TITLE
Recommendation to receive and file Separately Issued Financial Statements, the Federal Single Audit, and the Auditor's Communication with Those Charged with Governance for the Fiscal Year Ended September 30, 2011. (Citywide)
DISCUSSION
Separately Issued Financial Reports and Statements
Certain City funds, joint powers authorities, and other subsidiary entities are also required to submit audited annual financial statements under separate cover, including the Water Department, Airport Enterprise Fund, and Redevelopment Agency. These separate reports are enclosed and are issued annually to meet distinct legal and financial requirements.
Federal Single Audit
Also attached is the Federal Single Audit 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 11 major programs as well as all American Recovery and Reinvestment Act (ARRA) grant funds, resulted in the identification of two significant deficiencies, five findings and $173,190 in questioned costs. No material weaknesses were identified. In general, this is an improvement over the audit of the previous fiscal year that resulted in two significant deficiencies, seven findings, and $620,000 in questioned costs.
A significant deficiency is a deficiency in internal controls. One deficiency related to the number of adjusting entries made after the close of the year. A large number of year-end entries is seen as a potential weakness (even though they were correct). In this case, many of the entries resulted from the mandated dissolution of the Redevelopment Agency. The other deficiency had to do with our difficulty in recording some non-grant-funded revenues and expenses in the correct fiscal year. This primarily has to do with the challenges associated with obtaining timely information and this issue generally does not have a significant impact on any analysis or decisions that are bei...
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