1992-1998-FISCAL AUDITS - Laserfiche WebLink

Home Browse Search

13. Commitments and Contingencies Outstanding Lawsuits - There are several pending lawsuits in which the Town is involved. The Town 's management is of the opinion that the potential future settlement of such claims would not materially affect its financial statements taken as a whole. Grants -Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time, although the Town expects such amounts, if any, to be immaterial. 14. Deferred Compensation Plan The Town offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all employees, ermits them to p defer aortion of their salary until future p rY years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. The Town funds all amounts of compensation deferred under the Plan at P , the direction of the covered employee, through investments underwritten by the ITT Hartford Group. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, are (until paid or made available to the employee or other beneficiary) solely the property and rights of the Town, subject only to the claims of the Town 's general creditors. Participants' rights under the plan are equal to those of general creditors of the Town in an amount equal to the fair market value of the deferred account for each participant. On August 20, 1996, the Small Business Reform Act changed Section 457 to require t he exclusive benefit of q that all assets of a plan be held in a trust for t participants and their beneficiaries, thus eliminating the ability of the Town's creditors to obtain funds from the plan. The Town has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The Town bel' to satisfy the claims of Teves that � s the assets at it is unlike) that it will use Y Y general creditors in the future. 21