On December 14, 2016

Town and golf course finances create auditing headache

By Evan Johnson

KILLINGTON—Killington and the Green Mountain National Golf Course have found a way to report their financial standings to the public: keep the details separate.
Last week, the Select Board heard from Bill Hall, principal and audit director with R.H.R. Smith & Co., which is preparing the audit for the town. In completing this audit, the town faced two options: include the golf course’s assets and debts in the report or audit the golf course separately.
The town is organized by a fiscal year, in accordance with the New England Municipal Resource Center accounting system, while the golf course’s budgets are organized on a calendar year due to when it does the most business.
“It makes sense for the golf course to be on a calendar year considering it is a seasonal business and it has over the last couple of years run independently of the town budget,” Select Board member Patty McGrath said.
By excluding the golf course from the town audit, the auditors, under GAAP (“generally accepted accounting principles”) rules are required to note it as an “adverse opinion” because it doesn’t present a full picture of the town’s activities.
“It’s no reflection on the numbers or the operation, it’s just saying it’s not all in there,” McGrath said.
Hall made this clear as well while he presented the pros and cons of these options to the Select Board. “That is the only bad aspect of that being pulled out,” he said.
Keeping the golf course in the town audit would result in the town noting the audit as a unqualified opinion, indicating the town’s records are fairly presented and in accordance with GAAP rules. Keeping the golf course in the town audit would also give the town a snapshot of the golf course’s activities every six months.
“Whether that has any value to you and the townspeople, that’s something for you to decide,” Hall told the Select Board.
Withdrawing the golf course’s information will have other implications. The golf course audit lists two reserve assets that will need to be withdrawn from the town’s information: one for a balloon payment of $217,000 due in 2022 and the other for capital improvements.
Hall’s final message to the board was that he would have plenty of work to do in the weeks ahead. “Either way you do this is not going to be fun for me,” Hall said. “If you do pull it out, it’s a one-time mess for me. If you leave it in, it will be a mess every year.”
Creating two distinct audits between town governments and other bodies has been done before, he continued. If a bank or bond company asked for the town’s financial statements, they could provide both audits.
“That would alleviate any of those issues,” he said.
The Select Board passed a motion to accept Hall’s recommendation and to complete a separate audit for the golf course. The two audits will be referenced in the town report, published before spring’s town meeting, and will be available to the public.

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