Milwaukee Metropolitan
Sewerage District
Policy, Finance and Personnel
Committee Meeting
July 13, 2020
Presentation of
December 31, 2019 Audit
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Audit Discussion Agenda
Milwaukee Metropolitan Sewerage District
Agenda
Audit Overview
Condensed Financial Data
Required Communication to
Governing Body
Discussion
Introduction
Milwaukee Metropolitan Sewerage District
Audit Team
Partner – Jodi Dobson
Concurring Reviewer – Russ Hissom
Manager – Ryan O’Donnell
Senior Accountant – Sara Schnelle
Minority Business Enterprise Partner Firm –
M.L. Tharps & Associates
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Audit Overview
Milwaukee Metropolitan Sewerage District
Audit assesses internal controls
“….a means by which an organization’s resources are directed,
monitored, and measured. It plays an important role in preventing
and detecting fraud and protecting the organization’s resources.”
Controls must meet the goal and objectives of Operations, Reporting
and Compliance
Audit Overview
Milwaukee Metropolitan Sewerage District
Controls
reviewed in
key
transaction
areas
Expenditures
Payroll
Customer billings
Information technology
Capital assets
Financial close
Financial Audit (Comprehensive Annual Financial Report)
Milwaukee Metropolitan Sewerage District
Financial statements received a “clean” Unmodified
Opinion
The financial statements are the responsibility of
management
Management Discussion and Analysis and the
Statistical Section provide an excellent summary of
key financial and operating results in tables and
narrative
2018 CAFR was awarded GFOA Certificate of
Achievement for Excellence in Financial for the
41st Consecutive Year
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Milwaukee Metropolitan Sewerage District
Single Audit
• Required because
you receive federal
and state funding
• Conclusion is you
complied with all
requirements
Indirect Cost Allocation
• Done to review
compliance with
Uniform Guidance as
used for federally
funded projects
• Conclusion is costs
are reasonable and
supported
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Condensed Financial Statements ($000)
Milwaukee Metropolitan Sewerage District
Income Statement
Operating Revenues
Operation and Maintenance
Expenses
Depreciation
Operating Loss
Property Taxes and Capital
Charges
2019
$ 99,129
109,160
99,124
(109,155)
132,269
2018
$ 96,744
73,312
Increase from GASB 75
implementation in 2018
96,356
Additional plant in
service
(72,924)
Includes depreciation,
excludes capital charges
130,028
Increase based on
budget
Increase in capital
program expenditures
Other Non-Operating
(24,592)
(23,528)
Capital Contributions
2,628
2,682
$ 1,150
$ 36,258
Change in Net Position
Increase in user
flow/volume
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Condensed Financial Statements ($000)
Milwaukee Metropolitan Sewerage District
Statement of Net Position
Unrestricted Cash and
Investments
Restricted Cash and Investments
Net Plant
Other Assets
Total Assets
Deferred Outflows of Resources
2019
2018
$ 36,914
Represents 3.5 months of
O&M
99,481
131,949
Draw down of bond
proceeds for capital projects
as planned
3,298,910
3,322,297
159,617
157,274
3,590,723
3,648,434
$ 32,715
35,119
10,652
Increase in pension
deferred outflows due to
GASB 68 and OPEB
deferred outflows due to
GASB 75
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Condensed Financial Statements ($000)
Milwaukee Metropolitan Sewerage District
Statement of Net Position (cont.)
2019
2018
Long-term Debt
760,051
827,696
16,280
17,555
Intergovernmental Loan
Post Retirement Benefits
Other Liabilities
Deferred Inflows of Resources
138,428
120,212
57,112
34,890
135,868
141,780
2,525,563
2,513,765
83,758
85,071
(91,218)
(81,883)
2,518,103
2,516,953
Impact of actuarial
assumptions including
discount rate
Increase in pension liability
based on market
performance and mortality
assumption
Net Position
Investment in capital assets
Restricted
Unrestricted
Total Net Position
77% of net plant
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Condensed Financial Statements ($000)
Milwaukee Metropolitan Sewerage District
Legal Debt Margin
Equalized Valuation as Determined by the WI Department of
Revenue in 2018
2019
$ 65,909,580
Statutory debt limit rate
5%
Statutory debt limit
3,295,479
General obligation indebtedness
Outstanding bonds issued by the District
(262,395)
Clean Water Fund Program loans
(486,837)
Total Borrowing
Legal debt margin
(749,232)
$ 2,546,247
Borrowing is at 23% of maximum allowed or 1.14% of total equalized value
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Auditor Communication to Those Charged with Governance
Milwaukee Metropolitan Sewerage District
Area to be Communicated
Area to be Communicated
Our responsibility under Auditing Other Information in Documents
Standards Generally Accepted in Containing Audited Financial
the United States and
Statements
Government Auditing Standards
Planned Scope and Timing of
the Audit
Accounting Policies
Accounting Estimates
Financial Statement Disclosures
Auditor Communication to Those Charged with Governance
Milwaukee Metropolitan Sewerage District
Area to be Communicated
Area to be Communicated
Difficulties Encountered in
Performing the Audit
Corrected and Uncorrected
Misstatements
Audit Adjustments
Disagreements with
Management
Consultations with Other
Independent Accountants
Management Representations
Auditor Independence
Other Audit Findings or Issues
Audit Summary
Milwaukee Metropolitan Sewerage District
We appreciate the work done by MMSD accounting
staff and management in preparing for and assisting
in the audit!
Questions…
Contact Information:
Jodi Dobson, Partner
[email protected]
608.240.2469
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