Board of Finance Regular Meeting

Page1 
Questions and Comments on FY2023 Audit Report 
 
State and Federal Special Report Letters 
1. Federal Single Audit Report was a clean report for FY2023. The Federal letter 
had the usual discussion of Internal Controls and the limitation of the Audit 
regarding the “…effectiveness of internal control over compliance”. 
2. Total Federal Expenditures for FY2023 were $4,342,973.  The largest single 
Department source was the Department of Education at $2,443,230.  The next 
highest was Department of the Treasury at $966,080.  Most of the Treasury 
funding as the from the ARPA.  The Department of Agriculture provided 
$715,050 for the School Lunch Program. 
3. As is usual, the Town got a clean report with no noncompliant issues in the state 
audit.  I always have to smile when every such audit includes the statement “Our 
audit was not designed for the purpose of expressing an opinion on the 
effectiveness of internal control over compliance.  Accordingly, no such opinion 
is expressed.”  Then the report says “The purpose of this report in internal control 
over compliance is solely to describe the scope of our testing of internal control 
over compliance and the results of that testing based on the requirements of the 
State Single Audit act.  Accordingly, this report is not suitable for any other 
purpose.”  This statement comes after two- and one-half pages describing internal 
control compliance. 
4. Total State revenues = $2,797,537 in FY23, down from $3,673,564 in FY2022 up 
from $2,075,683 in FY2021 up from $1,848,603 down from $2,446,421 in 
FY2020 down slightly from $2,489,647 in FY2018 which was down from 
$4,830,177 in FY2017.  Increase in FY2017 was in School Construction Grants.  
FY2022 increase appeared to be from a LOTCIP grant of $1,580,345 to Public 
Works. 
5. Grant that I just noticed after all the years doing this report – Which Department 
uses the Medicaid Grant from the Department of Social Services?  Page 4 of State 
Single Audit.  ($30,252 in FY2023, $124, 194 in FY2022, $62,310 in FY2021 
and $52,714 in FY2020).  I asked this question last year and I do not remember 
the answer. 
6. As usual, the Auditors noted that the Expenditures in the report are presented on 
the modified accrual basis of accounting. 
7. No Findings or Questioned Costs found in the State Single Audit Report 
 
Management Letters Comments 
 
1. No observations or negative comments were in the FY2023 Management Letter 
or Audit Check Off List.  This was also true in the FY2022 and FY2021 
Management letters and Audit Check off lists.  Unlike the FY20 Audit letter, 
there were no recommendations for improved Internal Controls.  
2.  In FY20, however, the Auditors did have some recommendations regarding 
Internal Controls: 
a. Initiate a regular review of employee listing and the payroll system change 
logs by an employee of the HR department to insure there are no false 

 
 
Page2 
employees, individuals not removed upon termination, or unapproved 
changes to pay rates. 
b. Establish a formal Whistleblower policy and tip line, especially for 
employees, to report fraud or inconsistencies in the Town. 
c. Establish the practice of having Town employees and elected officials sign 
a formal log acknowledging their understanding of the Ethics policies of 
the Town.  I informed the RTM L&A committee of this comment during 
the public hearing on the revision to the Ethics Ordinance.  The committee 
determined that the requirement for employees and public officials to sign 
acknowledging receipt of a copy of the Ethics ordinance was sufficient.  
The Ordinance would rely on the Human Resources Department and 
Town Clerk to administer such a sign in log. 
d. Town should perform a risk assessment to identify, analyze and manage 
the risk of asset misappropriation.  This should be an element of Town 
Internal Controls.  This assessment can be performed by an outside agency 
or a management level individual who has extensive knowledge of the 
Town that might be used in the assessment. 
e. The Town must be proactive in assessing and managing operations and IT 
environments in anticipation of cyber threats.  The recommendations are 
lengthy and I recommend all members read them to see what financial 
investments might be requested by the administration to implement the 
recommendations. 
f. The Auditors also reviewed the specific security of the financial 
management systems and the letter notes seven recommendations that are 
still outstanding: 
i. Perform regular format tests of backup data 
ii. Implement formal wire transfer procedures 
iii. Evaluate and ensure PCI (personal/confidential information) 
compliance 
iv. Update technology and operational policies and procedures 
v. Develop and test a comprehensive disaster recovery plan 
vi. Incorporate a mobile device and bring your own device (BYOD) 
strategy 
vii. Institute a comprehensive cybersecurity training program 
3.  Has the Finance Department implemented all of the recommendation of the 
FY2020 audit or explained why the recommendation was not implemented? 
  
Comprehensive Financial Report 
1. Cover notes that, like the FY2019, FY2020, FY2021 and FY2022 Reports, the 
FY2023 Report is a Comprehensive Annual Financial Report (CAFR) unlike 
the FY2018 report, which like the FY2017 Audit Report was just the Annual 
Financial Report, not a Comprehensive Annual Financial Report (CAFR).  I 
prefer the CAFAR because the additional statistical information is very useful. 
2. The Profile of Government on pages i and ii does not include the four-year 
term for the members of the Board of Finance. 
3. Excellent summary of Economic Activity in Town on Pages ii-iii   

 
 
Page3 
4. The paragraph on Long Term Financial Planning needs to be corrected to 
include the fact that the RTM formed a Planning Committee that superseded 
the BOF Committee in CY 2013 (October 7, 2013 RTM meeting). Also, the 
RTM Committee established in 1998 went out of business after the release of 
the Government Consulting Group Report in CY2001.  That is why the BOF 
formed its committee in FY2001.  A similar comment was in the Review of 
the FY2022 report, the FY 2021 report, the FY2020 Report and the FY2019 
report.  Page iii 
5. Note the Unassigned Fund Balance discussion.  Page iii  
6. The Organization Chart on Page iii does not reflect the titles of one of the 
Town Officials on page iv. Also, the “reports to” lines need to be changed to 
reflect what is actually the current chain of command in Waterford Town 
Government. Page v-vi. A similar comment was in my review of the FY2022 
audit report. 
7. The Auditor’s report explained how they conducted the Audit of the Financial 
Statements provided by the Town noting what they reviewed and what they 
did not review.  Key paragraph is the Opinion that the Financial Statements 
were”… in accordance with accounting principles generally accepted in the 
United States of America.”  Pages 8-9 
8. In the conclusion of the Auditor Report, the Auditors again state that the 
report is not an opinion “…on the effectiveness of the Town…internal control 
over financial reporting or on compliance” In plain English, What they looked 
at was correct but that does not mean there are no errors in places where they 
did not look.  Page 11. 
9. In FY2023 the Town’s net position decreased as a result of the year’s 
operations.  The governmental activities increased by $280 thousand and 
business type activities decreased by $973.0 thousand. .In FY2022 the Town’s 
net position increased by $5.0 million or 3.2% and the business activities 
decreased by $6.9 thousand or 1.4%    In FY2021 the Town’s net position 
decreased by $688 thousand after restatement or 0.4% and Business Activities 
decreased by $1.6 million or 3.1%.   In FY2020 the Town’s net position 
decreased by 0.6% or $894 thousand and business activities decreased by 
2.9% or $1.6 million.  In FY2019 the Town’s net position decreased by 0.8% 
or $1.4 million and the business activities decreased by 2.2% or $1.3 million. 
Page 12 
10. In FY2023 expenses were $691 thousand more than the $125.7 million 
generated in tax and other revenues for governmental programs.  In FY2022 
expenses were $5 million less than the $111.5 million generated by taxes and 
other revenues for government programs.  Expenses in FY2021 were $2.3 
million more than the $121.6 million generated in tax and other revenues for 
governmental programs.  Expenses in FY2020 were $894 thousand more than 
the $111.4 million generated in taxes and other revenue.  Expenses in FY2019 
were $1.4 million more than the $102.6 million generated in tax and other 
revenues. Page 12 
11. Resources available for appropriation in FY2023 were $5.4 million more than 
anticipated for the general fund.   Resources available for appropriation in 

 
 
Page4 
FY2022 were $1.1 million more than anticipated for the General Fund.   
Resources available for appropriation in FY2021 were $1.7 million more than 
anticipated. Resources available for appropriation in FY2020 were $1.5 
million more than anticipated compared to FY2019 resources available for 
appropriation of $2.7 million more than anticipated. Page 12 
12. The resources available for appropriation were $5.4 million more than 
anticipated for the General Fund in FY2023.  This permitted additional 
appropriations of $3.0 million to the Capital Improvement and Capital and 
Nonrecurring Funds.  Additional $1.3 million were returned to the fund 
balance at the end of FY2023 increasing the General fund balance by $3.4 
million to a yearend total of $26.5 million.  This compares to the managed 
spending by department heads and the impact of the COVID-19 partial 
shutdown of activities in FY2022, that resulted in $1.8 million transferred to 
the Capital and Nonrecurring (CNR) Fund and an unused appropriation of 
$1.0 million returned to the General fund in FYT2022.  Overall, in FY2022 
the operating results increased the General Fund Balance by $350.6 thousand.  
This compares to the $41.1 thousand transferred to the Capital Improvement 
Fund in FY2021 and unused appropriations of $2.2 million were returned to 
the fund balance at the end of FY2021.  This compares to $1 million of the 
unassigned balance transferred to the Capital Non-Recurring Expenditure 
Fund and $1.8 million of unused appropriations were returned to fund balance 
in FY2020 compared to the $963.0 thousand that were returned to fund 
balance at the end of FY2019.  Page 12 
13. Good explanation of town financial activities and categories of Town funds is 
found Pages 12 and 13. 
14. Note that Town Funds use the modified accrual accounting method so there is 
a difference between governmental activities and governmental funds.   This 
difference is described in a reconciliation included with the fund statements.  
Page 13. 
15. Town cannot use fiduciary net assets to finance operations.  Page 14 
16. The unrestricted net position decreased to $3.8 million at the end of FY2023.  
The FY 2022 Unrestricted net position decreased to $5.48 million.  Due to 
GASB 84 the FY2020 Unrestricted net position was restated at $18.9 million 
and the FY2021 Unrestricted Net Position is $9.002 million.  Business type 
activities (mostly the Utility Commission Enterprise Fund) decreased to $48.8 
million in FY2023 compared to $49.7 million in FY2022 compared to $50.4 
million in FY2021 compared to $52.0 million in FY2020, compared to $53.6 
million in FY2019.   Page 14. 
17. Total Revenues were $125.7 million and total expenses were $126.4 million 
in FY2023 compared to Total Revenues of $115.3 million and total expenses 
of $111.0 million in FY2022 compared to total revenues of $117.776 million 
and total expenses of $118.432 million in FY2021 compared to total revenues 
of $111.416 million and total expenses of $112.215 million in FY2020 
compared to Total Revenues of $102.563 million and total expenses were 
$103.781 million in FY2019.  Page 15 

 
 
Page5 
18. Government activities revenue sources – 80.1% from property taxes, 14.5% 
form operating and capital grants and contributions, 3.0% from charges for 
services and 2.4% from investment and other general revenues in FY 2023 
compared to 84.4 % from property taxes, 12.5% from operating and capital 
grants and contributions, 2.9% from charges for services and 0.2% from 
investments and other general revenues in FY2022 compared to   79.1% from 
property taxes, 17.9% from operating and capital grants and contributions, 
2.8% from charges for services and 0.2% from investment and other general 
revenues in FY21 compared to 82.7% from property taxes, 13.4% from 
operating and capital grants and contributions, 2.8% from charges for services 
and 1.1% from investment and other general revenues in FY20.  This 
compares to 88.0% from property taxes, 7.2% from operating and capital 
grants and contributions, 3.5% from charges for services and 1.3% from 
investment and other general revenues in FY2019.  Investments have increase 
by $2.8 million in FY2023 after increasing by $93 thousand in FY2022 after 
decreasing by $949.3 thousand in FY2021 after decreasing by $215.0 
thousand in FY2020 after increasing slightly in percentage share (up by 
$611.0 Thousand in FY2019 over FY18.  Page 15 & 16. 
19. Note the factors affecting operations outlined on Pages 15 & 16 
20. Revenues from Sewer fees increased by $22 Thousand in FY2023 after an 
increase of $43 Thousand in FY2022 after an increase of $115 thousand in 
FY21 after decreasing by $55 thousand in FY2020 after increasing by $111 
thousand in FY19.  Capital contributions decreased by $716.6 thousand in 
FY2023 after an increase by $16 thousand in FY21 after decreasing by $43 
thousand in FY2020 after a $221 thousand (5.3%) decrease in FY2019.   Page 
16 
21. Town Combined Fund Balance was $44.6 million in FY2023 an increase of 
$5.8 million from the FY2022 value of $38.8 million, an increase of $3.2 
million from the FY2021 value of $35.6 million, an increase of $4.1 million 
from the restated $31.5 million ($31.2 million originally) in FY2020, an 
increase of $7.5 million from $23.7 million in FY2019.  The General Fund 
showed a total increase of $2.6 million in FY 23 compared to an increase of 
$64.1thousand in FY22 compared to an increase of #3.7 million in FY21 
compared to an increase of   $2.8 million in FY20 compared to an increase of 
$2.5 million in FY2019.  Page 17 
22. The Internal Service Fund net assets decreased by$646.5 thousand in FY23 
after a decrease of $163.6 thousand in FY22 after an increase of $426.5 
thousand in FY21 compared to an increase of $1.3 million in FY20 compared 
to a decrease by $352.5 thousand in FY19  The FY23 decrease due to $12.4 
million in contributions and other revenue reduced by expenses for claims and 
program administration of $13.3 million. The FY22 decrease is a result of 
revenue of $$12.1 million and expenditures of $12.3 million.  Fortunately, in 
FY21 the contributions of $11.9 million offset the expenses for claims and 
program administration of $11.5 million in FY21 compared to FY20 when the 
contributions of $11.4 million offset the expenses of $10.2 million.  This 

 
 
Page6 
compared to FY19 when the contributions of $11.7 million offset the expenses 
of $12.1 million.  Page 18. 
23.  FY23 revenues were $3.4 million over expenses.  FY22 revenues were 
$350.6 thousand over expenditures.  In FY21 revenues were $3.9 million over 
expenses compared to FY20 revenues which were $2.3 million over 
expenditures.  This compares to FY19 when revenues were $2.8 million over 
expenditures on a budgetary basis.  Page 18 
24. As usual, a good presentation of major factors affecting the FY23 operating 
budget.  Pages 18 and 19. 
25. There were $234.4 thousand of outstanding encumbrances at end of FY23, 
compared to $226.1 thousand of outstanding encumbrances at end of FY22 
compared to $641.8 thousand of outstanding encumbrances at the end of 
FY21 compared to $522,100 of outstanding encumbrances at the end of FY20.  
This compares to $186,800 of outstanding encumbrances at end of FY19.  
Encumbrances are reported as expenditures for budgetary purposes.  Page 19 
26. Note that balances for special revenue funds that are funded primarily from 
operating transfers from the General Fund are also rolled into the General 
Fund for reporting purposes. In FY23 those balances amounted to $32.5 
thousand.  In FY22 those balances amounted to $59.3 thousand.  FY21 those 
balances amounted to $53.7 thousand.  In FY20 those balances amounted to 
$355,500. In FY19 those balances amounted to $67,000. Page 19 
27. Capital assets decreased b $9.9 million in FY23.  This compares to Capital 
assets decreasing by $6.1 million in FY22.  This compares to Capital assets 
decreasing by $4.5 million in FY21.  This compares to Capital assets 
decreasing by $2 million in FY20.  This compares to a decrease of $6.8 
million in FY19.  Much of these decreases were influenced by depreciation   
Page 19 &20. 
28.  Town debt at end of FY23 was $61.7 million, down from FY22 debt of $67.0 
million, down from the debt of $72.8 million at end of FY21 which was up 
from FY20 debt of $63 million down from $69.5 million at the end of FY19.  
Page 20. 
29. Town debt rating is “AA” from Standard and Poor’s in FY22. This is no 
change from FY21, FY20, FY19 and FY15.  Page 20 
30. Note that the town debt limit is $657.6 million in FY23, up from $654.1 
million in FY22 up from $646.3 million in FY21 up from $638.6 million in 
FY20, up from $614.8 million in FY19.  I hope we never get close to that 
figure.  Page 20 
31. The unemployment rate in FY23 was 3.7%, down from the FY22 rate of 4.3% 
down from 6.5% in FY21, down from the FY20 10.8% up sharply from 3.7% 
in FY19.  This lower than the national 3.8% and the State average of 4.0% in 
June FY23. This is higher than the national 3.6% and equal to the State average 
of 4.31% in FY22. (The FY22 audit report says it is higher-Hmm) Page 21 
32. The Unassigned Fund Balance increased by$3.1 million in FY23 compared to 
an increase of $23.0 thousand in FY22 compared to an increase of $4.0 
million in FY21 compared to an increase of $2.2 million in FY20 compared to 
a $2.8 million increase in FY19. Page 21 

 
 
Page7 
33. Total Net Assets for FY23 are $212,019,174 compared to $212,711,093 in 
FY22, compared to $208,405,121 in FY21 compared to $210,444,390 in 
FY20 compared to net assets in FY19 of $212,884,881.  Page 23. 
34. Total Cash, cash equivalents, and investments at end of FY23 was 
$68,298,427 in the Audit.  The Treasurer’s report for 06/30/2023 showed a 
value of $68,429,949.  Page 23 
35. Loss in the Business Type Activities (Utility Commission) in FY23 was 
$1,415,115 compared to a loss of $1,322,111 in FY22, compared to a loss of 
$1,622,655 in FY21, compared to a loss of $1,688,931 in FY20 compared to a 
loss in FY19 of $1,451,560. These losses are mostly due to depreciation of 
related capital equipment.   Page 24. 
36. Note the balance sheet General Fund total of $41,638,633 in FY23 up from 
$36,998,701 in FY22, up from $36,717,537 in FY21 up from $29,316,688 in 
FY20 up from $26,602,213 in FY19.  Page 25 
37. Long Term Liabilities at end of FY23 was $22,329,465.  This is an increase 
from the FY22 value of $19,538,314.  This is a slight increase from the 
FY21value of $19,360,178.  This is an increase from the FY20 value of 
$14,540,697.  This is an increase from the FY19 value of $13,688,114.  Page 
25. 
38. Total Cash and Investments in the General Fund for FY23 was $36,277,279.  
The 06/30/2023 Treasurer’s Report reported a total of $37,641,129 of Cash 
and Investments in the General Fund.  Page 25. 
39. Long Term Liabilities not reported in the funds at end of FY23 were 
$163,247,882 compared to a FY22 value of $162,968,647 compared to a 
FY21 value of $157,967,581 compared to a FY20 value of $158,417,896 
compared to a FY19 value of $134,731,866.  This is the sixth time the long-
term liabilities have been detailed in this part of the audit due to the OPEB 
reporting requirements. Page 26. 
40. Note that the Net Pension Liability is $37,159,387, Compensated absences is 
$$199,000 and Net OPEB liability is $19,564,900 in FY23.  This compares to 
Net Pension Liability of $20,396,063, Compensated absences of $7,033,590; 
and Net OPEB Liability of $17,595,916 in FY22.  This compares to a Net 
Pension Liability of $33,780,610, Compensated absences is $6,740,355, and 
Net OPEB liability is $16,693,761 in FY21.  This compares to a Net Pension 
Liability is $31,574,561, Compensated Absences is $7,239,502 and Net OPEB 
Liability is $17,291,575 in FY20.  This compares to a Net Pension Liability of  
$29,879,877, Compensated absences liability of $7,258,446, and the Net 
OPEB liability of $18,501,569 in FY19.  Page 26 
41. General Fund Balance at end of FY23 was $26,468,631 ($37,641,129 in 
Treasurer’s report), compared to $23,848,156 ($30,696,849 in Treasurer’s 
Report) at end of FY22, compared to $23,782,024 at end of FY21 compared 
to $20,113,162 at the end of FY20 compared to $17,259,424 at end of FY19.  
Page 27 
42.  Capital and Nonrecurring Fund Balance at end of FY23 was $$10,252,907 
($10,912,060 cash in Treasurer’s report), compared to $9,477,402 at end of 

 
 
Page8 
FY22, compared to $7,797,327 at end of FY21 compared to $8,062,934 at end 
of FY20 compared to $4,491,330 at end of FY19.   Page 27. 
43. Note that there was still a deficit of $10,252,907 related to the High School, 
down $47 from the FY22 deficit $2,941,624 related to the Waterford High 
School Building Project, a reduction of $3.00 from the $2,941,627 related to 
the Waterford High School Building Project at the end of FY21, a reduction of 
$1 from $2,941,628 at the end of FY20.  This is down from the deficit of 
$2,941,645 at end of FY19.  I guess $17 of interest sort of pays off.  Real 
question is what is current status?  No change of status for years.  Page 27 
44. Note the explanations for the differences in amounts reported for government 
activities on page28. There is more detail in FY23, FY22, FY21, FY20 and 
FY19 audits compared to previous audits before FY18.  Some of this is a 
result of the requirement to provide more detail regarding Pension and OPEB 
future liabilities. Page 28 ## 
45. The change in net assets of government activities was $279,234 in FY23 
compared to $5,001,066 in FY22 compared to (687,683) in FY21 compared to 
($895,894) in FY20 compared to ($1,356,763) at end of FY19.  Page 28. 
46. Enterprise Fund showed an operating loss of $1,082,060 in FY23 compared to 
a loss of $1,444,991 in FY22 compared to a loss of $1,638,665 in FY21 
compared a loss of $1,688,931 in FY20 compared to an operating loss of  
$1,451,560 in FY19.  The depreciation expense ($1,658,249) plays a 
significant role in this paper loss.  Page 30 
47. Internal Service Fund for Health insurance showed a decrease to $5,418,984   
in FY23 compared to the decrease to $6,065,526 in FY22 compared to an 
increase to $6,229,162 in FY21 compared to an increase to $5,802,649 in 
FY20 compared to a reduction to $4,542,016 in FY19.   Page 30 
48. Internal Service Fund Investment income of $230,691 in FY23 is up 
significantly from $19,994 in FY22 is up from the income of $5,069 in FY21 
was down significantly from $62,559 in FY20 is up from $43,199 in FY19.  
Page 31. 
49. Utility Commission Enterprise Fund ended FY23 with $5,212,880 up from the 
FY22 $4,487,154 cash balance up from the end of FY21 with $4,027,700 cash 
balance down from cash balance of $4,836,350 at end of FY20 compared to 
ending FY19 with $3,667,346.  Page 31. 
50. Note that $10,544,654 is restricted for OPEB Benefits and $509,459 is 
restricted for Pension Benefits in FY23.  This is an increase for OPEB and a 
decrease for Pension Benefits from the $8,452,117 restricted for OPEB 
Benefits and $522,836 restricted for Pension Benefits in FY22.  This is down 
from $9,062,017 restricted for OPEB Benefits and $639,050 to Retirement 
Benefits in FY21 compared to $6,109,331 restricted to OPEB Benefits and 
$540,447 to Retirement Benefits in FY20 compared to $5,056,942 restricted 
for OPEB and $535,281 for retirement in FY19. The lookback data tracks the 
ups and downs of investments in the past four years.   Page 32 
51. Trust Funds information was combined in the FY18 report rather than 
separating the Pension fund and the OPEB fund. This was repeated in FY19 
and FY20.   I prefer keeping the reporting of the two funds separate even 

 
 
Page9 
though both are managed by the Retirement Commission.  These funds are 
reported separately later in the Audit Report.  Page 32 &33 
52. The combined Trust funds ended FY23 with a balance of $11,054,113. Up 
from the FY22 balance of $8,974,953 which was down from the FY21 
balance of $9,701,067 up from the   FY20 balance of $6,649,778 up from a 
FY19 balance of $5,592.  Page32 and 33. 
53. The combined Retirement and OPEB Investment Income in FY23 was a gain 
of $1,012,137 compared to the FY22 loss of ($1,447,732).  This compares to 
an FY21 Investment income of a positive $1,977,974 up from FY20 
Investment Income of $333,388 in FY20, compared to a FY19 Investment 
income of $297.  FY22 was not a good year for the Stock Market. Page 33 
54. It is important to understand the accounting policies discussed on pages 34-47. 
55. Note that revenues are recorded when earned and expenses are recorded when 
a liability is incurred regardless of the timing of the related cash flows.  Page 
35 
56. Generally, expenditures are recorded when a liability is incurred.  However, 
debt service expenditures as well as expenditures related capital leases, 
compensated absences, claims and judgements are recorded when payment is 
due.  Page 36 
57. The Custodial Funds were new in FY21. The only custodial Fund is the 
Student Scholarship Fund.   Page 37 
58. Note the rules on interfund activity described on Page 37   
59. Note the depreciation table on page 39 for all physical property and 
equipment. 
60. The Section on Leases was new in FY22 due to GASB 87  Pages 39-41 
61. Note discussion of Deferred Outflows/Inflows related to OPEB funds on Page 
41-42. 
62. Fund balance terms explained on pages 44. (GASB 54 implementation) 
63. In budget discussion on page 33, the appeals process time lines are in the 
Town Charter, not Town Ordinances.  This error was also in the FY22, FY21, 
FY20, FY19 and FY18 reports. 
64. During FY23 there were $3,245,236 supplemental budgetary appropriations. 
During FY22 no supplemental budgetary appropriations were made. During 
FY21 supplemental budgetary appropriations of $41,100 were made 
compared to FY20 supplemental budgetary appropriations of $1 million.  This 
compares to supplemental budgetary appropriations of $800,000 in FY19. 
Page 46 
65. Note the difference between GAAP and budgetary basis of accounting on 
Page 47. 
66. Funds with Deficit balances –In FY23 the Waterford High School Building 
Project, the Nuclear Safety Emergency Preparedness, and ARPA Rural Roads 
Fund had a deficit fund balance at the end of the fiscal year.   In FY22 only 
the Waterford High School Building Project had a deficit fund balance of 
$2,941,624.  This compares to Historic Preservation Enhancement Grant – I 
assume that the dollars are in the General Fund.  High School Building Project 
– $2,941,627 in FY21 down a dollar from $2,941,628 in FY20 compared to 

 
 
Page10 
$2,941,645 deficit in FY19 (down from $2,941,672 deficit in FY18).   I 
assume this is the amount in dispute with the State regarding allowed 
expenditures for the High School Project. Nuclear Safety Emergency 
Preparedness - $80,594.  Again, I assume those dollars are in the General 
Fund.  Page 44.  In FY19 and FY18 report the High School Building Project 
owed the General Fund $2,942,807 (Page 37).  Page 47 
67. In FY23, the amount of deposits subject to Custodial Credit Risk has 
increased to $2,215,056. In FY22 the amount subject to Custodial Credit Risk 
was down to $1,494,832. In FY21 the bank balance had increased to 
$28,781,931.   In FY20 the discussion was limited to a bank balance of 
$9,684,969.  Discussion was limited to bank balance of $3,682,002 in FY19 
In FY23 the Bank Balance under consideration was $7,119,392. . Respective 
Credit Risks reported are $1,494,832 in FY22, $23,178,450 in FY21, 
$7,671,969 in FY20, 2,859,979 in FY19.  Page 49 
68. Be sure to review the Various Risk explanations.  Pages 48-50. 
69. Net Receivables in FY23 were $4.354,611 compared to $5,121,014 in FY22, 
compared to $4,420,989 in FY21, compared to $3,772,763 in FY20, compared 
to $3,669,623 in FY19.  Page 51 
70. Note the decrease in net capital assets on page 52 due to depreciation.  Page 
52 
71. Note the Depreciation expense of $9,092,531 for governmental activities in 
FY23 compared to $9,201,297 in FY22 compared to   $9,053,694 in FY21 
compared to $9,366,645 in FY20 compared to $9,627,541 in FY19.  Page 52 
& Page 53 
72. Construction Commitments of $2,463,120 in FY23 compared to $2,377,319 
remaining at end of FY22 compared to $1,002,753 in FY21, compared to 
$6,689,464 in FY20, compared to $13,379,955 in FY19.  The various Road 
Projects on Public Works list is probably responsible for the large number.  
Page 53 
73. Note the composition of the interfund balances of $10,128,396 in FY23 
compared to $7,904,369 at the end of FY22 compared to a balance of  
$9,846,013 in FY21 compared to a balance of $9,107,963 in FY20, compared 
to a balance of $7,352,253 in FY19.  Page 53 
74. Interfund transfers increased to $7,557,161 in FY23 compared to $6,977,677 
in FY22 compared $3,800,851 in FY21.  Page 54. 
75. Long Term Liabilities. Total Long-Term Liabilities for Government Activities 
in FY23 was $128,622,926 compared to $116,219,543 in FY22 compared to 
$135,325,515 in FY21 up from $134,964,002 in FY20, up from $130,232,756 
in FY19. Page 55 
76. Note the Post-Employment Benefits (OPEB) liability of $19,564,900 in FY23 
compared to   $17,595,916 in FY22 up from $16,693,761in FY21, down from 
$17,291,575 in FY20 compared to the FY19 liability of $18,501,569 and the 
Compensated absences of $6,872,353 in FY23 down from $7,033,590 in 
FY22 compared to   $6,740,355 in FY21 down from $7,239,502 in FY20 up 
from $7,258,446 in FY19.  Enterprise fund compensated absences are 

 
 
Page11 
$363,508 in FY23 down from $430,520 in FY22 compared to $315,651 in 
FY21 down from $345,395 in FY20 compared to $406,178 in FY19.  Page 55 
77. The Due within one year is $7,694,110 in FY23 up from $6,495,947 in FY22 
down from $7,372,193 in FY21 up from $6,521,348 in FY20 down from 
$6,534,786 in FY19.  Page 55 
78. Note the bond payment schedule.  Final payment of bonds will be in 2043 up 
from 2042 in FY22, up from 2041 in FY21, up from 2035 in FY20 up from 
reported 2034 in FY19). The bonding for the Municipal Complex in 2020and 
bond refinancing that happened in December 2020 moved the final payment 
year to FY2043. Page56 
79. Section on Leases was new in FY2022 Audit.  What are the Leases? Total 
minimum lease payments are projected to be $143,534 in FY23 compared to 
$209,470 projected in FY22 Page 56-57. 
80. Total statutory debt limit of seven times annual receipts from taxation is 
$657,560,505 in FY23 up from $654,121,524 in FY22 up from $648,806,802 
in FY21 up from $638,609,762 in FY20 compared to $614,810,721 in FY19. 
The actual debt at end of $70,440,973 at end of FY23, compared to 
$68,638,435 at end of FY22 down from 72,815,000 at end of FY21 up from 
$63,030,000 in FY20 compared to FY19 when it was $69,465,000. Page 56-
57 
81. Note that the Unassigned Fund Balance of the General Fund at end of FY23 
was $26,086,335 but the total Unassigned Fund balance was $23,046,476.  
The Unassigned Fund Balance was $23,004,117 but the total Unassigned 
Fund Balance was $20,062,493 at end of FY22.  In FY21 the Total 
Unassigned Fund Balance was $22,981,081 but the total Unassigned Balance 
was reduced to $19,948,347 by negative balances in other funds (mostly from 
the High School Building Project Fund deficit) in FY21.   Page 58 
82. Tax Abatement discussion on page 59 first appeared in the FY18 audit report. 
83. Description of Employee Retirement Systems and Pension Plans is much 
expanded from previous audit reports prior to FY17. Pages 59-78 (compared 
to Page 42-49 in FY14 audit report) 
84. Membership in the town retirement plan on July 1, 2021 (date of the last 
actuarial valuation is seven (7) down from the previous July 1, 2019 (date of 
last actuarial valuation) is 10, down from the FY19 and FY18 figure of 13 
(Based on July 1, 2017 actuarial valuation.  Page 60. 
85. Note the annual required contribution to the town plan of $27,280 with an 
actual contribution of $27,280 in FY23.  This compares to  $59,870 in FY22 
with actual contributions of $83,000 (the same amount as required in FY21) 
(with contributions of $82,000 made by the Town in FY21 compared to 
$81,131 (with contributions of $89,953 made by the Town) for the year that 
ended on June 30, 2020 compared to $82,000 for year that ended on June 30, 
2019.  Page 61     
86. Although the pension liability as of June 30, 2023 was $717,948 compared to   
June 30, 2022 of $746,333 compared to the  June 30, 2021 of  $931,582 
compared to the  June 30, 2020 of $969,081 compared to the June 30, 2019 
liability of $1,013,766, the actual amount in plan is $509,459 (70.96% of 

 
 
Page12 
pension liability) in FY23 compared to  $522,836 (70.05% of Pension liability 
at end of FY22 compared to  $639,050 (68.59% of pension liability)  at end of 
FY21 compared to $540,447 (55.77% of pension liability) at end of FY21 up 
from $535,281(52.80% of pension liability) at end of FY19 .  Page 62 
87. The net pension liability is very sensitive to the discount rate.  See table of 
page 63. 
88. Pension trust fund had a net position at end of FY23 of $509,459 down from 
the FY22 net position of $522,836 down from the  FY21 net position of 
$639,050 up from FY20 net position  of $540,447 up from FY19 net position 
of $535,281.  Page 64 
89. The MERS is fully explained on Pages 65-71 
90. Town reported liability share in the MERS was $36,950,898 at end of FY23 
up from $20,172,566 at end of FY22 down from $33,488,078 at end of FY21 
up from $31,145,927 at end of FY20 up from $29,401,392 at end of FY19.  
The recognized pension expense was $7,315,544 at end of FY23 up from 
$4,239,785 at end of FY22 down from $9,020,067 at end of FY21 down from 
$9,233,462 at end of FY20 up from $4,931,098 at end of FY19. Pages 67-68 
91. The town has recorded $0.00 as the long-term liability to MERS at end of 
FY23 down from $536 as long-term liability to MERS at end of FY22 (is a 
correct number??) down from $417,901 as long-term liability to MERS at end 
of FY21 down from $835,265 as long-term liability to MERS at end of FY20 
down from $1,252,629 as long-term liability to MERS at end of FY19.  The 
FY23 amount paid was $536.00. The FY22 amount paid was $417,365.   The 
FY21 amount paid was the same as the FY20 amount paid of $417,364.   The 
FY19 amount paid was $426,348.  Page 69 
92. Actuarial Assumptions noted on pages 69-71greatly impact the Net Pension 
Liability, especially the discount rate.  Page 71 
93. The Teachers’ retirement system is fully explained on Pages 71-76 
94. The aggregated Pension information combines data from the PERS plan, The 
State Teachers Plan and the MERS plan to show the total pension liability for 
the Town.  This table was new in the FY19 audit but the FY19 audit did not 
include the State Teachers Plan.  Page 76   
95. Employee contribution to the MERF is 3.75% if covered by Social Security 
and 5% if not covered by Social Security (Page 67) while the Teacher’s 
Contribution is 7% as of January 1, 2018 (An increase from 6% effective on 
July 1, 1992) (Page 72).  
96. Legislation passed in June 2019 has increased the employee contribution to 
MERF to 2.75% if covered by Social Security and 5.5% if not covered by 
Social Security for FY20.  The Act envisions an increase up to 5.25% if 
covered by Social Security and 8% if not covered by Social Security in FY24. 
(This change was not reflected in the FY21 audit). 
97. Note membership in the OPEB retirement plan of 486 as of July 1, 2022 down 
from 492 as of July 1, 2020 down from 514 as of July 1, 2018.  Page 77 
98. The Net OPEB liability that is recognized as of June 30, 2023 is $19,564,899 
up from June 30, 2022 of $17,595,916, up from the June 30, 2021 Net 

 
 
Page13 
Liability of $16,693,761 down from June 30, 2020 liability of $17,291,575, 
down from the June 30, 2019 liability of $18,501,569.  Page 78 
99. Note that because the total OPEB liability in FY23 is $30,109,553 up from 
FY22 total OPEB liability of $26,048,033 up from the FY21 total OPEB 
liability of $25,755,778 the Plan fiduciary net position percentage of total 
OPEB liability is 35.02% at end of FY23 up from 32.45% in FY22, down 
from 35.18% in FY21, up from 26.11% in FY20, which is up from 21.47% in 
FY19.  Page 78 
100. 
For a defined benefit plan, it is considered “fully funded” if the funding 
status is 100% which means there is enough money to cover any liabilities.  If 
the fund is 80% funded it is considered “Healthy”.  In reality, the average 
funding status is 69.9%.  Sourced from “THE NEST” “What is a Fully 
Funded Retirement Plan”. 
101. 
The Discount rate used to measure OPEB liability in FY23 is 6.5%, the 
same as FY22 as determined by an actuarial valuation of July 1, 2022 and 
FY21 which was down from the FY20 rate of 6.75%, the same as FY19 based 
on the July 1, 2018 study. Page 78-79 
102. 
Like the Retirement Plan Liability, the OPEB liability of very sensitive to 
the discount rate.  Page 79 
103. 
The Town recognized OPEB expense for FY23 was 1,215,654, up from 
$996,013 in FY22, up from the FY21 recognized OPEB expense of $750,150 
down from the FY20 recognized OPEB expense of $1,018,898 down from the 
FY19 Town recognized OPEB expense of $1,310,541. Page 81 
104. 
OPEB Trust Fund position at end of FY23 was $10,544,654, up from 
$8,452,117 at end of FY22, down from the FY21 end of year position of 
$9,062,017, up from the FY20 end of year position of $6,109,331 up from 
FY19 EOY position of $5,056,972.  Page 82 
105. 
Teacher’s OPEB explained although the Town makes no contributions to 
this fund Pages 83-88 
106. 
Note that if Town was required to fund OPEB for teachers the net OPEB 
liability would be $8,668,066 in FY23, down from $9,104,170 in FY22 down 
from $15,736,711 in FY21 up from $15,128,952 in FY20.  Page 85 
107. 
Not to panic anyone but that would give the Town a total OPEB liability 
of $38,777,619 at end of FY23, up from$26,700,086 at end of FY22, down 
from $41,492,489 at end of FY21, up from $32,420,527 at end of FY2020. 
108. 
Note discussion on Risk Management on Pages 89 
109. 
Health Claim additional liability as of June 30, 2023 was $727,000 down 
from $1,085,000 as of June 30, 2022, up from the June 30, 2021 additional 
liability of $605,346, down from the June 30, 2020 of $639,399, down from 
the June 30, 2019 additional liability of $976,696.  Page 89 
110. 
Stop Loss is discussed on Page 89.  This is important in funding Health 
Care Plans.  Page 89 
111. 
Note that Dominion is 34.5% of Town Property tax in FY23, up from the   
33.9% of Town Property Tax Revenue in FY22, down slightly from the 
34.3% of Town property tax revenue in FY21, up slightly from 34.1% of 

 
 
Page14 
Town property tax revenue in FY20 up from 33.7% of Town property tax 
revenues in FY19.  Page 90 
112. 
Note the difference in budgetary revenues compared to GAAP revenues. 
Page 93. 
113. 
Police Department returned $104,226 in FY23, compared to$182,431 in 
FY22 compared to $114,830 in FY21 compared to $40,321 in FY20.  Page 97 
114. 
Public Works returned $30,958 in FY23 compared to returning $142,912 
in FY22 compared to $116,241 in FY21 compared to returning $331,282 in 
FY20 compare to $149,384 in FY19. Page 75 
115. 
Senior Citizens returned $26,479 in FY23 compared to $39,168 returned 
in FY22 compared to $115,634 in FY21 compared to returning $58,128 in 
FY20.  Page 98 
116. 
Recreation and Parks returned $45,840 in FY23 compared to returning 
$35,836 in FY22 compared to $187,442 in FY21 compared to returning 
$80,965 in FY20.  Page 98 
117. 
Board of Education returned $304,703 in FY23 compared to returning   
$46,769 in FY22 compared to $1,123,093 at end of FY21 compared to 
returning $332,426 in FY20 compared to returning $50,099 in FY19.  Page 98 
118. 
The total returned funds for the Town and Board of Education was 
$1,302,293 in FY23 compared to returning $1,033,598 at end of FY22 
compared to returning $2,197,183 at the end of FY21 compared to a total 
returned of $,780,026 at the end of FY20.  Comment – The large returns at the 
end of FY21 and FY20 are a combination of good management by the 
Department Heads and the uncertainty of programs and projects in the 
COVID years.  Page 98 
119. 
Comparing expenditure total on Pages 99 with revenue total on page 93   
Revenue was $3,422482 greater than expenses in FY23 compared to $83,434 
greater than expenses in FY22 compared to $7,558,246 greater than expenses 
in FY21 compared to $2,229,889 greater than expenses in FY20 compared to 
Revenue $2,470,273 greater than Expenses in FY19. Pages 93,99 
120. 
Town finished year FY23 with $1,302,293 unexpended fund balance 
compared to  FY22 with $1,033,598 unexpended budget balance compared to 
FY21 with $2,197,183 unexpended budget balance compared to FY20 with 
$1,780,026 unexpended balance compared to a FY19 $962,997 unexpended 
balance.  Page 99. 
121. 
The major difference between the budgetary and GAAP basis is that 
encumbrances are recognized as a charge against a budget appropriation in the 
year in which the purchase order is issued so that encumbrances outstanding at 
year end are recorded in budgetary reports as expenditures of the current year 
while in GAAP basis encumbrances are recorded as assigned fund balance.  
Page 99 
122. 
Operating Indicators by Function/Program – This is a printing error.  The 
page is repeated in proper sequence on Page 152. The heading is correct as to 
what is supposed to be on that page. Page 100 
123. 
Pension liability for Pension Trust Fund is $746,333 in FY22 compared to 
$931,582 in FY21 compared to  $969,081 in FY20 compared to $1,013,766 in 

 
 
Page15 
FY19 compared to $1,066,831 in FY18 compared to $1,052,775 in FY17 
compared to $1,126,510 in FY16 compared to $1,213,597 in FY15 but the net 
pension liability is $223,497 or 70.05% in FY22 compared to  $292,532 or 
68.60% in FY21 compared to $428,634 or 55.77% in FY20 compared to 
$478,485 or 52.80% in FY19 compared to $523,262 or 50.95% in FY18 
compared to $488,219 or 53.63% for FY17 compared to $551,040 or 51.08% 
in FY16 compared to $574,126 or 52.69% in FY15. As noted above, this 
information for FY23 is missing on Page 100. Page 100 
124. 
Regarding MERS, the Town’s proportion of the net pension liability is 
2.69% in FY23 compared to 2.84% in FY22 compared to 3.01% in FY21 
compared to 3.02% in FY20 compared to 3.07% in FY19. The fiduciary net 
position is 68.71% in FY23 compared to  82.59% in FY22 compared to 
71.18% in FY21 compared to  72.69% in FY20 compared to 73.60% in FY19.  
Page 103 
125. 
Town contributions to the MERS was 19.70% of Covered Payroll in FY23 
compared to 18.16% of covered payroll in FY22 compared to 16.70% of the 
covered payroll in FY21 compared to 15.55% of the covered payroll in FY20 
compared to 13.26% of the covered payroll in FY19.  Page 104 
126. 
Although the town pays nothing to finance the Teacher’s Retirement 
System, the System fiduciary net position is 54.06% in FY23 down from 
60.77% in FY22 up from only 49.24% in FY21 compared to 52.00% in FY20 
down from 57.69% in FY19 up from 55.93% in FY18 up from 52.26% in 
FY17 down from 59.50% of the total pension liability in FY16 compared to 
61.56% of the total pension liability in FY15.  Page 105. 
127. 
Note that Net OPEB liability is 65.82% of covered Payroll of $29,726,235 
in FY23 compared to 53.93% of covered payroll of $32,626,883 in FY22 
compared to 52.39% of covered payroll of $31,862,190 in FY21 compared to 
55.64% of covered payroll of $31,077,578 in FY20 compared to 61.08% of 
covered payroll of $30,290,037 in FY19 compared to 68.09% of covered 
payroll of $30,429,413 in FY18 compared to 73.05% of covered payroll of 
$29,615,001 for FY17.  Page 106 
128. 
Note that   for FY23 the Actuarially determined contribution was 
$$2,231,121 but the actual contribution was $$1,508,151.  In FY22 the 
Actuarially determined contribution was $2,217,688 but the actual 
contribution was $1,677,660.  In FY21 the Actuarially Determined 
Contribution was $2,139,712 but the actual contribution was $1,388,794 
leaving a deficiency of $750,918.   In  FY20 the Actuarially  determined 
contribution was $2,127,089 but the actual contribution was $1,556,483 
leaving a deficiency of $570,606 compared to FY19 when the Actuarially 
determined contribution was $2,482,200 but the actual contribution was 
$1,802,704 leaving a deficiency of $679,496 compared to FY18 where the 
Actuarially determined contribution was $2,474,700 but the actual 
contribution was only $1,829,904, leaving a deficiency of $644,796 compared 
to the  FY17 Actuarially determined contribution of $2,607,000 but the  actual 
contribution of $3,698,337 which was a contribution Excess of $1,091,337. 
Page 107 

 
 
Page16 
129. 
Investment return of 6.5% in FY23 was equal to the Investment rate of 
return of 6.5% in FY22, down from return of 26.18% in FY21 is a significant 
increase from the   5.44% in FY20 is down from the 6.44% investment return 
in FY19 was better than the 4.13% in FY18 was better than the 2.069% rate of 
return in FY17.  Page 107 
130. 
Note information of Teacher’s Retirement System OPEB share for Town 
that is paid by the State on Page 109 (Same as on page 86) 
131. 
Note the Board of Education Unexpended balance of $304,703 in FY23 up 
from $46,789 in FY22, down from $1,123,093 in FY21 compared to  
$332,426 in FY20 compared to $50,099 in FY19 .  Page 113 
132. 
  Uncollected Taxes for FY2023 were $514,393 (Grand list of 2021). 
Uncollected taxes for FY2022 are $363,003 (Grand list of 2020).  Uncollected 
taxes for FY2021 were $423,052 (Grand List of 2019) Uncollected taxes for 
FY2020 were $525,600 (Grand List of 2018).  Uncollected taxes for FY2019 
were $527,459 (Grand list of 2017).   Total uncollected taxes at end of FY23 
was $941,603 down from $991,872 at end of FY22 down from $1,063,782 at 
end of FY21, down from FY20 total of $1,207,391, up slightly from FY19 
total of $1,180,222.  It is gratifying to note the success in collecting the back 
taxes.  There does not appear to be any impact of COVID-19 on the collection 
of Taxes in Waterford.   Page 114 
133. 
Utility Commission has about $16,848 of uncollected assessments at end 
of FY323, up from $15,496 of uncollected assessments at end of FY22 down 
from $25,838 of uncollected assessments in FY21, down from the $31,662 of 
uncollected assessments in FY20, down from $54,548 of uncollected 
assessments in FY19.  Pages 115-116.  Sewer assessments seem to be most 
delinquent.  It is obvious that the collection efforts of the Utility Commission, 
assisted by the Town Attorney, have been successful. 
134. 
The pages between pages 117 and 131explain all of the Special Revenue 
Funds.  These funds account for grants received by the town.  Most of the 
grants were for Board of Education, Youth & Family Services, Senior 
Services, Planning, and Police.  
135. 
Water Fund had a balance of $661,573 at end of FY23 up from   652,292 
at end of FY22 up from $632,093 in FY21 up from $622,193 in FY20 up from 
$617,287 in FY19.  Page 121. 
136. 
The following grants had no expenditures in FY23 – Small Harbor 
Improvement Projects Grant, Dock Removal Grant, Community Foundation 
Grant, Small Cities Grant (just built-up amount in Grant Fund), Reeve 
Foundation Grant.  Pages 127-130 
137. 
Sewer Maintenance Fund had assets of $777,269 at end of FY23, up from 
$562,617 at end of FY22 up from $542,417 at end of FY21 up from $481,119 
at end of FY20, up from $457,793 at end of FY19. Page 125.  Actual Cash 
Balance at end of FY23 was $776,789, up from $562,617 at end of FY22, up 
from $514,384 in FY21, up from $458,650 in FY20,  up from  $365,123 at 
end of FY19. Note that the Treasurer’s Report for end of FY2023 showed a 
cash position of $777,269.   Page 131 

 
 
Page17 
138. 
Fiduciary Funds Section was new in the FY2019 Audit report.  It changed 
slightly in the FY2021 report with Agency Funds being renamed Custodial 
Fund. 
139. 
Pension fund position at end of FY23 was $509,459 down from $522,836 
at end of FY22 compared to $639,050 at end of FY21, compared to $540,447 
at end of FY20 compared to $535,281 at end of FY19.  OPEB Fund position 
at end of FY23 was $10,544,654, up from $8,452,117 at end of FY22 
compared to $9,062,017 at end of FY21 compared to $6,109,331 at end of 
FY20 compared to $5,056,972 at end of FY19. Treasurer’s report for end of 
FY23 stated the Pension Fund had a Cash Balance of $510,601 and the OPEB 
fund had a Cash Balance of $10,561,097 compared to a Pension Fund  Cash 
Balance of $524,090 and the OPEB Fund cash balance of $8,465,847at end of 
FY22 compared to the FY21 report that stated the Pension Fund had a Cash 
Balance of $640,451 and the OPEB fund had a balance of $9,076,512 
compared to FY2020 when the report stated that Pension Fund had a Cash 
Balance of $541,890 and the OPEB fund had a balance of $6,119,819.  Like 
most investments in FY22, these funds