HomeMy WebLinkAbout19C - ANNUAL FINANCIAL RPTREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JANUARY 17, 2017
TITLE:
COMPREHENSIVE ANNUAL
FINANCIAL REPORT FOR
THE FISCAL YEAR -ENDED
JUNE 30, 2016
{STRATEGIC PLAN NO. 4, 1}
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
r_1=090=19
❑ As Recommended
❑ As Amended
❑ Ordinance on 181 Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO ac a
FILE NUMBER %i °L&I f
Receive and file the following audited and separately issued reports for Fiscal Year Ended June
30, 2016:
1. Comprehensive Annual Financial Report
2. South Coast Air Quality Management District (SCAQMD)
3. Appropriations Limit (GANN Limit)
4. Compliance with the Statement of Investment Policy
DISCUSSION
The Finance and Management Services
the lead on various audit and separately
Independent Auditor, White Nelson Diehl
reports and related status.
AUDITED REPORTS:
Agency - Accounting Division (Accounting Division) is
issued reports compiled and prepared by the City's
Evans LLP (WNDE). Outlined below is a list of the
Comprehensive Annual Financial Report (Exhibit 1)
The Comprehensive Annual Financial Report (CAFR), prepared by the Accounting Division
reports audited financial information on all City funds for the Fiscal Year ended June 30, 2016.
The CAFR is prepared in accordance with the Generally Accepted Accounting Principles along
with the reporting requirements set forth by the Governmental Accounting Standards Board.
The CAFR was audited by the City's independent public accounting firm, WNDE, in accordance
with Government Auditing Standards (GAS). WNDE was awarded a contract by the City Council
on May 3, 2016 after successful completion of the City's Request for Proposal (RFP) process.
19C -1
Comprehensive Annual Financial Report for the Fiscal Year - Ending June 30, 2016
January 17, 2017
Page 2
• Accounting Division is pleased to report that that the City received an unmodified opinion;
commonly known as a clean opinion, which is considered the most favorable conclusion
for the Audit. The unmodified opinion indicates that the City's financial statements present
fairly, in all material respects, the financial position of the City, changes in financial
position, and cash flows for the fiscal year ended June 30, 2016.
Audit of the City's South Coast Air Quality Management District (SCAQMD) financial statements
Exhibit 2
Under Assembly Bill 2766 Chapter 1705 [California Health and Safety Code (CHSC) Sections
44220 through 442471, cities and counties receiving the AB 2766 funds are required to separately
account for the revenue and to expend the revenue for air pollution reduction measures. The
SCAQMD audit report reflects the City's compliance to such measures.
• Accounting Division is pleased to report that the City received an unmodified opinion on
the SCAQMD audit report and no compliance findings were noted.
SEPARATELY ISSUED REPORTS:
In addition to the CAM and the SCAQMD reports, WNDE performed the following Agreed Upon
Procedures (AUP) examinations:
Appropriations Limit calculations, also known as GANN Limit (Exhibit 3)
The GANN limit established the appropriations limit on expenditures for publicly funded programs
in accordance with Section 1 of Article XIII of the California Constitution. Accounting Division is
pleased to report that no findings were noted as a result of this AUP review.
City's compliance with the Statement of Investment Policy (Exhibit 4)
The report on the City's Investment Policy is elected to be performed by the City to ensure
compliance.
• Accounting Division is pleased to report that no findings were noted as a result of this AUP
review.
The CAM is posted and available on the City's website. In addition, FMSA submitted the report
to the Government Finance Officers Association's Certificates of Achievement for Excellence in
Financial Reporting Program. This award is the highest form of recognition in governmental
accounting and financial reporting. The City has received this prestigious award for thirty eight
consecutive years.
19C -2
Comprehensive Annual Financial Report for the Fiscal Year - Ending June 30, 2016
January 17, 2017
Page 3
STRATEGIC PLAN ALIGNMENT
Approval of this item allows the City to meet Goal #4 - City Financial Stability, Objective #1
(maintain a stable, efficient, and transparent financial environment).
FISCAL IMPACT
There is no fiscal impact associated with this action.
Francisco Gutierrez
Executive Director
Finance and Management Services Agency
Exhibits: 1. Comprehensive Annual Financial Report (CAFR)
2. South Coast Air Quality Management District (SCAQMD) Report
3. GANN Limit Agreed -Upon Procedures Report
4. Investment Policy Agreed -Upon Procedures Report
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EXHIBIT 1
The Comprehensive Annual Financial Report CAFR) for the Fiscal Year ended June
30, 2016 is available on the City's website:
http: / /www.ci.santa- ana.ca.us /finance /cafr /documents /2016 cafr.pdf
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EXHIBIT 2
CITY OF SANTA ANA, CALIFORNIA
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND
FINANCIAL STATEMENTS
WITH REPORT ON AUDIT
BYINDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
FOR THE YEAR ENDED JUNE 30, 2016
19C -7
CITY OF SANTAANA, CALIFORNIA
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND
TABLE OF CONTENTS
For the year ended June 30, 2016
Page
Number
Independent Auditors' Report
Financial Statements:
Balance Sheet
Statement of Revenues, Expenditures and Changes in Fund ,Balance
Notes to Financial Statements
Required Supplementary Information: 10
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual 11
Independent Auditors' Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
19C -8
12
INDEPENDENT AUDITORS' REPORT
The Honorable Mayor and
Members of the City Council
of the City of Santa Ana
Santa Ana, California
Report on the Financial Statements
We have audited the accompanying financial statements of the Air Quality Improvement Special
Revenue Fund (AQMD) of the City of Santa Ana, California (the City), as of and for the year ended
June 30, 2016, and the related notes to the financial statements, as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditors consider internal control relevant to the City's
preparation and fair presentation of the AQMD's financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
-1-
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in 1;9CiL(.6w Diego Counties
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Air Quality Improvement Special Revenue Fund of the City of Santa Ana,
California as of June 30, 2016, and the changes in financial position thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Air Quality Improvement Special
Revenue Fund and do not purport to, and do not present fairly the financial position of the City of
Santa Ana, California, as of June 30, 2016, and the changes in its financial position for the year then
ended in accordance with accounting principles generally accepted in the United States of America.
Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Statement of
Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, identified as Required
Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement
the basic financial statements. Such information, although not a part of the basic financial statements,
is required by the Governmental Accounting Standards Board, who considers it to be an essential part
of financial reporting for placing the basic financial statements in an appropriate operational, economic
or historical context. We have applied certain limited procedures to the RSI in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
lmowledge we obtained during the audit of the basic financial statements. We do not express an
opinion or provide any assurance on the RSI because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Management has not presented the management's discussion and analysis that accounting principles
generally accepted in the United States of America require to be presented to supplement the basic
financial statements. Such missing information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic,
or historical context. Our opinion on the AQMD's basic financial statements is not affected by this
missing information.
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19C -10
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 7, 2016, on our consideration of the internal control over the AQMD's financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering
the internal control over the AQMD's financial reporting and compliance.
4 )'L� ,tom, tub &/0
Irvine, California
December 7, 2016
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19C-11
CITY OF SANTA ANA, CALIFORNIA
AIR QUALITY IMPROVEMENT FUND
BALANCE SHEET
June 30, 2016
ASSETS:
Cash and investments
Interest receivable
TOTAL ASSETS
LIABILITIES AND FUND BALANCE:
LIABILITIES:
Accounts payable
FUND BALANCE:
Restricted for air quality improvement
TOTAL LIABILITIES AND FUND BALANCE
See accompanying notes to financial statements.
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19C -12
$ 626,341
768
$ 627,109
$ 9,599
617,510
$ 627,109
CITY OF SANTA ANA, CALIFORNIA
AIR QUALITY IMPROVEMENT FUND
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
For the year ended June 30, 2016
REVENUES:
Motor vehicle fees
Investment income
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Direct program
Administrative
TOTAL EXPENDITURES
DEFICIENCY OF REVENUES
UNDER EXPENDITURES
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
See accompanying notes to financial statements.
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19C-13
$ 310,454
7,065
3,025
320,544
388,757
9,156
397,913
(77,369)
694,879
$ 617,510
CITY OF SANTA ANA, CALIFORNIA
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2016
1. GENERAL:
The financial statements are intended to reflect the financial position and changes in the financial
position attributable to the Air Quality Improvement Special Revenue Fund (AQMD) of the City of
Santa Ana, California (the City). These financial statements are exclusively for AQMD and do not
purport to, and do not present fairly the financial position and changes in the financial position for
the City.
The South Coast Air Quality Management District (SCAQMD) is authorized Linder Assembly
Bill 2766 (AB 2766) Chapter 1705 [California Health and Safety Code (CHSC) Sections 44220
through 44247] to impose a motor vehicle registration fee to be used by the SCAQMD and local
governments specifically for programs to reduce air pollution from mobile sources and related
planning, monitoring, enforcement, and technical studies necessary for the implementation of the
California Clean Air Act of 1988.
The California Department of Motor Vehicles collects the vehicle registration fee and subvenes it
to SCAQMD. Upon receipt, the vehicle registration fee is split into segments with 40% of the
revenue place in a special revenue fund designated as the Air Quality Improvement Trust Fund for
quarterly distribution to local governments.
CHSC Section 44243 requires cities and counties receiving the AB 2766 funds to separately
account for the revenues and to expend the revenues for air pollution reduction measures pursuant
to the California Clean Air Act of 1988 or the SCAQMD's Air Quality Management Plan pursuant
to Article 5 of Chapter 5.5 of Part 3 of the CHSC.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A. Fund Accounting:
The financial activity of the City is accounted for on the basis of fiends, each of which is
considered a separate accounting entity with a self- balancing set of accounts. Monies under
AB 2766 are accounted for in the Air Quality Improvement Special Revenue Fund, which is a
special revenue fund.
B. Measurement Focus and Basis of Accounting:
The accounting and financial reporting treatment is determined by the applicable measurement
focus and basis of accounting. Measurement focus indicates the type of resources being
measured such as current financial resources or economic resources. The basis of accounting
indicates the timing of transactions or events for recognition in the financial statements.
6-
19C -14
CITY OF SANTA ANA, CALIFORNIA
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
B. Measurement Focus and Basis of Accounting (Continued):
AQMD's financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accotunting. Revenues are recognized as soon as they
are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current
period. For this purpose, the government considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Expenditures generally are recorded when
a liability is incurred, as under accrual accounting.
C. Budgetary Accounting:
The City's fiscal year begins on July 1 of each year and ends June 30 the following year. On or
before the fifteenth of Jime of each year, the City Manager recommends and submits to the City
Council a proposed budget for the next ensuing fiscal year based on a detailed financial plan
prepared by the heads of the various offices, agencies and departments of the City and its
component units. Upon receipt of the proposed budget, the Council holds a public hearing
wherein the public is given an opportunity to be heard, after which the Council may make any
revisions deemed advisable. After the conclusion of the public hearing, the Council may make
modifications with the affirmative vote of at least a majority of its members. On or before the
thirty -first day of July, the City Council adopts the budget as amended by the affirmative vote
of at least a majority of its members. Upon final adoption, the budget is in effect for the ensuing
fiscal year and becomes the authority for the various offices, agencies, and departments to
expend subject to controls established by the City Charter. At any meeting after the adoption of
the budget, the City Council may amend or supplement the budget by affirmative vote of at
least two - thirds of the members so as to authorize the transfer of unused balances appropriated
for one purpose to another propose, or to appropriate available revenue not included in the
budget. Where appropriations are made to offices, departments, or agencies for more than one
activity or program, "appropriations" are considered in the aggregate with respect to total
expenditures authorized for that office, department or agency within each fund, limited to
purposes for which the revenues of such funds are to be spent. The City Manager is authorized
to make revisions among the items included in such appropriations if, in his opinion, such
revisions are necessary and proper. Budgetary control exists at the department level. Council
action is necessary for transfers between departments /agencies or transfers between funds.
During the fiscal year, all budget and supplemental amendments were necessary and made in a
legally permissible manner.
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19C-15
CITY OF SANTA ANA, CALIFORNIA
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
C. Budgetary Accounting (Continued):
The City legally adopts annual budgets for the Special Revenue Funds including the Air
Quality Improvement Special Revenue Fund. The budgetary control for the Special Revenue
Funds is under the department in charge. The Air Quality Improvement Special Revenue Fund
is managed by the Finance and Management Services Agency. Monthly budgetary reports are
prepared to effect control through fiscal management. The City Council approved supplemental
appropriations during the year, but they were not considered material.
Budgets are prepared on a modified accrual basis. Encumbrances (e.g. purchase orders,
contracts) outstanding at year -end are reported as restrictions of fund balances since they do not
constitute expenditures or liabilities. All other annual appropriations lapse at fiscal year -end to
the extent that they have not been expended or lawfidly encumbered. During the fiscal year, the
total Fund's expenditures were within the legal prescribed limits as approved by the City
Council.
D. Fund Balance:
AQMD's fund balance is reported based on the extent to which the City is bound to observe
constraints on the use of the AQMD's resources. AQMD's fund balance is classified under
restricted, which include amounts which are constrained for specific purposes that are
1) externally imposed by creditors, grantors, contributors, or laws or regulations of other
governments or 2) imposed by law through enabling legislation. AQMD's find balance is
restricted for programs initiated for the purpose of implementing the California Clean Air Act.
Information regarding the fund balance reporting policy adopted by the City is described in
Note 1 to the City of Santa Ana's Comprehensive Annual Financial Report.
E. Estimates:
The preparation of financial statements in accordance with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that effect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
19C -16
CITY OF SANTA ANA, CALIFORNIA
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. CASH AND INVESTMENTS:
AQMD's cash and investments balances are pooled with various other City funds for deposit and
investment purposes. Each fiend's share of the pooled cash account is separately accounted for, and
investment income is apportioned to the participating funds based on the relationship of their
average daily balances to the total of the pooled cash and investments. Information regarding the
credit risk and authorized types of deposits and investments in the City's pooled cash and
investments is included in the City's Comprehensive Annual Financial Report. This report can be
obtained from the City of Santa Ana.
4. AB 2766 BIENNIAL AUDIT AND QUESTIONED COSTS:
Health and Safety Code Section 44244.1 stipulate that each recipient of AB 2766 funds be subject
to an audit at least once every two years by an independent auditor selected by the SCAQMD. The
most recent AB 2766 audit resulted in no questioned costs.
5. SUBSEQUENT EVENTS:
The City has evaluated events subsequent to June 30, 2016 to assess the need for potential
recognition or disclosure in the financial statements. Such events were evaluated through
December 7, 2016, the date the financial statements were available to be issued. Based upon this
evaluation, it was determined that no subsequent events occurred that require recognition or
additional disclosure in the notes to financial statements.
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REQUIRED SUPPLEMENTARY INFORMATION
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CITY OF SANTA ANA, CALIFORNIA
AIR QUALITY IMPROVEMENT FUND
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the year ended June 30, 2016
REVENUES:
Motor vehicle fees
Investment income
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Direct program
Administrative
TOTAL EXPENDITURES
DEFICIENCY OF REVENUES
UNDER EXPENDITURES
FUND BALANCE, BEGINNING OF YEAR
Variance with
FUND BALANCE, END OF YEAR $ 94,879 $ (41,069) $ 617,510 $ 658,579
See accompanying notes to financial statements.
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19C-19
Final Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
$ 414,000
$ 414,000
$ 310,454
$ (103,546)
300
300
7,065
6,765
1,850
1,850
3,025
1,175
416,150
416,150
320,544
(95,606)
995,245
1,131,193
388,757
742,436
20,905
20,905
9,156
11,749
1,016,150
1,152,098
397,913
754,185
(600,000)
(735,948)
(77,369)
658,579
694,879
694,879
694,879
-
FUND BALANCE, END OF YEAR $ 94,879 $ (41,069) $ 617,510 $ 658,579
See accompanying notes to financial statements.
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19C-19
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and
Members of the City Council
of the City of Santa Ana
Santa Ana, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the Air Quality
Improvement Fund (AQMD) of the City of Santa Ana, California (the City), as of and for the year
ended June 30, 2016, and the related notes to financial statements, which collectively comprise the
AQMD's basic financial statements, and have issued our report thereon dated December 7, 2016.
Internal Control over Financial Reporting
In planning and performing our audit, we considered the City of Santa Ana, California's internal
control over AQMD financial reporting (AQMD's internal control) to determine the audit procedures
that are appropriate in the circumstances for the purpose of expressing our opinion on the AQMD's
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the
AQMD's internal control. Accordingly, we do not express an opinion on the effectiveness of the
AQMD's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a
material misstatement of the AQMD's financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit attention
by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
-12-
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 > Fax: 714.978.7893
Vices located 1 &* fin Diego Counties
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Air Quality Improvement Special
Revenue Fund of the City of Santa Ana, California's financial statements are free from material
misstatement, we performed tests of its compliance with applicable provisions of Assembly Bill 2766
(AB2766), Chapter 1705 (Health and Safety Code Sections 44220 through 44247), and certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have
a direct and material effect on the determination of the AQMD's financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our audit
and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
AQMD's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the AQMD's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
4 `?? 4nt) /au& LAP
Irvine, California
December 7, 2016
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EXHIBIT 3
CITY OF SANTA ANA, CALIFORNIA
APPROPRIATIONS LIMIT WORKSHEET NO.6
WITH INDEPENDENT ACCOUNTANTS' REPORT
ON AGREED -UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT WORKSHEET
FOR THE YEAR ENDED JUNE 30, 2016
19C -23
INDEPENDENT ACCOUNTANTS'REPORT
ON AGREED -UPON PROCEDURES APPLIED
TO APPROPRIATIONS LIMIT WORKSHEET
To the Honorable Mayor and
Members of the City Council
of the City of Santa Ana
Santa Ana, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit
Worksheet No. 6 of the City of Santa Ana, California for the year ended June 30, 2016. These
procedures, which were agreed to by the City of Santa Ana, California and the League of California
Cities (as presented in the League publication entitled "Article XIII -B Appropriations Limit Uniform
Guidelines ") were performed solely to assist the City of Santa Ana, California in meeting the
requirements of Section 1.5 of Article XIIIB of the California Constitution. The City of Santa Ana's
management is responsible for the Appropriations Limit Worksheet No. 6.
This agreed -upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of the
procedures is solely the responsibility of those parties specified in this report. Consequently, we make
no representation regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
The procedures performed and our findings were as follows:
1. We obtained the completed Worksheet No. 6 for the year ended June 30, 2016, and compared the
limit and annual adjustment factors included in that worksheet to the limit and annual adjustment
factors that were adopted by resolution of the City Council. We also compared the population and
inflation options included in the aforementioned worksheet to those that were selected by a
recorded vote of the City Council.
No exceptions were noted as a result of our performing this procedure.
2. For the accompanying Appropriations Limit Worksheet No. 6, we added last year's limit to the
total adjustments, and compared the resulting amount to this year's limit. We also recalculated the
adjustment factor and the adjustment for inflation and population, and compared the results to the
amounts on Worksheet No. 6.
No exceptions were noted as a result of our performing this procedure.
-1-
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located an San Diego Counties
3. We compared the prior year appropriations limit presented in the accompanying Appropriations
Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the
prior year.
No exceptions were noted as a result of our performing this procedure.
We were not engaged to, and did not, perform an audit, the objective of which would be the expression
of an opinion on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not
express such an opinion. Had we performed additional procedures, other matters might have come to
our attention that would have been reported to you. No procedures have been performed with respect
to the determination of the appropriation limit for the base year, as defined by the League publication
entitled "Article XIII -B Appropriations Limit Uniform Guidelines ".
This report is intended solely for the information and use of the City Council and management of the
City of Santa Ana, California and is not intended to be, and should not be, used by anyone other than
these specified parties,
Irvine, California
December 7, 2016
i i
XM
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19C -25
CITY OF SANTA ANA
APPROPRIATIONS LIMIT WORKSHEET NO. 6
For the year ended June 30, 2016
Appropriations limit for fiscal year ended June 30, 2015 (see Note 2)
Adjustment factors for the fiscal year ended June 30, 2016 (see Note 2):
Inflation
Population
Factor
Factor
(Note 3)
(Note 4)
1.0382 1.0108
Adjustment for inflation and population
Other adjustments (Note 5)
Total adjustments
Appropriations limit for fiscal year ended June 30, 2016
Combined
Factor
1.0494
See accompanying notes to Appropriations Limit Worksheet No. 6.
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19C -26
$ 893,083,329
x 0.0494
44,119,452
44,119,452
S 937.202.781
CITY OF SANTA ANA
NOTES TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
For the year ended June 30, 2016
1. PURPOSE OF LIMITED PROCEDURES REVIEW:
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative),
California governmental agencies are restricted as to the amount of annual appropriations from
proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of
Article XIIIB, the annual calculation of the appropriations limit is subject to a limited procedures
review in connection with the annual audit.
2. METHOD OF CALCULATION:
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the
appropriations limit is required to be calculated based on the limit for the fiscal year 1986 -87,
adjusted for the inflation and population factors discussed at Notes 3 and 4 below.
3. INFLATION FACTORS:
A California governmental agency may adjust its appropriations limit by either the annual
percentage change in the 4`h quarter per capita personal income (which percentages are supplied by
the State Department of Finance), or the percentage change in the local assessment roll from the
preceding year due to the change of local nonresidential construction. The factor adopted by the
City of Santa Ana, California (the City) for fiscal year 2015 -2016 represents the annual percentage
change in the 4`h quarter for per capita personal income.
4. POPULATION FACTORS:
A California governmental agency may adjust its appropriations limit by either the annual
percentage change of the jurisdiction's own population, or the annual percentage change in
population in the County where the jurisdiction is located. The factor adopted by the City for fiscal
year 2015 -2016 represents the annual percentage change in population in the County in which the
City is located.
5. OTHER ADJUSTMENTS:
A California government agency may be required to adjust its appropriations limit when certain
events occur, such as the transfer of responsibility for municipal services to, or from, another
government agency or private entity. The City had no such adjustments for the year ended
June 30, 2016.
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INDEPENDENT ACCOUNTANTS'REPORT
ON APPLYING AGREED -UPON PROCEDURES
To the Honorable City Council
of the City of Santa Ana
Santa Ana, California
EXHIBIT 4
We have performed the procedures enumerated below, which were agreed to by the City of Santa Ana,
California (the City), solely to assist the City in determining whether the City's investment activities
are in compliance with the City's Statement of Investment Policy (the Policy) and the California
Government Code, §53600, et al. (the Code) for the quarter ended June 30, 2016. The City's
management is responsible for the compliance with the Policy and the Code and for selecting the
criteria and determining that such criteria are appropriate for your purposes.
This agreed -upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of these
procedures is solely the responsibility of the City's management. Consequently, we make no
representation regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
Our procedures and findings were as follows:
1. We obtained a copy of the City's Quarterly Investment Report for the quarter -ended June 2016
and compared the investments listed in the report to the types of investments authorized by the
Policy for fiscal year 2015/2016.
Finding: No exceptions were noted as a result of our performing this procedure.
2. We compared the investments listed on the City's Quarterly Investment Report for the
quarter -ended June 2016 to the type of investments authorized by the Code.
Finding: No exceptions were noted as a result of our performing this procedure.
3. We ensured that the maturities of investments listed in the City's Quarterly Investment Report
for the quarter -ended June 2016 were in compliance with the Policy.
Finding: No exceptions were noted as a result of our performing this procedure.
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2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
O,JJces located (tW L29 Diego Coantiej
4. We reviewed the City's Quarterly Investment Report for the quarter -ended June 2016 to
ascertain it contained the information /data required by Government Code Section 53646 and
met the timing requirements of Government Code Section 53646, as follows:
a. Included the type of investment, issuer, date of maturity, par and dollar amount invested on
all securities, investments and monies held by the City.
b. Included those funds under management of contracted parties (fiscal agents, trustees, etc.).
c. Included market value (and source) as of the date of the report for all securities held by the
City or under management of any outside party that was not also a local agency or the State
of California Local Agency Investment Fund.
d. Stated compliance of the portfolio to the Policy of the City.
e. Included a statement addressing the ability of the City to meet the pool's expenditure
requirements for the next six months.
Finding: No exceptions were noted as a result of our performing this procedure.
5. We compared the investments listed in the City's Quarterly Investment Report for the
quarter -ended June 2016 to the prohibited investments listed in the Code.
Finding: No exceptions were noted as a result of our performing this procedure.
6. We reviewed the City's Quarterly Investment Report submission evidence documentation for
the quarter -ended June 2016 and ascertained whether a quarterly basis report was submitted
within 30 days following the end of the quarter.
Finding: No exceptions were noted as a result of our performing this procedure.
We were not engaged to, and did not, conduct an audit, the objective of which would be the expression
of an opinion on the compliance with the Policy. Accordingly, we do not express such an opinion. Had
we performed additional procedures, other matters might have come to our attention that would have
been reported to you.
This report is intended solely for the information and use of the City Council and management of the
City, and is not intended to be, and should not be, used by anyone other than those specified parties.
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Irvine, California
December 7, 2016
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