Road Board at odds with audit rules
IRON RIVER—The rules for financial audits of governmental bodies were changed a few years ago, and officials of the Iron County Road Commission feel some of the changes just don’t make sense.
They expressed their thoughts during the Aug. 8 regular commission meeting, when Kathleen Ciantar of Anderson Tackman and Co. presented the 2016 financial year audit.
Ciantar reported that commission expenses rose about $1 million over the year before, while revenue was down about $1.5 million. “That’s just based on the timing of your projects,” she said, “when funding came in for federal awards last year.”
The commission’s net position is up $250,000; last year, it was up $2.7 million, also based on when revenue came in and expenses went out.
Most of the focus was on the commission’s pension liability to its retirees. Ciantar said there is a total liability of $12.4 million, with $4.8 million funded and $7.6 million not funded.
“It’s all based on actuarial assumptions and mortality tables,” Ciantar said. Changes in several of those assumptions last year, she added, increased the ICRC liability by $647,000.
The figures assume an 8.25 percent return on investments. A 1 percent change in investment income, Ciantar said, “can drastically change your number.” She said all the post-employment liabilities will have to be on the books in two years.
While the commission doesn’t have to change its “pay as you go” strategy for pension benefits, the change in auditing and reporting will affect its financial position.