4-2019 City of Orange Investment Portfolio Report2875 Michelle Drive, Suite 300 | Irvine, California 92606 | WNDECPA.com | 714.978.1300
1
INDEPENDENT ACCOUNTANTS’ REPORT
ON APPLYING AGREED-UPON PROCEDURES
To the Honorable City Council
of the City of Orange
Orange, California
We have performed the procedures enumerated below, which were agreed to by the City Council and
the management of the City of Orange, California (the City), solely to assist the City in evaluating
the Treasurer’s Report for the month ended June 30, 2019 for compliance with the provisions of the
California Government Code (the Code) and with the City’s investment policy, dated June 12, 2018
(the Policy). The City’s management is responsible for the Treasurer’s Report for the month ended
June 30, 2019, 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 Treasurer’s Report for the month of June 30, 2019 and
reconciled individual investments/deposits to supporting documentation obtained from City
staff. Also, we traced total funds reported on the Treasurer’s Report to the City’s General
Ledger at June 30, 2019.
Finding: No exceptions were noted as a result of this procedure.
2.We compared the investments listed on the City Treasurer’s Report for the month of
June 30, 2019 to the type of investments authorized by the City’s Investment Policy and
Government Code Section 53601.
Finding: No exceptions were noted as a result of this procedure.
3.We compared the market value of the investments listed on the Treasurer’s Report for the month
of June 30, 2019 to the City’s copies of investment statements.
Finding: No exceptions were noted as a result of this procedure.
2
4. We read the City Treasurer’s Report for the month of June 30, 2019 to ascertain that it contains
all the information/data required by Government Code Section 53646 and meets the timing
requirements of Government Code Section 53646 as follows:
a.Was submitted within 30 days following the end of the quarter.
b.Included the type of investment, issuer, date of maturity, par and dollar amount invested on
all securities, investments and monies held by the City.
c.Included those funds under management of contracted parties (fiscal agents, trustee, deferred
compensation, plan administrators, etc.).
d.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 is not also a local agency or the State
of California Local Agency Investment Fund.
e.Stated compliance of the portfolio to the investment policy of the City.
f.Included a statement addressing the ability of the City to meet the pool’s expenditure
requirements for the next six months.
g.Included the most recent statements from the Local Agency Investment Fund and the
County Investment Pools, in lieu of the information required by (b) and (d) above, for City
investments that have been placed in those pools.
Finding: No exceptions were noted as a result of this procedure.
5.We compared the investments listed in the City Treasurer’s Report for the month of June 30, 2019
to the prohibited investments listed in the City’s Investment Policy and Government Code
Section 53601.6.
Finding: No exceptions were noted as a result of this procedure.
6.We calculated the totals (cost basis) for the investments listed in the City Treasurer’s Report for
the month of June 30, 2019 and compared those totals to the limitations imposed by the City’s
Investment Policy and Government Code Section 53601 for specified investment types.
Finding: City policy allows Local Agency Investment Fund (LAIF) investment to be at a
maximum of 40% of the total portfolio for 30 days and then must be back under the
35% threshold within 30 days. LAIF exceed the allowed portfolio percentage of 40%
at June 30, 2019. Additionally, LAIF exceeded 35% of the total portfolio in
May 2019 and did not get under 35% within the 30-day limit.
7.We agreed individual investment maturity dates listed on the City Treasurer’s Report for the month
of June 30, 2019 to the City’s copies of the investment statements to determine if they conformed
to the maturity requirements of the City’s Investment Policy and Government Code Section 53601.
Finding: No exceptions were noted as a result of this procedure.
3
8. We were asked to obtain and read any third-party agreements and broker/dealers agreements in
effect at June 30, 2019 to determine if the agreement contained a clause addressing delivery of
securities and that the delivery method conformed to Government Code Section 53601.
Finding: The City does not have a formal agreement or contract with the broker/dealer since they
are not required to use the broker/dealers for trades and there are no fees or
commissions charged. The City Treasurer authorizes the use of designated brokers and
ensures that the City has written documentation with the brokers’ signature stating that
the broker will adhere to the City’s investment policy.
9. We were asked to recompute and review supporting documentation relevant to and repurchase
agreements and any reverse repurchase agreements held by the City at June 30, 2019 to ascertain
if these investments conformed to the requirement of Government Code Sections 53601(i)
and 53635(i).
Finding: This step was not applicable, as the City did not have these types of investments.
We were not engaged to, and did not, conduct an audit of the Treasurer’s Report for the month
ended June 30, 2019, the objective of which would be the expression of an opinion on the
compliance with the Policy and the Code. 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.
Irvine, California
December 3, 2019