2017 audit complete

Borough’s balance sheet and fund balance both strong

LANSDALE » The news is good on Lansdale Borough’s financial picture as of the end of 2017.

“Overall, the balance sheet is strong, and the fund balance going into 2018 is also strong,” said auditor Ed Furman.

Furman, the borough’s longtime representative from auditing firm Maillie Inc., gave council an update at the start of their Aug. 15 meeting on the results of a close examination of the borough’s books from last year. Auditing software was used to evaluate the borough’s ledger for any unusual transactions, duplicate payments, or anything not properly accounted for — and found no problems.

“We’re actually touching 100 percent of the borough’s transactions, through the audit software we use, and there was nothing negative to report there,” he said.

Total cash assets for the borough were up by roughly $8 million in 2017 over the prior year, with the total capital assets of the borough dropping slightly due to depreciation, combined with no new large projects funded by the borough itself.

“You didn’t have any significant capital projects in 2017, so the depreciation expense basically outran the additions,” said Furman.

The borough’s total liability for post employment benefits such as pensions increased by roughly $200,000, Furman told council, and the total pension liability for Lansdale totalled roughly $4.2 million at the end of 2017.

“It actually went down from 2016, mainly from the favorable investments inside the pension plan’s assets,” Furman said.

State guidelines call for municipalities to have a funding level of roughly 70 percent of the total pension liability, and Lansdale’s level is closer to 80 percent.

“Pennsylvania would say that a 70 percent funded level is solid, so you’re well above that 70 percent threshold,” Furman said.

The total net assets of the borough were calculated at $74 million as of the end of 2017, which Furman said was “pretty comparable” to the year before, with a drop of roughly $275,000 from the prior year using the full accrual method of accounting.

The borough’s general fund cash balance increased by just under $4 million from 2016 into 2017, to a total of roughly $14 million, and revenues came in roughly $1.2 million ahead of projections.

“You actually went into the year budgeted to break even, so you had a favorable budget-to-actual of about $1.2 million,” Furman said.

The total unassigned fund balance in the general fund totals roughly 29 percent of total general fund revenues, and bond rating agencies tend to look at eight to 12 percent as the proper amount.

“Again, on the general fund, you’re well above that threshold,” he said.

In terms of total page count, Furman added, the borough’s 2017 audit report is roughly 125 total pages, which he said is roughly double the typical government financial statement, and he said the extra length is due to Lansdale’s Finance Department qualifying for the state standards with their Comprehensive Annual Financial Report.

“There’s only about 25 municipalities in Pennsylvania that have gone through the extra efforts to submit the CAFR,” he said.

Council President Denton Burnell thanked Furman on behalf of council for his and the auditing firm’s efforts, then asked for questions from council and the public, and said he was not surprised to not have any.

“It’s all good news, I don’t imagine we’ll have a lot of questions,” Burnell said.

For more information on Lansdale’s financial reports and audit visit www. Lansdale.org/143/Finance.