The U.S. Office of Management and Budget has released for comment guidance which proposes braod revisions to OMB Circular A-133, as well as a number of other key grant reforms. This release represents the OMB’s next step in their federal grants improvement initiative. Read more for a highlight of the key proposals and for links on where to comment on behalf of the grantee community… Continue reading
I was interested to read in todays Boston Globe that Merrill Lynch has agreed to repay the City of Springfield for nearly $14 million in investment losses, as well as the City’s legal fees. The losses were reportedly related to “collateralized debt obligations,” which are securities linked to bonds and loans, including subprime mortgages, according to the Globe. Continue reading
Many cities and towns throughout Massachusetts have received loans from the Massachusetts Water Pollution Abatement Trust (MWPAT) for a variety of capital projects. Until recently, it wasn’t clear that these communities were considered loan recipients of federal financial assistance. Continue reading
As part of our municipal audit procedures TLB has always incorporated procedures to evaluate the validity of budget encumbrances at year-end. TLB has noted in many communities and school districts year-end encumbrances practices and procedures are being followed without an understanding of the concepts underlying the encumbrance process. For our fiscal year 2007 municipal audits we have spent additional effort with our clients to ensure they understand what constitutes a valid encumbrance for annual operating budgets. Continue reading
Many municipalities have applied for the employer reimbursement provided for under Medicare Part D. Most assumed the reimbursement, administered by the federal Department of Health and Human Services (HHS), was not subject to the audit requirements provided for under the Single Audit Act. This includes several state comptroller and revenue offices, who have been advising their cities and towns that there was no Single Audit Act requirement. As TLB understands it this guidance is in question. Continue reading
As part of our fiscal year 2007 Massachusetts municipal audits, TLB has updated its school department internal control and compliance questionnaire and has been reviewing procedures at a number of school departments. The results of what we have been finding indicates various levels of understanding (or misunderstanding) of a Massachusetts School Committees responsibility for monitoring the school department budget. As auditors, TLB does not provide legal advice, however, does have a responsibility to test compliance with terms of laws, regulations, contracts, etc in connection with performing an audit in accordance with Government Auditing Standards. To follow is our understanding of certain provisions of MGL with respect to School Department budgets. Continue reading
With municipalities receiving significant Medicare Part D reimbursements in fiscal year 2007 and 2008, and with the tax rate setting season upon Massachusetts municipalities, TLB has been fielding several questions regarding the proper accounting treatment of these reimbursements. The Government Accounting Standards Board (GASB) has issued a Technical Bulletin concerning these reimbursements, effective for financial statements issued after June 30, 2006. Continue reading
If your community has already issued permanent debt on its school construction project when it receives a lump-sum payment reimbursement from the Massachusetts School Building Authority the Town must set up a reservation of general fund balance according to Informational Guideline Release (IGR) 06-101 issued by the DLS.
According to the DLS the reserved fund balance may be segregated into two portions, either discretionary or non-discretionary.
Discretionary reservations can be used to offset prior general fund revenues used to pay school project ban/bond interest. (this assumes the issue was not raised outside the levy limit, ie: debt exclusion). Non-discretionary reservations must be amortized over the remaining life of the permanent debt of the approved school building project.
These issues/reservations are expected to be handled in conjunction with the local communities Bureau of Accounts field representative and through the tax rate setting process.
In July, 2007 Governor Patrick signed into law a bill allowing Massachusetts cities and towns to join the Commonwealth’s Group Insurance Commission (GIC). There has been pressure on municipal managers to undertake the effort needed for their community to join the GIC. TLB cautions municipalities to undertake a complete analysis of its options before joining the GIC. Continue reading
Massachusetts municipalities have been hearing a lot lately about Section 18 of Massachusetts General Law Chapter 32B. Due to the increasing fiscal pressure of providing employee health insurance, TLB and others have been recommending municipalities consider adopting the provisions of Section 18. We have noted that relatively few communities have adopted this local option – here are some of the basics. Continue reading