Planning District Commission Finance-Executive Committee   11/7/2024

Well, to order the Executive Committee meeting here for November 7th, 2024.

Aye.

Staff present.

Laura Greene?

Here.

Christine Jacobs?

Here.

All right.

Next is the consent agenda.

Any questions?

Anything that needs to be pulled?

No?

All right.

Do we have a motion?

I'll make the motion.

Second.

All right.

Motion made by Mr. Smith and seconded by Mr. Payne.

All those in favor?

Aye.

Moved by Mr.

Chair votes aye.

Motion passes.

All right, so next Ms. Greene.

I may kick you off later.

David came on site on September 30th of that week.

I was here for five days, collected the site information necessary to do the reporting and evaluation of the financials.

So

This is when he returned.

All right.

Well, thank you.

Thank you all for having me here.

As Laura said, we've completed the audit and have issued a draft of the audited financial statements, which we'll go through with a fine-tooth comb.

But included in the

Audited Financial Report are three different reports from us that communicate the results of the audit.

And so as part of the audit that we do, there's really three main pieces of that audit.

One, of course, is we audit the financial statements to make sure that they're prepared in accordance with generally accepted accounting principles.

And then the other two pieces of the audit we do, we do in accordance with government auditing standards.

So one is we

Gain an understanding and review the internal controls that the Commission has in place over its financial reporting.

We do this to design our audit test accordingly.

And then the third piece of the audit is the federal compliance piece in accordance with the Interform Guidance.

So anytime an organization expends over $750,000 in federal grant funds,

You have to have a single audit as part of the financial statement audit.

So as when we're out doing the audit, OMB provides

A compliance supplement with a list of all the various compliance requirements that the commission has to comply with when it's expended in its federal grant program.

So as part of the audit for the major federal grant programs, we go through those compliance requirements to make sure that the commission is complying with those requirements.

So included in the all the financial requirements

statements, there are again, three different reports from us.

The first is on number page six of the report.

And this is our independent auditors report.

So in this report, we say, you know, we did perform an audit of the commission's financial statements.

And then the second paragraph of this report is where we show our opinion on the financial statements.

And we have issued an unmodified opinion on the commission's financial statements, which an unmodified opinion is the cleanest opinion in order to 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 the opinion is clean.

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

Starting on page 70.

The first report back here is our report on the internal controls over financial reporting.

This report is claimed as well.

We know that no significant deficiencies or material weaknesses in the Commission's internal controls over its financial reporting.

For example, when we came to do the audit, we had no proposed audit adjustments, which I think speaks to the internal controls that the Commission has in place and the strength of the

the finance team.

To go through an audit and not have any proposed audit adjustments is not very common.

Usually, we find a few things here and there.

So the fact that we did not have any, again, I think speaks to the strength of the controls and finance folks.

And then the third and final report from us is two pages over on page 72.

This is our report for the federal compliance report.

Again, this report was clean as well.

We noted no significant deficiencies or material weaknesses in the Commission's compliance with its major federal grant programs.

Also, no items of noncompliance were noted as part of the audit.

So very, very clean audit for the Commission again this year.

So going back towards the front of the report, so those are the three reports from us.

So going back to the front of the report on page nine starts the next section of the report.

So this, starting on page nine, is the management's discussion and analysis.

So this document is written and prepared by management.

It's more of a narrative overview

of the year, a lot of financial highlights in here.

There's various tables like page nine is a summary table of the general fund revenues and expenditures.

And it's also comparative so you can see how this year compared to last.

A couple other tables in here more just summarized financial information and some

You know, again, more narrative analysis on how the year went.

I wanted to answer any questions, if anyone has any questions on anything in the MDNA report.

I think I had just a quick note that we wanted to

say that the general fund increase, it's balanced by $463,786 in this fiscal year.

And let's go see.

Indirect cost rate.

Yes.

is a calculation of indirect cost divided by total staff salary infringed that's applied to projects.

So that calculated rate for this 24 fiscal year was 41%.

74.

I think it's important to note though, you know, with

In a year where we had 74% indirect cost rate, we're bringing in more revenue than our actual administrative expenses were for that year.

What we need to look at is with a 41% rate, there is the risk that our administrative expenses will be more than that, and we won't be bringing in enough, which just means we would need a reserve transfer to capture some of the gains from the previous year with that rate changing year over year.

You're never really striking a one to one balance.

You're two years lagging behind.

So the 24 sets the 26 rates.

And so there's a variable, you know, like

Ebenflow to that.

And I have done a deep dive into the numbers as to the justification of why it has dipped so low.

It is low for the agency in general.

And a lot of what contributes to that, the direct costs were higher.

as opposed to being lower, even though we did lose some direct staff.

And that's partially because the staff that needed to go to those program costs were higher level staff.

So their rates were higher.

So the cost on the direct programs were higher as compared to last year, as well as the indirect costs were lower.

The bulk of that is,

Once you move time over to direct costs, you automatically take it out of administrative costs, indirect costs.

So there's a skew there.

So the analysis was that we had a decrease in expenditures in fiscal year 1994 of 92,696 over fiscal year 23.

And for income, we had a increase of direct cost by $101,021.

And in layman's terms, that means

Ruth and I and Laura and David are billing to programs in order to fill those vacancies.

As an example, Christine was 14% more than budgeted to programs.

that is directly related to the, yes.

And we are filling two

Well, I guess, Keith, you answered your question with two vacancies, but it's because we moved the body program into planning.

And so we're now doing, so we didn't lose a person.

And mobility management will be a new staff member coming here that we're pulling.

What are we looking for next year?

I have not looked that forward yet.

Thank you.

All right.

So the financial statements start on page 17.

And so the first two exhibits here are the full accrual statements that you have on the financial statements.

You have capital assets, any long-term liabilities, and then all the pension-related information.

So exhibit one is a statement in that position.

So this shows the total assets, deferred outflows, liabilities, deferred inflows in that position.

at the end of the fiscal year.

So on exhibit one, total assets and deferred outflows were a little over 9 million at the end of the fiscal year compared to total liabilities and deferred inflows, a little over 7 million.

So then at net position,

End of the year, a little over $2 million.

And then that position is further broken down between what's invested, that investment in capital assets, restricted into that position, which is the commission's pension

Plan actually has a net pension asset.

So that's restricted for the pension.

And then unrestricted was 1.30 at the end of the fiscal year.

And then the next page is a statement of activities.

Again, this is on the full accrual basis.

So this shows the expenses and

program revenues and general revenues and about three quarters of the way down the page, you can see the net increase in that position.

So net position increased by 652,000 during the fiscal year.

So again, those are the full accrual statements.

If we flip over two pages to page 20, this starts the fund statements.

These are on the modified accrual basis, so you don't have things like depreciation expense, all that fund pension information and no long-term debt, which the only long-term obligations that the commission has is the

The crude leave and also the lease liability.

So exhibit three is a balance sheet.

Again, this shows the assets, liabilities, and fund balance at the end of the fiscal year.

And then there's various columns for the different funds.

So general fund, which is the main operating fund, and we've got the

transportation, home, and there's the column for the Blue Ridge Cigarette Tax Board, and then broadband, and then other governmental funds.

So total assets, $8.5 million at the end of the fiscal year, compared to total liabilities of $6.9 million, and then

Ending fund balance for the fiscal year was $1,523,000.

And then that fund balance, again, is further broken down between non-spendable, which is just your prepaid items, committed, which is the capital reserve, and then unassigned.

Unassigned fund balance is $652,000 at the end of the year.

The next exhibit, exhibit four, this is just a reconciliation.

So this just shows you how you get from the ending fund balance of 1.5 million to the ending net position that you saw on exhibit one.

So again, things like capital assets, all the pension information, and then any long-term obligations.

The next exhibit is exhibit 5 on page 22.

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

And we got various columns for the different funds.

And then this shows total revenues, total expenses, and then change in fund balance.

So total revenues, 36.6 million, which of course most of that is 30.1 million is related to the broadband.

And then expenses of 36.1.

And then again, you can see down towards the bottom, the net change in the fund balance.

The commission's fund balance increased by $464,000 during the fiscal year.

Healthy increase.

The next exhibit again is just one of reconciliation exhibit.

This just shows how you get from that net change in fund balance that we just looked at on exhibit five to

Then that change in net position that we saw on exhibit two.

And then the next section of the report is the notes of the financial statements.

So the notes of the financial statements, they start on page 25.

So the notes of the financial statements discloses significant accounting policies that the commission uses to prepare its financial statements.

It also can provide some more detailed information behind

some of the information in the financial statements.

For example, on page 35, that just shows a detailed capital assets that the commission has.

And then if you wanted to know anything about BRS or group life insurance, that starts on page 38

and goes on for probably 15 pages.

So anything you want to know about the VRS program, you don't need to go on their website.

You can just read this, read your financial report.

Just one other note on indirect costs.

That's in between the two pension notes.

On page 46, there's a note on the indirect cost.

So again, here the note shows the indirect cost rate that was used during the fiscal year.

So 74% was used for the billing during the fiscal year.

And then down below that shows what the actual indirect cost was for FY24 of the 41%, which again will take effect in FY26.

So then,

After the notes to the financial statements, a few more schedules and exhibits in here on page 55.

This is the budget actual numbers on exhibit seven.

So again, this shows columns for the original budget, the final budget, the actual numbers, and then the variance.

So I guess it sort of jumps out that we budgeted $54 million in revenues, but actually did $28 million.

Yeah, our original budget, the one where we project in the fall, a year in advance, is $50 million.

And the big one is BODI.

BODI?

Yeah, I was projecting out a three-year grant, trying to say what's going to happen in the next three months versus nine months versus 12 months.

And that is a constantly moving target.

That's something we do our best.

We work with Firefly Partners.

Particularly with that project, yeah.

Is that the same thing with the EPA?

That one we actually moved quicker on that project than we anticipated.

So the next six exhibits are related to the pension and OPEB program.

So we can kind of skip over those.

So the next meaningful exhibit schedule is over a few pages on page 65.

This is schedule one.

This is a schedule of expenditures for the general fund.

So in the MD&A report, it does tell you which program codes, because this is not just administrative codes.

You're doing some kind of academic funding and things

So the next two schedules are related to the calculated indirect cost.

So the indirect cost rate.

So it's schedule two on page 66.

This is a schedule of indirect costs for the year.

So this is basically the numerator and the indirect cost calculation.

And then the next page over page 67, this exhibit or schedule three, that's a schedule of,

The program personnel costs, this is basically the denominator of the calculation.

And then down at the bottom of schedule three, it shows how the indirect cost is calculated.

So taking your indirect cost of $411,000 divided by a million dollars in program personnel cost, and that's how you get your 41% indirect cost rate.

So these schedules just support how that is calculated.

And the last schedule, it's on the next page, page 68, the schedule of grant contracts.

So this is a list of all the current contracts the commission has in place.

And so it shows how much the grant was, what was spent during the fiscal year, what's been spent to date.

and then any remaining balance that would be budgeted for the next fiscal year.

And last few things that are coming out,

Flipping over a few pages to page 75.

This is the schedule of expenditures of federal awards.

This shows all the various different federal grant programs that the commission expanded during the year.

So it lists the program and how much was spent on each program.

In the big, so total 26.9 million, the big chunk of that is the body program of 24.9 million.

This schedule is one that a lot of funders like to look at.

And then the last thing is on page 77 is a schedule of findings and question costs.

This just basically summarizes the audit results.

So again, unmodified opinion on the financial statements, no internal control or federal award issues.

This talks about the major program that was audited for uniform guidance, which of course was the body program.

and there was no financial statement findings or federal award findings or question calls.

As usual, well done.

Congratulations to the staff, the new finance director doing a great job right off the bat.

It's really wonderful.

I'm sure it was not an easy task.

We have a motion to recommend the agenda through the board here.

Yeah, so we want to make a motion.

The Finance Executive Committee recommends approval of the FY24 financials.

What can I ask for?

I'll make that motion.

Thank you very much.

Thank you all.

I do have a question though, before we move on to the next, can you do that?

Yeah.

It's more of a process question.

And since we have our auditor here, is there a way that we can start looking at making AP disbursement other than physical checks?

I mean, we're pushing out a bunch of checks that require multiple signatures.

I'm pretty sure this is of this where we are in the world in time.

Is there a way we can automate that in some way?

And it's just seems to me to be super laborious to generate checks, rotate them, go through, have two signatures on them.

There's got to be an easier way to do that.

I don't know if that impacts the auditing side of things.

No, I mean, it wouldn't change.

It wouldn't change the audit overall.

Now we would certainly look at if you change your process on how you do a disbursement, we'll

It just seems that there's a lot of staff time that could be reduced if we did some sort of way where we're doing, you know, online digital payments.

And then as the chair, excuse me, as the treasurer, instead of signing checks, then I would just sign a one single document that reviews all the checks.

It's a physically signing,

How many checks going through?

Kind of like we do for the VATI, right?

It just seems to me that this would be a streamlined version of it and to do that, I just wanted to kind of throw that out.

Laura and I have been talking about it and I figured this is a good place to table that.

It just seems a little old school and there may be an actually more efficient and better way of doing this.

There you go.

Just from a staff perspective, my understanding is that at some point, some financial policies and procedures were put in place and that our process right now is dictated by these policies and procedures.

and that they need to be reviewed in full on not just accounts payable checks but probably a bunch of other tasks that are being done including how things are being categorized between charted account codes and just a menagerie of things in that.

So we do have a plan to look at policies and procedures and do a policy and procedure audit

across the board as part of our five-year strategic plan.

This maybe should be moved up and maybe move up that independently because of the time involved.

We do have in place through QuickBooks the ability to do online bill K, which would eliminate the need for checks to be printed and signed.

And in doing so,

Keith is correct.

We could do an accounts payable report, make it digital, send it around by what the cash outlay would be, have eyes on all the expenses, sign off on the maybe one page summary report that all are approved in one quick, twice a month process.

And then those bills could be paid up on an online.

So there is a way

And we have that on our list of coming up in the either the February or the April Finance Executive Committee meeting to be looking at that so that we can make that change in advance of next fiscal year.

That was on the list.

That's my recollection.

And I mean, we've certainly seen places move away from writing

As many checks as they used to and using things like bill pay, one of the things you and I were talking about, they use that.

You know, doing EFTs, ACH type transactions.

You know, we've seen a lot of more on the government side, but using P cards.

And like I have some that they only write a check if they have to.

Well, you just noted, I think the biggest struggle is not internally.

It'll be on the vendor.

Yeah, exactly.

Yeah.

You got to look at your vendors and see what day they will accept.

But yeah, definitely the trend seems to be more either p-card or some type of, or bill pay or something like that, electronic.

Well, thank you.

I just wanted a table.

I don't think we've ever talked about it.

And, um, as long as it's on the, uh, to do list, I'm, I'm good with it.

Yeah.

You just want to make sure you still have controls in place over.

I mean, you know, whenever they have questions or whatever, I mean, you know, we're happy to look at the policy and say, oh, wait a second, that doesn't look good.

We'd rather address it on the front end than the back end so that this is a far wide table.

Great.

Well, we now need to move into closed session.

So you can go into the other room and there's dinner.

So help yourself to dinner in there.

We'll have to read the closed session motions that are included in the packet to go in and out.

And then we'll meet you in there.

Meeting is over.

Thank you all.

Just a question on this motion.

It should say the executive committee.

Yeah, A3 sounds like personnel.

No, that's the right one.

Yeah, it's the right one.

See, cause I put to discuss TJPDC office space.

So when I make the motion, I'm just going to say the executive committee.

Good catch, thank you.

So can I do that?

Yes, I'm going to take roll call just before we go into it.

Here.

Hi, Keith Smith.

Keith Smith moves that the Executive Committee for the Planning District Commission be conveyed to closed session pursuant.

Is that correct?

That's correct.

pursuant to the exception found in section 2.2-3711A3 of the Code of Virginia to discuss Thomas Jefferson Planning and History Commission office space.

Second.

Okay, motions are made by Mr. Smith, seconded by Mr. Payne.

All those in favor?

Aye.

Chair votes aye, the motion passes.

Mikey Smith moves that the executive committee for the Thomas Jackson Plaza District Commission exit closed session.

Motion seconded by?

Motion's been made by Mr. Smith and seconded by Mr. Payne.

All those in favor?

Roll call.

Tonya O'Brien?

Yes.

Motion passes.

O'Brien, and Michael O'Brien.

Smith, Michael Payne, Tony O'Brien, Keith Smith.

Well, we actually have one question since we talked about the lease improvements.

So page 35, you list as an asset lease building

That's confusing.

And we show a 392,000 as the asset component of it.

The balance that was put in as the original value of the asset was after two years of the lease.

Okay.

It's 12 months for this current year and three months of fiscal year 26.

Liability.

because that would be what, 96,000 plus another 40,000 or something like that.

15 months, okay.

So we'll get right around 2,000.

Page 35.

Motion to adjourn.

I'm going to make a motion.

Second.

Motion's been made by Mr. Smith, seconded by Mr. Payne.

All those in favor?

Aye.