Annual Comprehensive Financial Report
Jennifer Farr, of Davis Farr LLC, presented highlights of the final 2020-21 Annual Comprehensive Financial Report (ACFR). Policy 15.1.0 requires that the Audit Committee’s report be presented to the Board along with the ACFR, however the Board’s schedule did not allow time for the Audit Committee to review the ACFR and complete their report. Some unanticipated changes made by staff prior to the Audit Committee’s December 8th meeting were of particular concern. Specifically, the final ACFR reflected a number of items that had been included as operating expenses in the draft ACFR presented to the Audit Committee in November and were subsequently treated as capital expenditures; items were grouped to meet the capitalization threshold. The Audit Committee considered these changes clear violations of Board policy 9.1.0 and Practice 2.9.0. Director of Finance Navazio instructed the Board that upon presentation, the ACFR should be “immediately” filed with the state. However, he also said the Board could ask for an extension. Despite objections from Trustees Dent and Schmitz (both Audit Committee members) about violations of Board policies, the motion to receive the ACFR and forward it to the Nevada Department of Taxation, was passed by a 3-2 vote.
Budget Workshop
Director of Finance Paul Navazio outlined the Budget timeline. This was the first in a series of budget workshops and covered 3 areas: 1) Board policies, in particular those related to reserves, capitalization, and central services 2) Internal Services Funds (Fleet, Engineering and Building Maintenance 3) Central Services Cost Allocation.
The packet contained existing, as well as draft, new policies for the above areas; a draft pricing policy was also included. Some, but not all, Trustees had already provided feedback that was not included in the Board packet; Mr. Navazio encouraged feedback, but was not clear on how differing opinions would be shared or how differences would be resolved. Revised policies will be presented in January in the hope that these new policies can guide the budget process. Some key discussion points:
- Moss Adams is working with district staff on new capitalization policies.
- Director Navazio suggested that a fund for Fleet replacement be set up to avoid fluctuations in amounts needed each year.
- A building condition assessment noted a number of older facilities that will require major remodel or replacement and several newer facilities that have had unexpected problems.
- The discussion about Central Services considered additional expenses to be included in the cost allocation. IT staff time, which is not currently included, was mentioned as a cost that is frequently treated as an internal service with costs distributed to those business type entities that use the services.
- Central Services Costs will be adjusted based on actual, not budgeted, costs.
- Future internal services bill-backs should be based on actual, not budgeted amounts.
The next meeting of the Board of Trustees is scheduled for January 12, 2022.
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