Fiscal year ends but numbers still in flux
June 30 marked the end of fiscal year 2017 (FY17), but Wilton’s books are not closed and the forecasted change to the town’s general fund balance is still being calculated.
The town’s books are kept open for 60 days after the end of the fiscal year in order to capture FY17 tax receipts collected during that time period, according to First Selectman Lynne Vanderslice’s July 18 presentation to the Board of Finance.
Vanderslice noted that this differs from accrual basis accounting “where you would accrue all billed revenues and book a reserve for uncollectible.”
Unlike the town’s monthly closes, which report “actual operating results on a cash basis,” the town’s annual budgetary financials — or general fund financials — are accounted for on a “modified accrual basis,” according Vanderslice.
For revenues, that means “a combination of both cash and accrual basis accounting,” according to Vanderslice, noting that revenues are recognized when measurable and available to spend within the next 60 days.
Expenses are recorded on an accrual basis. According to Vanderslice, the town not only records all its cash transactions, but also accrues other expenses, determines the adequacy of reserves, and sets up encumbrances for executed purchase orders that “do not qualify as an accrual and determine operating capital expenditures.”
Because of this, she said, “a year-end close cannot be accomplished in the 10 business days between June 30 and July 17.”
Although its books are not closed, the town’s financial current forecast remains approximately the same:
- Revenues: Surplus of $163,000.
- Board of Selectmen operating and capital: Surplus of approximately $100,000.
- Board of Education: Surplus of $50,000 (last reported).
- Debt: Surplus of $240,000.
- Charter Authority: Surplus of $1.242 million.
- Total surplus: $1.795 million.
At the Board of Selectmen’s July 10 meeting, Chief Financial Officer Anne Kelly-Lenz said that until a “soft close” is done and she knows “what level of encumbrances are getting rolled over” for the Board of Selectmen and Board of Education, she cannot determine what the change in the ending fund balance will be.
“We have a general idea of the employee cost side and if there’s any savings in there because the payroll is pretty much in,” she said, “but for the majority of the spending, we don’t know yet.”
Kelly-Lenz said she expects to have a “good indication” of the general fund balance change around the first week of September.
“We’re going to have this $1 million in favorability … which is going to go into the fund balance,” Vanderslice said on July 10, “which will be good because we still don’t know what’s going to hit from Hartford.”
Vanderslice said the Board of Selectmen’s FY18 budget is “in a bit of a holding pattern due to the situation with the state” and the town is “continuing to operate cautiously.”
At its July 10 meeting, the Board of Selectmen agreed to have Vanderslice work with the police commission, fire commission and heads of town departments to develop a “Plan B” budget for FY18 in the event that the state pushes down costs.