City of Piedmont
COUNCIL AGENDA REPORT
DATE: January 3, 2005
FROM: Mark Bichsel, Finance Director
SUBJECT: FY 2003-2004 Audit
Review and accept the FY 2003-04 audited financial statements, the auditors report on compliance and internal control over financial accounting based on an audit of financial statements performed in accordance with Government Auditing Standards and the auditors comment regarding the internal control structure of the City of Piedmont.
Vavrinek, Trine, Day & Co., LLP has completed the FY 2003-04 audit of the City of Piedmont. The audit committee met on December 2, 2004 and accepted the auditors report and recommendation for internal control.
Per the auditors report, the City of Piedmonts general fund balance at June 30, 2004 was $3,353,544, or 25% of general fund expenditures. The general fund balance is approximately $391,000 higher than the prior years general fund balance.
The City of Piedmont completed Phase II of the Sewer Rehabilitation Project in June of 2004 for a total cost of $2,968,191. Of this amount, $2,211,812 was funded by a loan from the State of California Water Resources Control Board. The total amount of the loan to be repaid, including interest, is $2,835,591. The loan is payable in 20 annual installments, commencing in December, 2004.
Preliminary design and engineering work continues on the Central Piedmont and Wildwood/Crocker underground utility districts. Preliminary work has also begun on the Alta Piedmont district. The City of Piedmont continues to collect money from the property owners within these districts and is holding this money to ensure adequate funding for these projects. All expenses incurred during FY 2003-04 on these districts have been paid out of the funds collected from the property owners.
The auditors made the following two comments regarding internal control:
1. Payroll procedures among departments become consistent.
The Finance Department of the City of Piedmont will develop consistent standards for signing payroll timesheets including proper documentation among departments regarding signatures on timesheets.
2. That the City of Piedmont develop clear policies and procedures regarding the accounting for assessment districts and apply them consistently to each district. Specifically, balances held for districts that have deposited funds with the City of Piedmont are maintained in the general ledger, while those districts that have opened separate bank accounts are not maintained in the general ledger. In addition, the City of Piedmont reviews the monthly fiscal agent statements for the Dudley/Blair Assessment District, however, the balances and transactions in these accounts are not recorded in the general ledger.
The Finance Department of the City of Piedmont will maintain balances of the all the assessment districts on the general ledger.
Enclosures: Basic Financial Statements for the Year Ended June 30, 2004
Independent Auditors Report on Compliance and Internal Control
Internal Control narrative to the City Council from the auditor