| TO: | Honorable Mayor and City Council | | FROM: | Randy McKeegan, Finance Director | | DATE: | 1/20/2021 | | WARD: | | | SUBJECT: | Audit Reports to be Referred to Budget and Finance Committee:
- Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2020.
- Agreed Upon Conditions Report for the fiscal year ended June 30, 2020.
- Auditor Communication with Those Charged with Governance (SAS 114 Letter) for fiscal year ended June 30, 2020.
- Independent Auditors Report – Compliance with Contractual Requirements relative to the Bakersfield Subregional Wastewater Management Plan for the year ended June 30, 2020.
- Independent Auditors Report on Appropriations Limit Worksheet (GANN Limit) of the City of Bakersfield for the fiscal year ended June 30, 2020.
- Independent Auditors Report – Mechanics Bank Arena, Theater, Convention Center, Dignity Health Amphitheatre, and Valley Children’s Ice Center for the fiscal year ended June 30, 2020.
- Agreed Upon Procedures Report (Public Safety and Vital Services) for the fiscal year ended June 30, 2020.
| STAFF RECOMMENDATION:
Staff recommends referral to the Budget and Finance Committee. | BACKGROUND:
The City’s Comprehensive Annual Financial Report (CAFR), commonly referred to as the Annual Audit Report, for the fiscal year ended June 30, 2020 will be provided to the City Council as part of the packet prior to this meeting. A copy of the report will also be on file in the City Clerk’s office for public review. The CAFR represents the City’s financial statements as of June 30, 2020, which are audited by the accounting firm of Brown Armstrong Accountancy Corporation. The current year audit opinion issued by the outside auditors was “unqualified,” which indicates that the City complied, in all material respects, with accounting principles generally accepted in the United States of America.
2. The Agreed Upon Conditions Report is designed to increase efficiency, internal controls and/or financial reporting and includes any reportable conditions noted during the Audit. A summary of reported conditions are included in the report. The report also addresses conditions identified in the prior year which have all been resolved to the auditors’ satisfaction.
3. The SAS 114 Letter provides information about our auditors’ responsibilities under auditing standards generally accepted in the United States of America, Government Auditing Standards, and the Uniform Guidance, as well as certain information related to the planned scope and timing of the audit.
4. Contract requirements contained in City of Bakersfield Agreement 76-153 as amended by Agreements 76-153(5), 76-153(4), 77-44, 85-197 and 92-106 apply to operations of the Bakersfield Subregional Wastewater Management Plan. The City’s compliance with contract requirements is audited on an annual basis. The current compliance report, issued by the outside auditors, is attached for your review and indicates that there were no audit findings.
5. Attached is a letter from the City’s independent auditors Brown Armstrong Accountancy Corporation indicating they have completed their annual review of the Appropriations Limit Worksheet prepared by the City in accordance with Section 1.5 of Article XIIIB of the California Constitution (GANN Limit). This annual review is performed by the auditors as part of their contract to provide auditing services to the City of Bakersfield. The agreed upon review procedures are substantially less in scope than an audit and therefore no audit opinion is expressed regarding the calculation.
6. Attached is the independent audit report for the Mechanics Bank Arena, Theater, Convention Center, Dignity Health Amphitheatre, and Valley Children’s Ice Center, for the fiscal year ended June 30, 2020. This audit report presents the financial statements for this operational unit as of June 30, 2020. The management company (AEG) is required to submit an independent audit report of their operations to the City after the end of each fiscal year. This audit report was prepared by the accounting firm of Barbich, Hooper, King, Dill & Hoffman.
7. The Agreed Upon Procedures Report for the Public Safety and Vital Services measure is designed to increase efficiency, internal controls and/or financial reporting and includes any reportable conditions noted during the Audit. This report is a requirement per the guidelines stated in the Resolution No. 089-18 regarding the Public Safety and Vital Services measure. A summary of reported conditions is included in the report.
Staff is recommending these reports be received and referred to the Budget and Finance Committee for review and discussion. The reports will come back to the full Council for acceptance at a future meeting after the Committee review process is completed.
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