Assembly hears audit presentation

PALMER — The Mat-Su Borough Assembly received a report from Joy Merriner of BDO USA LLC., on the borough’s 2020 Comprehensive Annual Financial Report. The CAFR is forwarded to the Federal and state governments as well as bonding and granting agencies.

“We did Issue an unmodified or a clean opinion on the audited financial statements that’s what the bonding agencies are looking for, the granting agencies are looking for and we also issued an unmodified opinion on your compliance with your Federal and state grant awards. That’s a pretty big deal,” said Merriner. “Frankly I am very impressed with the way the borough was handled this year.”

Merriner thanked Finance Director Cheyenne Heindel for her work in preparing the financial statements, which can be found online at the borough website. The Mat-Su Borough received $33 million in CARES act grant funds advanced as of June 30 2020 and $38 million for the entire calendar year.

“I’m not anticipating any issues with 2021. Certainly you weren’t taking any aggressive positions on how to spend the money but rather following the guidelines very well,” said Merriner.

Merriner reported that there were a few sets of numbers that had to be estimated which included retirement pensions and estimated costs for the landfill cell closure.

“It does appear that under business like activities for our two enterprise funds we’re running a $1.8 million surplus of revenue over expense for the landfill and then a $1.8 million deficit on the port enterprise fund, netting basically out on business like expense,” said Assemblyman Jesse Sumner.

Merriner said that about $636,000 of those funds were expensed liabilities. Merriner discussed the differences between financial statements for Port Mackenzie and the central landfill.

“So the port does have a significant amount of debt issued associated with it so that’s why the port is major. The port doesn’t have a whole lot in revenue I think $14,000 in 2020. Solid waste is a different story. So the port does have an operating loss but this is not necessarily a cash loss because you did capitalize the port,” said Merriner.

The borough has over $1 billion in capital assets, most of which are in the form of of infrastructure and buildings and not accessible cash. The borough owes $42.5 million in pension liabilities and has $15 million of unassigned monies in the general fund with nearly $97 million in expenditures from the general fund.

During the audit process, BDO found three adjustments. One of which is a difference in accounting for the amount of debt calculated over time, and another was funding that had been entered into an incorrect column, but was not missing.

“We did report on page 8 the material adjustment related to investment income. Again that doesn’t’ mean that any money was missing it was really just recorded into one area of the balance sheet instead of being recorded into the investment income,” said Merriner.