Measure T Citizen s Bond Oversight Committee. Educating Every Child for Success

Transcription

1 Measure T Citizen s Bond Oversight Committee Educating Every Child for Success MEASURE T CITIZEN S BOND OVERSIGHT COMMITTEE ANNUAL REPORT Committee Members as of June 30, 2016 Board of Education as of June 30, 2016 Michael Bolander, Chair Lori Bluvas Jeanne Panos Felix Gonzalez Rebecca Weekly Carolina Webster Elizabeth Flegel Richard Delfs Ellen Jacobson Hilary Paulson, President Maria Diaz Slocum, Vice President Dennis McBride Janet Lawson Alisa Green MacAvoy Superintendent John R. Baker, Ed.D.

2 August 29, 2017 To: The Board of Education and the Citizens of the Redwood City School District From: Measure T Citizen s Bond Oversight Committee The Measure T Citizen s Bond Oversight Committee (CBOC) is pleased to forward its Annual Report, covering the fiscal year. Measure T was passed by the voters in November 2015 and authorized the Redwood City School District (the District) to issue up to $193 million in general obligation bonds for the purpose of renovating aging classrooms and science labs for 21 st -century learning and provide flexible classrooms and labs for science and other core academics; updating school libraries, classroom computers, and instructional technology at all schools; fix and replace deteriorating roofs, remove aging and unsafe portable buildings, and improve school fire and earthquake safety; replace old, outdated and inefficient electrical, plumbing, heating, and ventilation systems; and provide dedicated classrooms for music, art, and performing arts electives. The purpose of the CBOC is to inform the public concerning the expenditure and uses of bond revenues. As required by State law, the CBOC will actively review and report on the expenditure of taxpayer money for school construction in accordance with voter approved projects. In fulfilling its duties, the CBOC reviews, among other things, the Redwood City School District s (the District) annual independent performance and financial audits of the Measure T Bond. Due to a lack of a quorum, the CBOC did not have a regular meeting in FY The first regular meeting of the CBOC occurred on November 3, Total expenditures in FY totaled $241,176 and included $59,787 in salaries and benefits, $24,125 for books and supplies, and $156,264 in services and other operating expenditures. Since the sale of first bond series did not occur until September 2016, funds were advanced by the District to cover the above listed expenditures and will be reimbursed through bond proceeds. Attached to this report is the FY expenditure report. The CBOC reviewed the Independent Auditor s Report issued by the independent auditing firm of Vavrinek, Trine, Day & Co. (vtd), a professional certified public accounting firm, including the Independent Auditors Report, the Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards, and the Independent Auditor s Report on Performance. Vtd found that the District complied with the terms of Proposition 39 and the Measure T Bond during the fiscal year. In summary, the CBOC wishes to report that, to the best of its knowledge, the District expended Measure T General Obligation Bond funds only for the specific projects approved by the voters, in accordance with Proposition 39 and outlined in Article XIIIA, Section 1 (b)(3)(c) of the California Constitution.

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4 ATTACHMENT I

5 REDWOOD CITY SCHOOL DISTRICT MEASURE T 2015 GENERAL OBLIGATION BONDS AUDIT REPORT JUNE 30, 2016

6 REDWOOD CITY SCHOOL DISTRICT MEASURE T 2015 GENERAL OBLIGATION BONDS FINANCIAL AUDIT JUNE 30, 2016

7 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND - (MEASURE T) 2015 GENERAL OBLIGATION BONDS ` TABLE OF CONTENTS JUNE 30, 2016 FINANCIAL SECTION Independent Auditor's Report 2 Building Fund (MEASURE T) Balance Sheet 4 Statement of Revenues, Expenditures, and Changes in Fund Balance 5 Notes to Financial Statements 6 INDEPENDENT AUDITOR'S REPORT Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 11 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Financial Statement Findings 14 Summary Schedule of Prior Audit Findings 15 1

8 INDEPENDENT AUDITOR'S REPORT Governing Board and Citizens Oversight Committee Redwood City School District Redwood City, California Report on the Financial Statements We have audited the accompanying financial statements of the Redwood city District's (the District), Building Fund (Measure T), as of and for the year ended June 30, 2016, and the related notes to the financial statements, as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of financial statements, whether due to error or fraud. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 2

9 Unmodified Opinion In our opinion, the financial statements referred to previously present fairly, in all material respects, the financial position of the Building Fund (Measure T) of the Redwood City School District at June 30, 2016, and the results of its operations for the period then ended in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1, the financial statements present only the Building Fund specific to Measure T, and are not intended to present fairly the financial position and changes in financial position of Redwood City District in accordance with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 31, 2017, on our consideration of the District Building Fund's (Measure T) internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered with the results of our audit. Pleasanton, California March 31,

10 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND - (MEASURE T) 2015 GENERAL OBLIGATION BONDS BALANCE SHEET JUNE 30, 2016 ASSETS Deposits and investments $ 799 Due from other funds 23 Total Assets $ 822 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $ 612 Due to other funds 210 Total Liabilities 822 Fund Balance: Restricted for capital projects - Total Fund Balance - Total Liabilities and Fund Balance $ 822 The accompanying notes are an integral part of these financial statements. 4

11 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND - (MEASURE T) 2015 GENERAL OBLIGATION BONDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2016 REVENUES Investment income $ (25) Total Revenues (25) EXPENDITURES Current Salaries 46,529 Benefits 14,258 Books and supplies 24,125 Services and other operating expenditures 156,264 Total Expenditures 241,176 DEFICIENCY OF REVENUES OVER EXPENDITURES (241,201) Other Financing Uses: Transfers In 241,201 Net Financing Uses 241,201 NET CHANGE IN FUND BALANCE - FUND BALANCE - BEGINNING - FUND BALANCE - ENDING $ - The accompanying notes are an integral part of these financial statements. 5

12 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND (MEASURE T) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Redwood City School District's (the District) Building Fund (Measure T) conform to accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants. The Redwood City School District Building Fund accounts for financial transactions in accordance with the policies and procedures of the California School Accounting Manual. Financial Reporting Entity The financial statements include only the Building Fund of the Redwood City School District used to account for Measure T projects. This Fund was established to account for the expenditures of general obligation bonds issued under the General Obligation Bonds, Election of These financial statements are not intended to present fairly the financial position and results of operations of the Redwood City School District in compliance with accounting principles generally accepted in the United States of America. Fund Accounting The operations of the Building Fund are accounted for in a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues, and expenditures. Resources are allocated to and accounted for in the fund based upon the purpose for which they are to be spent and the means by which spending activities are controlled. Basis of Accounting The Building Fund is accounted for using a flow of current financial resources measurement focus and the modified accrual basis of accounting. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. The statement of revenues, expenditures, and changes in fund balance reports on the sources (revenues and other financing sources) and uses (expenditures and other financing uses) of current financial resources. Budgets and Budgetary Accounting Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds. The District's governing board adopts an operating budget no later than July 1 in accordance with State law. A public hearing must be conducted to receive comments prior to adoption. The District's governing board satisfied these requirements. The Board revises this budget during the year to give consideration to unanticipated revenue and expenditures primarily resulting from events unknown at the time of budget adoption. The District employs budget control by minor object and by individual appropriation accounts. Expenditures cannot legally exceed appropriations by major object account. Encumbrances The District utilizes an encumbrance accounting system under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation. Encumbrances are liquidated when the commitments are paid and all outstanding encumbrances lapse at June 30 since they do not constitute expenditures or liabilities. 6

13 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND (MEASURE T) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Fund Balance - Building Fund (Measure T) As of June 30, 2016, the fund balance is classified as follows: Restricted - amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments. Spending Order Policy When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the District considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the District considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the governing board has provided otherwise in its commitment or assignment actions. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - INVESTMENTS Policies and Practices The District is authorized under California Government Code to make direct investments in local agency bonds, notes, or warrants within the State: U.S. Treasury instrument; registered State warrants or treasury notes: securities of the U.S. Government, or its agencies; bankers acceptances; commercial paper; certificates of deposit placed with commercial banks and/or savings and loan companies; repurchase or reverse repurchase agreement; medium term corporate notes; shares of beneficial interest issued by diversified management companies, certificates of participation, obligations with first priority security, and collateralized mortgage obligations. Investment in County Treasury The District is considered to be an involuntary participant in an external investment pool as the District is required to deposit all receipts and collections of monies with their County Treasurer (Education Code Section 41001). The fair value of the District's investment in the pool is reported in the accounting financial statement at amounts based upon the District's pro-rata share of the fairly value provided by the County Treasurer for the entire portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by the County Treasurer, which is recorded on the amortized cost basis. 7

14 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND (MEASURE T) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 General Authorizations Limitations as they relate to interest rate risk, credit risk, and concentration of credit risk are indicated in the schedules below: Maximum Maximum Maximum Authorized Remaining Percentage Investment Investment Type Maturity of Portfolio in One Issuer Local Agency Bonds, Notes, Warrants 5 years None None Registered State Bonds, Notes, Warrants 5 years None None U.S. Treasury Obligations 5 years None None U.S. Agency Securities 5 years None None Banker's Acceptance 180 days 40% 30% Commercial Paper 270 days 25% 10% Negotiable Certificates of Deposit 5 years 30% None Repurchase Agreements 1 year None None Reverse Repurchase Agreements 92 days 20% of base None Medium-Term Corporate Notes 5 years 30% None Mutual Funds N/A 20% 10% Money Market Mutual Funds N/A 20% 10% Mortgage Pass-Through Securities 5 years 20% None County Pooled Investment Funds N/A None None Local Agency Investment Fund (LAIF) N/A None None Joint Powers Authority Pools N/A None None Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value is to changes in market interest rates. The District manages its exposure to interest rate risk by investing in the County Pool. The District maintains a building fund investment of $799 with the San Mateo County Investment Pool. The fair value of this investment is approximately $801 with an average maturity of 387 days. NOTE 3 - FAIR VALUE MEASUREMENTS The District categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset's fair value. The following provides a summary of the hierarchy used to measure fair value: Level 1 - Quoted prices in active markets for identical assets that the District has the ability to access at the measurement date. Level 1 assets may include debt and equity securities that are traded in an active exchange market and that are highly liquid and are actively traded in over-the-counter markets. 8

15 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND (MEASURE T) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Level 2 - Observable inputs, other than Level 1 prices, such as quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, or other inputs that are observable, such as interest rates and curves observable at commonly quoted intervals, implied volatilities, and credit spreads. For financial reporting purposes, if an asset has a specified term, a Level 2 input is required to be observable for substantially the full term of the asset. Level 3 - Unobservable inputs should be developed using the best information available under the circumstances, which might include the District's own data. The District should adjust that data if reasonably available information indicates that other market participants would use different data or certain circumstances specific to the District are not available to other market participants. Uncategorized - Investments in the San Mateo County Treasury Investment Pool are not measured using the input levels above because the District's transactions are based on a stable net asset value per share. All contributions and redemptions are transacted at $1.00 net asset value per share. The fair value measurements are as follows at June 30, 2016: Fair Value Measurements Using Level 1 Level 2 Level 3 Investment Type Fair Value Inputs Inputs Inputs Uncategorized County Pool $ 799 $ - $ - $ - $ 799 NOTE 4 - ACCOUNTS PAYABLE Accounts payable at June 30, 2016, consisted of the following: Vendor payables $ 612 9

16 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND (MEASURE T) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 NOTE 5 DUE FROM OTHER FUNDS Interfund Receivables/Payables (Due To/Due From) Interfund receivable and payable balances arise from interfund transactions and are recorded by all funds affected in the period in which transactions are executed. Interfund receivable and payable balances at June 30, 2016, are as follows: Due from Other Funds - The Capital Facilities Fund transferred a portion of projects funded with developer fees to Building Fund. $ 23 Interfund payable balance at June 30, 2016, was as follows: Due to other funds - Interfund transactions between Fund 25 and 21 after County Office cash cut off $ 210 NOTE 6 - COMMITMENTS AND CONTINGENCIES As of June 30, 2016, the Building Fund (Measure T) had no commitments with respect to unfinished capital projects. Litigation The District is involved in various litigation arising from the normal course of business. In the opinion of management and legal counsel, the disposition of all litigation pending is not expected to have a material adverse effect on the overall financial position of the District at June 30,

17 INDEPENDENT AUDITORS' REPORT 11

18 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Governing Board and Citizens Oversight Committee Redwood City High School District Redwood City, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the accompanying financial statements of the Redwood City School District (the District) Building Fund (Measure T), as of and for the year ended June 30, 2016, and have issued our report thereon dated March 31, As discussed in Note 1, the financial statements present only the Building Fund specific to Measure T, and are not intended to present fairly the financial position and changes in financial position of Redwood City District in accordance with accounting principles generally accepted in the United States of America. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Redwood City School District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Redwood City School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the Redwood City School District's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies or material weaknesses. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 12

19 Compliance and Other Matters As part of obtaining reasonable assurance about whether Redwood City School District's Building Fund (Measure T) financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Pleasanton, California March 31,

20 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 14

21 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND - (MEASURE T) 2015 GENERAL OBLIGATION BONDS FINANCIAL STATEMENT FINDINGS JUNE 30, 2016 None reported. 15

22 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND - (MEASURE T) 2015 GENERAL OBLIGATION BONDS SUMMERY SCHEDULE OF PRIOR AUDIT FINDINGS JUNE 30, 2016 Not applicable. 16

23 ATTACHMENT II

24 REDWOOD CITY SCHOOL DISTRICT MEASURE T 2015 GENERAL OBLIGATION BONDS PERFORMANCE AUDIT JUNE 30, 2016

25 REDWOOD CITY HIGH SCHOOL DISTRICT MEASURE T 2015 GENERAL OBLIGATION BONDS TABLE OF CONTENTS Independent Auditor's Report 1 Authority for Issuance 2 Purpose of Issuance 2 Authority for the Audit 2 Objectives of the Audit 3 Scope of the Audit 3 Procedures Performed 3 Conclusion 3 Schedule of Findings 4

26 INDEPENDENT AUDITOR'S REPORT ON PERFORMANCE Governing Board and Citizens Oversight Committee Redwood City School District Redwood City, California We were engaged to conduct a performance audit of the Redwood City School District (the District), Measure T General Obligation Bond funds for the year ended June 30, We conducted this performance audit in accordance with the standards applicable to performance audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our conclusion based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our conclusions based on our audit objectives. Our audit was limited to the objectives listed within the report which includes determining the District s compliance with the performance requirements as referred to in Proposition 39 and outlined in Article XIIIA, Section 1(b)(3)(C) of the California Constitution. Management is responsible for the District s compliance with those requirements. In planning and performing our performance audit, we obtained an understanding of the District s internal control in order to determine if the internal controls were adequate to help ensure the District s compliance with the requirements of Proposition 39 and outlined in Article XIIIA, Section 1 (b)(3)(c) of the California Constitution but not for the purpose of expressing an opinion on the effectiveness of the District s internal controls. Accordingly, we do not express an opinion on the effectiveness of the District s internal control. The results of our tests indicated that the District expended Measure T General Obligation Bond funds only for the specific projects approved by the voters, in accordance with Proposition 39 and outlined in Article XIIIA, Section 1 (b)(3)(c) of the California Constitution. Pleasanton, California March 31,

27 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND (MEASURE T) JUNE 30, 2016 AUTHORITY FOR ISSUANCE The Measure T Bonds are issued pursuant to the Constitution and laws of the State of California (the State), including the provisions of Chapters 1 and 1.5 of Part 10 of the California Education Code, and other applicable provisions of law. The Bonds are authorized to be issued pursuant to a request of the District made by a resolution adopted by the Board of Education of the District in July 29, The District received authorization at an election held on November 3, 2015, to issue bonds of the District in an aggregate principal amount not to exceed $193,000,000 to finance specific construction and renovation projects approved by eligible voters within the District. The proposition required approval by at least 55 percent of the votes cast by eligible voters within the District (the 2015 Authorization). PURPOSE OF ISSUANCE The net proceeds of the Bonds and any other series of general obligation bonds issued under the Authorization will be used for the purposes specified in the District bond proposition submitted at the Election, which includes repair, construction, and replacement of school classrooms and facilities. To upgrade and repair neighborhood schools with funding that cannot be taken by the State, shall Redwood City Elementary School District: renovate aging classrooms and science labs for 21 st century learning; fix or replace deteriorating roofs; update classroom and instructional technology; improve school fire and earthquake safety; and repair, construct, acquire or equip classrooms, sites and facilities, by issuing $193 million in bonds at legal rates, with independent oversight, no money for administrators, and all funds staying local? AUTHORITY FOR THE AUDIT On November 7, 2000, California voters approved Proposition 39, the Smaller Classes, Safer Schools and Financial Accountability Act. Proposition 39 amended portions of the California Constitution to provide for the issuance of general obligation bonds by school districts, community college districts, or county offices of education, for the construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of rental property for school facilities, upon approval by 55% of the electorate. In addition to reducing the approval threshold from two-thirds to 55%, Proposition 39 and the enacting legislation (AB 1908 and AB 2659) requires the following accountability measures as codified in Education Code sections : 1. Requires that the proceeds from the sale of the bonds be used only for the purposes specified in Article XIIIA, Section 1(b)(3)(C) of the California Constitution, and not for any other purpose, including teacher and administrator salaries and other school operating expenses. 2. The school district must list the specific school facilities projects to be funded in the ballot measure, and must certify that the governing board has evaluated safety, class size reduction and information technology needs in developing the project list. 3. Requires the school district to appoint a citizen s oversight committee. 4. Requires the school district to conduct an annual independent financial audit and performance audit in accordance with the Government Auditing Standards issued by the Comptroller General of the United States of the bond proceeds until all of the proceeds have been expended. 2

28 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND (MEASURE T) JUNE 30, Requires the school district to conduct an annual independent performance audit to ensure that the funds have been expended only on the specific projects listed. OBJECTIVES OF THE AUDIT 1. Determine whether expenditures charged to the Building Fund have been made in accordance with the bond project list approved by the voters through the approval of Measure T. 2. Determine whether salary transactions, charged to the Building Fund were in support of Measure T and not for District general administration or operations. SCOPE OF THE AUDIT The scope of our performance audit covered the period of July 1, 2015 to June 30, The population of expenditures tested included all object and project codes associated with the bond projects. The propriety of expenditures for capital projects and maintenance projects funded through other State or local funding sources, other than proceeds of the bonds, were not included within the scope of the audit. Expenditures incurred subsequent to June 30, 2016 were not reviewed or included within the scope of our audit or in this report. PROCEDURES PERFORMED We obtained the general ledger and the project expenditure reports prepared by the District for the fiscal year ended June 30, 2016 for the Building Fund (Measure T). Within the fiscal year audited, we obtained the actual invoices and other supporting documentation for a sample of expenditures to ensure compliance with the requirements of Article XIIIA, Section 1(b)(3)(C) of the California Constitution and Measure T as to the approved bond projects list. We performed the following procedures: 1. We selected a sample of expenditures for the period starting July 1, 2015 and ending June 30,2016, and reviewed supporting documentation to ensure that such funds were properly expended on the specific projects listed in the ballot text. 2. Our sample included transactions totaling $164,711. This represents 68 percent of the total expenditures of $241, We verified that funds from the Building Fund (Measure T) were expended for the construction, renovation, furnishing and equipping of District facilities constituting authorized bond projects. CONCLUSION The results of our tests indicated that, in all significant respects, the Redwood City School District has properly accounted for the expenditures held in the Building Fund (Measure T) and that such expenditures were made for authorized Bond projects. 3

29 REDWOOD CITY SCHOOL DISTRICT BUILDING FUND (MEASURE T) SCHEDULE OF FINDINGS AND QUESTIONED COSTS JUNE 30, 2016 None reported. 4

30 ATTACHMENT III

31 Redwood City School District Data Date: 06/30/16 Consolidated Projected Cost Report Budgets versus Projected Costs and Expenditures for multiple Projects Budget vs. Projections and Expenditures RCSD Measure T as of June 30, 2016 Budget Expenditures Project Name/Budget Group/Object Code/Contract Name Total Budget Total Expenditures Remaining Against Budget District - Interim Housing C - Construction Total 5,000,000-5,000,000 5,000,000-5,000,000 Adelante - Adelante Modernization A - Site Total 32,591-32,591 B - Planning Total 203, ,493 C - Construction Total 1,144,118-1,144,118 D - Testing Total 12,984-12,984 E - Inspection Total 19,157-19,157 F - Furniture & Equipment Total 31,929-31,929 G - Project Contingency Total 341,869 1,786,142-1,786,142 Clifford - Clifford Modernization A - Site Total 23,760-23,760 B - Planning Total 467, ,772 C - Construction Total 3,249,555-3,249,555 D - Testing Total 33,028-33,028 E - Inspection Total 48,731-48,731 F - Furniture & Equipment Total 81,218-81,218 G - Project Contingency Total 1,096,542 5,000,604-5,000,604 Clifford - Clifford Quick Start HVAC B - Planning Total 40,328-40,328 C - Construction Total 523, ,625 E - Inspection Total 4,463-4,463 G - Project Contingency Total 41, , ,410 Fair Oaks - Fair Oaks Modernization A - Site Total 27,560-27,560 B - Planning Total 512, ,657 C - Construction Total 3,833,045-3,833,045 D - Testing Total 36,255-36,255 E - Inspection Total 53,490-53,490 F - Furniture & Equipment Total 130, ,783 G - Project Contingency Total 1,008,112 5,601,900-5,601,900 Fair Oaks - Fair Oaks Quick Start Lunch Shelter A - Site Total 19,578-19,578 B - Planning Total 41,979-41,979 C - Construction Total 155, ,955 D - Testing Total 1,770-1,770 E - Inspection Total 16,200-16,200 F - Furniture & Equipment Total 17,352-17,352 G - Project Contingency Total 38, , ,492 Garfield - Garfield Primary A - Site Total 88,517-88,517 B - Planning Total 2,226,504-2,226,504 C - Construction Total 17,861,875-17,861,875 D - Testing Total 202, ,712 E - Inspection Total 299, ,083 F - Furniture & Equipment Total 543, ,219 G - Project Contingency Total 5,083,311 26,305,219-26,305,219 Hawes - Hawes Modernization A - Site Total 65,534-65,534 B - Planning Total 516, ,699 C - Construction Total 3,022,022-3,022,022 D - Testing Total 34,296-34,296 E - Inspection Total 50,601-50,601 F - Furniture & Equipment Total 116, ,716 G - Project Contingency Total 1,284,728 Colbi Technologies Inc. (c) Page 1 of 5 1 of 5

32 Redwood City School District Data Date: 06/30/16 Consolidated Projected Cost Report Budgets versus Projected Costs and Expenditures for multiple Projects Budget vs. Projections and Expenditures RCSD Measure T as of June 30, 2016 Budget Expenditures Project Name/Budget Group/Object Code/Contract Name Total Budget Total Expenditures Remaining Against Budget 5,090,597-5,090,597 Henry Ford - Henry Ford Modernization A - Site Total 31,175-31,175 B - Planning Total 361, ,286 C - Construction Total 2,296,699-2,296,699 D - Testing Total 26,065-26,065 E - Inspection Total 38,456-38,456 F - Furniture & Equipment Total 64,094-64,094 G - Project Contingency Total 726,996 3,544,771-3,544,771 Hoover - Hoover Primary A - Site Total 96,210-96,210 B - Planning Total 1,587,090-1,587,090 C - Construction Total 11,580,000-11,580,000 D - Testing Total 121, ,735 E - Inspection Total 179, ,609 F - Furniture & Equipment Total 350, ,944 G - Project Contingency Total 2,806,105 16,721,694-16,721,694 John Gill - John Gill Primary A - Site Total 75,395-75,395 B - Planning Total 2,112,804-2,112,804 C - Construction Total 15,449,554-15,449,554 D - Testing Total 175, ,334 E - Inspection Total 258, ,690 F - Furniture & Equipment Total 431, ,150 G - Project Contingency Total 5,188,007 23,690,935-23,690,935 Kennedy - Kennedy Primary A - Site Total 90,545-90,545 B - Planning Total 1,657,765-1,657,765 C - Construction Total 12,737,671-12,737,671 D - Testing Total 144, ,558 E - Inspection Total 213, ,282 F - Furniture & Equipment Total 355, ,470 G - Project Contingency Total 3,549,868 18,749,159-18,749,159 Kennedy - Kennedy Quick Start Lunch Shelter A - Site Total 12,127-12,127 B - Planning Total 26,571-26,571 C - Construction Total 369, ,326 D - Testing Total 3,079-3,079 E - Inspection Total 19,372-19,372 F - Furniture & Equipment Total 31,570-31,570 G - Project Contingency Total 64, , ,443 McKinley - McKinley Modernization A - Site Total 19,974-19,974 B - Planning Total 565, ,993 C - Construction Total 3,534,608-3,534,608 D - Testing Total 40,114-40,114 E - Inspection Total 59,184-59,184 F - Furniture & Equipment Total 138, ,336 G - Project Contingency Total 1,565,581 5,923,788-5,923,788 McKinley - McKinley Quick Start Lunch Shelter A - Site Total 11,604-11,604 B - Planning Total 12,954-12,954 C - Construction Total 271, ,266 D - Testing Total 1,584-1,584 E - Inspection Total 19,366-19,366 F - Furniture & Equipment Total 31,394-31,394 Colbi Technologies Inc. (c) Page 2 of 5 2 of 5

33 Redwood City School District Data Date: 06/30/16 Consolidated Projected Cost Report Budgets versus Projected Costs and Expenditures for multiple Projects Budget vs. Projections and Expenditures RCSD Measure T as of June 30, 2016 Budget Expenditures Project Name/Budget Group/Object Code/Contract Name Total Budget Total Expenditures Remaining Against Budget G - Project Contingency Total 17, , ,614 North Star - North Star Modernization A - Site Total 16,595-16,595 B - Planning Total 221, ,241 C - Construction Total 911, ,667 D - Testing Total 10,346-10,346 E - Inspection Total 15,265-15,265 F - Furniture & Equipment Total 25,442-25,442 G - Project Contingency Total 220,340 1,420,895-1,420,895 North Star - North Star Quick Start Lunch Shelter A - Site Total 7,842-7,842 B - Planning Total 9,178-9,178 C - Construction Total 123, ,029 D - Testing Total E - Inspection Total 15,771-15,771 F - Furniture & Equipment Total 18,385-18,385 G - Project Contingency Total 2, , ,775 Orion - Orion Modernization A - Site Total 34,223-34,223 B - Planning Total 220, ,476 C - Construction Total 1,325,371-1,325,371 D - Testing Total 12,905-12,905 E - Inspection Total 19,040-19,040 F - Furniture & Equipment Total 31,734-31,734 G - Project Contingency Total 184,470 1,828,220-1,828,220 Orion - Orion Quick Start Lunch Shelter A - Site Total 11,722-11,722 B - Planning Total 29,719-29,719 C - Construction Total 83,629-83,629 D - Testing Total E - Inspection Total 1,400-1,400 F - Furniture & Equipment Total 2,334-2,334 G - Project Contingency Total 29, , ,848 Prop 39 - Prop 39 Energy Efficiency A - Site Total 30,750-30,750 B - Planning Total 267, ,840 C - Construction Total 1,290,000-1,290,000 D - Testing Total 14,640-14,640 E - Inspection Total 21,600-21,600 F - Furniture & Equipment Total 36,000-36,000 G - Project Contingency Total 454,668 2,115,498-2,115,498 Roosevelt - Roosevelt Modernization A - Site Total 52,258-52,258 B - Planning Total 965, ,068 C - Construction Total 5,548,000-5,548,000 D - Testing Total 54,216-54,216 E - Inspection Total 79,991-79,991 F - Furniture & Equipment Total 175, ,786 G - Project Contingency Total 1,590,981 8,466,299-8,466,299 Roy Cloud - Roy Cloud Modernization A - Site Total 19,815-19,815 B - Planning Total 703, ,392 C - Construction Total 4,122,980-4,122,980 D - Testing Total 44,208-44,208 E - Inspection Total 65,225-65,225 Colbi Technologies Inc. (c) Page 3 of 5 3 of 5

34 Redwood City School District Data Date: 06/30/16 Consolidated Projected Cost Report Budgets versus Projected Costs and Expenditures for multiple Projects Budget vs. Projections and Expenditures RCSD Measure T as of June 30, 2016 Budget Expenditures Project Name/Budget Group/Object Code/Contract Name Total Budget Total Expenditures Remaining Against Budget F - Furniture & Equipment Total 108, ,708 G - Project Contingency Total 1,123,796 6,188,123-6,188,123 Roy Cloud - Roy Cloud Quick Start HVAC A - Site Total B - Planning Total 64,234-64,234 C - Construction Total 220, ,882 D - Testing Total 1,708-1,708 E - Inspection Total 5,020-5,020 G - Project Contingency Total 13, , ,137 Roy Cloud - Roy Cloud Quick Start Lunch Shelter A - Site Total 18,784-18,784 B - Planning Total 68,012-68,012 C - Construction Total 350, ,464 D - Testing Total 3,167-3,167 E - Inspection Total 23,923-23,923 F - Furniture & Equipment Total 31,788-31,788 G - Project Contingency Total 27, , ,047 Selby - Selby Quick Start HVAC A - Site Total B - Planning Total 90,190-90,190 C - Construction Total 589, ,180 D - Testing Total 4,696-4,696 E - Inspection Total 6,929-6,929 G - Project Contingency Total 37, , ,983 Selby Lane - Selby Lane Modernization A - Site Total 87,425-87,425 B - Planning Total 514, ,969 C - Construction Total 4,013,176-4,013,176 D - Testing Total 41,878-41,878 E - Inspection Total 61,787-61,787 F - Furniture & Equipment Total 170, ,060 G - Project Contingency Total 1,464,197 6,353,491-6,353,491 Taft - Taft Primary A - Site Total 77,536-77,536 B - Planning Total 2,335,851-2,335,851 C - Construction Total 18,775,001-18,775,001 D - Testing Total 212, ,667 E - Inspection Total 313, ,771 F - Furniture & Equipment Total 522, ,952 G - Project Contingency Total 5,320,391 27,558,168-27,558,168 Taft - Taft Quick Start Lunch Shelter A - Site Total 11,735-11,735 B - Planning Total 9,885-9,885 21,620-21,620 U Board's Reserve - U Board's Reserve G - Project Contingency Total 4,000,000 4,000,000-4,000,000 V District Office - V District Office Technology Infrastructure A - Site Total 6,654-6,654 B - Planning Total 79,161-79,161 C - Construction Total 284, ,967 D - Testing Total 3,234-3,234 E - Inspection Total 4,772-4,772 F - Furniture & Equipment Total 53,071-53,071 G - Project Contingency Total 108, , ,025 Colbi Technologies Inc. (c) Page 4 of 5 4 of 5

35 Redwood City School District Data Date: 06/30/16 Consolidated Projected Cost Report Budgets versus Projected Costs and Expenditures for multiple Projects Budget vs. Projections and Expenditures RCSD Measure T as of June 30, 2016 Budget Expenditures Project Name/Budget Group/Object Code/Contract Name Total Budget Total Expenditures Remaining Against Budget W Program Common - W Program Administration A - Site Total 845, ,000 B - Planning Total 15,130, ,660 14,977,960 C - Construction Total 3,174,168 63,516 3,110,652 F - Furniture & Equipment Total 453,071 24, ,072 19,602, ,176 19,361,684 Y District - Y Program Reserve G - Project Contingency Total 6,508,000 6,508,000-6,508,000 Totals 205,706, , ,465,583 Colbi Technologies Inc. (c) Page 5 of 5 5 of 5