Winnetka Park District
Minutes Of The Administration Committee
Monday, November 9, 2009
Commissioner Vanden Bosch called the meeting to order at 3:12 p.m. Present were Commissioners DiCola, Kahnweiler and Vanden Bosch. Also present were Executive Director Schwarz, Treasurer Farmer and Mr. Ronald Amen of Lauterbach and Amen, LLT.
Mr. Farmer introduced Mr. Amen to the committee and requested that Mr. Amen present the audit reports to the committee.
Mr. Amen stated the Winnetka Park District 2008/2009 Certified Annual Financial Report (CAFR) included a copy of the “Certificate of Achievement for Excellence on Financial Reporting” award received from The Government Finance Officers Association for the 2007/2008 CAFR. The District was one of only sixteen Illinois Association of Park Districts (IAPD) member agencies to receive that award (IAPD is comprised of more than 400 park district, forest preserve, conservation and recreation and special recreation agencies). As part of the annual process, the 2008/2009 CAFR will be submitted to the Government Finance Officers Association for review after Board approval.
In the “Report of Independent Auditors” the District had received an “unqualified opinion”, indicating that all appropriate accounting standards were used in the preparation of the financial statements. An “unqualified opinion” is the highest opinion that a financial entity can receive.
A discussion ensued regarding the audit process, what the auditors reviewed and materiality. Mr. Amen stated materiality was very important. The audit is to review the overall accounting process and numbers provided by staff. Material items are verified and anything unusual or abnormal is investigated and if material reported to the Board in a management letter (all discovered cases of fraud would be considered material). However, if the audit was for the purpose of discovering all possible cases of improprieties or fraud, the time and labor expense would be significantly higher.
Mr. Amen reviewed the financial statements for the governmental and business type funds. Commissioner Vanden Bosch asked what the differentiation was. Mr. Amen explained the General Fund, the Recreation Fund and various Miscellaneous Funds (Special Recreation, IMRF and FICA, etc...) were considered governmental funds and the Golf Fund, Paddle Tennis Fund, Tennis Fund and Ice Fund were considered business type.
On the “Statement of Revenues, Expenses and Changes in Net Assets”, Mr. Amen directed the Committee’s attention to the “Change in Net Assets” line as an indicator of how well the District performed in 2008/2009. For the Governmental Funds the net change was an increase of $129,444 and for the Propriety Funds the net change was an increase of $410,989. However, 2008/2009 included a $514,605 transfer from the General Fund to the Golf Fund to fund current year capital improvements and cash shortfalls.
A brief discussion ensued regarding the funding policy, how it evolved and why. Mr. Farmer stated “for the past few years the golf operations has experienced an erosion of net income and in 2006/2007, the Board approved the funding of the Golf Fund by the General Fund to pay for a needed golf course renovation and to fund the shortfall in net income”. Executive Director Schwartz stated that the golf course operations need to reflect changes to improve the financial position and the 2010 budget will begin to reflect those changes.
Commissioner Kahnweiler asked why the General Fund transferred $514,605 to the Golf Fund when the loss before transfers was only $321,508. Mr. Farmer stated the $193,097 difference was due to cash flow versus accrual funding.
Commissioner DiCola asked Mr. Amen what other information in the audited financials the Committee should pay special attention. Mr. Amen stated the budget versus actual comparisons were good to review. After a brief review, staff was instructed to prepare a schedule identifying the major variances and reasons why for each fund and report back to the Committee.
Commissioner Vanden Bosch requested staff to leave meeting at 3:48.
Questions regarding staff performance were satisfactorily answered by Mr. Amen.
Commissioner Vanden Bosch adjourned the meeting at 4:10 p.m.
The Audit Committee recommends the approval of the Winnetka Park District 2008/2009 Certified Annual Financial Report by the Board at the September 10, 2009 Regular Board meeting.
