HomeMy Public PortalAbout09) 7D Audit ReportsAGENDA
ITEM 7.0.
ADMINI S TRATIVE SE RVI CES DEP ARTM E NT
M E MO RANDUM
DATE: February 4, 2020
T O : The Honorable City Council
FROM: ,. . . Bryan Cook, City Manager
. _::.:·· ···:···,Via : Susan Paragas, Administrative Services Director
· · · · · By : Lee Ma , Accountant
' ! :i ·. .
S UBJECT: AljDIT RE PORTS FOR PROPOSITION A, PROPOSITION C , MEASURE R,
TRAN SPORTATION DEVELOPM ENT ACT ARTI C LE 3 AND M EASURE M
'\ .:· FOR FI SCAL Y EAR (FY) 2018-19
R ECOMME NDATION:
The City Council is requested to receive and file FY 2018-19 Proposition A, Proposition
C, M_easure R, Transportation Development Act Article 3 and Measure M Audit Reports.
BACKGROUND:
1. Effective July 1, 1982, Proposition A , passed by the electorate, increased the County
Sales Tax by one-half cent to provide for public transportation projects. Twenty-five
percent of these funds are allocated to municipalities based on population. Cities
have the year of receipt plus three additional years to expend the funds .
2 . Effective November 6, 1990, Proposition C, again passed by the electorate,
increased the County Sales Tax by one-half cent to provide funds for public
transportation projects . Twenty percent of these funds are allocated to municipalities
based on population . Cities have the year of receipt plus three additional years to
expend the funds .
3. Effective November 4, 2008, Measure R, approved by the electorate, increased the
County Sales Tax by one-half cent to provide for public transportation projects .
Fifteen percent of these funds are allocated to municipalities based on a per capita
basis . Cities have the year of receipt plus three additional years to expend the funds.
4. Effective November 8 , 2016, Measure M, approved by the electorate, increased the
County Sales Tax by one -half cent to provide for public transportation projects.
Seventeen percent of these funds are allocated to municipalities based on a per
capita basis. Cities have the year of receipt plus three additional years to expend
the funds .
City Council
February 4, 2020
Page 2 of 3
5. In October 2019, the firm of Simpson & Simpson LLP conducted field work for the
annual audits of Proposition A, Proposition C, Measure R, Transportation
Development Act Article 3 and Measure M. A separate audit of the City of Temple
City's Proposition A, Proposition C, Measure R, Transportation Funds and Measure
R is required on an annual basis by an independent audit firm (Simpson & Simpson
LLP) contracted and hired by the Los Angeles County Metropolitan Transportation
Authority.
6. On January 15, 2020, the City received the final audit (Attachment "A") from Simpson
& Simpson LLP.
ANALYSIS:
The City is in compliance with all requirements of the Los Angeles County Metropolitan
Transportation Authority's (LACMTA) Funding and Allocation Guidelines. The following
reports are presented for your review.
Proposition A
During FY 2018-19, the City received a total of $788,568 in revenues for Proposition A
funds which includes bus pass sales revenues of $43,916 and interest income of $14,103.
The total expenditures for FY 2018-19 were $497,638. The City of Temple City utilized
Proposition A funds for the following items:
• Special Service Paratransit;
• Recreation Transit;
• Bus Shelter Maintenance;
• Bus Pass Subsidy;
• Portion of San Gabriel Valley Council of Governments Membership (60%); and
• Direct Administration.
Proposition C
During FY 2018-19, the City received $632,016 of revenues for Proposition C which also
includes interest income of $26,046. FY 2018-19 expenditures for Proposition C were
$260,000 for the Dial-A-Ride Program.
MeasureR
The City received a total of $467,139 in revenues for Measure R funds which includes
interest income of $12,531. There were no expenditures during FY 2018-19.
City Council
February 4, 2020
Page 3 of 3
Transportation Development Act Article 3
Transportation Development Act Article 3 provides for construction of pedestrian and
bicycle facilities including ADA wheelchair ramps. The City returned the $62,351 draw
down from the fund reserve in May 2018 with the $1,006 in interest to Metro due to the
Sidewalks and Curbs Ramps ADA Improvement Project was not able to get started in FY
2018-19.
Measure M
The City received a total of $519,542 in revenues for Measure M funds which also
includes interest income of $7,381. The expenditures for MeasureR were $3,605 for the
Pavement Management Street Resurfacing Project in FY 2018-19.
Auditor Findings
The auditors identified seven deficiencies in internal control. Four of the findings were
related to missed submission deadlines of required forms that were because of the timing
of an employee turnover. These responsibilities have now been re-assigned to another
employee who will ensure the deadlines are met.
The other three findings are for: (1) exceeding the allotted administration costs; (2) lack
of vendor contracts; and (3) lapsed funds. The City is addressing and resolving these
issues by sending the newly assigned employee to the LACMTA training workshops to
ensure that these findings are resolved and for the City to be in compliance.
CITY STRATEGIC GOALS:
The City Council is requested to receive and file the Proposition A, Proposition C,
Measure R, Transportation Development Act Article 3 and Measure M Audit Reports for
the year ending June 30, 2019 to further City's Strategic Goal to promote Good
Governance.
FISCAL IMPACT:
This agenda item does not have a fiscal impact on the FY 2019-20 City Budget.
ATTACHMENT:
A. Annual Financial Report of Proposition A, Proposition C, Measure R, Transportation
Development Act Article 3 and Measure M Funds
CITY OF TEMPLE CITY
ANNUAL FINANCIAL REPORT OF THE
PROPOSITION A LOCAL RETURN FUND
PROPOSITION C LOCAL RETURN FUND
MEASURERLOCALRETURNFUND
MEASURE M LOCAL RETURN FUND
TRANSPORTATION DEVELOPMENT ACT
ARTICLE 3 FUND
FOR THE FISCAL YEARS ENDED
JUNE 30, 2019 AND 2018
Metro
Simpson & Simpson, LLP
Certified Public Accountants
ATTACHMENT A
• •
FINANCIAL SECTION
Independent Auditor's Report
Proposition A Local Return Fund:
Financial Statements:
Balance Sheets
CITY OF TEMPLE CITY
TABLE OF CONTENTS
Statements of Revenues, Expenditures and Changes in Fund Balance
Supplementary Information:
Schedule of Expenditures-Actual and Metro Approved Project Budget
Schedule of Capital Assets
Proposition C Local Return Fund:
Financial Statements:
Balance Sheets
Statements of Revenues, Expenditures and Changes in Fund Balance
Supplementary Information:
Schedule of Expenditures-Actual and Metro Approved Project Budget
Schedule of Capital Assets
Measure R Local Return Fund:
Financial Statements:
Balance Sheets
Statements of Revenues, Expenditures and Changes in Fund Balance
Supplementary Information:
Schedule of Expenditures -Actual and Metro Approved Project Budget
Schedule of Capital Assets
Measure M Local Return Fund:
Financial Statements:
Balance Sheets
Statements of Revenues, Expenditures and Changes in Fund Balance
Supplementary Information:
Schedule of Expenditures-Actual and Metro Approved Project Budget
Schedule of Capital Assets
Transportation Development Act Article 3 Fund:
Financial Statements:
Balance Sheets
Statements of Revenues, Expenditures and Changes in Fund Balance
Supplementary Information:
Schedule of Transportation Development Act Allocation for Specific Projects
Notes to Financial Statements
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
PAGE
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6
7
8
9
10
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12
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15
16
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18
19
20
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26
COMPLIANCE SECTION
CITY OF TEMPLE CITY
TABLE OF CONTENTS
(Continued)
Independent Auditor's Report on Compliance
Compliance Matrix
Schedule of Findings and Recommendations
EXIT CONFERENCE
ii
28
31
35
42
FINANCIAL SECTION
SIMPSON & SIMPSON
CERTIFIED PUBLIC ACCOUNT ANTS
FOUNDING PARTNERS
BRAINARD C. SI MPSON, CPA
MELBA W. SIMPSON, CPA
Independent Auditor's Report
To the Honorable Members of the City Council of the
City of Temple City, California and the
Los Angeles County Metropolitan Transportation Authority
Report on the Financial Statements
U.S. BANK TOWER
633 WEST 5TH STREET, SUITE 3320
LOS ANGELES, CA 90071
(213) 736·6664 TELEPHONE
(213) 736·6692 FAX
www.slm psonandsi mpsonc pas.com
We have audited the accompanying fmancial statements of the Proposition A Local Return Fund (PALRF),
Proposition C Local Return Fund (PCLRF), Measure R Local Return Fund (MRLRF), Meas ure M Local
Return Fund (MMLRF), and Transportation Development Act Article 3 Fund (TDAA3F) (collectively, the
Funds), of the City of Temple City, California (the City) as of and for the years ended June 30, 2019 and
2018, and the rel at ed notes to the financial statements, as lis ted in the table of contents .
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements 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 respons ibility is to express opinions on these fmancial statements based on our audits. We conducted
our audits in accordance with auditing standards generally accepted in the U ni ted States of America and
the standards applicable to fin ancia l audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those s tandard s require that we plan and perform the audit to
obtain reasonable assurance about whether the fmancial statements are free of m aterial 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 m aterial misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor cons iders 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 evalu ating the appropriateness of
accounting policies 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 opinions .
The CPA. Never Underestimate The Value~·
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the P ALRF, PCLRF, MRLRF, MMLRF and TDAA3F of the City of Temple
City, California, as ofJune 30,2019 and 2018, and the respective changes in their financial position for the
years then ended in accordance with accounting principles generally accepted in the United States of
America.
Emphasis of Matter
As di scussed in Note 2, the fi nancial statements present only the PALRF, PCLRF, MRLRF, MMLRF, and
TDAA3F of the City and do not purport to, and do not, present fairly the financial position of the City of
Temple City, California, as ofJune 30,2019 and 2018, and the changes in its financial position for the years
then ended in conformity with accounting principles generally accepted in the United States of America.
Our opinion is not modified with respect to this matter.
Supplementary Information
Our audits were conducted for the purpose of forming opinions on each of the Funds' financial statements.
The accompanying supplementary information as listed in the table of contents is presented for purposes of
additional analysis and is not a required part of the financial statements .
The supplementary information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the Funds' financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the Funds' financial statements or
to the Funds' financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the supplementary
information is fairly stated, in all material respects, in relation to each of the Funds' financial statements as
a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards , we have issued our report dated November 2 1,2019,
on our consideration of the City's internal control over the Funds' financial reporting and on our tests of its
compliance with certain provi sions 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 the Funds' financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over the Funds' financial reporting or on compl iance. That report is an integral part of an audit performed
in accordance with Government Auditing Standards in considering the City's internal control over the
Funds' financial reporting and compliance.
Los Angeles, Californ ia
November 21, 2019
2
CITY OF TEMPLE CITY
PROPOSITION A LOCAL RETURN FUND
BALANCE SHEETS
June 30
2019
ASSETS
Cash and investments $ 1,238,184 $
Other receivable 7,227
Total assets $ 1,245,411 $
LIABILITIES AND FUND BALANCE
Liabilities
Accounts payable $ 64,046 $
Total liabilities 64,046
Fund Balance
Restricted 1,181,365
Total fund balance 1,181,365
Total liabilities and fund balance $ 1,245,411 $
The accompanying notes are an integral part of the financial statements.
3
2018
984,420
7,227
991,647
101,212
101,212
890,435
890,435
991,647
CITY OF TEMPLE CITY
PROPOSITION A LOCAL RETURN FUND
STATEMENTS OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
For the Fiscal Years Ended June 30
2019
REVENUES
Proposition A $ 730,549 $
Project generated revenue (Note 8) 43,916
Interest income 14,103
Total revenues 788,568
EXPENDITURES
Various projects 497,638
Total expenditures 497,638
Excess of revenues over expenditures 290,930
Fund balance at beginning of year 890,435
Fuud balance at end of year $ 1,181,365 $
The accompanying notes are an integral part of tbe financial statements.
4
2018
681,478
73,388
12,926
767,792
740,309
740,309
27,483
862,952
890,435
Project
Code
130-01
130-05
140-02
170-04
250-03
270-02
480-05
CITY OF TEMPLE CITY
PROPOSITION A LOCAL RETURN FUND
SUPPLEMENTARY INFORMATION
SCHEDULE OF EXPENDITURES
ACTUAL AND METRO APPROVED PROJECT BUDGET
For the Fiscal Year Ended June 30, 2019
(With Comparative Actual Amount for the Fiscal Year Ended June 30, 2018)
2019
Variance
Metro Favorable
Project N arne Budget Actual (Unfavorable)
Special Service Paratransit $ 525,000 $ 266,631 $ 258,369 $
Dial-A-Ride 265,000 265,000
Recreational Transit 68,000 61,873 6,127
Bus Shelter Maintenance 17,000 12,525 4,475
User-Side Subsidy 111,030 61,974 49,056
San Gabriel Valley Council of
Governments Membership 11,500 10,880 620
Direct Administration 63,765 * 83,755 (19,990)
Total expenditures $ 1,061,295 $ 497,638 $ 563,657 $
* Metro subsequently approved the budget increase to $83,755.
The accompanying notes are an integral part of the financial statements.
5
2018
Actual
477,246
60,674
8,920
94,606
10,720
88,143
740,309
Date
Acquired
None
CITY OF TEMPLE CITY
PROPOSITION A LOCAL RETURN FUND
SUPPLEMENTARY INFORMATION
SCHEDULE OF CAPITAL ASSETS
June 30, 2019
Description
Balance
7/1/2018 Additions Deletions
Balance
6/30/2019
$ ___ $ ___ $ ___ $ ___ _
Total $====$ $ $====
The accompanying notes are an integral part of the financial statements.
6
CITY OF TEMPLE CITY
PROPOSITION C LOCAL RETURN FUND
BALANCE SHEETS
June 30
2019
ASSETS
Cash and investments $ 1,759,584 $
Total assets $ 1,759,584 $
LIABILITIES AND FUND BALANCE
Liabilities
Accounts payable $ $
Total liabilities
Fund Balance
Restricted 1,759,584
Total fund balance 1,759,584
Total liabilities and fund balance $ 1,759,584 $
The accompanying notes are an integral part of the financial statements.
7
2018
1,387,568
1,387,568
1,387,568
1,387,568
1,387,568
CITY OF TEMPLE CITY
PROPOSITION C LOCAL RETURN FUND
STATEMENTS OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
For the Fiscal Years Ended June 30
2019
REVENUES
Proposition C $ 605,970 $
Interest income 26,046
Total revenues 632,016
EXPENDITURES
Various projects 260,000
Total expenditures 260,000
Excess of revenues over expenditures 372,016
Fund balance at beginning of year 1,387,568
Fund balance at end of year $ 1,759,584 $
The accompanying notes are an integral part of the financial statements.
8
2018
566,343
16,824
583,167
203,442
203,442
379,725
1,007,843
1,387,568
Project
Code
130-05
440-01
CITY OF TEMPLE CITY
PROPOSITION C LOCAL RETURN FUND
SUPPLEMENTARY INFORMATION
SCHEDULE OF EXPENDITURES
ACTUAL AND METRO APPROVED PROJECT BUDGET
For the Fiscal Year Ended June 30, 2019
(With Comparative Actual Amount for the Fiscal Year Ended June 30, 2018)
2019
Variance
Metro Favorable
Project N arne Budget Actual (Unfavorable)
Dial-A-Ride $ 260,000 $ 260,000 $
Temple City Boulevard Upgrades and
Safety Improvements
Total expenditures $ 260,000 $ 260,000 $
The accompanying notes are an integral part of the financial statements.
9
$
$
2018
Actual
203,442
203,442
Date
Acquired
None
CITY OF TEMPLE CITY
PROPOSITION C LOCAL RETURN FUND
SUPPLEMENTARY INFORMATION
SCHEDULE OF CAPITAL ASSETS
June 30, 2019
Description
Balance
7/1/2018 Additions Deletions
Balance
6/30/2019
$ ______ $ ______ $ ______ $ ____ __
Total $ $ $ $ ====== ======
The accompanying notes are an integral part of the financial statements.
10
CITY OF TEMPLE CITY
MEASURER LOCAL RETURN FUND
BALANCE SHEETS
June 30
2019
ASSETS
Cash and investments $ 1,043,109 $
Total assets $ 1,043,109 $
LIABILITIES AND FUND BALANCE
Liabilities
Accounts payable $ $
Total liabilities
Fund Balance
Restricted 1,043,109
Total fund balance 1,043,109
Total liabilities and fund balance $ 1,043,109 $
The accompanying notes are an integral part of the financial statements.
11
2018
575,970
575,970
575,970
575,970
575,970
REVENUES
MeasureR
Interest income
Total revenues
EXPENDITURES
CITY OF TEMPLE CITY
MEASURER LOCAL RETURN FUND
STATEMENTS OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
For the Fiscal Years Ended June 30
$
2019
454,608 $
12,531
467,139
Street repair and maintenance
Total expenditures
Excess (deficiency) of revenues over (under) expenditures 467,139
Fund balance at beginning of year 575,970
2018
423,380
6,059
429,439
750,000
750,000
(320,561)
896,531
Fund balance at end of year $ 1,043,109 $ =~5;;,;7,;;,5•;;;9,;,;70;.,
The accompanying notes are an integral part of the financial statements.
12
Project
Code
1.05
1.05
CITY OF TEMPLE CITY
MEASURER LOCAL RETURN FUND
SUPPLEMENTARY INFORMATION
SCHEDULE OF EXPENDITURES
ACTUAL AND METRO APPROVED PROJECT BUDGET
For the Fiscal Year Ended Jnne 30,2019
(With Comparative Aetna! Amount for the Fiscal Year Ended Jnne 30, 2018)
2019
Variance
Metro Favorable
Project N arne Budget Aetna! (Unfavorable)
Pavement Management: Street
Resurfacing $ 750,000 $ $ 750,000
Street Repair and Maintenance
Total expenditures $ 750,000 $ $ 750,000
The accompanying notes are an integral part of the financial statements.
13
$
$
2018
Aetna!
750,000
750,000
Date
Acquired
None
CITY OF TEMPLE CITY
MEASURER LOCAL RETURN FUND
SUPPLEMENTARY INFORMATION
SCHEDULE OF CAPITAL ASSETS
Description
June 30, 2019
Balance
7/1/2018 Additions Deletions
Balance
6/30/2019
$ ___ $ ____ $ ___ $ __ _
Total $ $ $ $ ====== ======
The accompanying notes are an integral part of the financial statements.
14
CITY OF TEMPLE CITY
MEASURE M LOCAL RETURN FUND
BALANCE SHEETS
June 30
2019
ASSETS
Cash and investments $ 673,046 $
Due from Metro 41,376
Total assets $ 714,422 $
LIABILITIES AND FUND BALANCE
Liabilities
Accounts payable $ 274 $
Total liabilities 274
Fnnd Balance
Restricted 714,148
Total fund balance 714,148
Total liabilities and fund balance $ 714,422 $
The accompanying notes are an integral part of the financial statements.
15
2018
198,211
198,211
198,211
198,211
198,211
CITY OF TEMPLE CITY
MEASURE M LOCAL RETURN FUND
STATEMENTS OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
For the Fiscal Years Ended June 30
2019
REVENUES
MeasureM $ 512,161 $
Interest income 7,381
Total revenues 519,542
EXPENDITURES
Various projects 3,605
Total expenditures 3,605
Excess of revenues over expenditures 515,937
Fund balance at beginning of year 198,211
Fund balance at end of year $ 714,148 $
The accompanying notes are an integral part of the financial statements.
16
2018
383,679
1,377
385,056
186,845
186,845
198,211
198,211
Project
Code
1.05
1.05
CITY OF TEMPLE CITY
MEASURE M LOCAL RETURN FUND
SUPPLEMENTARY INFORMATION
SCHEDULE OF EXPENDITURES
ACTUAL AND METRO APPROVED PROJECT BUDGET
For the Fiscal Year Ended June 30, 2019
(With Comparative Actual Amount for the Fiscal Year Ended June 30, 2018)
2019
Variance
Metro Favorable
Project N arne Budget Actual (Unfavorable)
Pavement Management: Street
Resurfacing $ 400,000 $ 3,605 $ 396,395
Street Resurfacing per Pavement
Management Plan
Total expenditures $ 400,000 $ 3,605 $ 396,395
The accompanying notes are an integral part of the financial statements.
17
$
$
2018
Actual
186,845
186,845
Date
Acquired
None
CITY OF TEMPLE CITY
MEASURE M LOCAL RETURN FUND
SUPPLEMENTARY INFORMATION
SCHEDULE OF CAPITAL ASSETS
June 30, 2019
Description
Balance
7/1/2018 Additions Deletions
Balance
6/30/2019
$ ______ $ _______ $ ______ $ ______ _
Total $ $ $ $====
The accompanying notes are an integral part ofthe financial statements.
18
ASSETS
Due from Metro
Total assets
CITY OF TEMPLE CITY
TRANSPORTATION DEVELOPMENT ACT ARTICLE 3 FUND
(PURSUANT TO PUBLIC UTILITIES CODE SECTION 99234)
BALANCE SHEETS
June 30
2019
$
$====
LIABILITIES AND FUND BALANCE
Liabilities
$
$
2018
62,351
62,351
Accounts payable $ ____ $ ___ _
Total liabilities
Fund Balance
Restricted
Total fund balance
62,351
62,351
Total liabilities and fund balance $==== $ ===6='2,;,;,35;,;1=
The accompanying notes are an integral part of the financial statements.
19
CITY OF TEMPLE CITY
TRANSPORTATION DEVELOPMENT ACT ARTICLE 3 FUND
STATEMENTS OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
For the Fiscal Years Ended June 30
2019
REVENUES
TDA3 $ $
Interest income 1,006
Total revenues 1,006
EXPENDITURES
Various projects
Total expenditures
OTHER FINANCING USE
Funds returned to Metro 63,357
Total other financing use 63,357
(Deficiency) excess of revenues (under) over expenditures and
other financing use (62,351)
Fund balance at beginning of year 62,351
Fund balance at end of year $ $
The accompanying notes are an integral part of the financial statements.
20
2018
62,351
62,351
62,351
62,351
Project Description
Local allocations
None
Interest income
CITY OF TEMPLE CITY
TRANSPORTATION DEVELOPMENT ACT ARTICLE 3 FUND
SUPPLEMENTARY INFORMATION
SCHEDULE OF TRANSPORTATION DEVELOPMENT ACT
ALLOCATION FOR SPECIFIC PROJECTS
For the Fiscal Year Ended June 30, 2019
Program
Year Allocations Expenditures
Unexpended
Allocations
2018-19 $ $ $
Total $ $ $
1,006
Fund balance at beginning of year
Funds returned to Metro
62,351
(63,357)
Fund balance at end of year $
The accompanying notes are an integral part of the financial statements.
21
Project
Status
CITY OF TEMPLE CITY
NOTES TO FINANCIAL STATEMENTS
For the Fiscal Years Ended June 30, 2019 and 2018
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fund Accounting
The operations of the Proposition A Local Return Fund (P ALRF), Proposition C Local Return Fund
(PCLRF), Measure R Local Return Fund (MRLRF), Measure M Local Return Fund (MMLRF), and
Transportation Development Act Article 3 Fund (TDAA3F) (collectively, the Funds) are accounted for in
separate sets of self-halancing accounts that comprise their assets, liahilities, fund balance, revenues and
expenditures.
P ALRF and PCLRF represent 25% and 20%, respectively, of the Y, cent Proposition A and Y, cent
Proposition C sales taxes which are distributed to the jurisdictions within Los Angeles County based on
population and must be used exclusively for transportation related programs and projects.
MRLRF is derived from 15% of a county-wide Y, cent sales tax which is distributed to the jurisdictions
within Los Angeles County based on a per capita basis and must be used exclusively for transportation
purposes.
MMLRF is derived from 17% of a county-wide Y, cent sales tax which is distributed to the jurisdictions
within Los Angeles County based on a per capita basis and must be used exclusively for transportation
purposes.
TDAA3F is a Special Revenue Fund that accounts for the City's share of the Transportation Development
Act Article 3 allocations which are legally restricted for specific purposes.
Basis of Accounting and Measurement Focus
PALRF, PCLRF, MRLRF, MMLRF, and TDAA3F are accounted for using the modified accrual basis of
accounting whereby revenues are recognized when they become both measurable and available to finance
expenditures of the current period and expenditures are generally recognized when the related fund
liabilities are incurred.
Special Revenue Funds are reported on spending or "financial flow" measurement focus. This means that
generally only current assets, current liabilities and deferred inflows and outflows of resources are included
on their balance sheets. Statement of revenue, expenditures and changes in fund balance for Special
Revenue Funds generally present increases (revenue and other financing sources) and decreases
(expenditures and other financing uses) in net current assets.
Budgets and Budgetary Accounting
The budgeted amounts presented in this report for comparison to the actual amounts are presented in
accordance with accounting principles generally accepted in the United States of America.
22
CITY OF TEMPLE CITY
NOTES TO FINANCIAL STATEMENTS
For the Fiscal Years Ended June 30,2019 and 2018
(Continued)
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fair Value Measurement
In accordance with Government Accounting Standard Board (GASB) Statement No. 72, Fair Value
Measurement and Application, which became effective for the fiscal year ended June 30, 2016, the City
categorizes its fair value measurement within the fair value hierarchy that is based on the valuation inputs
used to measure the fair value of the investment. Level 1 inputs are quoted prices in active markets for
identical investments; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant
unobservable inputs. Accordingly, the City reports its investment at fair value and recognizes unrealized
gain (loss) on investments.
Refer to City's 2019 Comprehensive Annual Financial Report for detailed disclosures regarding the City's
investment policy and fair value measurement.
Fund Balance Reporting
GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, establishes
the fund balance classifications that comprise a hierarchy based primarily on the extent to which a
government is bound to observe constraints imposed upon the use of resources reported in governmental
funds.
The PALRF, PCLRF, MRLRF, MMLRF, and TDAA3F report the following fund balance classification as
ofJune 30,2019:
• Restricted-Amounts that are constrained for specific purpose, which are externally imposed by
providers, such as creditors, or amounts constrained due to constitutional provisions or enabling
legislation. The uses of the funds' remaining fund balances are restricted for projects approved by
Los Angeles County Metropolitan Transportation Authority (Metro).
Information regarding the fund balance reporting policy adopted by the City is described in Note 1 to the
City's Comprehensive Annual Financial Report.
NOTE 2-ANNUAL FINANCIAL STATEMENTS
The financial statements reflect only the financial position and results of operations of the PALRF, PCLRF,
MRLRF, MMLRF, and TDAA3F and their compliance with the Proposition A and Proposition C Local
Return Program Guidelines, Measure R Local Return Program Guidelines, Measure M Local Return
Program Guidelines, Transportation Development Act Article 3 and the Los Angeles County Metropolitan
Transportation Authority Funding and Allocation Guidelines for Transportation Development Act Article
3 Bicycle and Pedestrian Funds.
23
CITY OF TEMPLE CITY
NOTES TO FINANCIAL STATEMENTS
For the Fiscal Years Ended June 30, 2019 and 2018
(Continued)
NOTE 3 -PROPOSITION A AND PROPOSITION C LOCAL RETURN COMPLIANCE
REQIDREMENTS
In accordance with Proposition A and Proposition C Local Return Program Guidelines, funds received
pursuant to these guidelines may only be used for Proposition A and Proposition C Local Return approved
programs. See accompanying Compliance Matrix.
NOTE 4-MEASURER LOCAL RETURN COMPLIANCE REQIDREMENTS
In accordance with Measure R Local Return Program Guidelines, funds received pursuant to these
guidelines may only be used for Measure R Local Return approved programs. See accompanying
Compliance Matrix.
NOTE 5-MEASURE M LOCAL RETURN COMPLIANCE REQIDREMENTS
On June 23, 2016, the Metro Board of Directors approved the Los Angeles County Traffic improvement
Plan Ordinance, known as Measure M. In accordance with Measure M Local Return Program Guidelines,
funds received pursuant to these guidelines may only be used for Measure M Local Return approved
programs. See accompanying Compliance Matrix.
NOTE 6-TRANSPORTATION DEVELOPMENT ACT COMPLIANCE REQIDREMENTS
In accordance with Public Utilities Code Section 99234, funds received pursuant to this Code's section may
only be used for activities relating to pedestrians and bicycle facilities. See accompanying Compliance
Matrix.
NOTE 7-CASH AND INVESTMENTS
The PALRF, PCLRF, MRLRF, MMLRF, and TDAA3F's cash and investment balances were pooled with
various other City funds for deposit and investment purposes. The share of each fund in the pooled cash
account was separately maintained and interest income was apportioned to the participating funds based on
the relationship of their average quarterly balances to the total of the pooled cash and investments.
NOTE 8-PROJECT GENERATED REVENUE-PALRF
Project generated revenue for the years ended June 30, 2019 and 2018 consisted of the following:
Bus Pass Sales $
Total $
2019 2018
43,916 $ 73,388
---,....,...,~
43,916 $ 73,388
~~~~
24
CITY OF TEMPLE CITY
NOTES TO FINANCIAL STATEMENTS
For the Fiscal Years Ended June 30, 2019 and 2018
(Continued)
NOTE 9-TRANSPORTATION DEVELOPMENT ACT FUND REVENUE ALLOCATION
The revenue allocation for the years ended June 30, 2019 and 2018 consisted of the following:
2019 2018
FY 2014-15 allocation $ $ 15,273
FY 2015-16 allocation 23,034
FY 2016-17 allocation 24,044
Total payment requested $ $ 62,351
NOTE 10-TRANSPORTATION DEVELOPMENT ACT FUNDS RESERVED
In accordance with TDA Article 3 (SB821) Guidelines, funds not spent during the fiscal year have been
placed on reserve in the Local Transpottation Fund (L TF) account with the County Auditor-Controller to
be drawn down whenever the funds become eligible for a specific project and an approved drawdown
request is received by Metro. As of June 30, 2019 and 2018, the City has funds on reserve as follows:
2019 2018
FY 2015-16 allocation $ 23,034 $
FY 2016-17 allocation 24,044
FY 2017-18 allocation 23,802 23,802
FY 2018-19 allocation 24,676
Available reserve balance $ 95,556 $ 23,802
The fiscal year 2014-15 allocation of$15,273 was not spent as ofJune 30,2019 and therefore, lapsed and
returned to Metro for future reallocation. See Finding No. 2019-007 on the Schedule of Findings and
Recommendations.
NOTE 11-SUBSEQUENT EVENTS
The City has evaluated events or transactions that occurred subsequent to June 30, 2019 through November
21, 2019, the date the accompanying financial statements were available to be issued, for potential
recognition or disclosure in the financial statements and determined no subsequent matters require
disclosure or adjustment to the accompanying financial statements.
25
SIMPSON & SIMPSON
CERTI FIED PUBLIC ACCOUNT ANTS
U.S. BANK TOWER
633 WE ST 5TH STREET, SUITE 3320
LOS AN GELES, CA 9007 1
(213) 736·6664 TELEPHONE
(213) 736-6692 FAX
www .simpsonandsimpsoncpas.com
FOUNDING PARTN ERS
BRAINARD C. Sll.f'SON, CPA
MELBA W. SIMPSON, CPA 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
To the Honorable Members of the City Council of the
City of Temple City, California and the
Los Angeles County Metropolitan Transit Authority
We have audited, 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, the financial statements of the P r oposition A Local Return Fund,
Proposition C Local Return Fund, Measure R Local Return Fund, Measure M Local Return Fund, and
Transportation Development Act Article 3 Fund (collectively, the Funds) of the City of Temple City,
California (the City), as of and for the year ended June 30, 2019, and the related notes to the fina n cial
statements, and have issued our report thereon dated November 21,2019.
Internal Control Over Financial Reporting
In planning and performing our audit of the Funds' financial statements, we considered the City's internal
control over financial reporting (internal control) to determine the audit pr ocedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the Funds ' financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we
do not express an opinion on the effectiveness of the City's internal control.
A deficiency in internal control exists when the d esign or operation of a control does not allow management
or employees, in the normal course of performing their assigned func tions, to prevent, or detect and correct,
misstatements on a timely basis. A mate rial 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. A significant
d eficiency is a deficiency, or a combination of deficiencie s, in internal control that is less severe th an 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 p aragraph of this
section and was not designed to identify all deficiencies in internal control that might be materia l
weaknesses or significant deficiencies. Given these limitations, during our audit we did n ot identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
The CPA. Never Underesllmale The Value:"
26
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's Proposition A Local Return Fund,
Proposition C Local Return Fund, Measure R Local Return Fund, Measure M Local Return Fund and
Transportation Development Act Article 3 Fund financial statements are free from 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 audits, 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 result 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.
Los Angeles, California
November 21, 2019
27
COMPLIANCE SECTION
SIMPSON & SIMPSON
CERTIFIED PUBLIC ACCOUt-11 AlliS
FOUNDING PARTN ERS
BRAINARD C. SIIII'SON, CPA
MELBA W. SIIII'SON, CPA
Independent Auditor's Report on Compliance
To the Honorable Members ofthe City Council of the
City of Temple City, California and the
Los Angele s County Metropolitan Transit Authority
Report on Compliance
U.S. BANK TOVvt:R
633 Vvt:ST 5TH STREET, SUITE 3320
LOS ANGE LES, CA 9007 1
(2 13) 736-6664 TELEPHON E
(213) 736-6692 FAX
WWN .slmpsonandslmpsoncpas .co m
We have audited the compliance of the City of Temple City , California (the City) with the Propos ition A
and Proposition C Local Return Guidelines, MeasureR Local Return Guidelines, Measure M Local R eturn
Guidelines, Transportation Development Act Article 3, and the Los Angeles County Metropolitan
Transportation Authority's Funding and Allocation Guidelines for t he Transportation Development Act
Article 3 Bicycle and Pedestrian Funds (collectively, the Guidelines) for the year ended June 30, 2019.
Management's Responsibility
Management is responsible for the City's compliance with the Guidelines.
Auditor's Responsibility
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 of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States, and the Guidelines referred to in the preceding paragraph.
Those standards and the Guidelines require that we plan and perform the audit to obtain reasonable
assurance about whether noncompliance with the type s of compliance requirements referred to above that
could h ave a direct and material effect on Proposition A Local Return Program, Proposition C Local Return
Program, Measure R Local Return Program, Measure M Local Return Program, an d Tran sportation
Development Act Article 3 Program occuned. An audit includes examining, on a test basis, evidence about
the City's compliance with tho se requirements and performing such other procedures as we considered
necessary in the circumstances.
We believe that our audit provides a reasonable basis fo r our opinion on compliance w ith the Guidelines.
However, our audit does not provide a l egal determination of the City's c ompliance with the Guidelines.
Opinion 011 Each Local Return Program a11d Transportation Development Act Article 3
In our opinion, except as noted in the Compliance Matrix and the Schedule of Findings and
Recommendations, the City complied, in all material respects, with the compliance requirements of the
Guidelines for the year ended June 30, 2019.
(CPA)
The CPA. Never Underestimate The Value:·
28
Other M alters
The results of our auditing procedures disclosed instances of noncompliance, which are required to be
reported in accordance with the Guidelines and which are described in the accompanying Schedule of
Findings and Recommendations as Finding Nos. 2019-001, 2019-002, 2019-003, 2019-004, 2019-005,
2019-006, and 2019-007. Our opinion on each local return program and Tra nsportation Development Act
Article 3 program is not modified with respect to these matters .
The City 's re sponses to the noncompliance findings identified in our audit are described in the
accompanying Schedule of Findings and Recommendations. The City's responses were not subjected to
the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the
responses.
Report on Internal Control Over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the Guidelines referred to above. In planning and performing our audit of compliance, we
considered the City's internal contro l over compliance to determine the auditing procedures that are
appropriate in the circumstances for the purpose of expressing an 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.
Our consideration of internal contro l over compliance was for the limited purpose described in the fJist
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that we consider to be material weaknesses or significant deficiencies and therefore, material
weaknesses or significant deficiencies may exist that were not identified. However, we identified certain
deficiencies in internal control over compliance that we consider to be a material weakness and a significant
deficiency.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance 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 complian ce is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance under the Guidelines
will not be prevented, or detected and corrected, on a timely basis. We consider the deficiency in internal
control over compliance described in the accompanying Schedule of Findings and Recommendations as
Finding No. 2019-003 to be a material weakness.
A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with the Guidelines that is less severe than a material
weakness in internal control over compliance, yet important enough to merit attention by those charged
with governance. We consider the deficiency in internal control over compliance described in the
accompanying Schedule of Findings and Recommendations as Finding 2019-005 to be a significant
deficiency.
29
The City's responses to the internal control over compliance findings identified in our audit are de scribed
in the accompanying Schedule ofFindings and Recommendations. The City's responses were not subj ected
to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on
the responses .
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of that testing based on the requirements of the
Guidelines. Accordingly, this report is not suitable for any other purpose.
Los Angeles, California
November 21,2019
30
CITY OF TEMPLE CITY
COMPLIANCE MATRIX
Year Ended June 30, 2019
-c.:~:-.. ::,,--~.~m,::l~~:iJ;;;iEf;:=:·
-~----1--------~~-----~-~--~--------~-~--~---~-----~--~---~-------~~--~-y-e;;-~-,-~No-----N, A -----------~---~----------~-------------~-
~-~ ---~---~----~----~-----~------~--~-~------~--~-----------~--~-~ --~~~----"C ... ~--~-------~------------·------------------
A, Proposition A and Proposition C Local Retnrn Funds
-~-~-~--~-----------------------------~-------------~-------------------------~--~----------~~--~-----
1. Uses the State Controller's Uniform System of X None
Accounts and Records.
_ ~:-_Ti111_ely~ll~_()f fi:lt1ds._ __ ----------~--_______ ~~ ___ :X_~-----~~ ______ ~~~ __ 1'/o_ll': __ ~~----~-----~--------~ ____ _
3. Funds expended were approved and have not X None
been substituted for property tax.
4. Expenditures that 25% of approved
project budget have approved amended project
Description Form (Form A).
X None See Finding No. 2019-
00 I on Schedule of
Findings and
Recommendations.
5. Administrative expenses are within the 20% cap X None
of the total annual Local Return Expenditures.
------· .. -·~·----""" _____ , ______ , __ ~---------·-----~ .. ------------------·---.. ------------··-·----------·--------------·-···---~------------····-···-·····
6. All on-going and carryover projects were
reported in Form B.
X
---;:,-~ -~~--~---------~-~------~-------~-----------~----~-----------~~
7. Annual Project Summary Report (Form B) was
submitted on time.
None
X None See Finding No. 2019-
002 on Schedule of
Findings and
Recommendations. -~"-------------~---------~-----~--------~----~------~----~J-·::-~~J-------~--~-----------------------------------------~~--
8. Annual Expenditure Report (Form C) was X None
submitted on time .
. ---·----------·--·-···--------------·-----------·--"-·----------------··------------·-----------·-"""""" ____ --------·-----~--------·
9. _ c:;_~~~()_f_c_~~ll_e_gl!~[ll<:J1l~a_re_ lll_'lint!litl':~:-_ r--.~--
10. Accounting procedures, record keeping and
documentation are adequate.
11. Pavement Management System (PMS) is in place
and being used for Street Maintenance or
Improvement Projects Expenditures.
12. Local Retnrn Account is credited for
reimbursable expenditures.
X
X
···-----·-·-·--·-----·------------·--""""'_______________________________ --------~~··,~· ,_,_
13. Self-Certification was completed and submitted
for Intelligent Transportation Systems projects or
elements.
14. Sigoed Assurances and Understandings form was X
on file. 1-·:--::------~-------~-------------~-~---~---------------------~---
_1_5:_l_':und exchange_s_:-vere appr():lf_ed bi: M~tr_o._ ___ ~ _____ _
16. Recreational transit form was submitted on time.
31
X
X
X
X
None
None
·::·:-----I
None
None
None
None
See Finding No. 2019-
003 on Schedule of
Findings and
Recommendations.
X None
None See Finding No. 2019-
004 on Schedule of
Findings and
Recommendations.
Compliance Requirement
CITY OF TEMPLE CITY
COMPLIANCE MATRIX
Year Ended June 30, 2019
(Continued)
In Compliance Q t . d If no, provide details ues tone
C t and management
OS S
I Yes No
-c=c-+---------~ -~-----_t:~,_o,ccn=s~e~, __ _
N/A
B. MeasureR Local Return Fund
I. Funds were expended for transportation
purposes.
·------------------+---------------------1
X None
----·-·-······-----~------------------------------------------------+------+-
2. Funds were used to augment, not supplant, X None
existing local revenues being used for
transportation purposes unless there is a funding
shortfall.
3. Signed Assurances and Understandings form
was on file.
1-------· -----------------------------------------------------
4. Separate MeasureR Local Return Account was
established.
5. Revenues received including allocations, project
generated revenues and interest income was
properly credited to the Measure R Local Return
Account.
-------------------~ -----------------------------------
X None
X None
X None
--~ ----------·-·--·----------··----------------------------------
6. Funds were expended with Metro's approval. X None
1-~-------~---------------~----------------------------- -----------------------------lcc----c--c-c----------
7. Expenditure Plan (Form One) was submitted on X None See Finding No.2019-
time. 005 on Schedule of
Findings and
Recommendations.
8. Expenditure Report (Form Two) was submitted
on time.
X
9. Timely use of funds. X
1-: ~--------------·------·-····-·----- --···-·····--·-···· ---------------------------
I 0. Administrative expenditures are within the 20%
cap.
lc·c----------~----·----------------------
11. Fund exchanges were approved by Metro.
12. A separate account was established for Capital
reserve funds and Capital reserve was approved
by Metro.
13. Recreational transit form was submitted on
time.
32
None
None
X None
X
-1-----==---1--·---------------------~-------
X None
X None
Compliance Requirement
CITY OF TEMPLE CITY
COMPLIANCE MATRIX
Year Ended June 30,2019
(Continued)
In Compliance
If uo, provide details Questioned
Costs and management
response.
1------,------··-------·------·-------··-----·----------------·+-----r·---··-T---·----~ -------------------· ·--
I---·--L------·----------··---·---·--·--··-----------·--+·_Y,_e~~s. __ 1 __ N,_,_o~--f-'Nj_ A __ --------·-·-·-----------·----_ --··--
C. Measure M Local Return Fund
1.
14~~,;~·-·-···---·:----·-----·-------······-·--···:----· ----1-::c-···-1 ----1----·····-······l--,-:;------1-----~---·--··-···--··-······--·
2. Funds were used to augment, not supplant X None
existing local revenues being used for
transportation purposes unless there is a fund
shortfall.
3. Signed Assurances and Understandings was on
file.
4. Separate Measure M Local Return Acconnt was
established.
5. Revenue received including allocations, project
generated revenues and interest income was
properly credited to the Measure M Local
Return Account.
X
X
X
X -;s.--· li~ci~~;;;.e.;~;;;;~deci ~iiliiVretra;8;;;;;;;.~~~~.-
--,-·--··-·-·-··--·--·-·--·-----·-···--···---·--·-·-·--------------···-··--· I
7. Expenditure Plan (Form M-One) was submitted
on time.
8. X
None
None
None
None
X None
None
See Finding No. 2019-
006 on Schedule of
Findings and
Recommendations.
Expenditure Report (Form M-Two) was
submitted on time.
''~-··-·---·--·-------------__ ,,,, __________ " _________________ --·--· --f.-------1------+---------·-·-----.... -·-·-·-·-·--·----··-·-·-
9. Timely use of fuods.
10. Administrative expenses are within the 20%
cap.
- -" -." -------------------------------------·---·· .. ··-····------~---------------
11. Fund exchanges were approved by Metro.
· 12:-Asei~;.;;t;;-~~c-aao!~a8e8t;;i,lishecir0~ capital
X None
X None
X None
X None
reserve funds and Capital reserve was approved
by Metro. 1·--·-1-,--:_____ c ·· ·---··---· ·-c··-c·--------~·--c--·-c··-,----,----,L ________ -1 -1·-------·--·-· ---
13. Recreational transit form was submitted timely. X None
33
Compliance Requirement
I
CITY OF TEMPLE CITY
COMPLIANCE MATRIX
Year Ended June 30,2019
(Continued)
In Compliance
Yes No N/A
D. Transportation Development Act Article 3 Fnnd
I. Timely use of funds. X
____ ,_
2. Expenditures were incurred for activities relating X
to pedestrian and bicycle facilities and amenities.
34
--··--~----------·-·-·----··--·····-------
~ If no, provide details
Costs and management
response.
---------·----~----··-······--·----
-------"----""-"" _______
$15,273 See Finding No. 2019-
007 on Schedule of
Findings and
Recommendations. --------------·-----------
None
CITY OF TEMPLE CITY
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
June 30, 2019
PALRF: Finding No. 2019-001
Compliance According to Proposition A and Proposition C Local Return Guidelines, Section I (C),
Reference "Jurisdictions shall submit for approval a Project Description Form prior to the
expenditure of funds for: 5) a 25 percent or greater change in an approved Local Return
project budget or scope on all operating or capital Local Return projects."
Condition The City exceeded more than 25 percent ofLACMTA's approved budget on PALRF
Project Code 480.05, Direct Administration, in the amount of $4,049. However, the
City submitted a Project Description Form (Form A) to obtain a budget increase from
LACMTA and received subsequent approval on December 6, 2019.
Cause The preparation and submission of the form was assigned to a new employee who was
not aware of the deadline.
Effect The City's PALRF project expenditure exceeded 25 percent ofLACMTA's approved
budget without LACMTA 's approval and the City did not comply with the Guidelines.
Recommendation We recommend that the City establish procedures to ensure that project expenditures
are within the 25 percent cap of the LACMTA's approved budget and an amended
Form A (Project Description Form) is properly prepared and submitted prior to the
expenditure of funds which would result in a 25 percent or greater change in an
approved Local Return project budget or scope on all operating Local Return projects.
Management's In FY 2019-20, the newly assigned employee has been made aware of the reporting
Response deadline and has attended the necessary LACMTA traioing workshops.
Finding Corrected LACMTA Program Manager granted retroactive budget approval in the amount of
During the Audit $83,755 of the said expenditures on December 6, 2019. No follow-up is required.
35
CITY OF TEMPLE CITY
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
June 30, 2019
(Continued)
PALRF and PCLRF: Finding No. 2019-002
Compliance According to Proposition A and Proposition C Local Return Guidelines, Section I. C,
Reference "Jurisdictions shall submit on or before August 1 of each fiscal year an Annual Project
Update to provide current information on all approved on-going and carryover LR
projects."
Condition The City did not meet the August 1, 2018 deadline for submission of the Annual Project
Update (Form B). However, the City submitted the Form Bon August 8, 2018.
Cause The preparation and submission of the form was assigned to a new employee who was
not aware of the deadline.
Effect The City's Form B was not submitted timely as required by Proposition A and
Proposition C Local Return Guidelines.
Recommendation We recommend that the City establish procedures to ensure that the Form B is properly
prepared and submitted before the due date of August 1st so that the City's expenditures
of the Proposition A and Proposition C Local Return Funds will be in accordance with
LACMTA's approval and the Guidelines. Furthermore, we recommend the City to
retain a confirmation of receipt by LACMTA to indicate the form was submitted in a
timely manner.
Management's In FY 2019-20, the newly assigned employee has been made aware of the reporting
Response deadline and has attended the necessary LACMTA training workshops.
Finding Corrected The City subsequently submitted the Form B on August 8, 2018. No follow-up is
During the Audit required.
36
CITY OF TEMPLE CITY
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
June 30, 2019
(Continued)
PALRF: Finding No. 2019-003
Compliance Reference According to Proposition A and Proposition C Local Return Guidelines, Section II,
"A proposed expenditure of funds shall be deemed to be for public transit purposes
to the extent that it can reasonably be expected to sustain or improve the quality
and safety of and/or access to public transit services by the general public or those
requiring special public transit assistance" and Section V, "It is jurisdictions'
responsibility to maintain proper accounting records and documentation ... "
Condition To support the propriety of expenditures being charged to the P ALRF, non-payroll
expenditures should be supported by properly executed contracts, invoices, and
payment vouchers. Although payments to vendors were allowable and were
properly supported by invoices and cancelled checks, the expenditures for
Recreational Transit Project Code 140-02 were not supported by an existing
contract or purchase order form for the following vendors:
a) Thirteen (13) payments made to Fast Deer Bus Charter, Inc. in the total amount
of$20,376;
b) Two (2) payments made to Catalina Channel Express in the total amount of
$11,114.
This is a repeat finding from the prior two fiscal years.
Canse Contracts agreements with the transportation companies were not previously
enforced by the City.
Effect No contract or purchase order form to support the payments made to the vendors,
Fast Deer Bus Charter, Inc. and Catalina Channel Express, indicates a weakness in
the City's internal control.
Recommendation We recommend that the City establish controls to ensure that the costs charged to
the Local Return Funds, although allowable, are adequately supported by contracts,
purchase orders, invoices, canceled checks or similar documentation so that Local
Return expenditures are in compliance with the Guidelines.
Management's Currently, the City department receives services from different bus charter vendors
Response and prepares the necessary contracts for each vendor.
37
CITY OF TEMPLE CITY
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
June 30,2019
(Continued)
PALRF: Finding No. 2019-004
Compliance Reference According to Proposition A and Proposition C Local Return Guidelines, Section
II.A.l.3, Recreational Transit Service, "Jurisdictions shall submit a Listing of
Recreational Transit Services no later than October 15 after the fiscal year."
Condition The City did not meet the October 15, 2019 deadline for submission of the Listing
of Recreational Transit Services. However, the City submitted the listing on
November 6, 2019.
Cause The preparation and submission of the form was assigned to a new employee who
was not aware of the deadline.
Effect The City's Listing of Recreational Transit Services was not submitted timely as
required by the Guidelines.
Recommendation We recommend that the City establish procedures to ensure that the Recreational
Transit Services Listing is properly prepared and submitted before the due date of
October 15th so that the City's expenditures of the Proposition A Local Return Fund
will be in accordance with LACMTA's approval and the Guidelines. Furthermore,
we recommend that the City retain a confirmation of receipt by LACMTA to
indicate the form was submitted in a timely manner.
Management's In FY 2019-20, the newly assigned employee has been made aware ofthe reporting
Response deadline and has attended the necessary LACMTA training workshops.
Finding Corrected The City submitted the form to LACMTA on November 6, 2019. No follow-up is
During the Audit required.
38
CITY OF TEMPLE CITY
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
June 30, 2019
(Continued)
MRLRF: Finding No. 2019-005
Compliance According to MeasureR Local Return Guidelines, Section B (II.l), Expenditure Plan
Reference (Form One): "Jurisdictions shall submit to LACMTA an Expenditure Plan, annually,
on or before August 1st of each fiscal year."
Condition The City did not meet the August 1, 2018 deadline for submission of Form One.
However, the City submitted the Form One on August 7, 2018 .
This is a repeat finding from the prior fiscal year.
Cause The preparation and submission of the form was assigned to a new e mployee who was
no t aware of the deadline.
Effect The City's Form One was not submitted timely as required by MeasureR Local Return
Guidelines.
Recommendation We recommend that the City establish pro cedures to ensure that the Form One is
properly prepared and submitted before the due date of August 1st so that the City's
expenditures of the Measure R Local Return Funds will be in accordance with
LACMTA's approval and the Guidelines. Furthermore, we recommend the City to
retain a confirmation of receipt by LACMTA to indicate the form was submitted in a
timely manner.
Management's In FY 2019-20, the newly assigned employee has been made aware of the reporting
Response deadline and ha s attended the necessary LACMTA training workshops.
Finding Corrected The City subsequently submitted the Form One on August 7, 2018. No follow-up is
During the Audit required.
39
CITY OF TEMPLE CITY
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
June 30, 2019
(Continued)
MMLRF: Finding No. 2019-006
Compliance According to Measure M Local Return Guidelines, Reporting Requirements Section
Reference XXV, Expenditure Plan (Form M-Oue), "To maintain legal eligibility and meet
Measure M LR Program compliance requirements, Jurisdictions shall submit to Metro
an Expenditure Plan (Form M-Oue), annually, by August I of each year."
Condition The City did not meet the August 1, 2018 deadline for submission of Form M-Oue.
However, the City submitted the Form M-Oue on August 7, 2018.
Cause The preparation and submission ofthe form was assigned to a new employee who was
not aware of the deadline.
Effect The City's Form M-Oue was not submitted timely as required by Measure M Local
Return Guidelines.
Recommendation We recommend that the City establish procedures to ensure that the Form M-Oue is
properly prepared and submitted before the due date of August 1st so that the City's
expenditures of the Measure M Local Return Funds will be in accordance with
LACMTA's approval and the Guidelines. Furthermore, we recommend the City to
retain a confmnation of receipt by LACMT A to indicate the form was submitted in a
timely manner.
Management's In FY 2019-20, the newly assigned employee has been made aware of the reporting
Response deadline and has attended the necessary LACMTA training workshops.
Finding Corrected The City subsequently submitted the Form M -One on August 7, 2018. No follow-up
During the Audit is required.
40
CITY OF TEMPLE CITY
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
June 30,2019
(Continued)
TDAA3F: Finding No. 2019-007
Compliance According to LACMTA's Funding and Allocation Guidelines for the TDA Article
Reference 3 Bicycle and Pedestrian Funds, "TDA Article 3 local funds may be placed on
reserve for up to three years (i.e. no longer than the fourth June 30 after they were
made available by Metro Board action). Agencies may accumulate three years
worth of reserved TDA Article 3 local funds before being required to obligate
them or return them to the TDA Article 3 fund. Any funds left on reserve by the
local agency longer than three years are subject to lapse and future reallocation.
For FY 2018-2019, any TDA Article 3 funds left on reserve for FY 2014-2015
are subject to lapse if not claimed by the agency by May 31, 2019."
Condition At June 30, 2019, the City had lapsed fuuds of $15,273 from the June 30, 2015
allocation.
Cause The planned project for TDA Article 3 funds did not commence in FY 2018-19 as
anticipated by the City.
Effect Untimely review of the funding status from the prior year allocation could result in
losing the funding.
Recommendation We recommend that the City implement internal control procedures to track the
TDA Article 3 reserve balance to ensure that all TDA Article 3 funds are claimed
and expended within the required timeline per the TDA Article 3 Guidelines.
Management's In the future, the City will ensure that the TDA Article 3 funds are expended for
Response qualified projects within the period allowed for the timely use of funds.
41
EXIT CONFERENCE
CITY OF TEMPLE CITY
PROPOSITION A LOCAL RETURN FUND, PROPOSITION C LOCAL RETURN FUND,
MEASURER LOCAL RETURN FUND, MEASURE M LOCAL RETURN FUND, AND
TRANSPORTATION DEVELOPMENT ACT ARTICLE 3 FUND
EXIT CONFERENCE
June 30, 2019
An exit conference was held on December II, 2019, with the City of Temple City. Those in attendance
were:
Simpson & Simpson Representative:
John Longoria, Auditor
City's Representative:
Lee Ma, Accountant
Matters Discussed:
Results of the audit disclosed one(!) material weakness, one (1) significant deficiency
and seven (7) non-compliance issues with Metro Guidelines.
A copy of this report was forwarded to the following City representative(s) for their comments
prior to the issuance of the final report:
Lee Ma, Accountant
42
Simpson & Simpson, LLP
633 West 5'h Street, Suite 3320
Los Angeles, CA 90071
RE: CITY OF TEMPLE CITY ANNUAL FINANCIAL REPORT OF THE PROPOSITION A LOCAL
RETURN FUND, PROPOSITION C LOCAL RETIJRN FUND, MEASURER LOCAL RETURN
FUND, MEASURE M LOCAL RETURN FUND, AND TRANSPORTATION DEVELOPMENT
ACT ARTICLE 3 FUND FOR THE FISCAL YEARS ENDED JUNE 30, 2019 AND 2018
I have received the annual financial report of the Proposition A Local Return Fund, Proposition C Local
Return Fund, Measure R Local Return Fund, Measure M Local Return Fund, and Transportation
Development Act Article 3 Fund for the years ended June 30, 2019 and 2018 for the City of Temple City
and agree with the contents of the report except as indicated below:
(Attach additional pages if necessary)
Very truly yours,
Name
Title
Date