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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, 2023
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RECOMMENDATION
It is recommended that the Audit Committee 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, 2023 (Attachment A).
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Summary
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, 2023. 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 an Annual Comprehensive Financial Report (ACFR) 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 ACFR did not illustrate the level of detail necessary to fully understand how the City uses Measure A sales tax revenues, and how those uses compare 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 ACFR starting with the Fiscal Year (FY) 2014-15 report. The Council Audit Committee also supported the recommendations for the additional audit services and the supplemental display.
On March 23, 2020, the City Council authorized an agreement for Measure A additional audit services with The Pun Group, LLP. These auditing services were to be in addition to the ACFR audit and specific to the Measures A and B Supplemental Display in the ACFR.
Present Situation
The Pun Group 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 in accordance with Measure B for the year ended June 30, 2023. The agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.
Once accepted, staff will submit this report to the City Council for the March 19, 2024 meeting.
FINANCIAL SUMMARY
There is no financial impact associated with accepting this item.
Attachment A - Measure A Independent Accountants Report Year Ended June 30, 2023.