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Home My WebLink AboutRPRT Agreed-upon Procedures on Measure "A" Trnsprtatn Fund FYE 06/30/2009 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, 2009 DATE: February 11, 2010 SUBMITTED BY: Paul S. Gibson, Finance Director CONTENTS: Independent Accountants' Report on Agreed-Upon Procedures Performed on the Measure A Transportation Fund for the Fiscal Year Ended June 30, 2009 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, 2009. Committee Recommendation The Audit, Investment and Finance Committee received the Independent Accountants' Report at their January 26, 2010 meeting, and it was recommended that the report for the fiscal year ended June 30, 2009 be received and filed by the City Council. Backqround 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. Mayer Hoffman McCann PC, 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, 2009. Staff requests that the 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, 2009. G:\Finance\Niamh Ortega\Staff Reports�Audit staff reports\Audit Staff Reports 2009\SR-Council audit Measure A �(1(19 rinrx Staff Report Approval of Report on Procedures for Measure A Fund for Fiscal Year ended June 30, 2009 February 11, 2010 Page 2 of 2 Fiscal impact There is no fiscal impact associated with this action. Submitted by: Approval: � , Paul S. Gibson, Finance Director/City Treasurer J n M. Wohlmuth, City Manager CITY COUNC[L ACTION API'ROVED i)F.NiF,D RECEIVED �F`�� OTFiCR MF.F,TING DATE - -�C'�C) AYES: ��S " c (�SC� e �_� %� NOES: iV r,/l�' AI3SI�,NT: �� ARSTAIi'�: ��1 V6�:it11'Id;1) 13Y: /� +�)rigin��l on Fi1e with City Cierk's Oftice r�\Finanro\Ni�mh(lrtena\Rf�ff Ronnrte\Anrli4 e4�ff ronnhc\C�vii#.Ct�ff Rennrte 9f1(1Q\RR_(:n�inril mifli4 Me�cnro n�nno,�„�� . 1 ; � �.1 ..1 � � � CITY OF PALM DESERT, CALIFORNIA Report on Agreed-Upon Procedures � Applied to the Measure A Local Streets and Roads Program "l Year Ended June 30, 2009 J 1 � , � � � d � � t 1 l � Mayer Hoffman McCann P.C. An Independent CPA Firm ! 2301 Dupont Drive, Suite 200 Irvine, California 92612 949-4742020 ph � 949-2635520 fx www.mhm-pc.com �� Board of Commissioners Riverside County Transportation Commission Riverside, California 1 '� INDEPENDENT ACCOUNTANTS' REPORT � ON APPLYING AGREED-UPON PROCEDURES � We have performed the procedures enumerated below, which were agreed to by the Riverside County Transportation Commission (RCTC), solely to assist RCTC in determining whether the City of Palm Desert, Califomia (City) was in compliance with the Measure A Local Street and � Roads Program grant terms and conditions for the year ended June 30, 2009. The City's management is responsible for the accounting records. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the � American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of those parties specified in the report. Consequently, we make no representation regarding the sufficiency of the procedures described below, either for the + purpose for which this report has been requested or for any other purpose. J The procedures performed and the results of those procedures were as follows: J1. We reviewed the 1989 Measure A (Ordinance 88-1) compliance requirements. Although the 2009 Measure A (Ordinance 02-001) is not effective until July 1, 2009, � Western County jurisdietions are required to participate in the Transportation Uniform Mitigation Fee (TUMF) program, which is administered by the Westem Riverside Council of Governments (WRCOG). � Results: No exceptions were noted as a result of our procedures. �l 2. We obtained the City's approved Five-Year Capital Improvement Plan (CIP) from � RCTC for the fiscal year ended June 30, 2009. � Results: No exceptions we�e noted as a result of our procedures. � 3. We obtained a detailed general ledger and balance sheet from the City for the fiscal year ended June 30, 2009. 1 a. We identified the amount of Measure A cash and investments recorded at June 30, 2009. I 1 � � Board of Commissioners Riverside County Transportation Commission } Riverside, California � Results: The City recorded Measure A cash and investments in the amount of l $14,946,789 as of June 30, 2009. J b. We identified amounts due from other funds. lResults: There were no amounts due from other funds as of June 30, 2009. c. We identified reservations or designations of ending fund balance for the ( Measure A activity. ) Results: The City has recorded the following fund balances related to � Measure A activity as of June 30, 2009. � Reserved for encumbrances $ 500,705 �R Reserved for continuing appropriations 13,807,142 Unreserved 872.597 Total fund balance $ 5.180.444 � d. We identified the existence of any restatement of Measure A fund balance and � inquired of management as to the reason for any restatement. Results: The City has not restated Measure A fund balance. � 4. We obtained an operating statement for Measure A activity for the fiscal year ended June 30, 2009 (see Exhibit A), including budget amounts. _1 a. We reviewed the revenues in the operating statement. '� i. We inquired of management as to what fund is used to record Measure ,� A revenues received from RCTC for the fiscal year ended June 30, 2009, and documented what the total revenues were for the fiscal year ended June 30, 2009. � Results: The Cit accounts for Measure A revenue received from Y � RCTC in its Measure A Fund (Fund #213). The City has reco�ded total revenues in the amount of $2,433,714 f�r the fiscal year ended June 30, 2009. 1 ii. We obtained a listing of Measure A payments made from RCTC to the City. We compared the Measure A revenue recorded by the City to the listing of payments made by RCTC. 1 Results: No exceptions were noted as a result of our procedures. � iii. We determined the amount of interest allocated to the Measure A activity for the fiscal year ended June 30, 2009. ( 2 ( Board of Commissioners Riverside County Transportation Commission lRiverside, California Results: The City allocated interest in the amount of $346,388 to the � Measure A activity for the fiscal year ended June 30, 2009. b. We reviewed the expenditures in the operating statement. � i. We inquired of management as to what fund is used to record Measure A expenditures and what the total expenditures we�e for the fiscal year ended June 30, 2009. � Results: The City accounts for Measure A expenditures in its Measure A Fund (Fund #213). The City has recorded total Measure A ,l expenditures in the amount of $1,237,512 for the fiscal year ended ,,.1 June 30, 2009. � ii. We judgmentally selected at least 20% of total Measure A expenditures for testing. � Results: The City recorded Measure A expenditures in the amount of $1,237,512. We selected $376,817 (30.45%) fortesting. � 1. For the expenditures selected for testing, we compared the dollar amount recorded in the general ledger to the supporting documentation. l Results: No exceptions were noted as a result of our procedures. 1 2. For the expenditures selected for testing, we reviewed the 5-Year .l CIP and noted whether the projects claimed were included in the J 5-Year CIP and whether they constitute allowable costs. Results: The expenditures selected for testing were included in j� the 5-year CIP and were allowable costs. No exceptions were noted as a result of our procedures. � iii. We inquired of management as to the nature of any transfers recorded in the Measure A Fund. lResults: Per discussion with rrtanagement and review of the general ledger, there were no transfers recorded for the fiscal year ended June 30, 2009. � iv. We inquired of management as to the amount of indirect costs, if any, included in expenditures. lResults: Per discussion with management and review of the general ledger, there were no indirect costs recorded for the fiscal year ended 1 June 30, 2009. I 3 I ( Board of Commissioners Riverside County Transportation Commission iRiverside, California 5. We compared the budgeted expenditures to actual amounts and inquired of � management as to the nature of significant budget variances. � Results: The following schedule compares the budgeted expenditures to actual ...� amounts. � BudQet Actual Variance Construction and maintenance $22.976.661 $1.237.512 $21,739,149 J Totals $22.976.661 $1�� $ 1.739•149 � The variance in construction and maintenance was due to projects not being started during the audit period due to delays in environmental documentation and approval from Caltrans, citizen concems and sound study concems. � 6. We obtained a listing of jurisdictions who participate in the Western County or � Coachella Valley TUMF programs from RCTC. a. If the jurisdiction is a participant in the TUMF program, we selected at least � two disbursements for validation as to the amount remitted to WRCOG or Coachella Valley Association of Govemments (CVAG), as applicable. Results: The payments selected for testing indicated that TUMF is collected ( and remitted to CVAG, as required. � b. We noted the total amount of TUMF fees collected and remitted during the I fiscal year. J Results: The total amount of TUMF fees collected and remitted during the � fiscal year was $944,947. � 7. We obtained the maintenance of effort (MOE) base year requirement from RCTC. a. We obtained a copy of schedule 3 from the annual Street Report. � Results: No exceptions were noted as a result of our procedures. b. We compared the amount of discretionary funds spent per the Street Report to Ithe MOE base requirement. Results: No exceptions were noted as a result of our procedures. Jc. Using the prior years' report, we added any current year MOE excess or deducted any cuRent year MOE deficiency to the prior year carryover. CResults: MOE activity is summarized as follows: I 4 IBoard of Commissioners Riverside County Transportation Commission IRiverside, California MOE excess at July 1, 2008 $112,150,179 , Current year local discretionary expenditures 4,523,649 Less MOE base year requirement gp4,7gg � Excess MOE fo�fiscal year ended June 30, 2009 3,618.851 MOE excess at June 30, 2009 $115.769.030 1 We were not engaged to, and did not, conduct an audit, the objective of which would be the �� expression of an opinion on the accounting records. 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 information and use of the Riverside County Transportation Commission and is not intended to be and should not be used by anyone other � than this specified party. � t�,,�.—. t�` c�..— �.c . � `"�,," J Irvine, California October 20, 2009 � �S � I I 1 l I 5 I ' ' • � EXHIBIT A I CITY OF PALM DESERT, CALIFORNIA Summary of Revenues and Expenditures I Year Ended June 30, 2009 (Unaudited) i Budget Actual Variance lRevenues: Measure A $ 2,995,000 $ 1,958,640 $ (1,036,360) 4� Reimbursements from other agencies 8,651,251 128,686 (8,522,565) Interest 342,000 346,388 4,388 � Total revenues 11,988,251 2,433,714 (9,554,537) Expenditures: ' Construction and maintenance 22,976,661 1,237,512 21,739,149 ��l � Total expenditures 22,976,661 1,237,512 21,739,149 Excess (deficiency) of revenues over j (under) expenditures $ (10,988,410) $ 1,196,202 $ 12,184,612 � � Note: The above numbers were taken directly from the financial records of the City of Palm � Desert and were not audited. � � 1 I i 6