TITLE
Recommendation to receive and file the Federal Single Audit, Separately Issued Financial Statement, and the Auditor’s Communication with Those Charged with Governance for the Fiscal Year Ended September 30, 2017. (Citywide)
DISCUSSION
On May 8, 2018, the Financial Management Department submitted to the City Council the City’s Comprehensive Annual Financial Report (CAFR) and other separately issued financial reports and statements for the fiscal year ended September 30, 2017 (FY 17), as required by the City Charter.
Additional annual reports that were not available on the above date are attached, including the Los Cerritos Wetlands Authority annual financial report and the Federal Single Audit report, to meet distinct legal and financial requirements.
Federal Single Audit
The Federal Single Audit is required by the Federal Office of Management and Budget (OMB) for municipalities receiving over $500,000 annually in federal funds. The Federal Single Audit, covering three major programs (Section 8 Housing Choice Vouchers, HOME Investment Partnership Program, and Continuum of Care) resulted in a single material weakness in internal controls within the HOME Investment Partnership Program, and a significant deficiency in internal controls and $2,437 in questioned costs related to the Section 8 Housing Choice Voucher program. This is a slightly less favorable result than the previous fiscal year's audit that resulted in no findings or questioned costs.
The Auditor’s Communications with Those Charged with Governance
The City’s external auditor (KPMG) is required to prepare and submit the Auditor’s Communication with Those Charged with Governance in accordance with Statement of Auditing Standards 114 (SAS 114). “Those charged with governance” refers to the person or persons responsible for the strategic direction of the entity and the obligations relative to the accountability of such entity, including oversight of the financial reporting process. KPMG is required to communicate with those charged with governance those matters related to the financial statement audit that are, in KPMG's professional judgment, significant and relevant to the responsibilities of those charged with governance in overseeing the financial reporting process.
This matter was reviewed by Deputy City Attorney Amy R. Webber and by Budget Management Officer Rhutu Amin Gharib on August 30, 2018.
TIMING CONSIDERATIONS
City Council action on this item is not time critical.
FISCAL IMPACT
There is no fiscal or local job impact associated with this recommendation.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
PATRICK H. WEST
CITY MANAGER