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Home My WebLink AboutAudit Report for Gas Tax Fund - July 1, 2001 through June 30, 2002_X-h- 1 City of Palm Desert STAFF REPORT Council. Meeting of May 13, 2004 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: PAUL S. GIBSON, DIRECTOR OF FINANCE/CITY TREASURER SUBJECT: Cit of Palm Desert Audit Re • ort for the Gas Tax Fund Jul 1, 2009 through .0 20�� for the • eriod Tune 3 DATE: Ma 13, 2004 RECOMMENDATION: By Minute Motion, receive and file the audit report of the Gas Tax Fund for the Cit of P Desert for the period July 1, 2001, through June 30, 2002. Y alm BACKGROUND: The Gax Tax Fund is a special revenue fund that was created to keep track of funds receive by the State of California. The State apportions funds monthly from the highwayusersx account within the transportation tax fund to cities and counties for the construction, maintenance, and operation of local streets and roads. The highway users taxes are derived from state taxes on the sale of motor vehicle fuels. In accordance with Streets and Hi hwa Code Section 2101 and Article XIX of the State Constitution, all apportionmentso9 yy highway users taxes to cities must be deposited in the City's Gas Tax Fund and must be expended only for street -related purposes. The State's audit report disclosed that the City accounted for and expended its Gas in compliance with Article XIX of the State Constitution and the Streets and Highways Fode for the period of July 1, 2001, through June 30, 2002. Code Staff recommends that the City Council receive and file the audit report forthe Ga for the period of July 1, 2001, through June 30, 2002. s Tax Fund Respectfully submitted, Reviewed and concur, DIRECTOR OF FINANCE/TREASURER CARLOS L. EGA, CITY MANAGER PAUL S. GIBSON, 11:1Acctg03W,udit031staffreportgastax2002audit.wpd CITY OF PALM DESERT Audit Report GAS TAX FUND July 1, 2001, through June 30, 2002 STEVE WESTLY California State Controller September 2003 STEVE WESTLY CIalti=.nxnja $tate &antraCJex September 5, 2003 Mr. Paul S. Gibson Finance Director/City Treasurer City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 Dear Mr. Gibson: The State Controller's Office has completed an audit of the C' (highway users tax and Traffic Congestion Relief Pro ra Cy P)of Palm) for the Gas Tax Fund July 1, 2001, through June 30, 2002. Program (TCRP) funds) for the period of The city accounted for and expended its Gas Tax F compliance with Article XIX of the State Constitution aand gy users tax and TCRP funds) in the Streets and Highways Code. If you have any questions, please contact Jim L. Spano, Chief, Co (916) 323-5849, Compliance Audits Bureau, at Sincerely, ��I ACM F3z'"-( ALTER BARNES Chief Deputy State Controller, Finance WB:jj Clty of Palm Desert Contents Gas Tax Fund Audit Report Summary .......................... .................. .............. .............. Background .......... ..................... Objective,"" . 1 Scope, and Methodology ................................... Conclusion ........ ....................... ............................. Follow -Up ............. p on Prior """• 2 Audit Findings ............................. ........................... Vie.................... Views of Responsible """"" 2 P Official.... ................... .............. .............. Restricted ""'•••••••• Use........................................................................ .... 2 Schedule 1 Rec •••••• 2 1—Reconciliation of Fund Balance ................. Steve Westly • California State Controller City of Palm Desert Gas Tax Fund Audit Report Summary The State Controller's Office (SCO) has completed an audit of the City. of Palm Desert's Gas Tax Fund for the period of July 1, 2001, through June 30, 2002. The last day of fieldwork was July10, 2003. The SCO also performed an audit of the Traffic Congestion Relief Program (TCRP) funds recorded within the Gas Tax Fund for the period of July 1, 2001, through June 30, 2002. The audit disclosed that no adjustment to the Gas Tax Fund and TCRP funds is required. Background Objective, Scope, and Methodology The State apportions funds monthly from the highway users tax account within the transportation tax fund to cities and counties for the construction, maintenance, and operation of local streets and roads. The highway users taxes are derived from state taxes on the sale of motor vehicle fuels. In accordance with Streets and Highways Code Section 2101 and Article XIX of the State Constitution, all apportionments of highway users taxes to cities must be deposited in the city's Gas Tax Fund (also known as the Special Gas Tax Street Improvement Fund) and must be expended only for street -related purposes. The audit of the city's Gas Tax Fund was conducted under the authority of Government Code Section 1241.0. Chapter 91, Statutes of 2000, (Assembly Bill 2928) as amended by Chapter 656, Statutes of 2000, (Senate Bill 1662) established a Traffic Congestion Relief Fund (TCRF) in the State Treasury for allocating funds quarterly to cities and counties for street or road maintenance, reconstruction, and storm damage repair. Funds received must be deposited into the city account designated for the receipt of state funds allocated for transportation purposes. The funds were recorded in the city's Gas Tax Fund. The audit of the city's TCRP funds was conducted under the authority of Streets and Highways Code Sections 2182 and 2182.1. The objective of the audit was to determine whether the Gas Tax Fund (highway users tax and TCRP funds) was accounted for and expended in compliance with Article XIX of the State Constitution and the Streets and Highways Code. In order to meet the audit objective, the auditor determined whether: • Highway users tax apportionments and other appropriate revenues were properly deposited in the Gas Tax Fund; • Gas tax monies were expended exclusively for authorized street - related purposes; and • Unexpended gas tax monies were available for future expenditures. Steve Westly • California State Controller 1 City of Palm Desert Gas Tax Fund Conclusion Follow -Up on Prior Audit Findings Views of Responsible Official Restricted Use The audit was conducted in accordance with Government Auditing Standards, issued by the Comptroller General of the United States. However, the procedures did not constitute an audit of the city's financial statements. The audit scope was limited to planning and performing audit procedures to obtain reasonable assurance that the Gas Tax Fund (highway users tax and TCRP funds) was accounted for and expended in accordance with the requirements of the Streets and Highways Code. Accordingly, transactions were examined on a test basis to determine whether funds were expended for street purposes. The auditor considered the city's management controls only to the extent necessary to plan the audit. The audit disclosed that the city accounted for and expended its Gas Tax Fund (highway users tax and TCRP funds) in compliance with Article XIX of the State Constitution and the Streets and Highways Code for the period of July 1, 2001, through June 30, 2002. The prior SCO audit report, issued on March 4, 1997, disclosed no findings. The audit results were discussed with city representatives during an exit conference on July 10, 2003. Jose Luis Espinoza, Finance Operations Manager, agreed with the audit results. Mr. Espinoza further agreed that a draft audit report was not necessary and that the audit report could be issued as final. This report is intended for the information and use of city management and the SCO; it is not intended to be and should not be used by anyone other than these specified parties. This restriction is not intended to limit distribution of this report, which is a matter of public record. JEFFREY V. BROWNFIELD Chief, Division of Audits Steve Westly • California State Controller 2 Gas Tax Fund City of Palm Desert Schedule 1— Reconciliation of Fund Balance July 1, 2001, through June 30, 2002 Beginning fund balance per city Revenues Total funds available Expenditures Ending fund balance per city SCO adjustment Ending fund balance per audit Highway Users Tax Funds 1 76,281 825,876 902,157 (755,262) 146,895 Gas Tax Fund TCRP Funds 2 $ 268,248 105,516 373,764 (268,248) 105,516 Total $ 344,529 931,392 1,275,921 (1,023,510 252,411 $ 146,895 $ 105,516 $ 252,411 The city receives apportionments from the state highway users tax account, pursuant to Streets and Highways Code Sections 2105, 2106, 2107, and 2107.5. The basis of the apportionments for Sections 2105, 2106, and 2107 varies, but the money may be used for any street purpose. Section 2107.5 apportionments are restricted to administration and engineering expenditures, except for cities with populations of less than 10,000 inhabitants. Those cities may use the funds for rights of way and for the construction of street systems. of nate 2 Chapter 91, Statutes of 2000, (Assembly Bill 29Fund) as ,whichallocatesby er funds tote ties and counties efor street et ill 1662) established the State Traffic Congestion Relief or road maintenance and reconstruction from FY 2000-01 through FY 2005-06. Steve Westly • California State Controller 3 State Controller's Office Division of Audits Post Office Box 942850 Sacramento, CA 94250-5874 http://www.sco.ca.gov CO3-GTA-029 UN10N �qg�