Town of Portsmouth 2008 Financial Statements

Two Charles Street Providence, RI 02904

Introduction

Presentation will review the Town’s 2008 Audit Results Discussion of observations and recommendations Feel free to ask questions at any time

Topics of Discussion

Financial Statements

Observations and recommendations

Required Communication to Audit Committee

The General Fund

Total Fund Balance increased by $790,671 Budgeted change was a decrease of $25,000

(liquidation of carryforward encumbrances) Undesignated Fund Balance = $1,586,864 Undesignated Fund Balance represents roughly 3.5

% of Operating Budget Current level is well below analyst benchmarks

(15% - 20%, one year debt svc, etc)

Fund Balance: last 10 years

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

1999 2001 2003 2005 2007

TotalUndesignated

Results of Operations

Revenues exceeded budget by $484,883 Property taxes $441,414 above what was

anticipated Tax collection percentages:

97.1% of current year assessment 96.3% of all assessments outstanding

Tax Collections:% of current levy

90

91

92

93

94

95

96

97

98

99 '00 '01 '02 '03 '04 '05 '06 '07 '08

Current

Results of Operations (cont.)

Expenditures were $402,427 below appropriated amounts

No functional areas exceeded budget Significant favorable results in these areas:

General government Public works Recreation, parks and grounds

Net Bonded Debt per capita

0

200

400

600

800

1000

1200

92 94 96 98 '00

'02

'04

'06

'08

$$$

School Department

Unrestricted fund ended year with fund balance of $889,195

$471,741 of this fund balance consists of outstanding, but unfilled, purchase commitments (encumbrances)

$200,000 is designated for 2008-09 expenditures Balance of $217,454 is undesignated

School Department

Revenues were $147,760 below anticipated amounts

Expenditures were $121,854 below appropriations School Lunch Fund operated on a self-sufficient

basis School Restricted Funds (grants) recognized

$1,901,124 in expenditures

Town Pension Plan

Funded status has deteriorated significantly since 2000 80.1% funded as of 1/1/2000 64.1% funded as of 7/1/2007

Market performance since latest valuation likely has not improved status

While all actuarially required contributions have been made, these amounts have significantly increased over past 10 years and town must anticipate additional future increases

Significant Restatements

Note 14 to the financial statements outlines the restatements that were made to the 2007 financial statements: Reclassification of fund types Prior period cut-off issues and other

reclassifications General Fund fund balance increased by $579,497

Observations & Recommendations

Material weaknesses and significant deficiencies were noted: Reconciliation of school operating cash account Year-end closing and audit readiness at School Dept Interim financial analysis at School Dept Prior year financial reporting controls Anti-fraud programs and procedures

Audit Committee Correspondence

Required communication of audit matters directly to parties responsible for audit oversight and follow-up Difficulties in performing audit – readiness of financial

records at School Dept Significant adjustments to opening balances Other significant adjustments to current year financial

statements

Questions?

The End

Thank you!