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Home My WebLink AboutRprt - Measure A Trnsprtatn Fund FYE 06-30-2012 X -�.,. 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, 2012 DATE: April 25, 2013 SUBMITTED BY: Paul S. Gibson, Finance Director CONTENTS: Independent Accountants' Report on Agreed-Upon Procedures 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, 2012. Committee Recommendation The Audit, Investment and Finance Committee received the Independent Accountants' Report at their April 23, 2013 meeting, and it was recommended that the report for the fiscal year ended June 30, 2012 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. Macia, Gini & O'Connell, LLP, 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, 2012. 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, 2012. G:\Finance\Niamh Ortega\Staff ReportsWudit staff reportsWudit Staff Reports 2012\SR-Council audit 2012 Measure A.docx Staff Report Approval of Report on Procedures for Measure A Fund for Fiscal Year ended June 30, 2012 April 25, 2013 Page 2 of 2 Fiscal lmpact There is no fiscal impact associated with this action. Submitted by: Approval: aul S. Gibson ohn M. Wohlmuth Finance Director/City Treasurer City Manager C1TY COUNCIL ACTION APPROVED _._Di;NIF.D RECEIVED 9`'�OTHCR MF,ETING DATE - �- a � AYES: ° `f � /�K NOES: N�'nP _ AT3SF.NT: .No�P __� ABSTAIN: ��1 e . _. VE[21FIF.D I3Y: �� - Original on File with Citg� Cfea•�:'s Of'ticc G:\Finance\Niamh Ortega\Staff ReportsWudit staff reports�Audit Staff Reports 2012\SR-Council audit 2012 Measure A.docx Newport Beach 4675 MacArth;..r Court,Suita 600 �ic:wpnrt 3•,a,.'r:,CA 92660 Certi�ied Public Accountants. �a9 22, �0�5 Sacramento Walnut Creek The Board of Commissioners Oakland Riverside County Transportation Commission Riverside,California LA/Century City San Diego Independent Accountant's Report On Applying Agreed-Upon Procedures Seattle 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, California(City), was in compliance with the Measure A Local Streets and Roads Program grant terms and conditions for the year ended June 30, 2012. 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 these 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. Our procedures and findings are as follows: ]. Obtain the 2009 Measure A (Ordinance 02-001) compliance requirements. Western County jurisdictions are required to participate in the Transportation Uniform Mitigation Fee (TUMF) program and in the Multi-Species Habitat Conservation Plan (MSHCP), which are administered by the Western Riverside Council of Governments (WRCOG) and the Western Riverside County Regional Conservation Authority (RCA), respectively. Coachella Valley jurisdictions are required to participate in the TUMF program administered by the Coachella Valley Association of Governments (CVAG). Finding: No exceptions were noted as a result of applying this procedure. The City participates in the TUMF program administered by CVAG. 2. Obtain the City's approved Five-Year Capital Improvement Plan(CIP) from RCTC for the fiscal year ended June 30, 2012. Finding: No exceptions were noted as a result of applying this procedure. 3. Obtain a detailed general ledger and balance sheet from the City for the fiscal year ended June 30,2012. a. Identify the amount of Measure A cash and investments recorded at June 30, 2012. Finding: Measure A cash and investments were$20,972,547 at June 30, 2012. b. ldentify amounts due from other funds. Finding: There were no amounts due from other funds as of June 30, 2012. www.mgo�pacom � c. Identify any levels of constraint of ending fund balance for Measure A activity. Finding: Ending fund balance for Measure A activity was restricted for street related purposes in the amount of$21,425,164 at June 30, 2012. d. Identify the existence of any restatement of Measure A fund balance and inquire of management as to the reason for any restatement. Finding: We noted no restatement of Measure A fund balance at June 30, 2011. 4. Obtain an operating statement for Measure A activity for the fiscal year ended June 30,2012 (see Exhibit A), including budget amounts. a. Review the revenues in the operating statement. i. Inquire of management as to what fund was used to record Measure A revenues received from RCTC and document total revenues for the fiscal year ended June 30,2012. Finding: The City accounts for Measure A revenues in its Measure A Fund (Fund #213). The City recorded total revenues in the amount of$3,146,265 for the fiscal year ended June 30,2012,which includes reimbursement from other agencies of$760,244 and interest income of$87,034. ii. Obtain a listing of Measure A payments made from RCTC to the City. Compare the Measure A revenues recorded by the City to the listing of payments made by RCTC. Finding: We identified a variance of$63,332 between the Measure A revenues recorded by the City and the RCTC Measure A payment schedule. The difference is due to a fiscal year 2011 adjustment from RCTC, in the amount of$63,332, recorded by the City in fiscal year 2012. The following schedule summarizes these differences. City of � RCTC Palm Desert Measure A revenue recorded $ 2,235,655 $ 2,298,987 2011 clean-up payment - (63,332) Measure A revenue reconciled $ 2,235,655 $ 2,235,655 iii. Determine the amount of interest allocated to Measure A activity for the fiscal year ended June 30, 2012. Finding: The City allocated interest in the amount of$87,034 to Measure A activity for the fiscal year ended June 30, 2012. b. Review the expenditures in the operating statement. i. Inquire of management as to what fund is used to record Measure A expenditures and document total expenditures for the fiscal year ended June 30, 2012. � Finding: The City accounts for Measure A expenditures in its Measure A Fund(Fund#213). The City recorded total Measure A expenditures in the amount of$2,082,693 for the fiscal year ended June 30, 2012. ii. Select expenditures for testing that comprise at least 20%of total Measure A expenditures. Finding: The City recorded Measure A expenditures in the amount of $2,082,693. We selected$1,l 16,095, or 53.6%, for testing. 1. For the expenditures selected for testing, compare the dollar amount recorded in the general ledger to the supporting documentation. Finding: No exceptions were noted as a result of applying this procedure. 2. For the expenditures selected for testing, review the Five-Year CIP and note whether the projects claimed were included in the Five-Year CIP and whether they constitute allowable costs. Finding: The expenditures selected for testing were included in the Five-Year CIP and were allowable costs. No exceptions were noted as a result of applying this procedure. iii. Inquire of management as to the nature of any transfers recorded in the Measure A Fund. Finding: We noted no transfers in the Measure A Fund for the fiscal year ended June 30, 2012. iv. Inquire of management as to the amount of indirect costs, if any, included in expenditures. Finding: Per discussion with City management, no indirect costs were allocated to the Measure A Fund for the fiscal year ended June 30,2012. 5. Compare budgeted expenditures to actual amounts and inquire of management as to the nature of significant variances. Finding: The following schedule compares budgeted expenditures to actual amounts. Budget Actual Variance Construction and Maintenance $ 21,987,754 $ 2,082,693 $ 19,905,061 Per discussion with City management, the variance in construction and maintenance was due to projects that were not started or were in the beginning stages of construction at year end June 30, 2012. 6. Obtain from RCTC a listing of jurisdictions that participate in the Western County or Coachella Valley TUMF programs. a. If the jurisdiction is a participant in the TUMF program, select at least one disbursement for validation as to the amount remitted to WRCOG or CVAG, as applicable. 3 Finding: We selected one disbursement in the amount of $67,298. The payment selected for testing indicated that TUMF is collected and remitted to CVAG, as required. b. Indicate the total amount of TUMF fees collected and remitted during the fiscal year ended June 30, 2012. Finding: The total amount of TUMF fees collected and remitted during the fiscal year ended June 30,2012, was$171,564. 7. Obtain from RCTC a listing of jurisdictions that participate in the Western County MSHCP program. a. [f the jurisdiction is a participant in the Western County MSHCP program, select at least one disbursement for validation as to the amount remitted to RCA. Finding: The City is not a participant in the Western County MSHCP program. b. Inquire of management as to the existence of fees collected in prior years that were not remitted to RCA by the end of this fiscal year. Finding: The City is not a participant in the Western County MSHCP program. c. Indicate the total amount of Western County MSHCP fees collected and remitted during the fiscal year. Finding: The City is not a participant in the Western County MSHCP program. 8. Obtain from RCTC the Maintenance of Effort(MOE) base year requirement, including its supporting detail calculations for the City,and the carryover amount allowed as of July 1,2011. a. Obtain from the City a calculation of its current year MOE amount in a format similar to its base year calculation. See Exhibit B. Finding: No exceptions were noted as a result of applying this procedure. b. Compare the amount of current year MOE expenditures to the MOE base requirement. Finding: We noted that current year MOE expenditures were greater than the MOE base requirement. c. If the amount of discretionary funds spent is less than the MOE base requirement (MOE deficiency), determine the amount of any prior year MOE carryover using the information obtained from RCTC, and reduce the MOE deficiency by any available MOE carryover to determine an adjusted current year expenditure amount. Finding: No exceptions were noted as a result of applying this procedure. The City's discretionary funds spent in the fiscal year ended June 30, 2012, exceed the MOE base year requirement. The City's MOE carryover at June 30,2012, is calculated as follows: 4 MOE excess at July l,2011 $ 4,796,292 Current year MOE expenditures 2,428,610 Less:MOE base year requirement (2,398,146) Excess MOE for fiscal year ended June 30,2012 30,464 MOE excess at June 30,2012 $ 4,826,756 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 Board of Commissioners of RCTC and the City of Palm Desert and is not intended to be, and should not be, used by anyone other than these specified parties. I c/.`:,•�•t, ( D ' LL� Newport Beach, California April 1 l,2013 5 Exhibit A CITY OF PALM DESERT Measure A Operating Statements For the Fiscal Year Ended June 30,2012 (Unaudited) Revenues: Budget Actual Variance Measure A $ 1,913,000 $ 2,298,987 $ 385,987 ReQnbursements from other agencies 12,170,500 760,244 (11,410,256) Interest income 200,000 87,034 (112,966) Total revenues 14,283,500 3,146,265 (11,137,235) Expenditures: Construction and maintenance 21,987,754 2,082,693 19,905,061 Excess (deficiency)of revenues over(under)expenditures $ (7,704,254) $ 1,063,572 $ 8,767,826 6 m � r N Lii O � 0 J� � U � � m � L � �y C W pe� 6 r 3 0 � � � d N � O � N C O F .L "� a � � ' � y y� � U q y � O � M t�+t P N K N N o0 � ? r � d � t��l t�; 0�0 � r � V n V � ^ �O � � p O P P T h t'i �D � O O 1� �O -� O 1� 1� O V -+ N o0 N N o0 N �O a �.7 fcl 9 9 �: 1 N �� n vi ' 1�— � t� � O o0 0o C ae � o oG oy 0o aG O � � �' � w N M� r � � N � N � O � � � b O �O O M M � Y � ? a �l� a � O h� N N 0 V }i 7 u C O u � r � v" � w w vi n sv b, � fa 9 a 0 9 0 � � u � u o � � • o • 9 � '� � � � y � o °° �� M '3 �� r � 0� 41 Q' i� Q � r y �: ��" [L O � 6 � � � � b � � H eo � q � � � o a � V � � M � N � Q � � A � Q C o �y =' Q N � � a 2 � 2 N r N � p .9 C� o N � � C] �•, � o � a C � u' t� Q � 7 r1 4' � � . i C V v ' �' `'�' "� C] �n n p � m V' o � � '� � � � a N p � � 9 � � � � 9 Q � > � �` v0 0 � � Q � h 'n E � +�� ? 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