Audit flags depreciation, investment and related-party issues; town plans auditor briefing

The town’s audit report drew sustained scrutiny at the meeting after members read a summary of the auditor’s findings and recommendations, including the absence of capital-asset capitalization and depreciation, investment custodial risk and potential issues around related‑party contracting.

Officials noted the audit’s central recommendation that capital assets (for example, the townhouse, town building and other infrastructure) should be inventoried and depreciated following generally accepted accounting principles and GASB guidance. The audit language cited the applicable GASB requirement and recommended that capital-asset records include description, cost, vendor, date placed in service, useful life and accumulated depreciation.

Some board members questioned the short-term practical benefit of capitalizing and depreciating assets, noting that the town already sets aside trust-fund money for repairs and replacement. Other members and participants said depreciation better reflects the cost of using assets over time and would provide clearer accounting in the event the town sought financing or faced an unexpected, large replacement expense.

The audit also highlighted investment-custodial risk: the town holds more than $1 million in investments that are not FDIC insured and are exposed to custodial credit risk if a counterparty fails. The auditor recommended an investment policy that mandates collateralization above FDIC limits, diversification rules and regular assessment of holdings. Meeting participants said the town uses a New Hampshire public investment pool that is liquid and typically accessible within a day but not FDIC insured; they asked the auditor to describe the tradeoffs between liquidity and custodial risk.

Audit language flagged a related‑party concern involving the town’s road-agent configuration (a contractor who manages labor and equipment) and recommended competitive bidding or independent oversight to address potential conflicts or the appearance of related‑party contracting.

Multiple attendees requested the auditor come to a future meeting to present these findings and explain whether the town’s current practices are acceptable or whether corrective action is required. One participant suggested the auditor explain how the town’s existing trust‑fund set‑asides compare with a formal depreciation schedule, and another asked for clarity on the auditor’s recommended remediation steps for fiduciary cash‑flow and investment oversight.

No corrective actions were adopted at the meeting; board members directed staff to invite the audit representative to present and to prepare for a follow-up discussion.