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FY2016 Audited Financials Are Out

Bob Mendes

Metro's Comprehensive Annual Financial Report For the Year Ended June 30, 2016, or CAFR, was accepted by the Metro Audit Committee yesterday and is posted online. It's 320 pages of financial details about Metro. Since I'm still recovering from my rotator cuff surgery, and typing doesn't feel great, I'll just hit a few points of interest:

  1. The auditors provided an unqualified opinion -- that's good. See pages 19-21 of the PDF. That means that Metro's financials fairly present its financial position in accordance with generally accepted accounting principles.

  2. The auditors did not find any material weaknesses in Metro's financials. This is good.

  3. Metro added some information about tax abatements to the Notes this year. This was voluntary by the administration -- it's not required to be included. It is at pages 153-54 of the PDF, and describes nine current real property tax abatements.

  4. If you want to read up about Metro's long term bond debt and commercial paper program, there's lots of detail from pages 96-110 of the PDF.

  5. Metro's pension plans are discussed at pages 111-131 of the PDF.

  6. Metro's other post-employment benefits (OPEB) plans are discussed at pages 132-134 of the PDF. This shows the OPEB obligations are funded at 0%. This will bite Metro at some point if left unaddressed.

  7. There is information about our investment in roads, streets and bridges at pages 155-56 of the PDF. There's some interesting data about how the quality of our roads and streets took a hit with the flood in 2010, but are making a comeback over time.

  8. The fact that Metro does not have a good, accurate budget for Nashville General Hospital has an impact on the audit. At page 20, the auditors include a "going concern" note about NGH. At page 144 of the PDF, there is more detail. Basically, because we continue to budget about $35 million even though the real cost is higher, the audit has to say, "The Government has budgeted and legally approved an appropriation of $35 million to the Hospital Authority for the year ended June 30, 2017. The Government has also not committed to provide additional funding to the Hospital Authority should such funding become necessary." If Metro would budget a realistic budget and NGH met the budget, we would likely eliminate the "going concern" comment about the hospital.

Feel free to email me any questions or comments.