Loading...
HomeMy WebLinkAbout2004-01-13 - AGENDA REPORTS - ANNUAL FIN RPT MGMT LETTER (2)CONSENT CALENDAR DATE: SUBJECT: DEPARTMENT: Agenda Item:_ CITY OF SANTA CLARITA AGENDA REPORT City Manager Approval: Item to be presented by: January 13, 2004 Barbara Boswell JUNE 30, 2003 COMPREHENSIVE ANNUAL FINANCIAL REPORT AND MANAGEMENT LETTER Administrative Services RECOMMENDED ACTION Receive Comprehensive Annual Financial Report and the Management Letter for Fiscal Year Ended June 30, 2003. BACKGROUND The City's independent audit firm, Diehl, Evans and Company, has completed the City's annual audit for fiscal year ending June 30, 2003. Diehl, Evans and Company conducted the audit in accordance with generally accepted auditing standards, whereby an audit plan was prepared and followed to obtain reasonable assurance that the City's financial statements were free from material misstatements. The audit included a review, on a test basis, of documents supporting the amounts and disclosures in the financial statements. The audit also included assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. No significant findings were noted as a result of the audit. Based on the audit performed, Diehl, Evans and Company issued an unqualified audit opinion letter. This opinion reflects the best level of opinion an organization can receive on its financial statements. This letter is identified as the "Independent Auditors' Report" in the City's Comprehensive Annual Financial Report for FYE June 30, 2003. The Management Letter is prepared as part of Diehl, Evans and Company's annual audit to identify and communicate areas that are viewed as potential areas for improvement in the City's Internal Controls. All items in the Letter are considered insignificant to affect the current audit. Staff is currently working to improve these areas of concern. RECEIVED ALTERNATIVE ACTIONS No feasible alternative action has been identified by staff. FISCAL IMPACT None. ATTACHMENTS Comprehensive Annual Financial Report available in the City Clerk's Reading File Management Letter available in the City Clerk's Reading File ©DIEHL, EVANS & COMPANY, LLP CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS 2121 ALTON PARKWAY, SUITE 100 IRVINE, CALIFORNIA 926064906 (949) 399-0600 • FAX (949) 399-0610 www.diehlevms.wm August 29, 2003 City Council City of Santa Clarita Santa Clarita, California MICHAEL R. LUDIN, CPA CRAIG W. SPRAKEIL CPA NITIN P. PATEL, CPA ROBERT I. CALLANAN, CPA •PHILIP H. HOLTKAMP, CPA 'THOMAS M. PERLOWSKI, CPA 'HARVEY I. SCHROEDEK CPA 'A PROFESSIONAL CORPORATION In planning and performing our audit of the financial statements of the City of Santa Clarita for the year ended June 30, 2003, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole and we do not express such an opinion. The management of the City of Santa Clarita is responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of a system are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly. During our audit, we noted certain matters involving the internal control structure and its operation that we wish to call to your attention. These matters are set forth below, together with our recommendations for improvement. AUTHORIZED SIGNERS We noted that the former Administrative Services Director was still listed as an authorized signer on certain bank and investment accounts subsequent to his departure. We recommend that the City establish procedures to ensure the timely removal of the names of departing employees listed as authorized signers on the City's bank and investment accounts in order to prevent the occurrence of any unauthorized transactions. OTHER OFFICES AT: 2965 ROOSEVELT STREET 613 W. VALLEY PARKWAY, SUITE 330 CARLSBAD, CALIFORNIA 92008-2389 ESCONDIDO, CALIFORNIA 92025-2598 (760)729-2343' FAX (760) 729-2234 (760)741-3141• FAX (760) 741-9890 GRANT REPORTING During our review of the Workforce Investment Act grant and the Office of Criminal Justice Program grant, we noted that certain reports were not filed in a timely manner due to employee turnover. We recommend the City implement procedures that will identify the due date of reports and the individuals responsible for preparing and signing the reports. This will assist the City in meeting reporting deadlines even in the event of employee turnover. These conditions were considered in determining the nature, timing and extent of the audit tests to be applied in our audit of the City of Santa Clarita's financial statements and this letter does not affect our report on these financial statements dated August 29, 2003. This letter is intended solely for the information and use of the City Council and management of the City of Santa Clarita and is not intended to be, and should not be, used by anyone other than these specified parties. -2-