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1996-12-31 I .. i. .. ... .. i. i.. TOWN OF WAPPINGER, NEW YORK FINANCIAL STATEMENTS ~ AS OF AND FOR THE YEAR ENDED DECEMBER 31,1996 .. , w .. .. , ... L. t; .. it ~ III J; ~ ... \ ... :1 .. " -. RECEIVED OCT 1 fJ 1997 ELAINE SNOWDEN TOWN ClERK II. h ... TOWN OF WAPPINGER, NEW YORK TABLE OF CONTENTS DECEMBER 31, 1996 \. ... DESCRIPTION PAGElS) Independent Auditors' Report ....................... . . . . . . . . . . . . . . . . . . . . . . . .. 1 .. .. Independent Auditors' Report on Internal Control Structure Based on an Audit of General Purpose Financial Statement$ Performed in Accordance with Government Auditing Standards ......................................... 2-3 .. Independent Auditors' Report on Compliance With Laws and Regulations Based on an Audit of General Purpose Financial Statements Performed in Accordance With Government Auditing Standards ................................. 4-5 l.. ~. .. GENERAL PURPOSE FINANCIAL STATEMENTS: Combined Balance Sheet - All Fund Types and Account Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6-9 .. Combined Statements of Revenues, Expenditures and Changes in Fund Equity - All Governmental Fund Types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 t.. Combined Statements of Revenues, Expenditures and Encumbrances - Budget and Actual - General and Budgeted Special Revenue Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11-12 ... i... Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 13-27 OTHER SUPPLEMENTAL INFORMATION: l L. Independent Auditors' Report on Schedule of Federal Financial Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 '" I ... Schedule of Federal Financial Assistance ........... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 , ... Independent Auditors' Report on Internal Control Structure Used in Administering Federal Financial Assistance Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 30-32 .. Independent Auditors' Report on Compliance With the General Requirements Applicable to Federal Financial Assistance Programs ............................................... 33 i. ... III III TOWN OF WAPPINGER, NEW YORK TABLE OF CONTENTS (CONT'D) DECEMBER 31, 1996 ... .. Independent Auditors' Report on Compliance With the Specific Requirements Applicable to Non-Major Federal Financial Assistance Programs ............................................... 34 ,., ... Schedule of Findings and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 t ... Town of Wappinger Responses to Findings and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . 36 .. ... It. 1 .. .. II. ... ~ .. l. La .. .. '- .. II. Sedore, 0' Sullivan, Letterio & Barschi ... Certified Public Accountants, P. C. ... INDEPENDENT AUDITORS' REPORT i. ... To the Supervisor and Members of the Town Board Town of Wappinger, New York Wappingers Falls, New York 12590 ... III. We have audited the accompanying general purpose financial statements of the Town of Wappinger, New York as of December 31, 1996, and for the year then ended as listed in the foregoing Table of Contents. These general purpose financial statements are the responsibility of the Town of Wappinger, New York's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. III. I ... We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States, and the provisions of Office of Management and Budget Circular A-128, II Audits of State and Local Governments." Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our OpInIOn. l.. , .. i.. ~" ... In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Town of Wappinger, New York as of December 31, 1996, and the results of its operations for the year then ended in conformity with generally accepted accounting principles. 1. In accordance with Government Auditing Standards, we have also issued a report dated June 12, 1997 on our consideration of the Town of Wappinger, New York's internal control structure, and ~.. re ort dated June ,12, 19?~ ?n its compli~e_ ~ith l~ws and ~e,~ulations. . -' c..t.~~ rcY.~~ /~ V d.S~~ appingers Falls, New York June 12, 1997 . L.. .. 1 .. 62 East Main Street. P,O. Box 918. Wappingers Falls NY 12590 Wappingers (914) 297-111l!fax (914) 297-1432 . Beacon (914) 831-0542/fax (914) 831-5114 . Newburgh (914) 565-1373 .. ... i. Sedore, 0' Sullivan, Letterio & Barschi .. Certified Public Accountants, PC. ?, ( .. INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ii. Ii.. To the Supervisor and Members of the Town Board Town of Wappinger, New York Wappingers Falls, New York 12590 t '- .. We have audited the general purpose financial statements of the Town of Wappinger, New York as of and for the year ended December 31, 1996, and have issued our report thereon dated June 12, 1997. , f~ l;J ... We have conducted our audit in accordance with generally accepted auditing standards, and GovernmenJ Auditing Standards issued by the Comptroller General of the United States, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments." Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. i ... L ... The management of the Town of Wappinger, New York is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. .. L ~.. .. L In planning and performing our audit of the general purpose financial statements of the Town of Wappinger, New York for the year ended December 31, 1996, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our .. ~ ... 2 L 62 East Main Street. P.O. Box 918 . Wappingers Falls NY 12590 Wappingers (914) 297-111l/fax (914) 297-1432 . Beacon (914) 831-0542/fax (914) 831-5114 . Newburgh (914) 565-1373 .. tl .. opinion on the general,purpose financial statements and not to provide assurance on the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. ... ~J' I. I.. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. However, we noted no matters involving the internal control structure and its operations that we consider to be material weaknesses as defined above. .. .. ... .. We noted certain matters involving the internal control structure and its operation that we have reported to the management of the Town of Wappinger, New York in the Schedule of Findings and Recommendations. r.. This report is intended for the information of the Supervisor, Town Board, Management and the New York State Emergency Management Office. However, this report is a matter of public record and its distribution is not limited. ~~ r CJ ~~-~ I" ~~ \t,j(jCbl-4c.L<' Wappingers Falls, New York June 12, 1997 ... f i. ... j" .. III ... i. 3 .. .. II. II. Sedore, 0' Sullivan, Letterio & Barschi ... Certified Public Accountants, pc. II. .. INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMRNT AUDITING STANDARDS .. II. To the Supervisor and Members of the Town Board Town of Wappinger, New York Wappingers Falls, New York 12590 .. '- We have audited the general purpose financial statements of the Town of Wappinger, New York as of and for the year ended December 31, 1996, and have issued our report thereon dated June 12, 1997. .. We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards issued by the Comptroller General of the United States, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments." Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. .. ... II. Compliance with laws, regulations, contracts and grants applicable to the Town of Wappinger, New York is the responsibility of the Town of Wappinger, New York's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Town of Wappinger's compliance with certain provisions of laws, regulations, contracts and grants. However, the objective of our audit of the general purpose financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. _'t ~ .. I I .. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. itc ... However, we noted certain immaterial instances of noncompliance that we have reported to the management of the Town of Wappinger, New York in the Schedule of Findings and Recommendations. .. 4 ... 62 East Main Street. P.O. Box 918 . Wappingers Falls NY 12590 Wappingers (914) 297-111l/fax (914) 297-1432 . Beacon (914) 831-0542/fax (914) 831-5114 . Newburgh (914) 565-1373 ... .. ~~ .. This report is intended for the information of the Supervisor, Town Board, Management and the New York State Emergency Management Office. However, this report is a matter of public record and its distribution is not limited. &. i. _-6~,()r~~ IL7li~cr~d; Wappingers Falls, New York June 12, 1997 ji .. .. .. .. .. .. p &; .. i. Ii. i' .. .. .. .. 5 ~! , ... ... .. TOWN OF WAPPINGER, NEW YORK COMBINED BALANCE SHEET- ALL FUND TYPES AND ACCOUNT GROUPS DECEMBER 31, 1996 IIIIi GOVERNMENTAL FUND TYPES .. ASSETS GENERAL FUND SPECIAL REVENUE FUND CAPITAL PROJECTS FUND .IIi Cash and cash equivalents Cash from obligations - restricted Investments Receivables: Charges for services Other Due from other funds Due from other governments Deferred compensation benefits State and federal receivable Property, building and equipment Amounts to be provided for the payment of: Landfill closure costs Compensated absence obligations Long-term debt $316,673 $609,730 $1,462,416 1,437,433 IIIIiI 1,812,061 819,766 1,353,171 568,219 64,596 IIIIiI 29,838 289,907 46 193,958 72,182 .. IIIIi Total Assets $2,417,126 $2,359,804 $4,253,066 IIIIIIlI IIIIIIlI .. .. .. IIIIiI .. ..i The accompanying Notes to the Financial Statements are an integral part of this financial statement. .. 6 IIIfIl .. .. f .. L. FIDUCIARY FUND TYPE ACCOUNT GROUPS TRUST & WNG- GENERAL TOTALS AGENCY TERM FIXED (MEMORANDUM FUND DEBT ASSETS ONLY) $331,352 $- $- $2,720,171 1,437,433 3,984,998 568,219 64,596 319,791 193,958 61,604 61,604 72,182 16,807,813 16,807,813 550,000 550,000 279,734 279,734 23,191,000 23,191,000 $392,956 $24,020,734 $16,807,813 $50,251,499 '- L. ~ .. ~, ... .. i.:' .. ... I' .. ... .. ,~ .. 9 $ - t ... it. L. 7 , .. LIABILITIES AND FUND EQUITY LIABILITIES Accounts payable and accrued liabilities Retainages payable Bond anticipation notes payable Due to other funds Deferred revenues Deferred compensation Other liabilities Landfill closure costs Compensated absence obligations Long-term debt Total liabilities FUND EQUITY Investments in general fixed assets Fund balance (deficit): Reserved for: Encumbrances Miscellaneous Unreserved: Designated for: Subsequent years' expenditures Undesignated Total fund equity Total liabilities and fund equity TOWN OF WAPPINGER, NEW YORK COMBINED BALANCE SHEET, (CONT'D.) - ALL FUND TYPES AND ACCOUNT GROUPS DECEMBER 31, 1996 GOVERNMENTAL FUND TYPES GENERAL FUND SPECIAL REVENUE FUND CAPITAL PROJECTS FUND $98,400 $365,812 314,154 3,104,000 84,289 $119,258 235,502 12,334 98,400 3,868,255 367,094 6,637 980,327 564,397 58,264 857,491 652,115 890,201 1,340,595 (653,780) 2,318,726 1,992,710 384,811 $2,417,126 $2,359,804 $4,253,066 The accompanying Notes to the Financial Statements are an integral part of this financial statement. 8 .. .. .IIi .. ... IIlIIiI .. .. IIIl IIIl IIlIIiI IIlli .. .. .. IIlIIiI IIIIIl IIIIIl .. ... II. FIDUCIARY F1JND TYPE ACCOUNT GROUPS It. TRUST & AGENCY F1JND .. ... i. It. III LONG- TERM DEBT GENERAL FIXED ASSETS 9 TOTALS (MEMORANDUM ONLY) ... .. TOWN OF WAPPINGER, NEW YORK COMBINED STATEMENTS OF REVENUES, EXPENDI1URES AND CHANGES IN FUND EQUITY - ALL GOVERNMENTAL FUND TYPES FOR THE YEAR ENDED DECEMBER 31, 1996 .. GOVERNMENTAL FUND TYPES SPECIAL CAPITAL TOTALS ... GENERAL REVENUE PROJECTS (MEMORANDUM FUND FUND FUND ONLY) REVENUES ~j Real property taxes $1,156,927 $3,756,987 $- $4,913,914 .. Real property tax items 67,445 67,445 Non property tax items 812,707 812,707 Departmental income 113,526 1,722,137 1,835,663 Intergovernmental charges 1,545 5,436 6,981 ... Use of money and property 280,659 715,406 117,644 1,113,709 Licenses and permits 56,156 56,156 Fines and forfeitures 94,863 94,863 .. Sale of property and compensation for loss 45,617 3,439 49,056 Miscellaneous local sources 3,222 210,425 14 213,661 State aid 507,007 147,566 654,573 Federal aid 19,471 33,909 53,380 .. Total revenues 3,159,145 6,595,344 117,658 9,872,108 .. EXPENDInJRES General government support 1,345,869 478,850 1,824,719 Public safety 234,511 234,511 II. Health 0 231,700 231,700 Transportation 106,162 1,349,417 1,455,579 Economic assistance and opportunity 1,428 1,428 ... Culture and recreation 450,079 450,079 Home and community services 312,718 1,663,173 2,994,009 4,969,900 Employee benefits 259,119 244,945 504,064 J; Debt service 576,381 2,569,725 3,146,106 .. Total expenditures 3,286,267 6,058,960 3,472,859 12,818,086 .. Excess (deficiency) of revenue over expenditures (127,122) 536,384 (3,355,201) (2,945,978) Other financing sources (uses): BANS redeemed from appropriations 207,000 207,000 x Operating transfers in 130,750 130,750 ... Operating transfers (out) (94,000) (36,750) (130,750) Total other financing sources ( uses) (94,000) (36,750) 337,750 207,000 f .. Excess (deficiency) of revenue and other sources over expenditures and other uses (221,122) 499,634 (3,017,451) (2,738,978) ... Fund Equity, December 31,1995 2,539,848 1,493,076 3,402,262 7,435,186 Fund Equity, December 31,1996 $2,318,726 $1,992.710 $384.811 $4.696.208 ... The accompanying Notes to the Financial Statements are an integral part of these financial statements. II. 10 k ... .. TOWN OF WAPPINGER, NEW YORK COMBINED STATEMENTS OF REVENUES, EXPENDITURES AND ENCUMBRANCES - BUDGET AND AC1UAL - GENERAL AND BUDGETED SPECIAL REVENUE FUNDS FOR THE YEAR ENDED DECEMBER 31, 1996 IIIiii GENERAL FUND IIIiii VARIANCE REVISED FAVORABLE BUDGET AC1UAL (UNFAVORABLE) REVENUES .. Real property taxes $1,156,927 $1,156,927 $- Real property tax items 50,000 67,445 17,445 Non property tax items 550,000 812,707 262,707 ... Departmental income 86,925 113,526 26,601 Intergovernmental charges 1,545 1,545 Use of money and property 287,776 280,659 (7,117) Licenses and permits 44,400 56,156 11,756 IIIiii Fines and forfeitures 94,500 94,863 363 Sale of property and compensation for loss 16,240 45,617 29,377 Miscellaneous local sources 30,866 3,222 (27,644) .. State aid 455,456 507,007 51,551 Federal aid 19,471 19,471 Total revenues 2,773,090 3,159,145 386,055 Appropriation of prior's year's fund balance 930,648 227,759 (702,889) .. Total revenues and appropriation of prior year's fund balance 3,703,738 3,386,904 (316,834) .. EXPENDITIJRES AND ENCUMBRANCES General government support 1,422,078 1,346,716 75,362 .. Public safety 250,242 234,511 15,731 Health Transportation 114,957 106,162 8,795 IIIiii Economic assistance and opportunity 7,600 1,428 6,172 Culture and recreation 520,467 455,869 64,598 Home and community services 387,831 312,718 75,113 Employee benefits 330,182 259,119 71,063 .. Debt service 576,381 576,381 Total expenditures and encumbrances 3,609,738 3,292,904 316,834 .. Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) expenditures and encumbrances 94,000 94,000 lIIIl Other financing sources (uses): Operating transfers (out) (94,000) (94,000) .. Total other financing sources ( uses) (94,000) (94,000) Excess (derlCiency) of revenues, appropriation of prior year's fund balance and other sources .. over (under) expenditures, encumbrances and other uses $0 $0 $0 The accompanying Notes to the Financial Statements .. are an integral part of these financial statements. 11 ... IIIiii ~ .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 1996 iI. ~ NOTE A - SummaQ of Accountina: Policies if .. The Town of Wappinger, New York (lithe Town") was incorporated on May 20, 1875, under the provisions of the State of New York. The Town operates under a Town Board form of government, consisting of a Supervisor and four Councilmen/women. The Supervisor serves as the Chief Executive Officer and as the Chief Fiscal Officer of the Town. .. The Town provides the following services: highway maintenance, water, sewer, planning, zoning, building and safety inspection, lighting, and culture and recreation. The financial statements of the Town have been prepared in conformity with generally accepted accounting principles (GAAP), as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles, some of which are as follows: r .. .. 1. The Reporting Entity The Town, for financial purposes, includes all of the funds and account groups relevant to the operations of the Town of Wappinger, New York. The financial statements include organizations, functions and activities that are controlled by or dependent upon the Town. Control or dependence is determined on the basis of budget adoption, taxing authority, funding and appointment of the respective governing board. Fund Accounting .. II. .. 2. ill The accounts of the Town are organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts, which are comprised of each fund's assets, liabilities, fund equity, revenues and expenditures. Government resources are allocated to and for individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into fund types and two account groups, as follows: i ... z i. GOVERNMENTAL FUND TYPES iii. The accounting and reporting treatment applied to assets and liabilities associated with a fund are determined by its measurement focus. All governmental fund types are accounted for on a spending "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available ... ill. 13 .. .. II. L TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 if II. ... Summary of Accounting Policies (Continued) spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. General Fund t ill Ii !' .. - The General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. .. Special Revenue Fund Special Revenue Fund is used to account for the proceeds of specific revenue sources (other than special assessments, expendable trust or major capital projects) that are legally restricted to expenditures for specified purposes. Capital Projects Fund '- '- This fund is used to account for financial resources to be used for the acquisition and construction of major capital facilities. '- FIDUCIARY FUND TYPE Ii .. Trust and Agency Fund Trust and Agency Fund is used to account for assets held by the Town in a trustee capacity, or as an agent for individuals, other governments, and/or other funds. These include Expendable Trust and Agency Funds. Expendable Trusts are accounted for in essentially the same manner as governmental funds. Agency funds are custodial in nature (assets equal liabilities), and do not involve measurement of results of operations. ~ " ill .. ACCOUNT GROUPS ~, Account groups are used to establish accounting control and accountability for General Fixed Assets and General Long-Term Debt. The two account groups are not "funds." They are concerned only with the measurement of financial position. They are not involved with the measurement of the results of operations. ill r. I. 14 .. i: ill ... ,,; t .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 ... III Summary of Accounting Policies (Continued) General Fixed Assets Account Group Property, plant and equipment used in governmental fund type operations are accounted for in the General Fixed Assets Account Group, rather than in governmental funds. No depreciation has been provided on such property, plant and equipment. All property, plant and equipment are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated property, plant and equipment are valued at their estimated fair value on the date donated. Interest costs incurred during construction have not been capitalized, however. ~, ~: III ~ ... .. The Town has adopted the accounting policy of not capitalizing "infrastructure" general fixed assets (roads, bridges, curbs and gutters, streets and sidewalks, drainage system, lighting systems and similar assets) that are immovable and of value only to the Town. General Long- Tenn Debt Account Group Long-term liabilities expected to be financed from governmental fund types are accounted for in the General Long-Term Debt Account Group, not in the governmental funds. They are recorded at the par value of the principal amount. No liability is recorded for interest payable to maturity. Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by non- current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as liabilities in the General Long-Term Debt Account Group. Basis of Accounting ... ... l. .. III 3. .. ... Basis of accounting refers to when revenues and expenditures are recognized in the accounts, and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. .. All governmental and expendable trust funds are accounted for using the "modified accrual basis" of accounting. Their revenues are recognized when they become measurable and available as net current assets. All major revenues are susceptible to accrual. .. 15 .. .. Summary of Accounting Policies (Continued) Expenditures are generally recognized under the "modified accrual basis" of accounting when the related fund liability is incurred. Exceptions to this general rule include: (1) accumulated unpaid vacation, sick pay, and other employee amounts which are not accrued; (2) principal and interest on general long-term debt which is recognized when due; and (3) expenditures for inventory-type items which are recognized at the time of purchase. Expenditures for judgments and settled claims are also recognized when the related liability is incurred, that is when the judgment has been rendered or settlement has been reached. Unsettled claims and contingencies are recognized only if it is probable that an asset has been impaired or a liability has been incurred and the amount of the impairment or liability can be reasonably estimated. k; ... I, ... i .. .. "~ '- ... .. II. I.. i. ... .. .. II. ~ ... ... ... i.. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 4. Budgets The Town employs a formal budgetary accounting system as a management tool. During the year, a budget was adopted and modified by the Town Board for the General Fund and Special Revenue Fund. However, for the Capital Projects Fund, budgets are established at the project level and continue until the project is completed. Unused appropriations of the annually budgeted funds lapse at the end of the year. 5. Encumbrances 6. Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded for budgetary control purposes to reserve that portion of the applicable appropriations, is employed as a control in preventing over expenditure of established appropriations. Open encumbrances are reported as reservations of fund balance since they do not constitute expenditures or liabilities and will be honored through budget appropriations in the subsequent year. Budget and Actual Comparison The budget and actual Comparison for Special Revenue Funds, included in the Combined Statement of Revenues and Expenditures - Budget and Actual, reflects budgeted and actual amounts for funds with legally authorized (appropriated) budgets. Certain Special Revenue Funds have not been included in the comparison because they do not have legally authorized (appropriated) budgets. The actual activity of these unbudgeted funds, as follows, is provided in order to reconcile to the total combined balances of the Special Revenue Funds: 16 .. t: .. I.. ~ II. ... .. ... .. !i .. .. '- ... ... III .. ... II. ... .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31~ 1996 Summary of Accounting Policies (Continued) JANUARY 1, REVENUES & (EXPENDITURES DECEMBER 31, 1996 _ OTHER SOURCES & OTHER USES) 1996 Total for funds Included in Budget Comparison $1,493,036 $6,595,257 $(6,095,710) $1,992,583 Funds not included in Budget Comparison 40 87 127 Total Special Revenue Funds $1.493.076 $6.595.344 $(6.095.710) $1.992.710 7. Cash and Investments Cash includes amounts in demand and time deposits, as well as, short-term investments. State statutes and the Town's own written investment policy govern the investment policies of the Town. Short-term investments consist of investments in repurchase agreements. The repurchase agreements involve purchases by a broker of portfolio securities concurrently with an agreement by the broker to sell the same securities at a later date at a fixed price. Generally, the effect of such a transaction is that the Town can invest its excess cash balances at competitive interest rates. Market value of the repurchase agreements approximates cost plus accrued interest. The cash and investments of the Town at December 31, 1996, are as follows: SPECIAL CAPITAL TRUST & GENERAL REVENUE PROJECTS AGENCY FUND FUND FUND FUND TOTAL N on- Interest Bearing Accounts $ 944 $ $ $ $ 944 Interest Bearing Accounts 315,729 609,730 2,899,849 331,352 4,156,660 Repurchase Agreements 1.812.061 819.766 1.353.171 3.984.998 TOTAL $2.128.734 $1.429.496 $4.253.020 $331.352 $8.142.602 All of the Town's deposits were covered by Federal Deposit Insurance or collateralized with securities held by a third party custodian in the Town's name. 17 Summary of Accounting Policies (Continued) 8. Accumulated Compensated Absences It is the Town's policy to permit employees of the Highway Department to accumulate a limited amount of earned but unused vacation and sick leave, which will be paid to employees upon separation from the Town's service. Other Town employees accumulate unused compensated absences. However, such earned, but unused compensated absences, must be used during their period of employment with the Town. No payment will be made upon separation from the Town's service. In governmental and fiduciary funds, the cost of vacation and sick leave is recognized when payments are made to employees. A long-term liability of $279,734 of accrued vacation and sick leave at December 31, 1996, has been recorded in the General Long- Term Debt Account Group of Accounts, representing the Town's commitment to fund such costs from future operations. Pension Plans .. .. .. Ii. j~ .. .. .. .. .. Ii. {; .. ... .. L. ... IiIIII .. ... I .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 9. Plan Description The Town of Wappinger participates in the New York State and Local Employees' Retirement System (ERS), and the Public Employees' Group Life Insurance Plan (Systems). These are cost-sharing multiple-employer retirement systems. The Systems provide retirement benefits as well as death and disability benefits. Obligations of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the NYSRSSL, the Comptroller of the State of New York (Comptroller) serves as sole trustee and administrative head of the Systems. The Comptroller shall adopt and may amend rules and regulations for the administration and transaction of the business of the Systems and for the custody and control of their funds. The Systems issue a publicly available financial report that inc,ludes financial statements and required supplementary information. That report may be obtained by writing to the New York State and Local Retirement Systems, Gov. Alfred E. Smith State Office Building, Albany, NY 12244. Funding Policy The Systems are noncontributory except for employees who joined the New York State and Local Employees' Retirement System after July 27, 1976 who contribute 3% of their salary. Under the authority of the NYSRSSL, the Comptroller shall certify annually the rates expressed as proportions of payroll of members, which shall be used in computing the contributions required to be made by employers to the pension accumulation fund. 18 II. '- TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 .. .. Summary of Accounting Policies (Continued) The Town of Wappinger is required to contribute at an actuarially determined rate. The required contributions for the current year and two preceding years were: c:. .. ERS. .. 1996 1995 1994 BI .. The Town's contributions made to the Systems were in excess of 100 percent of the contributions required for each year. The Town has not recorded a deferred asset for the excess contributions made since the additional funds have been applied to the pension credits described below. .. .. Since 1989, the System's billings have been based on Chapter 62 of the Laws of 1989 of the State of New York. This legislation requires participating employers to make payments on a current basis, while amortizing existing unpaid amounts relating to the System's fiscal years ending March 31, 1988 and 1989 (which otherwise were to have been paid on June 30, 1989 and 1990, respectively) over a 17-year period, with an 8.75 % interest factor added. Local governments were given the option to prepay this liability. The Town of Wappinger paid this liability in full in 1989. However, during the 1990 Legislative session Chapter 210 was enacted which required a change in funding method. This change was subsequently ruled unconstitutional but Chapter 210 also required that any credits created by the initial change be applied to the Chapter 62 billing change liability. Although the Town had paid its liability as noted above, an amortization balance was created, which was offset by the prepaid amortization credit. The Town, therefore, did not record any net liability. In 1996, the Town elected to apply the accrued pension credits against the amortization balance. 10. Deferred Compensation Plan Employees of the Town of Wappinger may participate in a deferred compensation plan adopted under the provisions of Internal Revenue Code ~ection 457 (Deferred Compensation Plans with Respect to Service for State and Local Governments). The deferred compensation plan is available to all employees of the Town. Under the plan, employees may elect to defer a portion of their salaries and avoid paying taxes on the deferred portion until the withdrawal date. The deferred compensation amount is not available for withdrawal by employees until termination, retirement, death, or unforeseeable emergency. The deferred compensation plan is administered by an unrelated financial institution. Under the terms of an IRe Section 457 deferred compensation plan, all deferred compensation and income attributable to the investment of the deferred compensation amounts held by the financial institution, until paid or made available to the employees II. ... ... ~ .. .~ II. .. ... I. 19 " ... .. I ... TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 ... Summary or Accounting Policies (Continued) or beneficiaries, are the property of the Town subject only to the claims of the Town's general creditors. In addition, the participants in the plan have rights equal to those of the general creditors of the Town, and each participant's rights are equal to his or her share of the fair market value of the plan assets. The Town believes that it is unlikely that plan assets will be needed to satisfy claims of general creditors that might arise. 11. Post Employment Benefits .. II. .. In addition to providing pension benefits, the Town provides health insurance coverage and survivor benefits for retired employees and their survivors. Substantially all of the Town employees may become eligible for these benefits if they reach normal retirement age while working for the Town. Health care benefits and survivors benefits are provided through an insurance company whose premiums are based on the benefits paid during the year. The Town recognizes the cost of providing benefits by recording its share of insurance premiums as an expenditure in the year paid. Employees contribute according to a sliding scale based on years of service. For the year of 1996, $12,170 was paid on behalf of eight retirees and recorded as expenditures in the General and Special Revenue Funds. .. lIIII ... 12. Property Taxes ... The Town submits an approved budget to the Dutchess County Commissioner of Finance by December 5th of the previous year. The County then establishes the warrant for the year which is due and payable on or about January 1 of each year. The Town collects the taxes on behalf of the Town and County without penalty through February 28th and with penalties and interest through August 31st. The Town's portion of the taxes is recognized and transferred prior to the County's portion. Therefore, the Town receives its entire tax, leaving the unpaid to the County Commissioner of Finance. ~\ i. ... 13. Long- Term Obligations ... ... Long-Term Debt is recognized as a liability of a governmental fund when due, or when resources have been accumulated in the debt service fund for payment early in the following year. For other Long-Term Obligations, only that portion expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. The remaining portion of such obligations is reported in the General Long-Term Debt Account Group. ... 14. Insurance , ... The Town of Wappinger assumes the liability for most risk including, but not limited to, property damage and personal injury liability. Such risks are covered by the purchase of commercial insurance. Judgements and claims are recorded when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. Workers compensation coverage is provided through a retrospective policy, wherein premiums are recorded based on the ultimate cost of the experience to date of workers in similar occupations. .. .. 20 ... .. j'-> ... .. II ... .. .. .. ... II. \, II. ~. I II. .. i. .. .. .. .. Ii. TOWN OF WAPPINGER, NEW YORK NOTES TO mE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 Summary of Accounting Policies (Continued) 15. Reserves of Fund Equity The Town records indicate that portions of the fund equity are segregated for a specific future use. The following details the description and amounts of the reserves used by the Town: A. General Fund Reserved for Encumbrances Miscellaneous: Reserved for Inspection Fees Reserved for Downstream Drainage Total Miscellaneous Reserves BALANCE AT DECEMBER 31. 1996 $ 6,637 330,000 234.397 564.397 TOTAL $571.034 B. Ca.pital PrQject~ Fund Reserved for Encumbrances Miscellaneous: Reserved for Highway Equipment $980,327 58.264 TOTAL $1.038.591 16. Allowance for Uncollectible Accounts 17. An Allowance for Uncollectible Accounts is not reflected in the Special Revenue Fund. Past due accounts after one year are placed on the county tax rolls for collection, and reimbursed to the Town as they are put on the tax rolls by the County. Total Columns on Combined Statements Total Columns on the Combined Statements - Overview are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Such data is not comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. NOTE B - Other Receivables Other Receivables at December 31, 1996 consist of the following: GENERAL FUND TOTAL Fines and Fees Receivable $ 64.596 $ 64.596 21 III TOWN OF WAPPINGER, NEW YORK NOTES TO mE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 Ii. .. NOTE C - Interfund Receivables and Payables The following is a summary of amounts due from and due to other funds as of December 31, 1996: ... DUE TO .. General Fund Capital Projects Fund Special Revenue Fund $29,838 46 289.907 .. TOTAL $319.791 DUE FROM $ 84,289 235.502 $319.191 NOTE D - General FIXed As..~et~ Account Group The following is a summary of changes and adjustments in the General Fixed Assets Account Group, for the year ended December 31, 1996: III .. .. BALANCE- JANUARY 1, 1996 ADDITIONS Land $ 5,106,650 $ 23,000 Buildings 6,195,313 2,392 Improvement Other Than Buildings 2,886,793 5,265 Machinery and Equipment 2.261.505 351.840 TOTAL $16.450.261 $382.497 f III ... ... NOTE E - Bond Anticipation Notes Payable BALANCE - DECEMBER 31, (DELETIONS) 1996 $ $ 5,129,650 6,197,705 2,892,058 (24.945) 2.588.400 $(24.945) $16.807.813 II. Bond Anticipation Notes Payable are renewed annually and are not to exceed five renewals, except for water and sewer improvements which may be renewed for the life of the improvement not to exceed twenty years. The Bond Anticipation Notes outstanding as of December 31, 1996, are as follows: AMOUNT OUTST ANDING AT DECEMBER 31, 1996 ~ III ORIGINAL ISSUE DATE MATURITY DATE ORIGINAL INTEREST AMOUNT OF RATE ISSUE PURPOSE ~, III Water Water Sewer Sewer Sewer Subtotal 09/17/91 09/16/92 09/17/91 07/14/94 07/11/96 07/11/97 07/11/97 07/11/97 07/11/97 07/11/97 3.90% 3.90% 3.90% 3.90% 3.90% r.. II. 22 III $ 375,760 30,500 4,000,000 375,000 403.000 5.184.260 $ 283,000 23,000 1,540,000 355,000 403.000 2.604.000 ... f i. .. :i ... L. .. II. .. .. .. Ii. !, ([, .. ~ ... ... .. .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 NOTE E - Bond Anticipation Notes Payable (Continued) PURPOSE ORIGINAL ISSUE DATE AMOUNT OUTSTANDING ORIGINAL AT MATURITY INTEREST AMOUNT OF DECEMBER 31, DATE RATE ISSUE 1996 07/11/97 3.98% 390.000 300.000 07/11/97 3.96% 200.000 200.000 $5.774.260 $3.104.000 Emergency Service Bldg 07/14/95 Sewer Phase IlIA 09/25/96 TOTAL NOTE F - Long-Term Debt 1. Serial Bonds The Town borrows money in order to acquire or construct buildings and public improvements. This enables the cost of these capital assets to be borne by the present and future taxpayers receiving the benefit of the capital assets. These long-term liabilities, which are full faith and credit debt of the Town, are recorded in the General Long-Term Debt Account Group. The provision to be made in future budgets for capital indebtedness represents the amount, exclusive of interest, authorized to be collected in future years from taxpayers and others for liquidation of long-term liabilities. The Serial Bonds Payable, as of December 31, 1996, are as follows: AMOUNT OUTSTANDING AT DECEMBER 31, 1996 PURPOSE ISSUE MATURITY INTEREST DATE DATE RATE ORIGINAL AMOUNT OF ISSUE Water Sewer Drainage $ 66,000 104,000 1.125.000 1.295.000 $ 7,800 12,000 130.200 150.000 09-01-71 03-01-99 5.0% Water Sewer 36,800 55.200 92.000 8,400 12.600 21.000 02-15-73 11-15-03 5.0% Water Sewer Drainage 400,000 500,000 375.000 1.275.000 112,000 136,500 101.500 350.000 03-01-74 03-01-03 5.8% 23 " ... TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 ~ NOTE F - Lon&:- Term Debt (Continued) I. ill PURPOSE ISSUE MATURITY INTEREST DATE DATE RATE ORIGINAL AMOUNT OF ISSUE AMOUNT OUTSTANDING AT DECEMBER 31, 1996 .. The annual requirements to amortize bonded debt, as of December 31, 1996, are as follows: YEAR ENDING DECEMBER 31. ~ Water Sewer Drainage 05-01-77 ... Water Sewer Drainage 05-01-78 I. .. Water Sewer Town Hall 12-01-85 II. Water Machinery and Equipment 05-01-87 .. Water Sewer Drainage .. 08-15-91 ! it. Sewer - Tri-Municipal 11-12-92 Emergency Services Building 10-01-94 , ~ Sewer - Tri-Municipal 12-15-94 f ~ Sewer - Tri-Municipal 06-01-95 .. ... 1997 1998 1999 2000 2001 Thereafter .. iI. 05-01-04 5.375% 2,630,000 3,005,000 400.000 6.035.000 787,000 896,000 117.000 1.800.000 05-01-98 6.10% 330,000 222,000 239.400 791.400 41 ,700 28,000 30.300 100.000 06-01-05 148,070 362,000 700 .000 1.210.070 80,900 197,550 381 .550 660 .000 7.75% 05-01-02 6.3% 364,500 207.000 571.500 148,800 61.200 210.000 08-15-11 6.5% 824,400 528,000 2.192.600 3.545.000 617,000 393,000 1.710.000 2.720.000 09-15-12 3% - 6.65% 6.060.000 5.245.000 10-01'-14 6.01 % 1.500.000 1.415.000 05-15-15 8.519.786 8.005.000 Variable 11-15-15 3.70-5.55% 2.515.000 2.610.054 $33.504.810 $23.191.000 PRINCIPAL INTEREST TOTAL $ 1,398,000 1,443,000 . 1,413,000 1,388,000 1,413,000 16.136.000 $23.191.000 $ 1,391,938 1,314,955 1 ,235,799 1,156,919 1,076,724 6.762.416 $12.938.751 $ 2,789,938 2,757,955 2,648,799 2,544,919 2,489,724 22.898.416 $36.129.751 24 .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 ... .. NOTE F - Long-Term Debt (Continued) 2. Changes The changes in the Town's indebtedness during the year ended December 31, 1996, are summarized as follows: .. .. BALANCE - JANUARY 1, 1996 ADDITIONS (REDUCTIONS) BALANCE - DECEMBER 31, 1996 Serial Bonds $24,549,054 $ $(1,358,054) $23,191,000 .. Landfill Closure and Post-Closure Costs - Note J 550,000 550,000 .. Compensated Absences - Note A.8 258.505 21.230 279.735 .. Total $25.357.559 $21.230 $(} .358.054) $24.020.735 it. NOTE G - Operating Leases The Town is committed under various leases for office equipment and communication equipment. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended December 31, 1996 amounted to $12,000. At December 31, 1996, the approximate annual operating lease commitments, subject to appropriation of funds, were as follows: .. ~; III k .. YEAR ENDING DECEMBER 31, 1997 1998 1999 2000 OPERATING LEASES $9,008 6,972 1,728 700 .. TOTAL MINIMUM LEASE PAYMENTS $18.408 .. NOTE H - Deficit Fund Balances I., III Certain Capital Projects had deficits of fund equity at the end of the year which are listed below. These deficits arose through the funding of expenditures by issuing bond anticipation notes. As the notes are paid, revenue will be recognized and the deficits will be eliminated. Oakwood Knolls Water $(1.757) $(16.918) $(247,431) $(344,716) ~ Sewer # 1 - Lines ... Emergency Services Building Tri-Municipal Sewer Phase 3-A it. 25 .. .. . TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 '- NOTE I - Commitments and Contingent Liabilities .. 1. The Town is a defendant in various lawsuits and tax certiorari cases. The outcome of these cases and lawsuits, as determined by the Town Attorney, should not result in material unfavorable settlements. Any return of property taxes made as a result of the settlement of a tax certiorari case is funded by an increase in the property taxes collected in the year subsequent to payment. 2. The Town has received amounts from grantor agencies, principally the Department of Housing and Urban Development. Any allowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor agency cannot be determined at this time. .. ... .. .. 3. Tri-Municipal Sewer Plant Expansion .. A consent judgement was executed between the Town and the New York State Department of Environmental Conservation dated April 18, 1988 regarding alleged environmental violations. Due to numerous technical difficulties, the Town of Wappinger was unable to meet the threshold dates contained in the consent judgement, and an amended consent judgement was re-negotiated and approved by both parties. This amended consent judgement required the Town to construct a sewer line to the Tri- Municipal Sewer Treatment Plant plus a one million gallon expansion of said plant. The Town, however, does not own the plant nor does it have voting rights on the Commission's governing board. The plant is owned and operated by the Tri-Municipal Sewer Commission, made up of representatives of the Town of Poughkeepsie and the Village of Wappingers Falls. Construction is on-going; however, as a result of additional difficulties between the Tri-Municipal Sewer Commission and the Department of Environmental Conservation, delays have occurred and a Third Amended Judgement has been agreed to, extending the date of completion to July 1, 1997. Funding for the project has been provided by two authorizations for a total project cost of $19,630,054. Through December 31, 1996, $17,189,840 in bonds have been issued through the Environmental Facility Corporation and $2,060,414 in Bond Anticipation Notes have been issued. .. .. ... k .. '- Ill. Total project costs incurred through December 31, 1996, amounted to $17,831,700. Under the terms of the agreements with the Environmental Facility Corporation, serial bond proceeds are required to be deposited into a Construction Fund Account, be invested in u.S. Treasury securities until drawn upon, and be subject to regulatory approvals before being drawn upon. The unspent balance in the Construction Fund Account amounted to $1,437,433 as of December 31, 1996, and is classified as a Restricted Asset. ... ... .. .. 26 .. ... TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID.) DECEMBER 31, 1996 II. NOTE I - Commitments and Continlent Liabilities (Continued) ... 4. Tn Municipal Sewer Plant Expan~ion - Pha~e IlIA In May 1996, the Town entered into a contract with the Tri-Municipal Sewer Commission with regard to the further expansion of the Commission's sewage treatment facility, from 2.4 million gallon per day capacity to 3.4 million gallon per day capacity. The commission will hire consultants to prepare a map, plan and report which will include environmental studies, permit applications and estimates of project costs. The funding for the map, plan and report and other related costs has been provided through bond resolution totaling $575,000. Costs of the map, plan and report to date amount to $307,400. II. ... ... NOTE .T - Municipal Landfills 1. Castle Point Landfill - , .. The Town has voluntarily entered into a Consent Order with the New York State Department of Environmental Conservation to close, cap and monitor the landfill at Castle Point. The Town estimates the cost of closing and capping the landfill to be $550,000, which has been recorded in the Long Term Debt Account Group (see Note F). The costs of monitoring, which could be required for up to thirty years after closure, have not been estimated since an agreement with the Department of Conservation has not yet been reached as to the nature and extent of required monitoring. The costs of both closure and postclosure monitoring are ordinarily recognized over the expected useful life of the landfill. However, since the landfill has stopped accepting refuse, all costs are being recognized as the terms of closure and postclosure requirements are determined. The actual costs may be higher due to inflation, changes in technology or subsequent changes in regulations. The Town plans for construction of the capping system to take place during the summer of 1997. At report date, bids have been solicited, however no contracts have been awarded. 2. Poughkeepsie-Wappinlers-LaGrange .Toint Landfill .. IiIII II. ... .. The Town has shared in the monitoring costs of a closed landfill, the Poughkeepsie- Wappinger-LaGrange Joint Landfill. This joint activity includes the City and Town of Poughkeepsie, the Village of Wappingers Falls and the Town of LaGrange, as well as the Town of Wappinger. All costs associated with monitoring are recognized as incurred. No assessment of the extent and cost of future monitoring costs has been made. Any such costs will be shared equally among the five municipalities. The Town's share of monitoring costs for the year ended December 31, 1996 amounted to $3,300. Financial statements are available from the Joint Landfill's Board. Ii. ... NOTE K - Subsequent Events ... In January 1997, the Town Board authorized the purchase of approximately 2.8 acres of land adjacent to the Highway Department facilities for further expansion. A bond resolution was also authorized in the amount of $150,000 which would fund this purchase. As of our report .. date, neither transaction had been completed. ... 27 . ... Ii. I" .. ... Ii ... ~ ... t.. OTHER SUPPLEMENTAL INFORMATION .. i- t.. III ~ III ... ... La ~ ... 1.. I- ~.. ... .. .. .. .. Sedore, 0' Sullivan, Letterio & Barschi '- Certified Public Accountants, Pc. f' k .. INDEPENDENT AUDITORS' REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE L. .. To the Supervisor and Members of the Town Board Town of Wappinger, New York Wappingers Falls, New York 12590 We have audited the general purpose financial.statements of the Town of Wappinger, New York as of and for the year ended December 31, 1996, and have issued our report thereon dated June 12, 1997. These general purpose financial statements are the responsibility of Town of Wappinger, New York's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments." Those standards and O.M.B. Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Town of Wappinger, New York, taken as a whole. The accompanying Schedule of Federal Financial. Assistance is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. The information in that Schedule has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the .general purpose financial statements taken as a whole. .. i. .. i. s. ~ ... ~~ I.. k .. L ~.?Uu( O~,.~_ Wappingers Falls, New York June 12, 1997 r ~,~ d./l-A()c~ t; L. .. 28 '- i.. 62 East Main Street. P.O. Box 918' Wappingers Fails NY 12590 Wappingers (914) 297-1111 /fax (914) 297-1432 . Beacon (914) 831-0542/fax (914) 831-5114 . Newburgh (914) 565-1373 ... ~ .. .. .. PROGRAM NAME ~ Disaster Aid .. II. .. .. II. .. ~, .. i. I.. t. * .. ... .. .. TOWN OF WAPPINGER, NEW YORK SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE FOR THE YEAR ENDED DECEMBER 31, 1996 CFDA NUMBER GRANTOR REVENUES - EXPENDITURES - DECEMBER 31, DECEMBER 31, 1996 1996 83.516 Federal Emergency Management Agency $53.380 $53.380 29 .. Sedore, 0' Sullivan, Letterio & Barschi ... .. Certified Public Accountants, P. C. ... INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS .. .. To the Supervisor and Members of the Town Board Town of Wappinger, New York Wappingers Falls, New York 12590 We have audited the general purpose financial statements of the Town of Wappinger, New York as of and for the year ended December 31, 1996, and have issued our report thereon dated June 12, .1997. .. II. .. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States, and Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments. " Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. ... .. In planning and performing our audit for the year ended December 31, 1996, we considered the internal control structure of the Town of Wappinger,,in order to determine our auditing procedures for the purpose of expressing our opinion on the Town of Wappinger's general purpose financial statements and to report on the internal control structure in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated June 12, 1997. .. t: ... ~i .. The management of the Town of Wappinger, New York is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may ~ , ... .. ... 30 .. 62 East Main Street. P.O. Box 918. Wappingers Falls NY 12590 Wappingers (914) 297-1111 /fax (914) 297-1432 . Beacon (914) 831-0542/fax (914) 831-5114 . Newburgh (914) 565-1373 .. .. L. ... nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering federal financial assistance programs in the following categories: i. Accountin& Controls I ... Cycles of the entity's activity: Treasury or financing Revenue/receipts Purchases/disbursements External financial reporting I. L. Financial statement captions: Cash and cash equivalents Receivables Payables and accrued liabilities Fund balance I. ... Accounting applications: Billings Receivables Purchasing and receiving Cash disbursements General ledger k, ... ... Administrative Controls ... General Requirements: Political activity Civil rights Cash management Allowable costs/Principles Drug-free Workplace Act Administrative Requirements L. ~' '- ... Specific Requirements: Types of services allowed or not allowed Matching, Level of Effort, and/or Earmarking Requirements Special Tests and Provisions For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk. H ... ... 31 ... .. .. ... During the year ended December 31, 1996, the Town of Wappinger had no major federal financial assistance programs, and expended 100% of its total. federal financial assistance under the following non-major federal financial assistance programs as follows: . Federal Emergency Management Agency - Disaster Aid. We performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we have considered relevant to preventing or detecting material noncompliance with specific requirements, general requirements, and requirements governing claims for advances and reimbursements that are applicable to the aforementioned non-major program. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion. Our consideration of the internal control structure policies and procedures used in administering federal financial assistance would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operations that we consider to be material weaknesses as defined above. l.. ... .. '- ... ... ... .. However, we noted certain matters involving the internal control structure and its operation that we have reported to the management of the Town of Wappinger, New York in our Schedule of Findings and Recommendations. This report is intended for the information of the Supervisor, Town Board, Management and the New York State Emergency Management Office. However, this report is a matter of public record, and it.S d.r. istributio? is. not lim~'t. .. . P ill . 0 J _.A V~~~' -d.L ~ I ~/(J'-~ i Wappingers Falls, New York June 12, 1997 ... .. .. ... .. .. ... 32 .. ... ... L. {>' ~ 5 ... ~ III ... ... .. ... .. (;' I.. ... h! ... .. iM I. .. ... .. Sedore, 0' Sullivan, Letterio & Barschi Certified Public Accountants, Pc. INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS To the Supervisor and Members of the Town Board Town of Wappinger, New York Wappingers Falls, New York 12590 We have audited the general purpose financial statements of the Town of Wappinger, New York as of and for the year ended December 31, 1996, and have issued our report thereon dated June 12, 1997. We have applied procedures to test the Town of Wappinger, New. York's compliance with the following requirements applicable to its federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance, for the year ended December 31, 1996: political activity, civil rights, cash management, allowable costs/cost principles, Drug- free Workplace Act and administrative requirements. Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments". Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Town of Wappinger, New York's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the Town of Wappinger, New York had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed immaterial instances of noncompliance with those requirements, which are described in the accompanying Schedule of Findings and Recommendations. This report is intended for the information of the Supervisor, Town Board, Management and the New York State Emergency Management Office. However, this report is a matter of pubjic rxcord and it~.. dijtributiqn is not li?t~. '? _ / ~ ~~( CJ ,~~"'" ~~ ~tlsa/2-<J~ Wappingers Falls, New York June 12, 1997 33 62 East Main Street. P.O. Box 918' Wappingers Falls NY 12590 Wappingers (914) 297-1111 /fax (914) 297-1432 . Beacon (914) 831-0542/fax (914) 831-5114 . Newburgh (914) 565-1373 ~ .. Sedore, 0' Sullivan, Letterio & Barschi III .. Certified Public Accountants, pc. .. INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NON-MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS ~ ~ To the Supervisor and Members of the Town Board Town of Wappinger, New York Wappingers Falls, New York We have audited the financial statements of the Town of Wappinger; New York as of and for the year ended December 31, 1996, and have issued our report thereon dated June 12, 1997. Ii. III ... In connection with our audit of the general purpose financial statements of the Town of Wappinger, New York, and with our consideration of the Town of Wappinger, New York's control structure used to administer federal financial assistance programs, as required by Office of Management and Budget Circular A-128, Audits of State and Local Governments, we selected certain transactions applicable to certain non-major federal financial assistance programs for the year ended December 31, 1996. . As required by OMB Circular A-128, we have performed auditing procedures to test compliance with the requirements governing types of services allowed or unallowed; matching level of effort and/or earmarking requirements; and special tests and provisions that are applicable to those transactions. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Town of Wappinger, New York's compliance with these requirements. Accordingly, we do not express such an opinion'. ;J Ii. .. II. .. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Town of Wappinger, New York had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed immaterial instances of noncompliance with those requirements, which are described in the accompanying Schedule of Findings and Recommendations. .. .. This report is intended for the information of the Supervisor, Town Board, management, and the New York State Emergency Management Office. However, this report is a matter of public record and its distribution is not limited. .~~( CJ ~~ I'~~' 6aA4C~ Wappingers Falls, New York June 12, 1997 II. ... 34 III 62 East Main Street. P.O. Box 918 . Wappingers Falls NY 12590 Wappingers (914) 297-111l/fax (914) 297-1432 . Beacon (914) 831-0542/fax (914) 831-5114 . Newburgh (914) 565-1373 .. II. I.. f II. 'x .. i:- f: .. ~t .. t .. ~ II. L I i.. t L .. ... ;;, .. ... .. Ii. J' ... It. TOWN OF WAPPINGER, NEW YORK SCHEDULE OF FINDINGS AND RECOMMENDATIONS FOR TIlE YEAR ENDED DECEMBER 31, 1996 Finding 1: Payments have been made in excess of escrow amounts collected. Cause: The Town collects escrow funds to ensure that costs incurred by the Town, while projects or subdivisions are being considered by the Planning Board, are borne by the applicants. The Town maintains records for each project/applicant so that balances can be monitored, however, in some cases the disbursements exceeded the escrow collected. Effect: Additional liabilities could be incurred by the Town which were not budgeted. Recommendation: We note that the Town has increased its efforts to collect outstanding amounts due the Town. We recommend that the Town continue to monitor escrow balances by requiring additional payments when necessary. Resolution of old balances should be addressed as well. We note that the escrow liabilities exceed the cash held by the Town by approximately $22,100. FEDERAL ASSISTANCE PROGRAMS The Town has not adopted a formal civil rights policy. As a recipient of federal funds, the Town is required to have a policy regarding civil rights and non-discrimination. Recommendation: The Town should adopt a policy of non-discrimination. Finding 1: Cause: 35 .. ~ U' II. L .. f1 II. ';f: ... f I .. t ... ~. II. ~:, ;,. .. i. i. ... .. II. ,> .. .... .. .. TOWN OF WAPPINGER CONSTANCE O. SMITH SUPERVISOR SUPERVISOR'S OFFICE 20 MIDDLE BUSH ROAD P.O. BOX 324 WAPPINGERS FALLS, NY 12590-0324 TELEPHONE: (914) 297-2744 FAX: (914) 297-4558 TOWN OF WAPPINGER FINDINGS AND RECOMMENDATIONS RESPONSES TO AUDIT FOR THE YEAR ENDING DECEMBER 31, 1996 FINDING 1: Payments have been made in excess of escrow amounts collected. RESPONSE 1: The Town has implemented more checks & balances to correct this problem. The Comptroller's Office maintains a ledger sheet for all escrow accounts. The Zoning Department does as well. On a monthly basis the Comptroller gives a summary balance of all escrow accounts to Zoning Department to check against their records. All agendas of the Planning Board are given to the Comptroller's Office to check if there are any accounts on the agenda that need additional escrow monies, before the project is allowed to go further. Letters are sent to the developers to recoup the monies owed, however some of the accounts are completed and there is no recourse to collect this money. The Town should write off these charges and continue from a good starting balance. Federal Assistance Programs FINDING 2: The Town has not adopted a formal civil rights policy. RESPONSE 2: The Town is in the process of adopting a civil rights program. It will be presented at the Town Board Meeting of October 20, 1997. 36