IVGID Audit Committee Meeting – Annual Comprehensive Financial Report

GM Winquest introduced attorney, Melissa Crosthwaite of Best Best and Krieger, who will be assisting Josh Nelson, General Counsel to the District.

The Committee received and discussed the Annual Comprehensive Financial Report (ACFR) in detail. Although progress has been made in some of the areas identified by Moss Adams, there were still major concerns over lack of compliance with Board capitalization policy, GASB and NRS.

The management response letter had not been made available prior to the meeting.

The decision to consider the Facilities Fees as general revenue, not Charges for Services, was questioned. Auditor, Jennifer Farr said the fees were not exchange transactions and not legally restricted to any specific purpose. Mr. Dobler said that the Board resolution tells the public there is a direct benefit to the property. Finance Director Navazio remarked that without a benefit, the charges would be considered taxes and the District wouldn’t be able to collect them. Chair Tulloch said he felt the facility fees were taxes, like the ones for schools; he knew of many property owners who are forced to pay them, yet received no benefit.

Allocation of interest income was also a topic of discussion. Former practices resulted in nearly all interest income being accrued to the General Fund. Going forward there will be a more equitable distribution as well as a regular report of investment earnings that had not been prepared in recent years, despite a Board policy that required it.

Several committee members felt the Management Analysis should be more transparent and include a reference to the material weaknesses and significant deficiencies identified by the auditor.

Staff defended capitalization of items like exercise bikes, rental skis, snow guns and catering furniture, even though committee members felt these were clearly defined as items to be expensed by Board policy. Mr. Dobler stated that in the interest of transparency, it should be noted that more than half of the facility fees were used for operations.

The Committee was concerned that they did not have sufficient time to draft their recommendations to the Board to be presented with the ACFR, especially in light of the fact that although significant improvements in reporting had been made, there were still clearly written policies that had been not been applied consistently. Mr. Dobler recommended that the Board apply for an extension so they could do their job.

Chair Tulloch volunteered to draft the Committee’s letter and a meeting to discuss will be set for 12/16.