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INDEPENDENT ACCOUNTANT’S REPORT ON MEASURE A REVENUES AND EXPENDITURES FOR YEARS ENDED JUNE 30, 2015, AND JUNE 30, 2016
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RECOMMENDATION
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 Years Ended June 30, 2015, and 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 reports determine that revenues were collected in accordance with Measure A and expenditures were in accordance with Measure B for years ended June 30, 2015, and June 30, 2016. The agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The report for the year ended June 30, 2015, was received by the Council Audit Committee on December 12, 2016, and accepted by the City Council on January 24, 2017. The report for the year ended June 30, 2016, was received by the Council Audit Committee on February 9, 2017, and accepted by the City Council on March 7, 2017.
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 review the Measure A financial activities in more detail. The Advisory Committee conveyed that the CAFR did not contain the level of detail necessary to fully understand how the City uses Measure A sales tax revenues, and how the use of those revenues 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 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 2014-15 report. The Council Audit Committee also supported the recommendations for the additional audit services and the supplemental display.
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 reports determine that revenues were collected in accordance with Measure A and expenditures were in accordance with Measure B for the years ended June 30, 2015, and 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, 2015
Attachment B - Measure A Independent Accountants Report Year Ended June 30, 2016