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Audit finds healthy cash position; board agrees to explore investing reserve funds
Summary
An independent auditor told the Louisiana State Board of Medical Examiners that financial statements were materially correct, assets rose about $700,000 and operating cash flow was positive; the board voted to explore investment advisers and options for reserve funds while noting legal limits and risk.
An independent auditor told the Louisiana State Board of Medical Examiners that the agency's financial statements for the most recent fiscal year were materially correct and that the board's financial position had strengthened, prompting a board discussion and a vote to explore investing reserve funds with professional advice.
Mike, the auditor presenting the report, summarized the audit opinion for the board: "the financial statement amounts contained in the financials are materially correct." He reported assets were up about $700,000 compared with the prior year, with cash accounting for most of the increase, and highlighted a positive operating cash flow of more than $800,000. He also explained that GASB pension and OPEB reporting requirements affect the appearance of liabilities and expenses in the financial statements.
Finance staff said the board earned roughly $120,000 to $135,000 in investment income in the previous year from current conservative investments. Board members asked whether the board could invest more aggressively to improve returns; the auditor cautioned that higher returns come with higher risk. The board moved to explore hiring a financial adviser to review permissible investment options and ensure any adjustments comply with state rules. The motion to explore investment of reserve funds passed by voice vote.
The board asked staff to return with options that keep investments within state law and to consult the state treasury or other experts about permissible instruments. The auditor offered to provide examples of how other public entities structure investment arrangements and to recommend knowledgeable brokers.
