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Home My WebLink AboutAccountant's Report - Measure A Fund - FY Ended 06/30/07 !� � , CITY OF PALM DESERT FINANCE DEPARTMENT Staff Report REQUEST: RECEIVE AND FILE THE INDEPENDENT ACCOUNTANTS' REPORT ON AGREED-UPON PROCEDURES PERFORMED ON THE MEASURE A TRANSPORTATION FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2007 DATE: FEBRUARY 28, 2008 CONTENTS: INDEPENDENT ACCOUNTANTS' REPORT ON AGREED-UPON PROCEDURES PERFORMED ON THE MEASURE A TRANSPORTATION FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2007 Recommendation: By Minute Motion, that the City Council receive and file the Independent Accountants' Report on Agreed-Upon Procedures Performed on the Measure A Transportation Fund for the Fiscal Year Ended June 30, 2007. Back_qround: The Measure A Fund is a special revenue fund that was created to keep track of funds received by the Riverside County Transportation Commission. In 1988, Riverside County voters approved a half cent sales tax, known as Measure A, to fund a variety of highway improvements, local streets and roads maintenance, commuter assistance and specialized transit projects. Caporicci & Larson, CPA, performed the procedures which were agreed to by the Riverside County Transportation Commission, Riverside, California (RCTC) solely to assist RCTC with respect to an evaluation of the City of Palm Desert's Measure A Transportation Fund and degree of the City's compliance with RCTC requirements for the year ended June 30, 2007. The Audit, Investment and Finance Committee received the Independent Accountants' Report at their February 26, 2008 meeting, and it was recommended that the report for the fiscal year ended June 30, 2007 be received and filed by the City Council. Su �tted by: T;�TX CO(7NCIi, :3CTION: APPROVED DENIED �tECE IVED� F•�--- OTHER . Paul S. Gibson, Director of Finance/City Treasure��IN� �ATE , -� �_ AYE S: � �' � Approved: �,QEs: ' � �iB.SENT: N C�n� TAIN' N ' � Carlos L. Ortega, i Manager �g�FIED BY• �riginal on File wit City Clerk' s Offi�E �•\Finanre\Niamh (1rtPaa\Rtaff RPnnrtc\Aii�iit ctaff rPnnrtc��O7\an�it�(1(17 MaacnrP A rtf 1 I I i � I ' . I . 1 O a �11. �Sert � Measure A Trans ortation Fund p E� . . � Palm Desert, Calif ornla i � � � � Independent Accountants' Report on �° Agreed-Llpon Procedures Performed on the �� Measure A Transportation Fund For the year ended june 30, 2007 November 14, 2007 . , C,�L �Cap��ricri �c Iarscm i{.er�ijied Prtblir.l�•c•�,rmhutts I � CL ( Caporicci&Iarson ' Certifted Puh[ic Accountants INDEPENDENT ACCOUNTANTS'REPORT ON 1 APPLYING AGREED-UPON PROCEDURES � To the Riverside County Transportation Commission Riverside County Regional Complex 4080 Lemon Street,3rd Floor � Riverside,California 92501 We have performed the procedures enumerated below which were agreed to by the Riverside County Transportation Commission, Riverside, California (RCTC) solely to assist RCTC with respect to an � evaluation of the City of Palm Desert's (City) Measure A Transportation Fund (Transportation Fund) and degree of the City's compliance with RCTC requirements for the year ended June 30, 2007. It is understood , that this report is only for the information of the management of RCTC for use in evaluating the City's �ompliance with provisions of the Riverside County Transportation Commission Transportation �' Expenditure Plan and Retail Transaction and Use Tax Ordinance (Measure A) that is referred to in the procednres described below. The engagement to apply agreed-upon procedures was performed in � accordance with attestation standards established by the American Institute of Certified Public Accountants. 'The sufficiency of the procedures for the purposes of RCTC is solely the responsibility of RCTC. Consequenfly, we make no representations regarding the sufficiency of the procedures described below } either for the purpose for which this report has been requested or for any other purpose. l Scope of Procedures Performed and FindinQs i Our procedures and findings were as Eollows: 1. Reviewed the 1989 Measure A(Ordinance 88-1)compliance requirements. � � 2. Obtained from RCTC the City's approved Five-Year Capital Improvement Plan (CIP) for the fiscal � year. � � � 3. Obtained from the City a detail general ledger and balance sheet for the fiscal year. J a. Identified the amount of Measure A cash and investments recorded at d1e end of the fiscal year. Observation: The City recorded Measure A cash and investments in the amount of$8,693,953 for the fiscal year ended June 30,2007. b. Identified any amounts due from other funds. Ohsen�ation: The City has not recorded any amounts due from other Eunds for the fiscal year ended June 30,2007. full Prrc('h:tH'�>H(�1-?Llk) 1'�rll f�rcr I'ax:lli(�(,) E�(rU�)1' Oa4land Orange County 5uramento San Dieso l,Yi!Gr.�n�i.4�r..luirc!iG5 �l Cnrpur.ur I'.�rk.�uitr I�N) -„c.impu+Cnmmuns Hd..Suitr?lNl FRSt1 Mcrcun•,tiuitr IU6 11:I�Id11(Ll.IIIIUI'lll.lv-�OIl Ir��inc.Califurma'11(+IK� �;Il'fJfllClllU,(.dll�ii�1111'15µ_>5 �:inl)ic};u.(�.eliti�rma�)1111 � Riverside County Transportation Commission City of Palm Desert IAgreed-Upon Procedures � Page Two r c. Identified any reservations or designations of ending fund balance for the Measure A Fund. I ObservaHon: The City had recorded fund balance as of June 30,2QQ7 as follows: � Reserved for encumbrances $ 733,373 ( Reserved for continuing appropriations 10,277,549 � Unreserved 11,453 $ 11,022,375 � d. Identified as to the existence of any restatement of the Measure A Fund balance. If any, -� inquired of management as to the reason for the restatement. l.� Observation: The City had no restatement of the Measure A Fund balance. � 4. Obtained an operating statement for the Measure A activity for the fiscal year, including budget amounts. � a. Reviewed the revenues in the operating statement. � i. Inquired of management as to what fund was used to record Measure A revenues received from RCTC and identified what the total revenues were for the fiscal year. � Observation; Per the Accounting Technician, Fund #213 is used to record the Measure A revenues received from RCTC. The City had recorded tofial revenues in the amount of$7,280,776 for the fiscal year ended June 30,2007. f�; ii. Obtained from RCTC a listing of Measure A payments to the City. Compared the Measure A sales tax revenues recorded by the City to the listing oE payments made � by RCTC. ' � � Observation: The City recorded the same Measure A sales tax revenues as compared to the listing of payments made by RCTC as follows: City RCTC Measure A $ 2,726,096 � 2,726,096 iii. Obtained from the City an interest allocation schedule for the fiscal year. Identified the amount of interest income allocated to Measure A activity for the fisral year and compared this amount to the amount recorded in the general ledger. Ohservation: "I'he amount of interest income allocated to the Measure A Fund for the fiscal year was�44,714 and agreeci to the amount recorcied in the generaI tedger. b. Reviewed the expenditures in the operating statement. i. ln�uired c>f managemellf as to what funa was usea to re�or�i '�teasure �\ expenditures and what the total expen�iihires were for d1e fiscal year. � Riverside County Transportation Commission � City of Palm Desert Agreed-Upon Procedures Page Three � Obserz�ation: Per the Accounting Technician, Fund #213 is used to record the Measure A expenditures. The City had recorded total expenditures in the amount of � $4,085,052 for the fiscal year ended June 30,2007. ii. Selected expenditures for validation that comprised at least 20% of the total � expenditures. Observation: The City had total expenditures of $4,085,052 of which $3,202,723 I (78.40%)was validated. 1. For the expenditures selected for validation, compared the dollar amount listed on the general ledger to the supporting documentation. C:� Obsert�ation: The expenditures selected for validation agreed Eo the � supporfiing documentation. ( 2. For the expenditures selected for validation, reviewed the 5-Year CIP and � verified if the project was included in the 5-Year CIP and was an allowable I COSt. � Obserr�ation: The expenditures selected for validation were included in the 5- Year CIP and were allowable costs. iu. Inquired of management as to the nature of any transfers recorded in the Measure A � Fund. Obserr�ation:The City did not have any transfers recorded in the Measure A fund. � iv. Inquired of management as to the amount of indirect costs, if any, included in expenditures. ( � �-� Ohservation: The Accounting Technician indicated that there were no indirect costs included in the expenditures. 5. Compared the budgeted eapenditures to actual amounts; inquired of management as to the nature , of significant budget variances. Actua( Budget Variance Construction an�i maintenance $ 4,085,052 $ 20,904,795 $ 16,819,743 Total $ 4,085,052 $ 20,904,795 $ 16,819,743 Uhsemation: 1'here was a significant budget variance in construcdon an�1 maintenance expenditures �iue to some of the budgeted projects not starting because of a scope chanKe and planning obstacles �luring fiscal year 2007. Per the Accounting �Technician, the City had several large projects in the rurrent yt�ar that were not complete�i illlCi are still ungoing. � Riverside County Transportation Commission � City of Palm Desert Agreed-Upon Procedures Page Four � 6. Obtained from RCTC a listing of cities who participate in the Western County or Coachella Valley Transportation Uniform Mitigation Fee(TUMF)programs. � a. If the City is a participant in the TUMF program, selected at Ieast two disbursements for validation as to the amount remitted to the Western Riverside Council of Governments ( (WRCOG) or Coachella Valley Association of Governments(CVAG),as applicable. � Observation: The City appears to be collecting and remitting TUMF fees as required. � b. Indicate the total amount of TUMF fees collected and remitted during the fiscal year. �� Observation: The City colIected TUMF fees totaling $3,082,736 during fiscal year 2007, and � remitted$3,082,736 to CVAG as of June 30,2007. I? 7. Obtained from RCTC the Maintenance of Effort(MOE)base yeaz requirement. � a. Obtained from the City a copy of Schedule 3 from the 2007 Street Report. b. Compared the amount of discretionary funds spent per the Street Report to the MOE base i requirement. Ic. Added any current year MOE excess or deducted any cunent year MOE deficiency to the � prior year carryover. ObservaEion. The City had the following MOE base activity: f 2007 2006 �� Cunent year local discretionary expenditures $ 22,166,290 $ 12,277,593 • Less: Base Year (904,798) (904,798) � ; : ._ Excess of current year expenditures over Base Year 21,261,492 11,372,795 Excess local expenditures at beginning of year 73,272,364 61,899,569 Excess of locai expenditures at end of year $ 94,533,856 $ 73,272,364 We were not engaged to, and did not perform an audit of the City, the objective of which woulci be the expression of an opinion on the elements, accounts, or items specified above. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the use of RCTC and should not be used by those who have not agreed to the procedares and taken responsibility for the sufficiency of the procedures for their purposes. ��.u.: �. �,a*'�- Irvine, California November I-�, 2U07 f � � Exhibit A { City of Palm Desert Summary of Revenues and Expenditures ( For the year ended June 30,2007 1 (unaudited) � Revenues Measure A $ 2,726,096 Interest income 444,714 I Intergovernmental revenues 4,109,966 Total revenues 7,280,776 Cj Expenditures Construction and maintenance 4,085,052 ("� Total expenditures 4,085,052 � � Excess of revenues over expenditures $ 3,195,724 I 1 Note:The above numbers were taken directly from the City's financial records and were not audited. � L� �, ; : . l�i