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Millington receives ‘clean audit opinion’ for 2015 fiscal year

By Bill Short

Flag City LogoA certified public accounting firm reported earlier this month that it has given the city of Millington a “clean audit opinion” for the 2015 fiscal year.
Trey Watkins of Watkins Uiberall in Memphis presented the report during the Jan. 11 meeting of the Millington Board of Mayor and Aldermen. He said the “clean” opinion should be “no surprise” to the board members.
“Things went really smooth this year,” he noted. “We had some staffing changes in the middle, so it was a little bit of a challenge on our side.”
Watkins expressed appreciation to City Finance Director John Trusty for his assistance in getting the process completed.
He called the “new pension standards” the “biggest challenge” his firm had this year, because the pension “liability” must be recorded. While noting that “a lot of different numbers” are involved in how that works, he said that information is in the footnotes to the report’s financial statements.
Watkins said the “pension disclosures” are listed in the financial statements, beginning on Page 39.
“This is all new from what you’re used to seeing,” he told the board members. “So, that was a very big change this year.”
Watkins said the Statement of Net Position, which is the city’s “full-accrual” statement, begins on Page 12.
“This shows you kind of where the city stands from an asset-liability perspective on a full- accrual basis,” he noted. “A lot of times, what you will see is more of the fund-basis financial statements, which are budgetary-driven.”
Watkins said “adjustments” have to be made to the Statement of Net Position to get it to the “full-accrual side.”
He noted that Governmental Activities show a total net position of $87,746,960. And the Proprietary Funds – the “business-type” activities – show $19,258,000.
Watkins said Page 14, which has the fund statements that are budgetary-driven, is more of a “cash-basis” presentation of financial information. But it also includes the city’s “balance sheet,” which lists the major and non-major “governmental funds.”
For the 2015 fiscal year, Millington’s governmental funds totaled $14,117,000.
Watkins said Page 15 shows the “reconciliation” that takes the fund financial statements back to the full-accrual statements.
“You can kind of see the items, the biggest one being Capital Assets,” he said. “So, that’s a big adjustment in debt.”
He said Page 16 contains the “income statement” on the governmental funds, which shows how the city gets to those fund balances. And Page 17 shows the reconciliation statements to get from the income statements to the full-accrual statements.
“In the past,” he recalled, “I think we’ve done a work session that might make this a little bit more detailed with more detailed questions. But I’m trying to give you as high level as I can possibly give you at this time.”
Because his firm does not audit the municipal school system’s finances, Watkins said it takes “no responsibility” for the statements themselves. But they are included in the city’s report.
“All those funds will be shown as separate funds within the city’s financials,” he noted. “We make reference to the other auditors and the opinions.”
In response to a question by Alderman Mike Caruthers, Watkins said the board should not be concerned about the “level of debt” that the city currently has.
“Based on your other lending requirements, I’m not necessarily going to be in a position to actually answer that,” he acknowledged. “But I wouldn’t say that you have just a ton more than some other municipalities.”

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