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Home My WebLink About1991 TOWN OF SOUTHOLD AUDIT REPORT DECEMBER 31, 1991 RECEIVED LIUL $ lgg2 Southold t~,,,,-, rl~dr July 31, 1992 Town Board Town of Southold 53095 Main Road Southold, New York 11971 Members of the Board: We have audited the general purpose financial statements of the Town of Southold as of and for the year ended December 31, 1991, as listed in the accompanying table of contents. These general purpose financial statements are the responsibility of the Town'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 and the standards for financial audits contained in the "Standards for Audit of Governmental Organizations, Programs, Activities and Functions", issued by the United States General Accounting office, the single Audit Act of 1984, and the provisions of OMB Circular A-133 "Audits of Institutions of Higher Education and Other Nonprofit Organizations." 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Town of Southold at December 31, 1991, and the results of its operations and the changes in financial position of its proprietary and similar trust fund types for the year ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. Town Board Town of Southold July 31, 1992 Page Two The combining, individual fund, and individual account group financial statements and schedules listed in the accompanying table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the Town of Southold. Such information has been subjected to the auditing procedures applied in the audit of th~ ~eneral 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. Respectfully submitted, Elaine F. Kaldor Certified Public Accountant EFK:acl ELAINE F. KALDOR CERTIFIED PUBLIC ACCOUNTANT 162 GRIFFING AVENUE July 31, 1992 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Town Board Town of Southold 53095 Main Road Southold, New York 11971 Members of the Board: We have audited the financial statements of the Town of Southold as of and for the year ended December 31, 1991, and have issued our report thereon dated July 31, 1992. We conducted our audit in accordance with generally accepted auditing standards, Government Auditinq Standards, issued by ~he Comptroller General of the United States, and the provisions of office of Management and Budget Circular A-133, "Audits of Institutions of Higher Education and Other Nonprofit Organizations." Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. In planning and performing our audit of the Town of Southold, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. The management of the Town of Southold is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgements 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 the 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 Town Board Town of Southold July 31, 1992 Page Two of 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. For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories: Cash Receipts, Purchasing, Accounts Payable, Cash Disbursements, Payroll, Property and Equipment, General Ledger, and External Financial Reporting. For all of the control categories listed above, 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. During the year ended December 31, 1991, the Town of Southold had no major federal financial assistance programs and expended 100 percent of its total federal financial assistance under the following nonmajor federal financial assistance programs: Nutrition, Supplemental Nutrition Assistance Program, Community Development, Organized Crime Drug Enforcement Task Force and Airfield Design and Renovation. We performed tests of controls, as required by OMB Circular A-133, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to ~reventin~ or detecting material noncompliance with specific requirements, general requirements, and requirements governing claims for advances and reimbursements and amounts claimed or used for matching that are applicable to the aforementioned nonmajor programs. 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 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 condition in Town Board Town of Southold July 31, 1992 Page Three which the design or operation of the specific 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 financial state- ments 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 operation that we consider to be material weaknesses as defined above. This report is intended for the information of the audit committee, management, and others within the Town of Southold and its granting agencies. This restriction is not intended to limit the distribution of this report which, upon acceptance by the Town of Southold, is a matter of public record. Respectfully submitted, Elaine F. Kaldor Certified Public Accountant EFK:acl Town of Southotd Audit Report December 31, 1991 Index STATEHE~TS Combined BaLance Sheet - All Fur41 Types & Account Groups ............................ C~nbined Statement of Revenues, Expenditures, and Changes in Fund Balance - All Governmental Fund Types ................................ Combined Statement of Revenues, Expenditures, and Changes in Fund Ba[ance - Budget and Actual - All Goverl~nenta[ Fund Typos ............ 1-2 5.6 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Genera[ Fur~s .............................................. ? Special Revenue Funds ...................................... 8 Capita[ and Special District Funds ......................... 9 Combining Balance Sheets - General Funds .............................................. 10 Programs for the Aging ...................................... 11 Special Revenue Funds ....................................... 12 Special District Funds ..................................... Combining Statement of Revenues, Expenditure, and Changes in Fund Balance - Genera[ Funds .............................................. 14 Programs for the Aging ...................................... 15 Specie[ Revenue Funds ....................................... 16 Special District Funds ..................................... 17 SCHEDULES Schedule of Federal Assistance ................................... 18-19 Schedule of Obligations Payable .................................. Fishers Island Ferry District - Balance Sheet .............................................. Statement of Revenues, Expenditures, and Changes in Fund Balance ................................................. 2O 21 22 Departmentat Rank Reconcitiations - Town CLerk ................................................. 23 Tax Receiver ............................................... 23 Justice of the Peace ....................................... 24-25 Town of Southo[d Audit Report December 31o 1991 Index-Page 2 Fiduciary Bank Reconciliation - Payroll Account ............................................ 26 Supervisor's Tax Account ................................... 26 Notes to Financial Statements ................................... 27-40 ASSETS~ Cash Assessments Receivable Due From Other Funds O~her Receivables Deferred Expense Buildings Equipment and Machinery ........ -GOVE~NN~NTA~ FUND TYPES .............. FIDUCIARY ..... ACCOUNT GROUPS ....... MEMORANDUM ONLY--- LIABILITIES AND FUND B~LANCE LIABILITIES AcCOUntS Payable Due To Other Funds Due TO Other Governments Due To Pension Systems Deferred Revenues Deposits Held compensated Absences Obligations Pay&ble $ 149,354 $ 313,268 $ 21,513 $ 7,075 $ 102 $ 491,312 $ 389,490 125,517 60 155~577 33,707 2,183 2,183 5,156 $ 648,102 648,102 726,??0 382~374 623,425 28,918 1,034,717 2,082,132 533,911 $ 936,693 $ 422,513 $ 191,510 $ 332,515 $ 0 $7,018,949 $ 9,436,091 $ 8,553,876 -1- continued TO~N OF SOUTHOLD - Page 2 COMBINED BALANCE SHEET ALL F~ND TYPES and ACCOUNT GROUPS DECEMBER 31, 1991 TOTAL LIABILITIES - fr~ Page 1 FOND BALANCE Investment in Fixed Assets Reserve for Encumbrances Unappropriated Fund Deficit TOTAL LIABILITIES AND FUND BALANC8 ........ -GOVERNMENTAL FUND TYPES .............. FIDUCIARY ..... ACCOUNT GROUPS ....... MEMORANDUM ONLy--- $ 533,911 $ 936,693 $ 422,513 $ 191,510 $ 332,515 $ 0 $7,018,949 $ 9,436,091 $ 8,583,876 $10,914,421 $10,914,421 $10,386,394 4,044 4,044 0 2,871 2,871 309,950 350t000 $ 765,000 $2,020,684 $ 25t463 3,161,147 1,362,033 78,404 382,0?7 39,638 500,119 489,448 (19,481) (352,250) (371,731) (1,722,933) $ 435,319 $1,127,596 $1,668,434 $ 65,101 $ 0 $10,914,421 $ 0 $14,210,871 $10,824,892 969,230 $2,064,289 $2,090,947 $ 256,611 $ 332,515 $10,914,421 $7,018,949 $23,646,962 $19,378,768 -2- REVENUE Real Proper~y Tax Real Property Tax It~ Departmental Income Intergovernmental Charges Use of Money and Property Obligations Authorized EXPENDITURES General Government Suppor~ Public Safety Public Health Transportation Economic Assistance and Opportunity Culture and Recreation Home and Comunity Service Employee Benefits Debt Service Interfund Transfers TOWN OF SOUTBOLD COMBINED STATEMENT OF REVENUES, EXPBNDITURES A~D CHANGES IN FOND BALANCE GOV]~NMENTA~ FUND TYPH$ JANUARY I - DECEMBER 31, 1991 ......... GOVeRnMENTAL FUND TYPES ................. MEMORANDUM ONLY .... $3,$98,363 $6,105,954 $ 300,969 $10,105,286 $ 8,660,568 72,575 22,272 743 95~590 84,489 729~075 264,243 84w460 1,077,778 1,240~442 148,758 70,036 24,000 242,794 281,130 156,141 243,077 $ 131,341 18,943 549,502 452,707 114,924 12,595 127,519 82,442 $5,668,419 $8,273,240 $3,315,414 $ 433,128 $17,690,201 $13,672,457 $2,019,142 $ 338,754 $ 379,761 $ 6,159 $ 2,743,816 $ 2,407,637 170,342 3,420,339 131,680 3,722,361 3,753,481 65,095 3,000 68,095 83,531 297,357 1,929,188 2,226,545 2,191,132 418,557 418,557 417,092 227,497 227,497 337,239 856~182 415,271 335,605 271,693 1,878,751 1,566,083 241,387 1,906,031 2,147,418 1,864,141 545,920 42,476 30,512 13,061 631,969 592,382 300,066 306,174 6,000 155,000 767,240 649,956 $5,141,545 $ 8,361,233 $ 751,878 $ 577,593 $14,832,249 $13,85~,674 -3- continued TOTAL REVENUES from Page 3 ........ -GOVERNMENTAL FUND TYPES ................. MEMOP.~NDUM ONLy $ 5,668,419 $ 8,273,240 $ 3,315,414 $ 433,128 $17,690,201 $13,672,457 TOTAL EXPENDITURES from page 3 $ 5,141,545 $ 8,361,233 $ 751,878 $ 577,593 $14,832,249 $13,856,674 EXCESS RE~NUES OVER (UNDER) EXPENDITURES R~SIDUAL EQUITY TP. ANSFER FUND BA/~ANCE JAnUArY 1, 1991 FUND BA~CE DECEMBER 31, 1991 526,874 (87,993) 2,563,536 (144,465) $ 2,857,952 (184,217) 2,871 {2,871) (94,426) 1,215,589 (892,231) 209~566 $ 438~498 $ 622,715 435,319 $ 1,127,596 $ 1,668,424 $ 65,101 $ 5,296,450 $ 438,498 = NOTES TO FINANCIAL STATEMENTS ~ AN INTEGRAL PA~T OF THIS STATEMENT -4- TOTAL REVENUES Appropriated Fund Balance ....................... GOVERNMENTAL FUND TYPES ................................................. SPECIAL CAPITAL SPECIAL TOTAL $3,698,363 $6,105,954 $ 300,969 $10,105,286 33,700 16,500 502 50,702 912,442 369,500 98,12S 1,380,067 162,845 70,636 24,000 257t481 120,100 274,000 $ 16,05! 15t063 425,214 107~000 13~275 120,275 41,000 41,000 4,000 4,000 8~000 10,000 140,070 150,070 492,520 300,119 792,639 90,983 345,964 436,547 6~000 636,000 155,000 517 797,517 2,476,500 2,476,500 155,000 155,000 $10,105,286 $ 0 $ 0 95,590 44,888 1,077,778 (302,289) 242,794 (14~687) 549,502 124,288 127,519 7,244 56,938 15,938 105,092 97,092 153~712 3,642 799,871 7,232 2~285 2,285 579,694 142,747 767,240 (30,277) 2,708,500 232~000 318,400 318,400 (155,000) $5,678,953 $8,276,018 $ 2,647,551 $ 594,176 $17,196,698 $17,690,201 $ 0 $ 493,503 655t202 125~011 22,956 803,169 $5,678,953 $8,931,220 $ 2,772f562 $ 617,132 $17,999,867 -5- continued EXPENDITURES General Government Support Public Safety Public Health Transportation Econo~ic Assistance & Opportunity Culture & Recreation Home & Community Service Employee Benefits Debt Service Interfund Transfers FUND EQUITY TRANSFER FUND BALANCE JANUARY 1, 1991 FUND BALANCE DECEMBER 31, 1991 TOWN OF SOUT~OLD BUDGET AND ACTUAL - ALL GOVERNMENT FUND TYPES ................ GOVERNMENTAL FUND TYPES ........................................................ $2,057,281 $ 339,192 $ 2,071,116 $ 17,850 $ 4,485,439 $ 2,743,816 $ 4,044 $ 1,737,579 175,046 3,435,833 133,500 3,744,379 3~722,361 22,018 65,219 3,950 69,169 68,095 1,074 300,166 2,257,036 2,557,202 2,226,545 330,657 473,151 473,151 418,557 54,594 252,122 252,122 227,497 24,625 1~037,497 604~239 664,934 297,714 2~604,384 1,878,751 725,633 278,209 1,936,855 9,215,064 2,147~418 67,646 574,224 42,500 30t512 13~068 660,304 631~969 28,338 325,614 311,615 6,000 155,000 798,229 767,240 30,989 $5,538,529 $8,931,220 $ 2,772,562 $ 617,132 $17,859,443 $14,832,249 $ 4,044 $ 3,023,150 $ 140,424 $ (655,202) $ (125,011}$ (22,956) $ (662,745)$ 2,857,952 (94,426) 1,215,589 (892,231) 209,566 438~498 438,498 45,998 $ 560,387 $(1,017,242)$ 186,610 $ (224,247)$ 3,296,450 NOTES TO FINANCIAL STATEMENTS APsE AN INTEGRAL PART OF THIS STATEMENT -6- REVENUES Real Property Taxes Real Property Tax Items Departmental Income Intergovernmental Charges Use of Money and Property Licenses and Permits Fines and Forfeitures Property Sales & Loss Miscellaneous Local Sources State Aid Retirement System Credits Federal Aid Interfund Transfers $3,698,363 $3,698,363 $ 0 $ 0 33,700 72,575 38,875 912,442 729,075 (183,367) EXPENDITURES General Governement Support Public Safety Public Health Transportation Economic Assistance & Opportunity Culture & Recreation Nome & Community Service Employee Benefits Debt Service Interfund Transfers EXCESS REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE DECEMBER 31, 1991 $2,057,281 $2,019,142 $ 4,044 $ 34,095 175,046 170,342 4,704 65,219 65,095 124 300,166 297,357 2,809 473,151 418,557 54,594 252,122 227,497 24,625 278,209 241~387 36,822 574,224 545,920 28,304 325,614 300,066 25,548 $5t530,529 $5,141,545 $ 4,044 $ 392,940 $ 140,424 $ 526~874 2,871 (94,426) (94,426) 45,998 $ 435,319 -7- TOWN OF SOUTNOLU COMBINING STATENENT OF REVENUE, EXPENDITURES and CHANGES IN FUND BALANCE BUDGET AND ACTUAL - ALL SPECIAL REVENUE FUNDS REVENUES Real Property Taxes Real Property Tax Items Departmental Income Intergovernmental Charges Use of Money and Property Licenses and Permits Property Sales & Loss Compensation Miscellaneous Local Sources State Aid Retirement System Credits Federal Aid Interfund Transfers Appropriated Fund Balance TOTAL BUDGET ACTUAL $6,105,954 $6,105,954 16,500 22,272 369,500 264,243 70,636 70,036 274,000 243,077 13,275 12,595 4,000 100,223 140t070 110,905 300,119 343,448 345,964 392,683 636,000 606,240 $8,276,018 $8,273,240 655,202 $8,931~220 EXPENDITURES General Governement Support Public Safety Public Health Transportation Home & Community Service Employee Benefits Debt Service Interfund Transfers EXCESS REVENUES OVER (UNDER) EXPENDITURES $ 339,192 $ 338,754 3,435,833 3,420,339 3,950 3,000 2,257,036 1,929,188 604~239 415,271 1,936,855 1,906,031 42,500 42,476 311,615 306,174 $8,931,220 $8,361,233 $ (655,202) $ (87,993) FUND BALANCE - JANUARY 1, 1991 FUND BALANCE - DECEMBER 31, 1991 1,215,589 1,215,589 $ 560,387 $1,127,596 V~IANCE 0 5,772 (105,257) (600) (30,923) (680) 96~223 (29,165) 43,329 1,564 46,719 (29,760) (2,778) 430 15,494 950 327,848 188,968 30,824 24 5,441 REVENUES Real Property Taxes Real Property Tax Items Departmental Income Intergovernmental Charges Use of Money and Property Miscellaneous Local Sources Zn=erfund Transfers TOTAL REVENUES obligations authorized Motes Redeemed from Appropriations Appropriated Reserves TOTAL Appropriated Fund Balance TOTAL EXPENDITURES General Government Support Public Safety Mo~e & Community SerVice Debt SerVice Interfund Transfers FUND BALANCE - JANUARY 1, 1991 FUND BALARCE - DECEHBER 31, 1991 OF SOUTHOLD STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - CAPITAL AND SPECIAL DISTRICT FUNDS JANUARY I - DECEMBER 31, 1991 .............. -CAPITAL FUNDS ............................. SPECIAL DISTRICTS .............. 16,051 $ 131,341 2t173 158,000 155,000 171,051 $ 288,514 2,476,500 2,708,500 318t400 129,011 $ 2,772,562 $ 115,290 2,173 0 232,000 318,400 0 $ 667,863 $ 300,969 $ 300,969 $ 0 502 743 241 98,125 84,460 (13,665) 24,000 24,000 0 15,063 18,943 3,880 4,013 4,013 517 (517) $ 439,176 $ 433,128 $ (6,048) 0 0 155,000 (155,000) $ 594,176 $ 433,128 $ (161,048) $ 617,132 $ 2,071,116 $ 379,761 $1,691,355 664,934 335,605 329,329 30,512 30,512 0 6,000 6,000 0 $ 2,772,562 $ 751,878 $2,020,684 ..................... =====~===~ $ (125,011) $2,563,536 17f850 $ 6~159 $ 11,691 133,500 131,680 1,820 297,714 271,693 26,021 155,000 155,000 0 617,132 $ 577,593 $ 39,539 (22,956) $ (144,465) (2,871) (892,231) (892,231) $(1,017,242) $1,668,434 209,566 209,566 ASSETS Cash Due From other Funds Due From Other Governments State and Federal Receivables Accounts Receivable Deferred Expense TOTAL ASSETS LIABILITIES Accounts Payable Due To General/(From) Aging Due To Other Governments Deferred Revenues TOTAL LIABILITIES Fund Deficit $ 713,820 $ 810 $ 714,630 $ 353~536 577 577 4,580 25,574 25,574 269,091 128~324 128,324 25~732 86,297 174 86,471 148,829 13,654 13,654 1f447 $ 942,672 $ 26,558 $ 969,230 $ 813,215 $ 146,079 $ 3,275 $ 149,354 $ 142,301 (20,803) 20,803 2,183 2,103 3,591 382,077 297 382,374 761,749 $ 507,353 $ 26,558 $ 533,911 $ 907,641 $ 17,107 4,044 $ 4,044 2,871 2,871 350,000 350,000 78,404 78,404 (111,533) 435,319 $ 0 $ 435,319 $ (94,42&) $ 942,672 $ 26,558 $ 969,230 $ 813,215 NOTES TO FXNANCIAL STATERENTS ARE AN INTEGRAL PANT OF THIS STATERENT ASSETS Cash Due £r~m Other Governments Accounts Receivable TOTAL ASSETS LIABILITIES AND FUND BALANCE LIABILITIES Accounts Payable Due to General Fund Due to Other Governments Deferred Revenue TOTAL LIABILITIES FUND BALANCES TOTAL LIABILITIES AND FUND BALARCES ADULT DAY BRIEF RO~E AID/ NUTRITION CAR~ RESPITE CHORE SNAP EISEP TOTALS 301 $ 509 $ 810 2,816 $ 6,511 6,057 4,840 5,350 25,574 $ 90 $ 84 174 3,117 $ 6,511 $ 0 $ 6,147 $ 5,349 $ 5,434 $ 26,558 $ 676 $ 1,000 $ 1,599 $ 3,275 $ 3,055 $ 5,641 5,346 3,036 3,725 20,803 870 1,313 2,183 62 125 110 297 $ 2,117 $ 6,511 $ 0 $ 6,147 $ 5,349 $ 5,434 $ 26,558 $ o $ o $ o $ o $ o $ o $ o -11- ASSETS Cash Due From Other Funds Due From Other Governments State and Federal Receivables LIABILITIES AND FUND BALANCE Accounts Payable TOTAL LIABILITIES FOND BA~J~NCE Reserved Fund Balance Appropriated - Ensuing Year's Budget Unappropriated Deficit Fund Balance TOTAL LIABILITIES AND FUND BALANCES TO.N OF SOUTHOLD COMBINED BALANCE SHEET ALL SPECIAL RL~F~NUE FUNDS D~EHBER 31. 1991 GENERAL ..... HIGHWAY FUNDS ..... SPECIAL RISK .... HEBORAHDUB ONLY .... $ 641,247 $ 359.840 $ 541,200 $ 25,512 $ 1,567,799 $ 2,446,249 $ 405 405 24,470 57,599 116t091 182,154 355.844 37.810 45.123 2,869 664 20,196 68.852 157,242 53,556 4.043 13.790 71.389 20,274 $ 797,525 $ 482.843 $ 737.808 $ 405 $ 45.708 $ 2.064,289 $ 2,686,083 201,739 $ 30,342 $ 17,200 $ 405 $ 63,582 $ 313,268 $ 210,185 38 447,156 43,572 131,090 1,607 623,425 1.258,706 648,895 $ 73,914 $ 148.290 $ 405 $ 65,189 $ 936,693 $ 1,470.494 $ 167,843 $ 400.000 $ 365,000 $ 765,000 620,000 148~630 8,929 224,518 382,077 427.746 $ (19,481) $ (19,481) 0 148,630 $ 408,929 $ 599,518 $ 0 $ (19.481) $ 1,127.596 $ 1,215,589 797,525 $ 482.843 $ 737,808 $ 405 $ 45,709 $ 2,064,289 $ 2,686.083 -12- ASSETS TOTAL ASSETS TOWN OF $OUTHOLD COMBINED BALANCE SHEET SPECIA~ DISTRICT FUNDS DECEMBER 31, 1991 W~NDY DRIVE WEST CP~EK FIRE WEST SOUTHOLD FISHERS MEMORANDUM ONLY IMPROVEMENT IMPROVEMENT PROTECTION GREEMPORT WASTEWATER ISLAND SEI~ER TOTALS DISTRICT DISTRICT DISTRICT WATER DIST. DISTRICT DISTRICT 12/31/91 12/31/90 $ 48 $ 2,537 $ 14,939 $ 3,583 $ 220,628 $ 7,048 $ 248,783 $ 245,625 2t393 2,393 585 29,089 5,422 13 5,435 12,526 1,070 $ 48 $ 2,537 $ 14,939 $ 3,583 $ 226,050 $ 9,454 $ 256,611 $ 288,895 LIABILITIES AND FUND BALARCE LIABILITIES ACCOUnts Payable Due To Other Funds Deferred Revenues TOTAL LIABILITIES TOTAL LIABILITIES AND FUND $ 879 $ 6,196 $ 7,075 $ 17,652 $ 517 155,000 155,517 48 $ 801 $ 12,298 15,771 28,918 61,677 $ 565 $ 801 $ 12,298 $ 0 $ 171,650 $ 6,196 $ 191,510 $ 79,329 $ 125,000 $ 1,776 $ 2,600 $ 1,087 $ 20,000 $ 25,463 22,864 (517) (40) 41 2,496 34,400 $ 3,258 39,638 61,702 (517) $ 1,736 $ 2,641 $ 3,583 $ 54,400 $ 3,258 $ 65,101 $ 209,566 48 $ 2,537 $ 14,939 S 3,583 $ 226,050 $ 9,454 $ 256,611 $ 288,895 NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEM~T -13- TOWN OF SOUTEOLD COMBINED STATEMENT OF REVENUESf EXPENDITURES REVENUES Real Property Taxes Real Property Tax Items Departmental Income Intergoverpmental Charges Use of Money & Property Licenses & Permits Fines & Forfeitures Property Sales/Loss Compensation Miscellaneous Local Sources State Aid Federal Aid Interfund Transfers Retirement System Credits TOTAL REVENUES $3,69S,363 $3,698,363 $2,588,086 72,575 72,575 33,443 646,145 $ 52,930 729,075 667,325 4,000 144,758 148,758 201,9S6 356,141 156,343 10S,40S 114,924 114,924 75,207 $5,349,748 $ 318,671 $5,668,419 $4,712,961 EXPENDITURES General Goverrunent Support Public Safety Public Health Transportation Economic Assistance & Opportunity Culture & Recreation Home & Community Service Employee Benefits Debt Service Interfund Transfers TOTAL EXPENDITURES $2,017,592 $ 1,550 $2,019,142 $1,891,930 170,342 170~342 145,290 65,095 65,095 80,531 297,357 297,357 283,610 $4,822,874 $ 31S,671 $5,141,545 $5,174,004 EXCESS REVENUE OVER (UNDER) EXPENDITURES RESIDUAL EQUITY TRANSFER FUND BALANCE - JANUARY 1~ 1991 (94,426) 0 (94,426} 366,617 FUND BALANCE - DECEMBER 31, 1991 435,319 $ 0 $ 435,319 $ (94,426) NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT -14- TOWN OF SOUTHOLD COMBINING STATEH~NT OF P~%rENUES, EXPENDITURES and CHANGES IN FUND BALANCE REFENUES Departmental Income Intergovernmental Charges ~ederal Aid ADULT BRIEF HOME AID NUTRITION DAY CAP~ ~SPITE CHO~E ENAP EISEP TOTAL $ 45,821 $ 13,359 $ 148 $ 22,612 $ 990 $ 82,930 47~473 18,147 $ 1,374 20~000 27,879 29,885 144,758 75~748 15,235 90,983 $ 169,042 $ 31,506 $ 1,374 $ 20,148 $ 65,726 $ 30,875 $ 318,671 EXPENDITUP~S General Government Support Economic Assistance & opportunity Employees Benefits Interfund Transfers EXCESS REVENUE OVeR (UNDER) EXPENDITURES FUND ~JtLANCE - JANUARY 1, 1991 FUND BALANCE - DECEMBER 31, 1991 $ 1,550 $ 1,550 $ 162,371 $ 30,024 $ 1,355 $ 19,051 62,765 $ 29,858 305,424 6,057 1~482 19 1,097 1,411 1,017 11,083 614 614 $ 169,042 $ 31,506 $ 1,374 $ 20,148 $ 65,726 $ 30,875 $ 318,671 $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o $ o -15- Miscellaneous Local Sources EXPENDITURES General Government Support Public Safety Health Transportation Home & community services Employee Benefits Debt Services Interfund Transfers ~UND BALANCE - JANUARY 1, 1991 ~UND BALANCE - DECEMBER 31, 1991 .... HIGHWAy FUNDS ..... SPECIAL RISK ---MEMORANDUM ONLY .... $ 209,968 $ 128,786 $ 338,754 $ 238,370 3,420,339 3,420,339 3,485,866 3,000 3,000 3,000 $ 597,305 $1,331,883 1~929,188 1~838,962 256t495 $ 158,776 415t271 359,542 998,695 41,566 114,685 754,085 1~906,031 1t610t284 42,476 42,476 39,354 136,435 33,124 136~615 306,174 296,803 $5,021,932 $ 714,471 $1,583,183 $ 158,776 $ 882,871 $8,361,233 $7,872,181 $ 98,804 $ 102,850 $ (132,365) $ 0 $ (157,282) $ {87,993)$ 171,139 $ 49,826 $ 306,079 $ 721,883 $ 0 $ 137,801 $1,215,589 $1,044,450 $ 148,630 $ 408,929 $ 589,518 $ 0 $ {15,481) $1,127,596 $1,215,589 -16- REVENUES Real Property Taxes Real Prope~y Tax Items Departmental ~ncome Intergovernmental Charges Use of Money & Property Miscellaneous Local Sources EXPENDITURES General Government Support Public Safety Transportation Home & Co~unity Service Debt Service Interfund Transfers EXCESS RL~4ENUE OVER (UNDER) EXPENDITURES FUND ~ALANCE - JANUARY 1, 1991 FUND BALANCE - DECEMBER 31, 1991 WEND¥ DRIVE FIRE W~ST GREENPORT WEST SOUTHOLD FISHERS MEMORANDUM ONLy 1,787 $ 132,941 $ 12,141 $ 154,100 $ 300,969 $ 274,197 2 162 15 562 $ 2 743 30,871 61,285 23,175 84,460 88,995 24v000 24,000 25,500 63 659 $ 49 1,406 16,283 483 18t943 19,985 4,013 4v013 24,443 $ 1,852 $ 133,762 $ 49 $ 13,562 $ 260,243 $ 23,660 $ 433,128 $ 463,991 $ 2~552 10,509 $ 1,317 $ 4,842 $ 6,159 $ 10,192 131,680 122,325 28,560 $ 2,214 248,586 $ 20,893 271~693 252,962 13,061 1,417 155,000 155,000 1,381 2,552 $ 131,680 $ 2,214 $ 11,826 $ 408,428 $ 20,893 $ 577,593 416,837 (700) $ 2,082 $ (2,165) $ 1,736 $ (148,185) $ 2,767 $ (144,465) $ 47,154 183 $ 559 $ 5,748 $ 0 $ 202,585 $ 491 $ 209,566 $ 162,412 (517) $ 2,641 $ 3,583 $ 1,736 $ 54,400 $ 3,258 $ 65,101 $ 209,566 -17- Federal Granto=/Pass Through Grantor/Program Title Federal CFDA NUmber Amount ~/1/91 Reco~nized Disbursements/ Balance U.S. Department of Agriculture Passed throuqh Suffolk County~ Cash-in-lieu of Food Awards 10.550 $ 41,746 $ 0 $ 41,746 $ 41,746 $ 0 U.S. Department of Health and HUman Services Passed through Suffolk Count¥= Nutrition 13.635 $ 49,237 $ 0 $ 49,237 $ 49,237 $ 0 U.S. Department of Housing and Urban Development Passed through Suffolk Count¥: Community Development Block Grant 14.218 $1,018,985 (1) $ 0 $ 158,776 $ 158,776 $ 0 83.516 524,618 $ 0 $ 326,899 $ 326,899 $ 0 U,S. Department of Justice D~ug Enforcement Administration Organized crime Drug Enforcement Task Force N/A $ 3,540 $ 0 $ 3,036 $ 3,036 $ 0 (1) Combination of suhgrant awards as follows= Contract Date Program Year COmmenced Amount xII -1986 1/01/86 $ 188,155 XIII-1987 1/01/87 173,830 XIV -1988 4/01/88 159,000 ~ -1989 4/01/89 199,000 XVI -1990 4/01/90 196,000 XVII-1991 9/01/91 1%3,000 $1,018,985 The above program years are open as of December 31, 1991 w/th the exception of Year XIX - 1986, which closed during 1991. NOTES TO FXNA~CIA~ STATEMENTS ARE AN INTEGRAL PA~T OF THIS STATEMENT Federal Grantor/Pass Through Grantor/Program Title FISHERS ISLAND FERRY DISTRICT SCHEDULE OF FEDEP-~L ASSISTANCE December 31, 1991 Federal Fund CFDA Program Balance Revenue Disbursements/ Number Amount 1/1/91 Recognized Expenditures 12~/91 U.S. DepNr~ment Of Transportation Federal Aviation A~ministration Rehabilitation of 8xistinq Runways NO. 3-36-0029-01-85 20.106 $ 136,906 $ 0 $ 2,662 $ 2,662 $ 0 Obstruction Lighting Removal & Airport Prope~y Map - No. 3-36-0029-03-90 20.106 $ 259,067 $ 0 $ 17,428 $ 17,428 $ 0 Lighting Design & Favement Evaluation No. 3-36-0029-04-91 20.106 $ 109,882 $ 0 $ 65,908 $ 65,908 $ 0 The above grant programs are open as of December 31, 1991 with the exception of 3-36-0029-01-85, which closed during 1991. NOTES TO FINANCIAL STATEMENTS A~ AN INTEG~t~L PART OF THIS STAT~SNT ORIGINAL ISSUE DATE Agriculture Land Rights-Serial Bond 4/84 Telephone System 1/86 Repairs SYC Building 10/86 La~dfill Compactor 4/87 Scale House 6/87 Wendy Drive Road Improvement 10/87 Police Console 11/87 Dog Pound Improvement 11/87 Computer System 11/87 Computer System 10/88 Payloader 5/88 Highway Equipment 6/89 Truck Scale 9/89 Co~puter Equipment 11/89 Police Headquaz~aers Repairs 3/90 Fuel Distribution Repairs 9/90 Glenn Road & Shepard Drive Road Improvement 10/90 Acquisition of Land 11/90 Acquisition of Land-Capital Note 11/90 Various Purposes 12/90 Various Purposes-serial Bond 2/91 Land Acquistion 3/91 Computer System 11/91 ISSUED FINAL INTER~ST OUTSTANDING IN MA~I/~ ~ATE 1-1-91 1991 PAID IH OUTSTANDING 1991 12-31-91 4/05 9.10 1,310w000 1/81 6.00 6vO00 10/91 6.30 8,000 3/92 5.75 7o,0oo 6/92 5.50 56,000 10/91 6.35 2,400 11/92 5.20 30~000 11/92 5.20 28v000 11/92 5.20 90,000 5/91 6.29 36,000 5/91 6.24 51,000 6/91 6.25 136t000 5/91 6.19 120,000 5/91 6.31 128,000 3/91 5.89 60tO00 9/91 6.08 50~000 10/91 6.29 40~000 5/91 6.30 600,000 11/92 5.15 87,500 5/91 6.12 100,000 2/11 6.375 3/96 5.50 11/96 5.20 2,708,500 175,000 89,000 75,000 1,235,000 6,000 0 8,000 8 35,000 35,000 28,000 28,000 2~400 0 15,000 15,000 14,000 14,000 45,000 45w000 36,000 0 51,000 0 136,000 0 120,000 0 128~000 0 60,000 0 50,000 0 40,000 0 600,000 0 43,750 43,750 100,000 0 2,708,500 175,000 '89,000 $3,008,900 $2,972,500 $1,593,150 $4,388,250 NOTES TO FINANCIAL STATEMENTS AR~ AN INTEGRAL PART OF THIS STATEMENT -20- ASSETS Cash Due Fr~ Other Funds State and Federal Receivables Other Receivables Provisions to be Made in Future Budgets FISH~RS ISLAND FERRY DISTRICT COMBINED BALANCE SHEET DECEMBER 31, 1991 ~F~O~/~DUM ONLY GBNEBAL TRUST & LONG ~ TOTALS FUND AGENCY DEBT 12-31-91 12-31-90 876,140 $ 15,066 $ 891,206 $ 792,238 17,000 17,000 13,931 26,864 26,864 195,328 3,002 3,802 6,176 $ 585,000 585,000 645,000 920,004 $ 18,868 $ 585,000 $ 1,523,872 $ 1,652,673 LIABILITIES AND FUND BALANCE Due To Other Punds Due To Other Governments Deferred Revenues Deposits Held Serial Bonds Sayable TOTAL LIABILITIES $ 19,285 $ 362 $ 19,647 $ 68,715 17,000 17,000 13,931 475 475 127 11,587 11,587 25,524 1,031 1,031 187 $ 585,000 $ 585,000 645,000 $ 30,872 $ 18,868 $ 585,000 $ 634,740 $ 753,484 FUND BALANCE Other Reserves Appropriated Ensuing Year's Budget Unappropriated $ 3,001 393,000 $ 393,000 250,000 496,132 496,132 646,188 089,132 $ 0 $ 0 $ 889,132 $ 899,189 TOTAL LIABILITIES & FUND BA~CE $ 920,004 $ 18,868 $ 585,000 $ 1,523,872 $ 1,652,673 ======================================================================= -21- REVENUES Real Property Tax Items Departmental Income Use of Money and Property Miscellaneous Local Sources State Aid Retirement System Credits Federal Aid TOTAL REVENUES MEMORANDUM ONLY GENERAL TOTALS FUND 12-31-91 12-31-90 $ 125,100 $ 125,100 $ 127,400 862,224 862,224 933,322 63,381 63,381 68,277 6,720 1,896 1,896 127 127 687 85,998 85,998 226,792 EXPENDITURES Personal Services Contractual Expense Capital Outlay Employee Benefits Debt Service TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER} EXPENDITURES FUND BALANCE - JANUARY 1~ 1991 FUND BALANCE - DECEMBER 31, 1991 $ 468,243 $ 468,243 $ 438,474 354,084 354,084 565,584 115,839 115,839 61,063 101,511 101,511 93,297 109,106 109r106 113,103 $ 1,148,783 $ 1,148,783 $ 1,271,521 $ (10,057) $ (10,057) $ 91,677 899,189 $ 899,189 $ 807~512 889~132 $ 889,132 $ 899,189 ========================================= -22- TOWN OF SOUTHOLD DEPARTMENTAL EANK RECONCILIATIONS DECEMBER 31, 1991 TOWN CLERK - JUDITH T. TERRY Bank Balance - 12/31/91 Add: Deposit in Transit Less: Outstanding Checks Miscellaneous Adjustment Ledger Balance - 12/31/91 $ 100,546.94 9,792.00 (110,010.37) ( 328.57) $ - 0 TAX RECEIVER - GEORGE SULLIVAN Checkinq Account Bank Balance 12/31/91 $ 739.27 Add: Deposits in Transit -0- Less: Outstanding Checks (91.34) Ledger Balance 12/31/91 $ 647.93 $ 647.93 Money Market Account Bank Balance 12/31/91 Add: Deposits in Transit Less: Outstanding Checks Ledger Balance 12/31/91 $2,839,236.16 $2,839,236.16 $2~839,236.16 NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT 23 - TOWN OF SOUTHOLD JUSTICE OF THE PEACE BANK RECONCILIATIONS DECEMBER 31, 1991 JUSTICE PRICE Norstar Bank Balance 12/31/91 Checking Account Bail Account Add: Deposits in Transit Less: Outstanding Checks Justice's Ledqer Bail Held Due to Comptroller Due to Supervisor Miscellaneous Refund $ 6,141.00 27,601.76 (166.50) $24,924.76 8,387.00 262.50 2.00 $ 33,576.26 $ 33,576.26 JUSTICE TEDESCHI North Fork Bank Balance 12/31/91 Checking Account Bail Account Add: Deposits in Transit Less: Outstanding Checks Miscellaneous Adjustment $11,752.48 12,958.20 (2,126.00) 23.63 $ 22,608.31 Justice's Ledqer Bail Held Due to Comptroller Due to Supervisor $10,403.00 12,047.25 158.06 $ 22,608.31 NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT -24- TOWN OF SOUTMOLD JUSTICE OF THE PEACE BANK RECONCILIATIONS DECEMBER 31, 1991 JUSTICE EDWARDS Bank Balanc~ 12/31/91 Add: Deposits in Transit Less: Outstanding Checks Justice's Ledger Bail Held Due to Comptroller $ 1,129.00 7~0,00 379.00 $ 1,129.00 $ 1,129.00 NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT - 25 - TOWN OF SOUTHOLD FIDUCIARY BANK RECONCILIATIONS DECEMBER 31, 1991 PAYROLL ACCOUNT Bank Balance 12/31/91 Add: Deposits in Transit Less: Outstanding Checks Miscellaneous Adjustment $ 24,054.51 (23,703.85) 1.00 Ledger Balance 12/31/91 *Due to Supervisor-Interest on Account $ 351.66 $ 351.66' SUPERVISOR;S TAX ACCOUNT Bank Balance 12/31/91 Add: Deposits in Transit Less: Outstanding Checks $ 932,748.55 (931,911.25) Ledger Balance 12/31/91 *Due to Supervisor-Interest on Account $ 837.30 $ 837.30* *Explanation of Ledger Balance NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT. - 26 - Town of Southold Notes To The Finaneial Statements For the Fiscal Year Ended December 31, 1991 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Town of Southold have been prepared in conformity with generally accepted accounting prineiples (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. The more significant of the government's accounting policies are described below. A. FINANCIAL REPORTING ENTITY The Town of Southold, which was established in 1640, is governed by its Charter, the Local Municipal Law and other general laws of the State of New York and various local laws. The Town Board is the legislative body responsible for overall operations, the Supervisor serves as Chief Executive Officer and as Chief Fiscal Officer. Basic services provided included Public Safety, Health, Transportation, Economic Assistance and Opportunity, Culture and Recreation, and Home and Community Services. All governmental activities and functions performed for the Town are its direet responsibility. No other governmental organizations have been included or excluded from the reporting entity. The financial reporting entity includes organizations, functions and activities over which elected officials exercise oversight responsibility. Oversight responsibility is determined on the basis of financial interdependency, selection of governing authority, designation of management, and ability to significantly influence operations and accountability for fiscal matters. 1. Included in the Reoorting Entity - The following districts, located within the Town, are included in the reporting entity: East-West Fire Protection District West Greenport Water District Wendy Drive Road Improvement District West Creek Estates Road Improvement District 2. Excluded From the Reporting Entity - The following districts, located within the Town, are excluded from the reporting entity: Fishers Island Ferry District Fishers Island Refuse and Garbage District Orient Mosquito District Cutchogne-New Suffolk Park District Mattituck Park District Orient East Marion Park District Southold Park District 27 - B. BASIS OF PRESENTATION - FUND ACCOUNTING The accounts of the Town are organized on the basis of funds or account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for within a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance/retained earnings, revenues and expenditures/expenses which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The various funds are summarized by type in the financial statements.. (Certain funds of the local government are utilized to account for resources derived from, and/or expenditures applicable to an area less than the entire local government). The following fund types and account groups are used: 1. FUND CATEGORIES a. GOVERNMENTAL FUNDS - Governmental funds are those through which most governmental functions are financed. The acquisition, use and balance of expendable financial resources and the related liabilities are accounted for through governmental funds. The measurement focus of the governmental funds is upon determination of financial position and changes in financial position. The following are the Town's governmental fund types. General Fund - the principal operating fund which includes all operations not required to be recorded in other funds. Special Revenue Funds - used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. The following Special Revenue Funds are utilized: Highway Funds-To maintain and operate highways General Fund Part Town-To provide general services outside the Village of Greenport Community Development Fund-Segregate and account for projects funded by special federal revenues Risk Retention Fund-To provide health benefits to certain Town employees Capital Projects Fund - used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by special assessment funds and trust funds). b. FIDUCIARY FUNDS - used to account for assets held by the local government in a trustee or custodial capacity: Trust and Agency Funds - used to account for money received and held in the capacity of trustee, custodian or agent. These include expendable trusts, non-expendable trusts, and agency funds. - 28 2. 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 with measurement of financial position and not results of operations. The General Fixed Assets Account Groul~ - used to account for land, buildings, improvements other than buildings, and equipment utilized for general government purposes, except those accounted for in proprietary funds. The General Lone-Term Debt Account Groul~ - used to account for all long-term debt except that accounted for in proprietary and special assessment funds. C. BASIS OF ACCOUNTING/MEASUREMENT FOCUS Basis of accounting refers to when revenues and expenditures and the related assets and liabilities 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. Measurement focus is the determination of what is measured, i.e. expenditures or expenses. Modified Accrual Basis - All governmental Funds and Expendable Trust Funds are accounted for using the modified accrual basis of accounting. Under this basis of accounting, revenues are recorded when measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Material revenues that are accrued include real property taxes, state and federal aid, sales tax and certain user charges. If expenditures are the prime factor for determining eligibility, revenues from federal and state grants are accrued when the expenditure is made. Expenditures are recorded when incurred except that: a. Expenditures for inventory-type items are recognized at the time of the disbursements. b. Principal and Interest on indebtedness are not recognized as an expenditure until due. 29 - c. Compensated absences, such as vacations and sick leave which vests or accumulates, are charged as an expenditure when paid. See Note I-J. Accrual Basis - Proprietary funds are accounted for on the accrual basis of accounting, whereby revenues are recognized when earned and expenses are recorded when incurred. Fixed assets and long-term liabilities related to these activities are recorded within the funds. Account Groul~s - General fixed assets are recorded at actual or estimated cost or, in the case of gifts and contributions, at the fair market value at the time received. No provision for depreciation is made. General long-term debt liabilities are recorded at the par value of the principal amount. No Hability is recorded for interest payable at maturity. D. PROPERTY TAXES County real property taxes are levied annually and become a lien on December 1. Taxes are coliected during the period December 1 to May 31. Taxes for county purposes (apportioned to the area of the county outside the Town of Southold) are levied together with taxes for town and special district purposes as a single bili. The towns and special districts receive the full amount of their levies annually out of the first amounts coliected on the combined bills. The county assumes enforcement responsibility for all taxes levied in the towns (and for unpaid county taxes in the Town). Unpaid village taxes and school district taxes are turned over to the county for enforcement. Any such taxes remaining unpaid at year end are relevied as county taxes in the subsequent year. E. BUDGETARY DATA 1. BUDGET POLICIES - The budget policies are as follows: a. No later than October l, the budget officer submits a tentative budget to the Town Board for the fiscal year commencing the following fiscal year. The tentative budget includes the proposed means of financing for ali funds. b. After public hearings are conducted to obtain taxpayer comments, no later than November 20, the governing board adopts the budget. c. All modifications of the budget must be approved by the governing board. 30 - 2. ENCUMBRANCES 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 in all funds. Encumbrances are reported as reservations of fund balances since they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in the period in which the liability is incurred. 3. BUDGET BASIS OF ACCOUNTING Budgets are adopted annually on a basis consistent with generally accepted accounting principles. Appropriations authorized for the current year are increased by the amount of encumbrances carried forward from the prior year. Budgetary controls for the special revenue funds are established in accordance with the applicable grant agreement which covers a period other than the Towns fiscal year. Budgets have been adjusted to reflect the Town's fiscal year. F. CHANGES IN ACCOUNTING POLICIES There have been no changes in accounting policies. G. DEPARTURES FROM GENERALI,Y ACCEPTED ACCOUNTING PRINCIPLES (GAAP) There are no departures from generally accepted accounting principles (GAAP). H. INSURANCE The Town assumes the liability for most risk including, but not limited to, property damage and personal injury liability. 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. I. VACATION AND SICK LEAVE AND COMPENSATORY ABSENCES Town employees are granted vacation and sick leave and earn compensatory absences in varying amounts. In the event of termination or upon retirement, an employee is entitled to payment for accumulated vacation and sick leave and unused compensatory absences at various rates subject to certain maximum limitations. Estimated vacation and sick leave and compensatory absences accumulated by governmental fund type employees have been recorded in the general long-term obligations account group. 31 - Payment of vacation and sick leave recorded in the general long-term obligations account group is dependent upon many factors, therefore, timing of future payments is not readily determinable. However, management believes that sufficient resources will be made available for the payments of vacation and sick leave and compensatory absences when such payment becomes due. J. POST RETIREMENT BENEFITS In addition to providing pension benefits, the Town provides heaith insurance coverage and survivor benefits for retired employees and their survivors. Substantially, all of the Town's employees may become eligihie for these benefits if they reach normal retirement age while working for the Town. Health care benefits and survivors benefits are provided through either an insurance company o~' the Risk Retention Fund 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 or the actuai benefits paid from the Risk Retention Fund as an expenditure in the year paid. During the year $ 978,679 was paid on behaif of 62 retirees and 174 active employees and is recorded as an expenditure in the Risk Retention Fund and the Special Revenue Fund. The cost of providing benefits for 62 retirees is not separable from the cost of of providing benefits for the 174 active employees. L. TOTAL COLUMNS ON THE GENERAL PURPOSE FINANCIAL STATEMENTS Total columns on the general purpose financial statements 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, nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of the data. II. STEWARDSHIP, COMPLIANCE, ACCOUNTABILITY A. MATERIAL VIOLATIONS OF FINANCE REALTED ACTIVITES There are no material violations of finance-related provisions. B. DEFICIT FUND BALANCES 1. The Risk Retention Fund had a deficit fund balance at December 31, 1991. Pricipal factors which caused this deficit are as follows: In it's 1991 Budget, $731,670 was appropriated for anticipated 1991 insurance claims. However, expenses amounting to $754,085 were charged to the 1991 Budget, creating an overdrawn appropriation of $22,415. The net effect resulted in an actual 1991 Fund Balance of $19,481. To provide the necessary cash and appropriations for 1992, additional funding has been included in the 1992 budget to fund the deficit. 32 - 2. The Wendy Drive Road Improvement District had a deficit fund balance at December 31, 1991. This deficit is a result of an interfund advance from the General Fund used for debt service. An appropriation is included in the 1992 budget to fund the deficit by repaying the advance with interest (see note VII). C. OVERDRAWN APPROPRIATIONS - Expenditures for the year ended December 31, 1991 exceeded appropriations in the Risk Retention Fund's anticipated Employee Benefits function; $731,670 was appropriated for anticipated insurance claims and expenses amounted to $754,085, creating an unfavorable variance of $22,415. III.DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. ASSETS 1. CASH AND INVESTMENTS Town investment policies are governed by state statutes. In addition, the Town has its own written investment policy. Town monies are deposited in FDIC insured commercial banks or trust companies located within the state. The Supervisor is authorized to use demand accounts and certificates of deposits. Permissible investments include obligations of the U.S. Treasury and U.S. Agencies, repurchase agreements, and obligations of New York State or its localities. Collateral is required for demand deposits and certificates of deposit at 105 percent of all deposits not covered by federal deposit insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State and its municipalities and school districts. The written investment policy requires that repurchase agreements be purchased from banks located within the State and that underlying securities must be obligations of the federal government. Underlying securities must have a market value of at least 105 percent of the cost of the repurchase agreement. Deposits. All deposits, including certificates of deposits, are carried at cost plus accrued interest. Deposits at year-end were entirely covered by federal depository insurance or by collateral held by the Town's banking institutions in the Towns name. 2. CHANGES IN FIXED ASSETS Fixed assets increased from $10,386,394 to $10,914,421. - 33 - B. LIABILITIES 1. PENSION PLANS General Information The Town participates in the New York Employees' Retirement System and the New York State Policemen's and Firemen's Retirement System. These are cost sharing multiple public employer retirement systems. Obligations of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law (NYSRSSL). The systems offer a wide range of plans and benefits which are related to years of service and final average salary, vesting of retirement benefits, death and disability benefits and optional methods of benefit payments. Ali benefits generally vest after ten years of credited service. The NYSRSSL provides that all participants in each system are jointly and severally liable for any actuarial unfunded amounts. Such amounts are collected through annual billings to all participating employers. Generaliy, all employees, except certain part-time employees, participate in the Systems. The Systems are noncontributory except for employees who joined the Employees' Retirement System after July 27, 1976 who contribute 3% of their salary. Employee contributions are deducted by employer's from employee's paychecks and are sent currently to the Employees' Retirement System. Employee Groups Covered Nearly all Town of Southold employees are eligible for membership in the systems. All employees employed in a full-time position after June 30, 1976 are mandatory members. The total payroll for all employees of the Town of Southold for fiscal year 1991 was $6,571,896, of which $3,957,861 was attributable to the Employees' Retirement System and $2,269,506 was attributable to the Policemen's and Firemen's Retirement System. Payments and Funding Status Through 1988, the Systems billed all participating employers by May 31 each year. Billings were based on salaries paid during the System's fiscal year which ended on March 31 of the previous calendar year, and in accordance with funding requirements determined by the System's actuary. Employers were required to remit in full by June 30. In 1989 and future years, the System's billings are based on Chapter 62 of the Laws of 1989 of the State of New York. This legislation requires participating employers to begin making payments on a current basis, while amortizing existing unpaid amounts relating to the System's fiscal years ending March 31, - 34 - 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 Southold elected not to make the full payment on December 15, 1989. The acturial cost method used by the System to determine the annual contributions from employees through March 31, 1990 was the aggregate cost method. Under this method the excess of the acturial liabilities over the actuarial assets was funded by employees as a level percentage of salary over the current members' future working lifetimes. Effective April 1, 1990 the State legislature amended the Retirement and Social Security Law by enacting Chapter 210 Laws of 1990 which mandated a change to a different actuarial funding method for the System. The System changed from the aggregate cost funding method to a modified projected unit credit method. This new method utilizes a rolling amortization period for differences between acturial assets and actuarial accrued liabilities, of which approximately 17% of such differences are recognized each year in determining the funding amount. As a result of the legislated changes for the year ended March 31, 1991, ERS employer contributions were generally lower than would have beem the case under the aggregate cost funding method. The anticipated future effect is that employer contributions will be, for a time, less than they would have been under the aggregate cost funding method. However, over the long-term, employer contributions are expected to be higher under the modified projected unit credit funding method than under the aggregate cost method. Further, the legislation allows the reduction of non-State and State annual payments for prior year employer contributions being amortized over 17 years, by any yearly surplus (estimated funding credits) resulting from the roiling amortization. At March 31, 1991, the system established a reserve for funding credits of $190 million, reducing employer contributions receivable, based upon an actuarial determined estimate of 1992 employer contributions that are not expected to be received under the modified projected unit credit funding method. The prior year contributions consist of non-State employer contributions receivable for the fiscal years ended March 31, 1989 and 1988 and the State's contribution receivable for the fiscal years ended march 31, 1986 and 1985. The total pension liability for services rendered by current employees of the Town of Southold during the current fiscal year includes $251,677 employers share and $ 99,581 paid by employees as a current contribution, representing less than 1% of the covered salaries paid. The total unpaid liability at the end of the fiscal year was $648,102, and is reported in the General Long-Term Debt Account Group. - 35 - The Pension Benefit Obligation (PBO) of credited projected benefits is a standardized disclosure measure of the actuarial present value of pension benefits, adjusted for the effects of projected salary increases estimated to be payable in the future as a result of employees service to date. The retirement systems do not make separate measurements for individual employers. The PBO of credited projected benefits at March 31, 1991 for the Employee's Retirement System, determined through an actuarial valuation performed as of that date, is $40.08 billion. The net assets available to pay benefits at that date is $42.91 billion. The Town's employer contribution requirement was less than 1% of total contributions required of all employers participating in this system. The PBO of credited projected benefits at March 31, 1991 for the Polieemen's and Firemen's Retirement System determined through an actuarial valuation performed as of that date is $ 8.06 billion. The net assets available to pay benefits at that date is $7.62 billion. The Town's employer contribution requirement was less than 1% of total contributions required of all employers participating in this system. Historical trend information showing the progress in accumulating sufficient assets to pay benefits when due is presented in the Annual Financial Report of the two systems. Additional detailed information concerning the systems may also be found in the Report. 2. SHORT-TERM DEBT Liabilities for bond anticipation notes (BAN's) are generally accounted for in the capital projects funds. Principal payments on BAN's must be made annually. State law requires that BAN's issued for capital purposes be converted to long-term obligations within five years after the original issue date. However, BAN's issued for assessable improvement projects may be renewed for periods equivaient to the maximum life of the permanent financing, provided that stipulated annuai reductions of principal are made. To Be Redeemed 1992 Interest Budget Rate Appropriation Bonds 5.75 35,000 5.50 28,000 5.50 35,000 140,000 5.20 91,800 71,200 $189,800 $ 211,200 Description Amount Equipment- Compactor 35,000 Equipment- Scale 28,000 Land Acquisition 175,000 Various Purposes 163,000 $ 401,000 - 36 - 3. LONG-TERM DEBT a. At December 31, 1991, the total outstanding indebtedness of the Town, excluding the above BAN's aggregated $7,018,949. b. Serial Bonds and Capital Notes - The Town borrows money in order to acquire land or equipment or construct buildings and 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 local government, 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 the long-term liabilities. c. Other Long-Term Debt - In addition to the above long-term debt the local government had the following noncurrent liabilities: 1. Due to Employees' Retirement System. Represents the noncurrent portion of the liability to the various state retirement systems. 2. Compensated Absences. Represents the value of earned and unused portion of the liability for compensated absences. d. Summary Long-Term Debt - The following is a summary of long-term liabilities outstanding at December 31, 1991 by fund type and account group: Liability General-Long Term Debt Account Group Serial Bonds Capital Notes Total Bonds and Notes $3,943,500 43,750 $3,987,250 Unbilled Retirement Compensated Absences Total Long-Term Debt 648,102 2,383,597 $7,018,949 37 - e. The following is a summary of changes in the long term liabilities for the period ended December 31, 1991: Payable at Beginning of Fiscal Year Bonds and Unbilled Compensated Notes Retirement Absences $1,397,500 $726,770 $2,011,332 Additions 2,708,500 Deletions 118,750 Payable at End of Fiscal Year $3,987,250 $648,102 $2,383,597 Additions and deletions to unbilled retirement and compensated absences are shown net since it is impracticable to determine these amounts separately. f. Long Term Debt Maturity Schedule - The following is a statement of serial bonds and the Capital Note with corresponding maturity schedules: Serial Bonds Payable from: General Fund Description: Agriculture Development Rights Dated: October 1, 1984 Issue Amount: $1,662,500 Interest Rate: 9.1% Final Maturity Date: April 1, 2005 Balance as of December 31, 1991:$1,235,000 Payable from: General Fund, Highway Fund, Special Revenue Fund Description: Various Purposes Dated: February 15, 1991 Issue Amount: $2,708,500 Interest Rate: 6.375% Final Maturity Date: February 15, 2011 Balance as of December 31, 1991:$2,708,500 Cal~ital Note Payable from: General Fund Description: Acquisition of Land Dated: November 8, 1991 Issue Amount: $43,750 Interest Rate: 5.15% Final Maturity Date: November 6, 1992 Balance as of December 31, 1991:$43,750 38 - g. The following table summarizes the Town's future debt service requirement of the Serial Bond as of December 31, 1991: Year Ending Principal Interest 1992 363,500 1993 370,000 1994 350,000 1995 260,000 1996 210,000 1997-2001 1,065,000 2002-2006 825,000 2007-2011 500,000 358 777 247 019 222 026 200 402 183 104 679 283 304 691 79,688 h. In addition to the debt shown above, the following long-term debt has been authorized but remains unissued at December 31, 1991. Payable from: General Fund Description: Agricultural Land Development Rights Serial Bonds Authorized Amount: $1,750,000 Payable from: Special Revenue Fund Description: Improvement of Wastewater Disposal Facility Authorized Amount: $50,000 C. INTERFUND RECEIVABLES AND PAYABLES Interfund receivables and payables at December 31, 1991 were as follows: Interfund Interfund Fund Receivables Payables General Fund Whole Town Capital Projects Special Districts Trust and Agency Total Interfund $ 577 155,000 $ 155,517 60 $ 155,577 $ 155,577 D. FUND EQUITY 1. RESERVES The capital projects fund equity include 10 capital reserve funds established for varying purposes. E. DEFERRED COMPENSATION PLAN No employees have elected to participate in a deferred compensation plan. - 39 F. LEASE COMMITMENTS AND LEASED ASSETS The Town leases several photocopy machines under operating leases. Total rental expenditure on this leased equipment for the fiscal year ended December 31, 1991 were approximately $4,300. VI. CONTINGENCIES The local government has received grants which are subject to audit by agencies of the State and Federal Governments. Such audits may result in disallowances and a request for a return of funds to the federal and state governments. Based on past audits, the local government administration believes disallowances, ff any, wlil be immaterial. VII. OTHER A. In the State Annual Update Document the following funds are included in the Highway Fund Whole Town; in the audit report, these funds are included as Special Revenue Funds: Wendy Drive Road Improvement District West Creek Estates Road Improvement District B. The Town is the sponsor of a grant from Federal Aviation Administration for airport improvements at Elizabeth Airfield. The Town has contracted with' Calacerinos & Spina Engineers, P.C. to administer the grant. A copy of an audit report which includes a compliance audit is reviewed by the Town. These funds are shown in the audit report on the Fishers Island Ferry District Schedule of Federal Assistance. - 40