants and contributions and then the report further down shows some additional, sorry the screen's a little bit.

We've got general revenues there in 65,000 and so the during the fiscal year the Commission's net position increased by 116,000 dollars during the fiscal year so positive increase for the Commission this year.

So the next exhibits, these start the fund statements.

And so the fund statements are on the modified accrual basis.

These are much more in line with the way you budget.

So the first statement here, exhibit three, is the balance sheet.

And so this shows assets, liabilities, and fund balance for the commission.

And then you have columns for the various funds.

So at the end of the fiscal year, the commission had total assets of $1.4 million, total liabilities of $604,000, and then

At the bottom, a fund balance for the commission.

At the end of the fiscal year, the commission ended with a fund balance of a little over $869,000.

And then that, again, is broken down.

That fund balance is broken down between unspendable, which is your prepaid items, and then committed amount that the commission's put in for its capital reserve

and then the unassigned fund balance of $525,000.

This next exhibit is just a reconciliation exhibit.

This just shows how you get from the fund balance we just talked about to the net position we discussed earlier.

So then exhibit five.

This is a statement of revenues, expenditures, and changes in fund balance.

So this shows total revenues, expenditures, and changes in fund balance during the year.

Again, the columns for the various funds.

If we go...

The exhibit goes over two pages.

So if we go down to the next page, we can see total revenues during the fiscal year 4.1 million.

And again, we can see a lot of that.

The commission received a lot of revenue, a lot of federal revenue related to the CARES Act.

So that was a big change, big increase in revenue this year.

You can see 2.1 million related to that.

but in total 4.1 million compared and then total expenditures a little over 4 million in total expenditures and then again we see a positive change in fund balance so an increase in the commission's fund balance during the fiscal year of almost 126,000 so again nice nice increase to the fund balance

Exhibit 6, again, this is just another reconciliation exhibit between the two different bases.

It shows you how we get from the change in fund balance for the governmental funds of $125,000 to what the change in that position was on the full accrual statements.

So the next part of the report is the notes to the financial statements.

The notes to the financial statements, they disclose the significant accounting policies that the commission uses to prepare its financial statements.

It also provides some more detail behind some of the numbers in the financial statements.

Really the notes, no significant changes this year compared to the prior years and as far as the notes to the financial statements go.

Just highlight one item in the notes on the PDF page.

H.S.H.S.

42.

There's a note about the indirect cost rate that the commission has.

So during the year for billing purposes, the commission used 62% was the indirect cost rate.

And then the actual indirect costs during indirect cost rate for the commission during 20, for 2021.

is 55%.

Again, a drop in the indirect cost rate again this year.

Then next part is anything you want to know about group life insurance or ERS pension, there's 20 pages worth of disclosures in here for you.

It's really good reading.

I highly recommend it.

but I won't hog up the meeting too much with that.

So after the notes, we get into the next exhibit is a budget to actual for the commission.

So again, we've got columns for the original budget, the final budget, and then actual numbers.

So we can see for total revenues, budget revenues, 4.3 million,

Actual came in at 4.1.

You can see the variance there as well.

Same thing for expenditures, budget expenditures of 4.2, but expenditures came in under budget of a little over 4 million.

So expenditures under budget by about 229,000.

The next schedule, the next few exhibits in the report is if you didn't get enough reading on the pension and OPEB, life liability in the notes, if those 20 pages didn't give you all the information you wanted to, we have about six more exhibits that go over some information related to the pension and OPEB.

So again, I'll skip over those.

and the next.

So the next, we get to the supporting schedules.

That's the schedule one.

This is just the schedule of expenditures for the general fund.

So this just shows the breakdown of the expenditures that were reported in the general fund back on exhibit five.

The next two schedules are related to how the indirect cost rate is calculated.

So schedule two is the schedule indirect cost.

This is a numerator to that.

Again, this shows what indirect costs were incurred during the year.

So 417,000 during the fiscal year.

So that's the numerator portion of the indirect cost rate.

And then schedule three is the schedule of personnel, program personnel cost.

This is the denominator.

So this just shows the salaries and benefits related to the program cost.

So 754,000

Then kind of down at the bottom, we kind of show how that indirect cost is calculated.

You take the indirect cost, buy it by the program personnel cost, which is the driver.

And then that's how we get to the 55% indirect cost rate.

Next schedule, schedule four.

This is the schedule that was put into the report a few years ago,

More than a few years ago now, the request of the commission, again, this just shows various grants that the commission has as well as the status of those grants.

And then we get to the compliance section, which

and that had the two reports from us and then go down to the, this is the schedule of expenditures of federal awards.

This schedule shows all the federal grants that the commission had and that it expanded during the fiscal year.

So again, we'll see,

The money that the commission received related to the CARES Act, $2.1 million in total related to the CARES Act, this is what was spent during the fiscal year.

In grand total, the federal awards that were spent, $3.3 million.

And then the last page of the report, this is the schedule of findings and question cost.

This page basically summarizes the report.

Again, the type of auditors report unmodified, no material weaknesses or significant deficiencies over financial reporting, federal awards, no findings, no material weaknesses or significant deficiencies.

This shows the federal program that was audited as a major program, the CARES Act.

And then also, again, stating that there were no financial statement findings to report and that there were no federal award findings for question calls to report.

So again, just a summary of the audit document.

That's a brief overview of the report.

Happy to answer any questions anyone may have.

I had only one question.

It really related to just a little additional information.

It was really in the managerial letter from Christine.

So maybe we'll never get to it.

I know what your question is, and I can answer it.

I'm not necessarily going to go through the five-page managerial report.

But in the managerial report, if you look at page four of five, David, you can probably scroll to that faster than I can pull it up.

But there's a budget to actuals table.

And it shows that our operating expenses increased by 130% and that our pass-through expenses decreased.

And the reason for that is the Nelson Cares federal money.

We had it budgeted as pass-through, but it is not considered pass-through.

It's considered contractual.

And so it showed our pass-through higher than it was.

So David's getting to it right now.

I asked that question because it wasn't really apparent on the face of it, why

The operating expenses were higher than the budget.

And so this explanation, I certainly thought it was something like that.

And it answers my question.

I don't know if anybody else would have had the question, but there was a very nice explanation as to why

Payroll administrative expenses were down.

So right after we discuss about how those expenses were down, we see the operating expenses are 130% higher than budget.

Thanks for asking that, Andrea.

Anyone else have any other questions for David or Don at this time?

Nope.

Oh, sure.

I'm good.

I call it, it's my COVID beard.

I had to quarantine for two weeks, so this kind of came out of it.

I feel that.

Yeah, I guess this is my first presentation of yours.

I'm waiting for the other five I'll get in the next three months.

Great.

Other than that, Mr.

Gotcha.

Great.

I don't.

The only thing I want to make sure that I say is, first of all, a thank you to David Foley and your team for your work on this.

We always appreciate you very much during a really busy time for you all.

So we definitely appreciate your work.

And then even particularly for you, Don, your tremendous efforts and the tremendous job that you do.

Yet again, another year coming through with another unmodified, especially with all of the changes that we've had in the past fiscal year, leadership, staffing,

Standing up new large federal programs.

I just want to make sure you hear from me and from this executive team, a sincere thank you for all of your work and the preparation that you do to get us through a very clean and simple audit.

Has Don ever seen like the, he wouldn't have seen any other reactions.

Look, that's you, Don.

Don, is there anything that you would like to say?

Nope.

All right, I guess with that, going back to the agenda, what we would like from you all is staff would recommend that the executive finance committee recommend approval of the FY21 financial report and audit to the full commission.

Excellent.

Dale, Keith, or Andrea, we need a motion.

So moved.

Motion for Mr.

Thank you from Andrea.

Without objection, this will pass.

Any objections?

Very good.

And then the last step would move to adjourn.

Just so that you all know, the Zoom link for the full commission meeting is this same link.

So you can either leave the meeting and come back on, or you can mute, turn off camera, do what you like until the seven o'clock meeting.

I will turn off the recording in the mid time.

Great.

Motion to adjourn.

Anybody?

Second from Keith.

Without objection, is there any objections to adjourning?

Hearing none, we are adjourned.

Thank you, David.

Thank you.