HomeMy WebLinkAboutReport - Measure A Trnsprtatn Fund FYE 06-30-2013 CITY OF PALM DESERT ���
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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,
2013
DATE: February 27, 2014
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, 2013.
Committee Recommendation
The Audit, Investment and Finance Committee received the Independent Accountants' Report at
their January 28, 2014 meeting, and it was recommended that the report for the fiscal year ended
June 30, 2013 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, 2013.
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, 2013.
G:\Finance\Niamh Ortega\Staff Reports�Audit staff reportsWudit Staff Reports 2013\SR-Council audit 2013 Measure A.docx
Staff Report
Approval of Report on Procedures for Measure A Fund for Fiscal Year ended June 30, 2013
February 27, 2014
Page 2 of 2
Fiscal Impact
There is no fiscal impact associated with this action.
Submitted by: Approval:
P I . Gibson ohn M. Wohlmuth
Finance Director/City Treasurer City Manager
CITY COUNCILACTION
APPROVED � 1)�M�D
RCCEIVED � C��� OTHCR
MEETING DATE ���'�
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ABSENT:L�S?12�.,_
ABSTAIN: ' '�
VERIFIED BY: �
Original on File with City Clerk's ffico
G:\Finance\Niamh Ortega\Staff ReportsWudit staff reports�Audit Staff Reports 2013\SR-Council audit 2013 Measure A.docx
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Sacramento
Walnut Creek
Independent Accountant's Report o�kiand
On Applying Agreed-Upon Procedures
LA/Century City
The Board of Commissioners San Diego
Riverside County Transportation Commission
Riverside, California sv�t`iP
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, 2013. 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:
1. 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, 2013.
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, 2013.
a. Identify the amount of Measure A cash and investments recorded at June 30, 2013. Compare
amount to Measure A fund balance and provide an explanation for any difference greater than
25% of fund balance.
Finding: Measure A cash and investments were $23,204,998 at June 30, 2013. The difference
between Measure A cash and investments of $23,204,998 and fund balance of $22,986,048 is
$218,950 or 0.95%.
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b. Identify amounts due from other funds.
Finding: There were no amounts due from other funds as of June 30, 2013.
c. Identify the components of ending fund balance for Measure A activity.
Finding: The Measure A fund balance as of June 30, 2013 was $22,986,048 and is
comprised of: (a) unassigned fund balance of $18,686,227; and (b) restricted fund
balance of$4,299,821.
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, 2012.
4. Obtain an operating statement for Measure A activity for the fiscal year ended June 30, 2013 (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, 2013.
Finding: The City accounts for Measure A revenues in its Measure A Fund (Fund #213).
The City recorded total revenues in the amount of$2,600,270 for the fiscal year ended June
30, 2013, which includes $66,369 of federal grants, $63,742 reimbursements from other
agencies, and $17,075 investment income.
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$68,827 between the Measure A revenues recorded by
the City and the RCTC Measure A payment schedule. The difference is due to a fiscal year
2013 adjustment from RCTC, in the amount of$68,827, recorded by the City in fiscal year
2014. The following schedule summarizes this difference.
City of
RCTC Palm Desert
Measure A revenue recorded $ 2,521,911 $ 2,453,084
2013 clean up adjustment - 68,827
Measure A revenue reconciled $ 2,521,911 $ 2,521,911
iii. Determine the amount of interest allocated to Measure A activity for the fiscal year ended
June 30, 2013.
Finding: The City allocated interest in the amount of$17,075 to Measure A activity for the
fiscal year ended June 30, 2013.
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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, 2013.
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$1,039,386 for the fiscal
year ended June 30, 2013.
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 $1,039,386. We
selected $683,278 or 65.74%, 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,
2013.
iv. Inquire of management as to the amount of indirect costs, if any, included in expenditures. If
indirect costs exceed 8% of Measure A revenue, inquire of management as to the basis for
indirect costs charged to Measure A.
Finding: Per discussion with City management, no indirect costs were allocated to the
Measure A Fund for the fiscal year ended June 30, 2013.
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 $ 19,618,347 $ 1,039,386 $ 18,578,961
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Per discussion with City management, the variance in construction and maintenance was due to
projects that were either not started or were in the beginning stages at year end June 30, 2013.
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.
Finding: We selected one disbursement in the amount of $145,526. 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, 2013.
Finding: The total amount of TUMF fees collected and remitted during the fiscal year ended
June 30, 2013, was $408,954.
7. Obtain from RCTC a listing of jurisdictions that participate in the Western County MSHCP program.
a. If 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, 2012.
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 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. Compare the amount of current year MOE expenditures to the MOE base requirement and add
any excess to, or subtract any deficiency from the carryover amount.
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Finding: We noted that current year MOE expenditures of $2,408,162 were greater than the
MOE base requirement of$2,398,146 resulting to an excess MOE of$10,016 for the fiscal year
ended June 30, 2013.
d. 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, 2013, exceeded the MOE base year
requirement. The City's MOE carryover at June 30, 2013, is calculated as follows:
MOE excess at July 1, 2012 $ 4,826,756
Current year MOE expend'rtures 2,408,162
Less: MOE base year requirement (2,398,146)
Excess MOE for fiscal year ended June 30, 2013 10,016
MOE excess at June 30, 2013 $ 4,836,772
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.
1d,c.,�.c: � C../ r L�-�
Newport Beach, California
January 10, 2014
5
Exhibit A
CITY OF PALM DESERT
Measure A Operating Statements
For the Fiscal Year Ended June 30,2013
(Unaudited)
Revenues: Budget Actual Variance
Measure A $ 2,050,000 $ 2,453,084 $ 403,084
Federal grants 2,695,700 66,369 (2,629,331)
State grants 69,000 - (69,000)
Reimbursements from other agencies 2,870,000 63,742 (2,806,258)
Investment income 125,000 17,075 (107,925)
Total revenues 7,809,700 2,600,270 (5,209,430)
Expend'rtures:
Construction and maintenance 19,618,347 1,039,386 18,578,961
Excess (deficiency)of revenues
over(under) expenditures $ (11,808,647) $ 1,560,884 $ (23,788,391)
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