HARVARD -- The town's yearly audit shows overall improvement and financial stability in its funds, highlighting only a few perceived recommendations.

The report, conducted by Roselli, Clark and Associates to study financial management throughout fiscal year 2013, found improvements in other post-employment benefits and reimbursements for road improvements.

The report finds that the town had about $3.75 million unassigned in its general fund by the end of the fiscal year, which is over 15.3 percent of the fund's expenses. The portion of unassigned money is a two percent increase from last year, and the audit explains that it is one of the reasons the town has earned an AA+ rating from Standard and Poor's.

After last year's report found an issue in "cash reconciliation processes," the town improved its management through the hiring of a treasurer/collector, the report found. Auditors also applauded the town's contribution to its other post-employment benefit fund, as the unfunded liability for OPEB has decreased in recent years from $29.8 million to $23.3 million.

Harvard followed up on last year's recommendation to apply for state reimbursement money for roadway improvements projects as they were being completed instead of upon completion, the report stated. This new process ultimately benefited the town's free cash amount.

The report found two new issues for this year, including the amount of gross receivables -- money owed to the town -- that has been increasing since 2011.

"Rising receivables tie up available town resources and have a negative impact on the town's cash flows," the report states. "We continue to recommend that the town Tax Collector be proactive in the management of the town's property tax receivables."

The auditors took issue with the town's affordable housing trust, arguing that the town cannot "impose its will" on the trust even though the town appoints the majority of its members.

Banks that lend to the trust, which is a separate legal entity, will believe that the lending has the "full faith and backing of the town," the report states. But auditors argue that it does not.

The report also claims that the trust is not in full compliance with the section of state law that governs affordable housing trusts, but does not explain how.

The report recommends that the town, which keeps money for the trust in its budget, give any trust money to the trust for its own separate management.

Bruce Nickerson, chair of the trust, said members have drafted a letter to the auditor arguing these points.

"They said that the selectmen have no control over us, when in fact the selectmen can remove any or all of the trustees at any time and replace them," he said.

Nickerson said that if the trust's finances were no longer included in the town audit, the trust would have to hire an auditor of its own and at its own expense. Additionally, having the trust's money within the town budget creates a safeguard for the funds, since they must pass through the voters as a warrant article at town meeting.

If the trust wrote its own checks, he said, it would need to adopt a policy in which checks over a certain size would need to be signed by two trustees.

Nickerson said a separate fund would also mean that the trust would have to do its own investing, which would be a diversion of energy and talent.

The trust hired an accountant in 2011 to establish separate funds, but the accountant explained that it was unnecessary, Nickerson said. The accountant had also been a former auditor for the town, he said.

"He said you don't need to do this, so we didn't," Nickerson said.

It is also the trust's opinion that they are in compliance with the state law, Nickerson said. The letter will go through legal counsel before being sent to the auditors and copied to the selectmen, town administrator and finance director.

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