City of Rio Vista. Transportation Development Act Program. Rio Vista, California. Financial Statements and Independent Auditors Reports

Transcription

1 Transportation Development Act Program Rio Vista, California Financial Statements and Independent Auditors Reports For the year ended June 30, 2011

2 Transportation Development Act Program Financial Statements For the year ended June 30, 2011 Table of Contents Independent Auditors Report... 1 Financial Statements: Page Statement of Net Assets... 3 Statement of Revenues, Expenses, and Changes in Net Assets... 4 Statement of Cash Flows... 5 Notes to Financial Statements... 7 Report on Internal Control over Financial Reporting and on Compliance and Other matters, based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors Compliance Report Schedule of Findings and Responses i

3 This page intentionally left blank. ii

4 INDEPENDENT AUDITORS REPORT To the Honorable Mayor and Members of the City Council of the City of Rio Vista Rio Vista, California We have audited the accompanying financial statements of the Transportation Development Act Fund (TDA Fund) of the City of Rio Vista, California (City), as of and for the year ended June 30, 2011, as listed in the foregoing table of contents. These financial statements are the responsibility of the City s management. Our responsibility is to express an opinion on these financial statements based on our audits. 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. As discussed in Note 1, the financial statements of the TDA Fund are intended to present the financial position and the changes in financial position of the TDA Fund. They do not purport to, and do not, present fairly the financial position of the City as of June 30, 2011, or the changes in its financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of the TDA Funds as of June 30, 2011, and the respective changes in financial positions and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated January 30, 2013, on our consideration of the City s internal control over financial reporting as it relates to the TDA Funds 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 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 in assessing the results of our audit.

5 To the Honorable Mayor and Members of City Council of the City of Rio Vista Rio Vista, California Page 2 The City has not presented the Management s Discussion and Analysis that accounting principles generally accepted in the United States of America has determined is necessary to supplement, although not required to be part of the financial statements. Badawi & Associates Certified Public Accountants Oakland, California January 30,

6 Transportation Development Act Program Statement of Net Assets For the Fiscal Year Ended June 30, 2011 ASSETS Current assets: Cash and investments $ 325,333 Accounts receivable 22,082 Interest receivable 223 Prepaid items 1,223 Total Current assets 348,861 Noncurrent assets: Capital assets: Depreciable, net 194,571 Total Noncurrent assets 194,571 Total Assets 543,432 LIABILITIES Current liabilities: Accounts payable & other liabilities 38,399 Accrued salaries and wages 913 Unearned revenue 174,380 Compensated absences 478 Total current liabilities 214,170 Noncurrent liabilities: Compensated absences 1,433 Total noncurrent liabilities 1,433 Total liabilities 215,602 NET ASSETS Invested in capital assets 194,571 Unrestricted 133,259 Total Net Assets $ 327,830 See accompanying Notes to Financial Statements. 3

7 Transportation Development Act Program Statement of Revenues, Expenses and Changes in Net Assets For the Fiscal Year Ended June 30, 2011 OPERATING REVENUES Fare revenues $ 114,935 Miscellaneous revenue 11,898 Transit service reimbursement 20,000 Total Operating Revenues 146,833 OPERATING EXPENSES Operations and maintenance 474,402 Administrative and general 34,681 Depreciation 24,552 Total Operating Expenses 533,635 Operating Income (Loss) (386,802) NONOPERATING REVENUES TDA 2011 apportionment 176,351 TDA prior years' apportionment 104,391 STA reimbursement 44,945 Interest revenue 1,079 Total Nonoperating Revenues 326,766 Income (loss) before capital contributions (60,036) CAPITAL GRANT REVENUES TDA 2011 capital grant 2,094 Changes in net assets (57,942) BEGINNING NET ASSETS, RESTATED 385,772 ENDING NET ASSETS $ 327,830 See accompanying Notes to Financial Statements. 4

8 Transportation Development Act Program Statement of Cash Flows For the Fiscal Year Ended June 30, 2011 CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers $ 157,751 Cash paid to suppliers (529,483) Cash paid to employees for services (33,418) Cash Flows from Operating Activities (405,150) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Cash received from City funds 64,875 TDA operating grants 271,899 Other operating grants 48,210 Cash Flows from Noncapital Financing Activities 384,984 CASH FLOWS FROM INVESTING ACTIVITIES Interest income received 1,115 Cash Flows from Investing Activities 1,115 Net Cash Flows (19,051) Cash and investments at beginning of year 344,384 Cash and investments at end of year $ 325,333 Reconciliation of Operating Income (Loss) to Cash Flows from Operating Activities: Operating income (loss) (386,802) Adjustments to reconcile operating income to cash flows from Operating Activities: Depreciation 24,552 Change in assets and liabilities: Receivables, net 10,918 Accounts payable (53,858) Prepaid items (1,223) Accrued salaries 632 Compensated absences 631 Cash Flows from Operating Activities $ (405,150) See accompanying Notes to Financial Statements. 5

9 This page intentionally left blank 6

10 Transportation Development Act Program Notes to Financial Statements For the year ended June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. The Reporting Entity The City of Rio Vista (City) accounts for California Transportation Development Act (TDA) monies in the Transit Enterprise Fund. This fund is a part of the City and not separate legal entity. These financial statements are not intended to reflect the financial position, changes in financial position and cash flows, where applicable, of the City in accordance with accounting principles generally accepted in the United States of America. The Transit Enterprise Fund s operations do not generate sufficient fares to cover the operating expenses. Expenses incurred in excess of these revenues, interest and other revenues are reimbursed with grant funds. The operations are subsidized by the Solano Transportation Authority, which is the regional coordinating agency for State of California Transportation Development Act grants. B. Basis of Accounting and Measurement Focus The basic financial statements of the TDA Fund have been prepared in conformity with Generally Accepted Accounting Principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the TDA Fund s accounting policies are described below. The accounts of the TDA Fund are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of selfbalancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. 7

11 Transportation Development Act Program Notes to Financial Statements For the year ended June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Proprietary funds are accounted for using the economic resources measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in Net Assets presents increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which liability is incurred. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses. Proprietary Fund Type Enterprise Fund An enterprise fund is used to account for operations financed and operated similar to business activities such as services rendered to the general public on a fee basis. C. Cash and Investments The City pools cash resources from all funds in order to facilitate the management of cash and achieve the goal of obtaining the highest yield with the greatest safety and least risk. The balance in the pooled cash account is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest-bearing accounts and other investments for varying terms. In accordance with GASB Statement No. 40, Deposit and Investment Risk Disclosures an amendment of GASB Statement No. 3, certain disclosure requirements for deposits and investment risks have been made in the following areas: Interest Rate Risk Credit Risk o Overall o Custodial Credit Risk o Concentration of Credit Risk 8

12 Transportation Development Act Program Notes to Financial Statements For the year ended June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Cash and Investments, continued Highly liquid money market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available. Interest earned on investments is allocated to all funds on the basis of daily cash and investment balances. The City participates in an investment pool managed by the State of California, titled Local Agency Investment Fund (LAIF), which has invested a portion of the pool funds in Structured Notes and Asset- Backed Securities. LAIF s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as to change in interest rates. D. Net Assets In the Proprietary Fund Financial Statements, net assets may be classified in the following categories: Invested in Capital Assets, Net of Related Debt This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the assets. Restricted Net Assets This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments. Unrestricted Net Assets This amount is all net assets that do not meet the definition of invested in capital assets, net of related debt or restricted net assets. E. Compensated Absences A total of 12 to 25 days vacation and 12 days sick leave per year may be accumulated by each employee; however, employees are not paid for accumulated sick leave in excess of 60 days upon retirement or other termination after completion of three years of service. Each employee may accumulate a maximum of 50 days of vacation. 9

13 Transportation Development Act Program Notes to Financial Statements For the year ended June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued F. Pension Plan The Transit Fund s employees are eligible to participate in pension plans offered by California Public Employees Retirement System (CalPERS), an agent multiple-employer defined benefit pension plan which acts as a common investment and administrative agency for its participating member employers. CalPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. The Transportation Funds employees participate in the separate Miscellaneous (all other) Employee Plans. Additional information about the plan can be obtained from the annual audited financial statements of the City. G 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 during the reporting period. Actual results could differ from those estimates. 2. CASH AND INVESTMENTS A. Summary of Cash and Investments The TDA Fund participates in the City s cash and investment pool that includes all other City funds, which the City invests to enhance interest earnings. Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances. As of June 30, 2011, the TDA Fund s cash and investment balance was comprised of the following: Balance June 30, 2011 Cash and investments $ 325,333 Total $ 325,333 10

14 Transportation Development Act Program Notes to Financial Statements For the year ended June 30, CASH AND INVESTMENTS, Continued The California Government Code requires California banks and savings and loan associations to secure cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City s name. The market value of pledged securities must equal at least 110% of the City s cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City s total cash deposits. The City may waive collateral requirements for cash deposits which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. B. Risk Disclosures Interest Risk: Interest rate risk is the market value fluctuation due to overall changes in the interest rates. It is mitigated by limiting the average maturity of the City s portfolio not to exceed five years. Credit Risk: The risk of loss of value of an investment due to a downgrade of its rating or the failure or impairment of its issuer. It is the City s policy to limit its investments in these investment types to the top rating issued by nationally recognized statistical rating organizations (NRSROs), including Standard & Poor s and Moody s Investor s Service. At June 30, 2011, the City s credit risk, expressed on a percentage basis, were as follows: Standard Moody's & Poor's External Pool State of California - Local Agency Investment Fund Not Rated Not Rated Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the failure of the counter party, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. None of the City s investments were subject to custodial credit risk. C. External Investment Pool Local Agency Investment Fund The City s investments with LAIF at June 30, 2011, included a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments may include the following: Structured Notes - debt securities (other than Asset-Backed Securities) whose cash-flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options. Asset-Backed Securities - generally mortgage-backed securities which entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as Collateralized Mortgage Obligations) or credit card receivables. 11

15 Transportation Development Act Program Notes to Financial Statements For the year ended June 30, CASH AND INVESTMENTS, Continued C. External Investment Pool Local Agency Investment Fund, continued As of June 30, 2011, the City had investments in LAIF, which had invested 5.01% of the pool investments funds in Structured Notes and Asset-Backed Securities. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. The fair value factor of was provided by LAIF and used to calculate the fair value of the investments in LAIF. The fair value of the City s position in LAIF is materially equivalent to the value of the pool shares. 3. CAPITAL ASSETS Capital assets are recorded at cost and depreciated over their estimated useful lives. Depreciation of capital assets in service is provided using the straight line method, which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. Depreciation of all capital assets is charged as an expense against operations each year and the total amount of depreciation taken over the years, called accumulated depreciation, is reported on the statement of net assets as a reduction in the book value of the capital assets. Capital assets comprised the following at June 30, 2011: Balance Balance June 30, 2010 Additions Retirements June 30, 2011 Capital assets, being depreciated: Vehicles $ 278,794 $ - $ 278,794 Less accumulated depreciation for: Vehicles (59,671) (24,552) - (84,223) Capital assets, net $ 219,123 $ (24,552) $ - $ 194, ACCOUNTS RECEIVBALE Receivables represent grant revenues due from other governments. Receivables are recorded and revenues are recognized as earned or as specific program expenditures are incurred. 12

16 Transportation Development Act Program Notes to Financial Statements For the year ended June 30, CONTINGENT LIABILITIES The Streets Projects and Transit Fund participate in State grant programs. The grants have been audited by the City s independent auditors in accordance with applicable State requirements. No cost disallowances were proposed as a result of these audits; however, these programs are still subject to further examination by the grantors and the amount, if any, of expenses which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial. 6. FARE BOX REVENUE Section (a) requires the City to earn at least ten percent of fare revenues over operating costs. The City is in compliance with the fare box revenue requirement in FY 2010/ PRIOR PERIOD ADJUSTMENTS The City made a prior period adjustment to record FTA grant revenues in the amount of $48,210 for the reimbursement of prior years expenditures. Net Assets, as Prior Period Adjustment Net Assets, as Previously Reported Grant Revenues Restated $ 337,562 $ 48,210 $ 385,772 13

17 This page intentionally left blank 14

18 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council of the City of Rio Vista Rio Vista, California We have audited the financial statements of the Transportation Development Act Fund (TDA Fund) of the City of Rio Vista, California (City), as of and for the year ended June 30, 2011, and have issued our report thereon dated January 30, 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. Internal Control over Financial Reporting Management of the City is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered City TDA Fund s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City TDA Fund s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City TDA Fund s internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies, or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as described in the accompanying schedule of findings and responses, we identified a deficiency in internal control over financial reporting that we consider to be a material weakness. 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 a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiency described as item FS in the accompanying schedule of findings and responses to be a material weakness.

19 To the Honorable Mayor and Members of City Council of the City of Rio Vista Rio Vista, California Page 2 Compliance and Other Matters As part of obtaining reasonable assurance about whether the TDA Fund s 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 result of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. The City s response to the finding identified in our audit is described in the accompanying summary of findings and responses. We did not audit the City s responses and, accordingly, we express no opinion on the response. This report is intended solely for the information and use of management, the City Council, others within the City and is not intended to be and should not be used by anyone other than these specified parties. Badawi & Associates Certified Public Accountants Oakland, California January 30,

20 INDEPENDENT AUDITORS COMPLIANCE REPORT To the Honorable Mayor and Members of City Council of the City of Rio Vista Rio Vista, California Compliance and Other Matters We have audited the compliance of the City of Rio Vista s (City) Transportation Development Act Fund (TDA Fund) with the types of compliance requirements described in Sections 6666 and 6667 of the Rules and Regulations of the California Administrative Code in the Transportation Development Act Statutes and Administrative Code for 1987 (the Act) and the allocation instructions and resolutions of the Metropolitan Transportation Commission for the year ended June 30, Compliance with the requirements of laws, regulations, contracts, and grants applicable to the TDA Fund is the responsibility of the City s management. Our responsibility is to express an opinion on the City s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Audit Standards issued by the Comptroller General of the United States; Sections 6666 and 6667of the Rules and Regulations of the California Administrative Code in the Transportation Development Act Statutes and Administrative Code for 1987 (the Act) and the allocation instructions and resolutions of the Metropolitan Transportation Commission. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on the TDA Fund occurred. An audit also includes examining, on a test basis, evidence about the City s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the City s compliance with those requirements. In our opinion the TDA funds allocated to and received by the City pursuant to the Act were expended in conformance with the applicable statues, rules and regulations of the Act and the allocation instructions and resolutions of the Metropolitan Transportation Commission for the year ended June 30, Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the compliance requirements referred to above. In planning and performing our audit, we considered the City s internal control over compliance to determine the auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City s internal control over compliance.

21 To the Honorable Mayor and Members of City Council of the City of Rio Vista Rio Vista, California Page 2 A deficiency in internal control over compliance 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, noncompliance on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a compliance requirement will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance 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 deficiencies, significant deficiencies, or material weaknesses in internal control over compliance. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended for the information of the Mayor, City Council Members, management, and the Metropolitan Transportation Commission and is not intended to be and should not be used by anyone other than these specified parties. Badawi & Associates Certified Public Accountants Oakland, California January 30, 2013

22 Transportation Development Act Program Schedule of Findings and Responses For the year ended June 30, 2011 A. CURRENT YEAR FINDINGS - FINANCIAL STATEMENT AUDIT FS Restatement of Previously Issued Financial Statements (Material Weakness) Condition: The City has restated its previously issued TDA financial statements to record FTA grant revenues in the amount of $48,210 for the reimbursement of prior year s expenditures. Criteria: The City is responsible for the fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. Cause: The City s internal controls over financial reporting did not identify the misstatements in a timely manner resulting in the restatement. Effect: The previous year s TDA financial statements were materially misstated. Recommendation: We recommend that the City enhance its internal control over financial reporting to ensure complete and accurate financial reporting. The City can accomplish this by expanding its year-end closing procedures to ensure that all routine and nonroutine transactions were accounted for, the appropriate accounting standards were applied, and transactions were accounted for in the proper period. Management Response: As a result of management turnover and the small staff in the finance department, the City did not have sufficient procedures overseeing financial reporting. The current management is committed to ensuring that all routine and non-routine transactions are accounted for and activities are recorded in the proper fiscal period and formal Accounting Policies and Procedures were approved by City Council on Resolution which address internal control procedures. B. PRIOR YEAR FINDINGS FINANCIAL STATEMENT AUDIT FS Restatement of Previously Issued Financial Statements (Material Weakness) Condition: The City has restated its previously issued TDA financial statements to record grant expenditures that were previously not recorded. Criteria: The City is responsible for the fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. Cause: The City s internal controls over financial reporting did not identify the misstatements in a timely manner resulting in the restatement. Effect: The previous year s TDA financial statements were materially misstated. Recommendation: We recommend that the City enhance its internal control over financial reporting to ensure complete and accurate financial reporting. The City can accomplish this by expanding its year-end closing procedures to ensure that all routine and nonroutine transactions were accounted for, 19

23 Transportation Development Act Program Schedule of Findings and Responses For the year ended June 30, 2011 the appropriate accounting standards were applied, and transactions were accounted for in the proper period. Management Response: The City now records all TDA transactions in separate funds for TDA expenditures. Previous to FY , TDA expenditures for street improvements were charged to General Fund rather than a separate fund, thus causing the misstatement. Status: A prior period adjustment to the TDA financial statements was noted for FY10/11. 20