Loading...
HomeMy WebLinkAboutStaff Report 4.A 02/02/2004CITY OF PETALUMA, CALIFORNIA MEMORANDUM Finance Department; I I English Street, Petaluma, CA 94952 707 - 778 -4352 Fax 707- 778 -4428 E -mail: rnancececi.petaluma.ca.us DATE: January 26, 2004 TO: Mayor and City Council Michael. A; Bierman, City Manager FROM: William J. Thomas, Finance Director SUBJECT: FY 2003 Comprehensive Annual Financial Report Attached is the recently completed FY 20033 Comprehensve.Annual Financial Report (CAFR). This year's CAFR was very challenging due to the implementation of GASB 34 and other pronouncements. GASB 34, especially, changed how governments provide financial information in the annual reports. The changes were meant to provide more understandable financial information to readers who are not familiar with governmental accounting. The FY 2004 CAFR has several changes that I will discuss at the February 2, 2004 Council meeting. These changes include: • A new section entitled "Management Discussion and Analysis" (MD &A) • Government -Wide Financial Statements that include: o Statement; of Assets for the City o Statement of Activities • Basic Financial Statements that include: o Balance Sheet. for the MAJOR. Governmental Funds • Income Statement for the MAJOR Governmental Funds • Budget; to Actual Statements for the MAJOR Governmental Funds 0- Statement of,Net Assets for the MAJOR Enterprise (Proprietary) Funds • Income Statement for the MAJOR Enterprise Funds • Statement of Cash Flows for the MAJOR Enterprise Funds • Statement of Fiduciary Net Assets Additionally, the Notes to the Financial Statement have been expanded to include additional information and clarification of line items found in the Basic Financial Statements. Although this. was a very big project that consumed over one year of activity within the Finance Department, it could not have been completed without the significant work that was done byCinde Rubaloff, Accounting Manager. Her diligence in researching and applying the various components of GASB 34 is to be commended. Additionally, this document was produced in- house for the first time. This allows the Cityto have control over the finished product and have it available on our website quicker. As she does with all finance documents, Chris Jones demonstrated her talents in getting the finished product from "accounting spreadsheets" into a presentable document. I would also like to report that for the first time there were no new reportable conditions. The "unqualified opinion" also does not contain any material weaknesses. To accomplish this, it.takes the entire Finance staff and they are also acknowledged for their hard work during the year. Also attached to this memo is a letter from the City's auditors identifying an issue that they found during-their' agreed -upon procedures engagement. This refers to an error that was made in calculating the FY 2003 GANN Limitations. The error carried over to FY 2004. I will 'be presenting the necessary amending resolutions at the February `2', 2004 Council meeting. If you have' any questions regarding either the FY'2004 CAFR or the auditor's letter please contact me. 0 tE r J u i.' I '� ' '`�j i. �- r "7�._b1 �? w PISENTI ®BRINKER LLP CERTIFIED PUBLIC- ACCOUNTANTS'a- CONSULTANTS MEMBER: THE - RSNI INTERNATIONAL City Council City of Petaluma, California Independent Accountants' Report on Agreed -Upon Procedures Applied to Appropriations timif Worksheets We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet No. 6 of the City of Petaluma, California for the year ended June 30, 2003. 'These procedures, which were agreed to 'by the City of Petaluma, California and the League of California Cities (as presented in the publication entitled Agreed -Upon Procedures Applied,on the Appropriations Limitation Prescribed by Article XIIIB of the California Constitution), were performed solely to assist the City of Petaluma, California, in meeting the requirements of Section 1.5 of Article ,XIIIB 'of the California Constitution. The City of Petaluma management is responsible for the Appropriations Limit Worksheet No. 6. This agreed -upon procedures engagement was conducted -in accordance with attestation standards established by the American Institute of Certified Public. Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified !in this report. Consequently, we make no representation regarding the sufficiency the procedures described below either for the.purpose for which this report has been requested or for any other purpose. The procedures performed and our findings were as follows: :f : We obtained the completed worksheets No. l through No: 7 and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by 'resolution of the City Council. We also compared the'population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council. F ' a g: We found the amount of exclusions in Worksheet No. 3 - "Interest:Earnings Produced By Taxes" was not properly subtracted from the non- interest tax proceeds. This error overstated the amount of _interest ear from taxes fro taxes by $101,672, which overstated the proceeds of taxes in Worksheet No:, 2 •and the " "Appropriations Subject to Limitation" 'in Worksheet No. 4 by the same amount. This error appears to have no significant impact on the current year Appropriations Limit since the Limit fapexce. d`s the "Appropriations Subject to Limitation ". Omc jn, Santa Rosa ,Napa and. Retalutno Independent Accountants' Report on Agreed-Upon, Procedures Applied to Appropriations Limit Wo - rksheets (continued). For the accom an ina r ~� p y b Appropriations Limit Worksheet No. 6, we ,added line. A, last years limit, to line E, total adjustments, and compared the resulting amount line F, this year's Iir I t. Finding: We, found the adjustment factor "01 -02 City population inc rease" wa& incorrect, which' understates the Annual Adjustmentand Appropriation. Limit by $719,769. The calculation was made using a population increase factor of .40% -for 01 -02. According to the California State. Department of Finance,, the eorrect population increase factor for the City of Petaluma is 'L26 %o for the 01 -02 year: The City obtained the population factor from the State of California - Department of Finance's. website. We have found the information on that site to be inconsistent and have so "advised the City; The City intends, to re- calculate the "limits" based on our findings and correct FY 2003 and FY 2004 Gann Calculations for consideration by the City Council. We compared the current year information, presented in the accompanying Appropriations Limit Worksheet,No. 6 to the other worksheets described in No. 1 above. Finding: No exceptions: were noted as aresuIt of our procedures. We compared 'the prior year a ro riations limit. presented in the accompanying Appropriations prior year. P Limit e No. 6 to the prior year" appropriations limit adopted by the :City Council for the' ear. Finding: No exceptions were noted as a result of our procedures. We were not engaged to, and did not, conduct an examination, the :objective of; which would be the expression of an opinion on the accompanying.Appropriations Limit Worksheet No. 6. Accordingly, we do not,express sueh.an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to. the determination of the appropriation limit for the base, year, as defined by Article XHIB of the California Constitution, This report .is intended solely for the information of management, Honorable Mayor and City Council members of the City of Petaluma, California; and is not intended to be and should not be used by anyone other than those specified parties. However, this report is matter of public record and it distribution 'is not limited. 4 Petaluma, California November 3 2003 (D