Homewood trustees approved the village’s comprehensive annual financial report (CAFR) on Tuesday after presentations by Finance Director Dennis Bubenik and Matt Beran, a partner in the audit firm Lauterbach & Amen LLP.
Beran said his firm gave the village an unmodified opinion.
“That’s the highest opinion that we give,” he said. “Basically we’re saying that the numbers in here are free of material misstatement, or in other words, the numbers are what they say they are.”
Beran reviewed some of the notable aspects of the village’s finances, drawing trustees’ attention to a $9 million deficit in the pension fund report.
He said the number might appear alarming, but it was due to a change in accounting practices specified by the Governmental Accounting Standards Board, not to a change in the village’s financial health.
“They added this net pension liability on the books,” he said. “In the old days, the actuary told you you needed to pay this much toward the pension fund and if you kept up with that you had a zero liability. Now it is what is left yet to be funded to be 100 percent. It’s what you have left to go. It’s more of an accounting thing rather than a funding thing.”
Beran noted the general fund saw an higher revenue than the previous year because of increasing sales tax revenue and fund transfers. He noted increases in expenditures because of infrastructure improvements and community development projects.
The water and sewer fund saw an increase in its reserves of $1.7 million because the water meter replacement project from the previous year was completed and there were no additional rate hikes from Chicago, the village’s ultimate source for Lake Michigan water.
Bubenik introduced the audit report by presenting a worksheet he said helps put the village’s finances in context.
“The budget is a 12-month forward-looking document based upon estimates that we go through each year, and the audit is a 12-month backward-looking document that’s based on actuals,” he said. “So if we want to answer the question of how the village’s finances are, if we compare our estimated budget to our actual audit we can probably answer that question.”
Bubenik showed trustees a table comparing budget totals and audit totals for the past 16 years, noting there was some fluctuation of three or four percentage points from year to year, based on general trends in the economy, but the average is close to the mark.
“We see that our actual revenues are at 101 percent of budget, so we’re pretty much dead on,” he said, adding that actual expenses average 99 percent of the budgeted amount.
Village President Richard Hofeld said the audit report is evidence of the good work the staff is doing managing the village’s financial resources.
“I think it reaffirms how well our staff runs the village, how accountable they are,” he said.