Annual Audit of the Financial Statements. White Nelson Diehl Evans LLP

Transcription

1 Annual Audit of the Financial Statements For the Year Ended June 30, 2014 White Nelson Diehl Evans LLP Certified Public Accountants

2 Management is responsible for the preparation and fair presentation of the City s financial statements and the relevant internal controls over financial reporting. The Auditors are responsible for expressing opinions on the City s financial statements based on their audit. WNDE did not audit the financial statements of the Oxnard Housing Authority, a component unit of the City. Our opinion on the Oxnard Housing Authority s financial statements is based solely on the report of Mayer Hoffman McCann P.C. who performed the audit of those financial statements. MHM expressed an unmodified opinion. WNDE expressed unmodified opinions on the City s financial statements.

3 Evaluate strength of internal controls Confirm cash and investment balances directly with institutions Confirm debt balances with bond trustees Evaluate capital projects to ensure they represent valid asset additions (not maintenance) in accordance with accounting standards and City policies Test investment compliance and debt covenant compliance Test sample of expenses for: Proper support Proper approval Proper classification Conformity with purchasing policy

4 The City implemented GASB Statement No. 65, Items Previously Reported as Assets and Liabilities Application of existing accounting procedures was not changed We did not note any transactions for which there was a lack of authoritative guidance Significant accounting estimates included in the financial statements which were evaluated for reasonableness are as follows: Fair value of investments General liability and worker s compensation claims liabilities Useful lives of capital assets for depreciation purposes Fair value of interest rate swap agreements Annual required contributions, funded status and funding progress of the defined benefit pension plans Annual required contributions, funded status and funding progress of the other postemployment health care benefits (OPEB) plan

5 The most sensitive footnote disclosures affecting the financial statements are reported in: Note III (pages 80-88) Pension Plans and OPEB Plan Note IV (pages 88-90) Risk Management Note I O. (pages 52-53) Prior period adjustments for: Implementation of GASB Statement No. 65 Report PEG Fees in its own special revenue fund (previously part of General Fund) Recognize deficiencies in required employer contributions to the Retirement Enhancement Pension Plan Note V C. (page 92) Prior period adjustments to write-off liabilities and implement GASB Statement No. 65 in the Successor Agency Private-purpose Trust Fund Note V D. (page 97) Prior period adjustment to report the City s Retirement Enhancement Defined Benefit Plan as a fiduciary pension trust fund There were no significant difficulties in dealing with management and completing the audit There were no disagreements with management that arose during the course of the audit There was one uncorrected misstatement related to the establishment of an allowance for doubtful accounts for a receivable account. Management has determined that its effect is immaterial to the financial statements Management corrected the following material misstatements detected as a result of our audit procedures: Write-off of certain Successor Agency payables to other governments Posting of certain reconciling items identified in the bank reconciliation process for the month of June.

6 Governments currently do not report their pension obligation as a liability in their financial statements In FY 14-15, GASB Statement No. 68 will require local governments to reflect this liability in each local government s Statement of Net Position The amount to report will be the amount of the City s unfunded obligation for pension benefits for services rendered to date CalPERS is in the process of determining the amount of this liability for nearly every local government in California