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INDEPENDENT ACCOUNTANT’S REPORT ON APPLYING AGREED-UPON PROCEDURES OF MEASURE A REVENUES AND EXPENDITURES FOR YEAR ENDED JUNE 30, 2016
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Information item only. No action required.
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Summary
Consistent with Council action on June 28, 2016, the firm of Eadie and Payne, LLP was contracted to complete the Independent Accountant’s Report on Applying Agreed-Upon Procedures of Measures A and B Revenues and Expenditures for the Year Ended June 30, 2016. The Measure A Citizens’ Advisory Committee and the Council Audit Committee had recommended that the City engage another independent auditor to conduct additional audit procedures on uses of Measure A proceeds. These auditing services were in addition to the Comprehensive Annual Financial Report (CAFR) audit and specific to the Measures A and B Supplemental Display in the CAFR. Pursuant to Council action, an additional independent auditor was contracted to perform the services.
The attached report determines that revenues were collected in accordance with Measure A and expenditures were in accordance with Measure B for the year ended June 30, 2016. The agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.
DISCUSSION
Background
As a general sales tax, Measure A proceeds are part of the City’s General Fund. The City Charter (sections 1910 and 1911) requires the City to prepare a CAFR and have an annual audit of all City accounts conducted by an independent firm of certified public accountants. The independent annual audit includes Measure A financial activity and complies with the Measure A ballot language and the Advisory Committee’s charter and by-laws.
In addition to the City’s annual independent audit, the Measure A Citizens’ Advisory Committee requested that the City engage an additional independent auditor to provide audit services to review in more detail, the Measure A financial activities. The Advisory Committee members conveyed that the CAFR did not illustrate the level of detail necessary to fully understand how the Measure A sales tax revenues are used, and how the use compares to the Measure B advisory measure. The Council Audit Committee and City Council supported the request and engaged a second independent audit firm to conduct annual agreed upon procedures to accomplish this additional review. In addition to the audit recommendation, the Advisory Committee also worked with staff to develop a supplemental display to provide a single reference and greater transparency regarding the use of Measure A proceeds. This display was subsequently added to the City’s CAFR starting with the Fiscal Year (FY) 2014-15 report. The recommendations for the additional audit services and the supplemental display were also supported by the Council Audit Committee.
On June 28, 2016, the City Council authorized an agreement for Measure A additional audit services with Eadie and Payne, LLP. These auditing services were to be in addition to the CAFR audit and specific to the Measures A and B Supplemental Display in the CAFR.
Present Situation
Eadie and Payne applied agreed-upon procedures to the City of Stockton’s Measure A revenues and expenditures. The attached report determines that revenues were collected in accordance with Measure A and expenditures were in accordance with Measure B for the year ended June 30, 2016. The agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.
Attachment A - Measure A Independent Accountants Report Year Ended June 30, 2016