HomeMy WebLinkAbout07.01 Comprehensive Annual Financial Report FY17AGENDA ITEM
1. SUBJECT
Audited Financial Statements and Related Financial Reports for the fiscal year ended June 30,
2017.
2. SUMMARY
Presentation of Financial Reports and Statements provided by independent auditors as a result of
the annual financial audit for the fiscal year ended June 30, 2017.
3. RECOMMENDATION
Receive and file the following documents for the fiscal year ended June 30, 2017:
• Comprehensive Annual Financial Report
• Audit Communication Letter
• Independent Accountants' Report on Agreed -Upon Procedures Applied to the
Appropriations Limit Worksheets
• Independent Accountants' Report on Agreed -Upon Procedures Applied to the
Investment Portfolio
• Air Pollution Reduction Fund Financial Statements and Independent Auditors' Report
• Independent Auditors' Report on Internal Control Over Financial Reporting
• Housing Successor Fund Financial Statements
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOAL(S)
Goal 2: Be a fiscally healthy community.
6. GENERAL PLAN IMPLEMENTATION
Not applicable.
7. DISCUSSION and BACKGROUND
White Nelson Diehl Evans, LLP again provided audit services to the City, for the fiscal year
ended June 30, 2017. As an integral part of their audit, the firm considers the City's internal
controls over our financial reporting and, while they did not express an opinion, their conclusion
was they did not identify any deficiencies in internal control considered to be material
weaknesses.
The City finance staff includes three former auditors. Throughout the year, the Finance
Department performs various internal audits to provide assurance both financial, and operational,
controls and efficiencies are in place and are being followed. While the City of Orange Audit
Committee continues to have vacancies, staff believes oversight of our financial position and
reporting requirements is being properly maintained.
The independent auditor's testing resulted in a "clean" audit opinion. This provides assurance the
City's financial transactions are accurately recorded and can be relied upon not only for proper
reporting of past financial results in the City's FY 2017 CAFR, but also on a go- forward basis as
we craft the FY 2019 Budget. This is of utmost importance given the results reflected in the
CAFR include fixed assets and restricted fund balances that are not readily available to staff for
appropriation as budgeted expenditures for operating costs or Capital Improvement Projects.
The following Reports, Letter and Statements are presented for fiscal year ended June 30, 2017:
1. Comprehensive Annual Financial Report (CAFR) — This report is divided into
three major sections: the Introductory Section, the Financial Section and the
Statistical Section. The Introductory Section includes a Letter of Transmittal. The
Financial Section comprises the Audit Opinion, Management's Discussion and
Analysis, and the Basic Financial Statements. The Statistical Section provides
important historical and trend information about the City. The Audit opinion is an
"unqualified opinion ", which states that, in the auditor's opinion, the basic
financial statements of the City are presented fairly in all material respects and are
in conformity with generally accepted accounting principles.
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2. Audit Communication Letter — a report of recommendations made to management
by the auditors to improve internal controls and/or operating efficiencies within the
city.
3. Independent Accountants' Report on Agreed -Upon Procedures Applied to the
Appropriations Limit Worksheets — procedures performed solely to assist the City
in meeting the requirements of Section 1.5 of the Article XIIIB of the California
Constitution.
4. Independent Accountants' Report on Agreed -Upon Procedures Applied to the
Investment Portfolio — independent review of investment operations and
compliance with the City's investment policy.
5. Air Pollution Reduction Fund Financial Statements and Independent Auditors'
Report - audited financial statements in accordance with Generally Accepted
Auditing Standards and the standards applicable to the financial audits contained in
Government Auditing Standards.
6. Independent Auditors' Report on Internal Control Over Financial Reporting — a
report to describe the scope of testing of the City's internal control over financial
reporting and the results of that testing.
7. Housing Successor Fund Financial Statements— audited financial statements in
accordance with Generally Accepted Auditing Standards and the standards
applicable to the financial audits contained in Government Auditing Standards.
8. Single Audit of Federally Assisted Grant Programs — audit of compliance
requirements as described in the U.S. Office of Management and Budget (OMB) 2
CFR part 200, Uniform Grant Guidance.
8. ATTACHMENTS
The following attachments are available for review in the office of the City of Orange City Clerk:
1. City of Orange Comprehensive Annual Financial Report and Summary of Audit
Results
2. Audit Communication Letter
3. Independent Accountants' Report on Agreed -Upon Procedures Applied to the
Appropriations Limit Worksheets
4. Independent Accountants' Report on Agreed -Upon Procedures Applied to Investment
Portfolio
5. Air Pollution Reduction Fund Financial Statements and Independent Auditors' Report
6. Independent Auditors' Report on Internal Control Over Financial Reporting
7. Housing Successor Fund Financial Statements
8. Single Audit of Federally Assisted Grant Programs
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