96 South Main Street, PO Box 77, Nephi, Utah 84648 - Voice: 435 623-0525 - FAX: 435 623-4735
On our front page this week
November 18, 2020

 

 

By Rebecca Dopp
TN Correspondent

Levan Town almost made it two years in a row without a single finding on its annual audit, said Greg Ogden, CPA, Springville, but because the state auditor had made some changes to the rules, Levan had a “ding” on its audit this year.

“They changed the rules this year and required that each government in the state of Utah complete a fraud risk assessment,” he said. “I know you are in the process of doing yours and getting it submitted.”

He said that a fraud risk assessment is a good thing for towns and cities. It helps each government do more things to strengthen internal controls to reduce risk of fraud.

A fraud risk assessment is a tool used by management to identify and understand risks to its business and weaknesses in controls that present a fraud risk to the organization. Once a risk is identified, a plan can be developed to mitigate those risks by instituting controls or procedures and assigning individuals to monitor and effectuate the plan of mitigation.

“Since nobody knew that you were supposed to do that,” he said, “it wasn’t done by the end of June. It can still be submitted by December 31 and they will be happy with that. Just be aware, it is required and you’ll want to do one probably once a year.”

The Town is currently discussing what steps and policies they will need to comply with this new rule.

Ogden went on to review the town’s financial statements. He said that this year the report included “layman’s terms” in order to help the public decipher the report. Copies of the report can be viewed at the Town Hall.

The statement of net position presents information on all of the Town’s assets, deferred outflows, liabilities, and deferred inflows, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating.

The total net position for the Town as a whole increased by $703,650.

“The bulk of that was the grant you received and the improvements you made with that grant,” he said. “That’s still a good increase.”

The total unrestricted net position for the Town as a whole decreased by $35,344.

“That’s the operating capital that you use to do your day-to-day operations to run the city,” he said. “That decreased by over $35,000, which isn’t too bad, you’ll just want to watch to see if it goes up or down. Generally you hope that it goes up.”

Governmental activities revenues of $491,357 is an increase of $23,231 from the previous year. Governmental activities expenses of $464,072 is an increase of $95,230 from the previous year. While general government, streets and highways, and parks and recreation expenses increased, all other department expenses decreased.

Business-type activities revenue of $1,602,079 is an increase of $550,636 from the previous year. Service revenues increased by $49,736 and other revenues decreased by $69. Business-type activities expenses of $925,714 is an increase of $23,609 from the previous year. While natural gas expenses decreased, water, electric and cable TV expenses increased.

“The electric fund had a $13,000 loss,” he said. “That says that for that specific year you had income coming in that was slightly less than the expenses.”

All other departments had enough money coming in to stay in the black. Ogden said that he didn’t recommend raising the electric rates, but that the Town should keep on eye on those numbers. If they are consistently negative, the Town should consider raising the rates. Stephanie Wood, town treasurer, said they were doing a rate study right now.

Mayor Corey Christensen said that the reason the cable TV department was doing better was that it now included the internet.

“It helped,” he said. “Our cable was taking a dive.”

Ogden praised the Town’s staff for their willingness to call throughout the year when they had questions or concerns.

“That lets me know that they’re concerned and really want to do things right,” he said. “Some cities I only hear from when I go and visit them.”

He said that the Town was doing really well and thanked Wood, Elizabeth Hone, town clerk; and Jessica Shepherd, deputy treasurer, for their hard work and help performing the audit.

Levan Town performs a yearly audit on its financial activities for the fiscal year which ends on June 30.