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ACCEPT BY MOTION THE INDEPENDENT ACCOUNTANT’S REPORT ON APPLYING AGREED-UPON PROCEDURES OF MEASURES A AND B REVENUES AND EXPENDITURES FOR YEAR ENDED JUNE 30, 2018
recommended action
RECOMMENDATION
It is recommended that the City Council accept by motion the Independent Accountant’s Report on Applying Agreed-Upon Procedures of Measures A and B Revenues and Expenditures for the Year Ended June 30, 2018.
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Summary
The attached report determines that revenues were collected in accordance with Measure A and expenditures were made in accordance with Measure B for the year ended June 30, 2018 (Attachment A). The agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The Council Audit Committee received and reviewed the Report on January 22, 2019.
Consistent with Council direction on June 28, 2016, the City contracted with the firm of Eadie and Payne, LLP to complete the Independent Accountant’s Report on Applying Agreed-Upon Procedures of Measures A and B for the Year Ended June 30, 2018. The additional audit procedures were procured to determine if revenues were collected in accordance with Measure A and expenditures were made in accordance with Measure B. These auditing services are in addition to the Comprehensive Annual Financial Report (CAFR) audit and ongoing review by the Measure A Citizens’ Advisory Committee. The additional auditing services were specific to the Measures A and B Supplemental Display in the CAFR.
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 members also worked with staff to develop a supplemental display for the CAFR that provides a consolidated display of Measure A sales tax revenues and compares expenditures to the Measure B advisory measure. The Council Audit Committee also recommended and City Council approved the supplemental display and approved contracting with a second independent audit firm to conduct annual agreed-upon procedures. The supplemental display provides a single reference and greater transparency regarding the use of Measure A proceeds. This display was added to the City’s CAFR starting with the Fiscal Year 2014-15 report.
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 Measures A and B revenues and expenditures. The attached report determines that revenues were collected in accordance with Measure A and expenditures were made in accordance with Measure B for the year ended June 30, 2018. The agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.
FINANCIAL SUMMARY
There is no financial impact associated with accepting this item.
Attachment A - Measure A Independent Accountants Report Year Ended June 30, 2018