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Home My Public Portal About7G AUDIT REPORTSCity Council February 5, 2013 Page 2 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. 5 . On June 23, 2011 , the Los Angeles County Metropolitan Transportation Authority Board authorized an amendment to the agreement by replacing the capita l reserve authorization of $5 ,000 ,000 in Proposition C funds with $1 ,500,000 Proposition A and $7,000 ,000 Proposition C funds for a total of $8,500 ,000 in capital reserve. In addition , the term of the reserve account was extended from June 30, 2011 to June 30, 2014. 6 . In December 2012, the firm of Vasquez & Company LLP conducted field work for the annual audits of Proposition A, Proposition C , Measure R and Transportation Development Act Article 3 . A separate audit of the City of Temple City 's Proposition A, Proposition C, Measu re R and Transportation Funds is requ ired on an annual basis by an independent audit firm (Vasquez & Company) contracted and hired by the Los Angeles County Metropolitan Transportation Authority . 7. On January 8, 2013, the City received the final audit from Vasquez & Company. ANALYSIS: All four audits indicate no financial or compliance issues. The following reports are presented for your review . Proposition A During the FY 2011-12, the City received a tota l of $673,192 in revenues for Proposition A funds which includes bus pass sales revenue of $141 ,107 and interest on income of $7,597 . The total expenditures for FY 2011-12 were $625 ,313 . 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 Admin i stration . Proposition C During the FY 2011-12, the City received $451 ,267 revenues for Proposition C which also includes interest income of $15 ,832 . The expenditure for Proposition C was $429 ,615 for the Rosemead Boulevard Improvement Project in FY 2011-12. City Council February 5, 2013 Page 3 MeasureR During the FY 2011-12, the City received a total of $326,581 in revenues for MeasureR funds which also includes interest income of $2,405. The total expenditure for Measure R was $199,731 for the following projects in FY 2011-12: the Citywide Traffic Calming Study Master Plan Project; the Comprehensive Downtown Parking Study and Strategic Plan Project ; the Left Turn Phasing Las Tunas Drive and Temple City Boulevard for East-West Traffic Project; and the Rosemead Boulevard Improvement Project. Transportation Development Act Article 3 Transportation Development Act Article 3 provides for construction of pedestrian and bicycle facilities including ADA wheelchair ramps. Transportation Development Act Article 3 funds are placed on reserve in the Local Transportation Fund Account with the County Auditor-Controller and are drawn down whenever the funds become eligible for a specific project. During the FY 2011-12, the City earned $73 in interest income and drew down the remainder of the $1,474 (of the $27,565 expenditure) for the Citywide Bicycle Master Plan Project from the County Auditor-Controller in Transportation Development Act Article 3 Funds. FISCAL IMPACT: This agenda item does not have a fiscal impact on the FY 2012-13 City Budget. CONCLUSION: Staff is recommending that the City Council receive and file the Proposition A, Proposition C, Measure R and Transportation Development Act Article 3 Audit Reports for the year ended June 30 , 2012. ATTACHMENT: A Annual Financial Report of Proposition A , Proposition C, Measure R and Transportation Development Act Article 3 Funds FINANCIAL SECTION Report of Independent Auditors Proposition A Local Return Fund : Basic Financial Statements: City of Temple City Table of Contents Balance Sheets 3 Statements of Revenues , Expenditures and Changes in Fund Balance 4 Supplemental Information : Schedule of Expenditures -Actual and LACMT A Approved Project Budget 5 Schedule of Capital Assets 6 Proposition C Local Return Fund : Basic Financial Statements : Balance Sheets 7 Statements of Revenues , Expenditures and Changes in Fund Balance 8 Supplemental Information: Schedule of Expenditures-Actual and LACMTA Approved Project Budget 9 Schedule of Capital Assets 1 0 Measure R Local Return Fund: Basic Financial Statements: Balance Sheets 11 Statements of Revenues, Expenditures and Changes in Fund Balance 12 Supplemental Information: Schedule of Expenditures -Actual and LACMT A Approved Project Budget 13 Transportation Development Act Article 3 Fund : Basic Financial Statements: Balance Sheets 14 Statements of Revenues, Expenditures and Changes in Fund Balance 15 Supplemental Information : Schedule of Transportation Development Act Allocation for Specific Pr~ects 16 Notes to Financial Statements 17 Report of Independent Auditors 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 21 COMPLIANCE SECTION Report of Independent Auditors on Compliance Compliance Matrix EXIT CONFERENCE 23 24 26 FINANCIAL SECTION l9J g VASQUEZ l'J]I ,\. COMPANY LLP "'' Report of Independent Auditors To the Honorable Members of the City Council of the City of Temple City, California and the Los Angeles County Metropolitan Transportation Authority We have audited the balance sheets of the Proposition A Local Return Fund , Propos ition C Local Return Fund , MeasureR Local Return Fund and the Transportation Development Act Article 3 Fund . of the City of Temple City , California (City) as of June 30 , 2012 and 2011 , and the accompanying statements of reven ue s, expend i tures. and changes in fund balance for the yea rs then ended . These financial statements are the responsibility of the City's management. Our responsibi lity is to express opinions on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the Un ited 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 audits 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 , assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation . We believe that our audits provide a reasonable basis for our opinions. As discussed in Note 2, the financi al statements present only the Proposition A Local Return Fund , Proposition C Local Return Fund , Measure R Local Return Fund and Transportation Deve lopment Act Article 3 Fund , and do not purport to , and do not, present fairly the City's f inancial pos ition as of June 30, 2012 and 2011 , and the changes in fund balances for the years 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 f inancial position of the Proposition A Local Return Fund , Proposition C Local Return Fund , Measure R Local Return Fund and Transportation Development Act Article 3 Fund of the City of Temple City, California as of June 30 , 2012 and 2011 , and the changes in their fund balan ces for the years then ended , in conformity with accounting principles generally accepted in the United States of America . As discussed in Note 11, the financial statem ents of Measure R Local Return Fund for the year ended June 30 , 2011 have been restated to recognize certain additional expenditures incurred in FY 2011 . In accordance with Government Auditing Standards, we have also issued our report dated December 28 , 2012 on our consideration of the City of Temple City, California 's internal controls over financial repo rting and on our tests of its co mpliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the sco pe of our testing of internal control over f inancial reporting and compliance and the results of that testing , and not to provide an opinion on the internal co ntrol over financial reporting or on compl iance . That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be conside red in assessing the results of our audits . The Proposition A Local Return Fund , Proposition C Local Return Fund , Measure R Local Return Fund and the Transportation Development Act Article 3 Fund , of the City has not presented a Management's Discussion and Analysis that accounting principles generally accepted in the United States of America have determined is necessary to supp lement, although not required to be part of, the basic financial statements . Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole . The supplementary information identified in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements . The supplementary information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the financial statements . The 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 financial statements or to the financial statements themselves , and other additional procedures in accordance with auditing standards generally accepted in the United States of America . In our opinion , the information is fairly stated in all material respects in relation to the basic financial statements as a whole. This report is intended solely for the information and use of City of Temple City and the Los Angeles County Metropolitan Transportation Authority and is not intended to be and should not be used by anyone other than these specified parties. Los Angeles, California December 28, 2012 ASSETS Cash and equivalents City of Temple City Proposition A Local Return Fund Balance Sheets June 30 2012 2011 $ 2,201,938 $ 2 ,210,456 Total assets $ 2,201,938 $ 2 ,210,456 LIABILITIES AND FUND BALANCE Liabilities Accounts payable $ Deposits payable Total liabilities Fund balance Restricted -Ro semead Boulevard Improvement Project Re stricted Total fund balance Total liabilities and fund balance $ See notes to financial statements. 3 46,455 $ 101 ,348 1,504 46,455 102,852 1,500,000 1,500,000 655,483 607,604 2,155,483 2 ,107 ,604 2,201,938 $ 2 ,210,456 City of Temple City Proposition A Local Return Fund Statements of Revenues, Expenditures and Changes in Fund Balance Revenues Proposition A $ Project generated revenue Interest income Total revenues Expenditures Various projects Total expenditures Excess (deficiency) of revenues over expenditures Fund balance at beginning of yea r Fund balance at end of year $ See notes to financial statements. 4 Years ended June 30 2012 2011 524,488 $ 483,469 141,107 146 ,587 7,597 10 ,347 673,192 640,403 625,313 721,977 625,313 721,977 47,879 (81 ,574) 2,107,604 2, 189,178 2,155,483 $ 2 ,107,604 Project Code 130-01 140-02 170-04 250-03 270 -02 380-11 480 -05 City of Temple City Proposition A Local Return Fund Supplemental Information Schedule of Expenditures -Actual and LACMTA Approved Project Budget- Year ended June 30, 2012 Actual for 2011 2012 Variance Metro Positive 2011 Project Name Bu d ge t Actual (Negative) Act ual Special Service Para tra nsit $ 350,000 $ 335 ,640 $ 14,360 $ 412,282 Recreational Transit 42 ,600 38,452 4,148 42 ,926 Bus Shelter Maintenance 10 ,870 8,772 2 ,098 8,772 User-Side Su bsidy 183,3 40 167 ,813 15,527 186 ,100 San Gabriel Valley Council of Governments Membership 9 ,500 9,421 79 9,461 Rosemead Boule vard Improvement Project 1,500 ,000 1,500,000 Direct Administra tion 77 ,225 65,215 12,0 10 62,436 Total e xpenditu res$ 2 ,173,535 $ 625,313 $ 1,548,222 $ 721 ,977 5 B a l a nce Date July1 , Acguir ed De s crietion 2011 08/05/08 Form E350 Va n $ 25 ,799 Total $ 25,799 6 $ $ City of Temple City Proposition A Local Return Fund Supplemental Information Schedule of Capital Assets Year ended June 30, 2012 Balance June 30 , Additi ons Deleti ons 2012 - $ - $ 2 .5,799 -$ - $ 25,799 ASSETS Cash and equivalents City of Temple City Proposition C Local Return Fund Balance Sheets $ Total assets $ June 30 2012 4,092,990 $ 4,092,990 $ 2011 4,071,338 4,071,338 LIABILITIES AND FUND BALANCE Liabilities Accounts payable· $ Total liabilities Fund balance Restricted -Rosemead Boulevard Improvement Project Total fund balance Total liabilities and fund balance $ See notes to financial statements. 7 - $ ____ _ 4,092,990 4,092,990 4,092,990 $ 4,071,338 4,071,338 4,071,338 City of Temple City Proposition C Local Return Fund Statements of Revenues, Expenditures and Changes in Fund Balance Revenues Proposition C $ Inter est income Total revenues Expenditures Various projects Total expenditures Excess of r evenues over expenditures Fund balance at beginning of year Fund balance at end of year $ See notes to financial statements. 8 Years ended June 30 2012 2011 435,435 $ 401 ,356 15,832 18 ,372 451,267 419,728 429 ,615 429,615 21 ,652 419,728 4,071 ,338 3 ,651,610 4,092,990 $ 4 ,071 ,338 Projec t Co d e 380-11 City of Temple City Propos ition C Local Return Fund Supplemental Inf ormation Sc hedule of Expenditures -Act ual and LAC MTA Approved Project Budget Year ended Ju ne 30, 2012 Actu al for 201 1 2012 Var ia nce M etr o Positi ve 2011 Pr oj ect Name B u d g e t A c tual (Negative} Actual Rosemead Boulevard Improvement Projec t $ 7 ,000,000 $ 429,615 $ 6,570,385 $ Tot a l expenditures$ 7,000,000 $ 429 ,615 $ 6,570,385 $ 9 Date Acquired None Description Balance July 1 , 2011 City of Temple City Proposition C Local Return Fund Supplemental Information Schedule of Capital Assets Year ended June 30, 2012 Additions De lations Balance June 30, 2012 $ _______ -_$ _______ -_$ _______ -_$ ________ _ Total $====·=$====·=$====·=$==== 10 ASSETS Cash and equivalents $ Due from other government agencies Total assets $ LIABILITIES AND FUND BALANCE Liabilities City of Temple City MeasureR Local Return Fund Balance Sheets June 30 2012 2011 (As restated) 589,923 $ 528 ,416 31 ,828 621 ,751 $ 528,416 Accounts payable $ _________ -_$ _____ 3_3~,5_1_5_ Fund balance Restricted Totalliabilities 33 ,515 Total fund balance Total liabilities and fund balance $ 11 621 ,751 494,901 621,751 494 ,901 621 ,751 $ ==5=2=8,=4=16= City of Temple City Measure R Local Ret urn Fund Stat ements of Revenues , Expend itures and Changes i n F u nd Balan ce Y e ars ended June 30 2012 2011 (As rest at ed) Re venues Measu r eR $ 3 2 4,176 $ 299,755 Inte r est income 2 ,405 1,638 Tota l re v enues 326,581 301 ,393 Expe ndi tures Va ri ous projects 199,731 33,515 Total expenditur es 199,7 31 33,515 Excess of r evenues over expenditures 126,850 26 7 ,878 Fund balance at beginning of year 494,901 227,023 Fund b alance at end of yea r $ 621,751 $ 494,901 12 Project Co de 01-001 02-001 02-002 02-003 02-004 City of Temple City Measure R Local Return Fund Supplemental Information Schedule of Expenditures -Actual and LACMT A Approved Project Budget Year Ended June 30, 2012 Actual for 2011 2012 Variance 2011 M e tro Po siti v e Actu al Pr oject Name Bud9et Ac t ual (Ne9ative) (As re s tate d) Rosemead Bl vd Improvement Project $ 44 3,700 $ 25 ,910 $ 417,790 $ City'Ni de Upgrade Traffic Street Signage 100,000 100,000 Traffic Signal Upg r ades ; Bal dwin at Oli ve and Las Tunas Dr. @Temp le City Blvd 50,980 11 '15 2 39,828 33,5 15 Compreh ens ive Dov.ntov.n Par king Study & Strateg ic Pl an 140,493 78,912 61,581 City'Nide Tr affic Ca lming Study and Master Plan 140,493 83 ,757 56 ,736 Total exp e nditu re s $ 875.666 $ 199.731 $ 675.935 $ 33,515 13 Cash a nd eq ui va le nts· Du e from LAC MT A ASSETS City of Temple City Transportation Development Act Article 3 Fund Balance Sheets - Pursuant to Public Utilities Code Secti on 99234 June 30 2012 201 1 $ 86 $ 1 ,474 26 ,0 92 Total assets$ ===..;1,!,;,5;,;;6=0=$ ==~2;;;6::;0;.;;9=:2= LIABILITIES AND FUND BALANCE Liabilities Du e to G e ne r al Fund Fund balance (deficit) R estricted $ Total liabilities Total fund ba lance Total liab i lities and fund balance $ See note s to fin anci al s tatements . 14 1 ,473 $ 27 ,552 1,473 2 7 ,552 87 (1 ,460) 87 ~ 1 ,460} 1 ,560 $ 2 6 ,0 92 C ity of Temple City Transportation Development Act Article 3 Fund Statements of Revenues, Expenditures and Changes in Fund Balance Revenues In tergovern men t al All ocations: Ar ticle 3 $ In terest in come Total revenues Expenditures Co n st r u ction Total expenditures Excess (def icie n cy) of revenues ov er expe nd it ures Fund b alance (def icit ) at b egin n in g of yea r Fund ba lance (deficit ) at end of yea r $ See notes to fina ncial statem en ts. 15 Years ended June 30 2012 2011 1,474 $ 26 ,092 73 13 1,547 26,105 27,565 27 ,565 1,547 (1 ,46 0) (1 ,460) 87 $ {1 ,460) City of Temple City Transportation Development Act Article 3 Fund Supplemental Information Schedule of Transportation Development Act Allocation for Specific Projects Year ended June 30 , 2012 Totals to Date Program Unexpended Project Project Description Year Alloca t ions Expend itu res Al loca t ions Status Local Allocations: Comp rehe nsive Ci tywide Bicycle Master Pl an 2012 $ 1,474 $ - $ 1,474 Ongoi ng Totals $ 1 ,474 $ 1,474 Unexpended in te rest accumul ated t o d ate 73 Fund balance at beginning of year {1.460) Fu nd ba l ance at end of year $ 87 16 NOTE 1 NOTE2 NOTE3 NOTE4 City of Temple City Notes to Financial Statements Years ended June 30,2012 and 2011 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fund Accounting The operations of the Proposition A Local Return Fund (PALRF). Proposition C Local Return Fund (PCLRF), Measure R Local Return Fund (MRLRF) and Transportation Development Act Article 3 Fund (TDAA3F) are accounted for in separate sets of self-balancing accounts that comprise their assets, liabilities , fund balance , revenue and expenditures . PALRF and PCLRF represent 25% and 20%, respectively , of the ~ cent Proposition A and ~ cent Proposition C sales taxes which are distributed to the jurisdictions within Los Angeles County based on population and must be used exclus ively for transportation related programs and projects. MRLRF represents 15% of a ~ cent sales tax which are distributed to the jurisdictions within Los Angeles County based on a per capita basis and must be used exclusively for transportation purposes . Transportation Development Act Article 3 Fund (TDAA3F) is a Special Revenue Fund that accounts for the City's share of the Transportation Development Act Article allocations which are legally restricted for specific purposes. Basis of Accounting PALRF, PCLRF , MRLRF and the 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 expend itures are generally recognized when the related fund liabilities are incurred. ANNUAL FINANCIAL STATEMENTS The financial statements reflect only the financial position and results of operations of the PALRF, PCLRF, MRLRF and TDAA3F, and do not purport to, and do not, present fairly the City's financial position as of June 30, 2012 and 2011 , and the changes in fund balances for the years then ended in conformity with accounting principles generally accepted in the United States of America . PROPOSITION A AND PROPOSITION C LOCAL RETURN COMPLIANCE REQUIREMENTS In accordance with Proposition A and Proposition C Local Return Program Guidelines, funds received pursuant to these guidelines may only be used for Propos ition A and Proposition C Local Return approved programs . MEASURE R LOCAL RETURN COMPLIANCE REQUIREMENTS 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. 17 NOTE 5 NOTES NOTE 7 NOTE 8 City of Temple City Notes to Financial Statements Years ended June 30, 2012 and 2011 TRANSPORTATION DEVELOPMENT ACT COMPLIANCE REQUIREMENTS In accordance with Public Utilities Code Se ction 99234 , funds received pursuant to this Code 's section may only be used for activities relating to pedestrians and bicycle facilities . CASH AND INVESTMENTS The PALRF , PCLRF , MRLRF and TDAA3F cash balances were pooled with various other City funds for deposit and investment purposes. The share of each fund in the pooled cash and cash equivalent account was separately maintained and interest income was apportioned to the participating funds bas ed on the relationship of their average monthly balances to the total of the pooled cash and investments . Please refer to the City's Annual Comprehensive Annual Financial Report (CAFR) for a full description of risks relating to cash and investments . PROJECT GENERATED REVENUE PALRF's project generated revenue for the years ended June 30, 2012 and 2011 represents bus pass sales amounting to $141 ,107 and $146,587 , respectively. CAPITAL RESERVE On July 1, 2006, LACMT A and the City entered into capital reserve agreements to establish a capital reserve account amounting to $5,000 ,000 for the Rosemead Boulevard Street Improvements Project (Project). The Project will be funded with the Proposition C Local Return funds allocated to the City. All interest shall be accrued and placed in the Account for use exclusively for the said projects. On June 23 , 2011, the LACMT A Board authorized an amendment to the agreement by replacing the capital reserve authorization of $5,000,000 in Proposition C funds with $1 ,500 ,000 Proposition A and $7 ,000 ,000 Proposition C funds for a total of $8,500,000 in capital reserve . In addition, the term of the reserve account was extended to June 30,2014 . For the year ended June 30 , 2012 and 2011 , following is the capital reserve amount for PCLRF: Capital reserve at 07 /01 /09 Additional reserve during the year Capital reserve at 06130/10 Additional reserve during the year Capital reserve at 6/30/11 Additional reserve during the year Capital expenses during the year Capital reserve at 6/30/12 18 $ 3,268,980 382 ,630 3,651,610 419,728 4 ,071 ,338 451 ,267 429 ,615 $ 4,092,990 NOTE9 NOTE 10 NOTE 11 City of Temple City Notes to Financial Statements Years ended June 30, 2012 and 2011 TRANSPORTATION DEVELOPMENT ACT FUND REVENUE ALLOCATION The revenue allocation for the years ended June 30, 2012 and 2011 co nsisted of the following: 2012 20 11 $ 13,824 FY 2007/08 reserve FY 2008/09 reserve $ $ 1 ,474 12,268 1,474 $ ___ .;;;;,26~·.;.;09;.;;2;,.,. TRANSPORTATION DEVELOPMENT ACT FUNDS RESERVED In accordance with TDA Article 3 (SB821) Guidelines , funds which will not be spent during the fiscal year have been placed on reserve in the Local Transportation 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 LACMT A. As of June 30, 2012 and 2011, the City has funds on reserve as follows: FY 2008/09 reserve $ FY 2009/1 0 reserve FY 2010/11 reserve FY 2011 /12 allocation 2012 6,853 15,403 14,391 17,306 Available reserve balance $ 53,953 ~=~_;,..,;~;_;,... PRIOR PERIOD ADJUSTMENT -MRLRF 2011 $ 8,327 15,403 14,391 $ 38,121 The beginning fund balance of MRLRF as of June 30, 2011 has been restated as a resu lt of an adjustment to recognize additional MRLRF expenditures incurred in FY 2011 for Project 02-002 Traffic Signal Upgrades that was om itted from the previously issued MRLRF f ina n cia l statements. Expenditures , year ended June 30, 2011 , $ prior to restatement Prior period adjustment 33,515 Expenditures, year ended June 30 , 2011 , as restated $ 33,515 Accounts payable , June 30 , 2011 , prior to restatement $ Prior period adjustment 33,515 Accounts payable, June 30 , 2011, as restated $ 33,515 Fund balance, June 30, 2011 , prior to restatement $ 528,416 Prior period adjustment {33,515} Fund balance, June 30, 2011, as restated $ 494,901 19 NOTE 12 SUBSEQUENT EVENTS City of Temple City Notes to Financial Statements Years ended June 30,2012 and 2011 The City has evaluated subsequent events through December 28, 2012, the date the financial statements were available to be issued , and concluded no events have occurred that require disclosure or adjustments to the financial statements. 20 Th is report is intended solely for the information and use of the City and the Los Angeles County Metropolitan Transportation Authority and is not intended to be and should not be used by anyone other than these specified parties. Los Angeles, California December 28, 2012 COMPLIANCE SECTION l9J 9 VASQUEZ l'J]rj ~COMPAN Y LLP Report of Independent Auditors To the Honorable Members of the City Council of the City of Temple City, California and the Los Angeles County Metropolitan Transportation Authority We have audited the compliance of the City of Temple City, California (City) with the Proposition A and Propos ition C Local Return Guidelines , Measure R Local Return Gu idelines, Transporta tion Development Act Article 3 and the Los Angeles County Metropolitan Transportation Authority's Funding and Allocation Guidelines for Transportation Development Act Article 3 Bicycle and Pedestrian Funds (collectively referred to as Guidelines) for the year ended June 30, 2012 . Management is responsible for the City's compliance with those Guidelines . Our responsibility is to express an opin ion on the City 's compliance based on our audit. We cond ucted our audit in accordance with the Guidelines and attestation standards published by the American Institute of Certified Publi c Accountants and, accordingly, included examining, on a test basis , evidence about the City's compliance with these Guidelines and performing such other procedures as we considered necessary in the circums tances . We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City's compliance with those Guideli nes. In our opinion , the City of Temple City complied, in all material respects , with the aforementioned Guidelines for the year ended June 30 , 2012 . This report is intended solely for the information and use of the City of Temple City and Lo s Angeles County Metropolitan Transportat ion Authority and is not intended to be and should not be used by anyone other than these specified parties . Los Angeles, California December 28, 2012 Compliance Requirements A. Proposition A and Proposition c Local Return Funds 1. Timely use of funds 2. Project was approved before expenditures were incurred. 3. Expenditure s did not exceed 25% of LACMTA's approved budqet. 4. Administrative expenses are within the 20% cap. 5 . All on -g oi ng and carryover projects were reported in Form B. 6 . Annual Project Summary Report (Form B) was submitted on time . 7 . Annual Expenditure Report (Form C) was submitted on time . 8 . Cash or cash equivalents are maintained. 9. Accounting procedures , record keeping and do cumentation are adequate. B. MeasureR Local Return Fund 1. Funds were expended for transportation purposes. 2. Fu nds were used to augment, not supplant exis ting local revenues being used for transportation purposes unless there is a funding shortfall . 3. Signed Assurances and Understandinqs on tile. In Compliance Yes No X X X X X X X X X X X X 24 Questioned Costs None None None None None None None None None None None None City of Temple City Compliance Matrix Year ended June 30 , 2012 If no, provide details and management response. Compliance Requirements B. MeasureR Local Return Fund 4. Separate Measure R Local Return Account was established. 5. Revenues recei ved including allocations , project generated revenues and interest income were properly credited to the Measure R LR Account. 6. Funds were expended w ith LACMTA 's approval. 7. Form One (Expenditure Plan) was submitted on tim e. 8. Form Two (Expenditure Report) was submitted on time . 9. Timely use of funds. 10.Administrative expenses are within the 20% cap . 11. Fund exchanges were approved by LACMTA. 12. A separate account was established for Capital reserve funds and Capital reserve was approved by LACMT A. 13. Re crea tional transit form was submitted timely . c . Transportation Development Act Article 3 Fund 1. Timely use of funds 2. Expend itures were incurred for activities relating to pedestrian and bicycle facilities and amenities . In Compliance Yes No X X X X X X N/A N/A N/A N/A X X 25 Questioned Costs None None None None None None N one None None None None None City of Temple City Compliance Matrix Year ended June 30, 2012 If no, provide details and management response. EXIT CONFERENCE City of Temple City Exit Conference Year ended June 30, 2012 An exit conference was held on December 5, 2012 with the City of Temple City representatives. Those in attendance were: Vasquez & Company LLP representative: Sophia Verdida-Senior Auditor City of Temple City representative : Lee Ma-Accountant Matters discussed : Results of the audit disclosed no significant financial and compliance issues. A copy of this report was forwarded to the following City of Temple City representative for their comments prior to the issuance of the final report: Lee Ma -Accountant 26 Vasquez & Company LLP 801 S . Grand Avenue , Suite 400 Los Angeles, CA 90017 RE: CITY OF TEMPLE CITY, CALIFORNIA ANNUAL FINANCIAL REPORT OF THE PROPOSITION A LOCAL RETURN FUND, PROPOSITION C LOCAL RETURN FUND , MEASURE R LOCAL RETURN FUND AND TRAN SPORTATION DEVELOPMENT ACT ARTICLE 3 FUND FOR THE YEARS ENDED JUNE 30 , 2012 AND 2011 J have received the annual financial report of the Proposition A Lo cal Return Fund , Proposition C Local Return Fund , Measure R Local Return Fund and Transportation Development Act Article 3 Fund, for the years ended June 30, 2012 and 2011 for the City of Temple City and agreed with the contents of the report except as indicated below: (Attach additional pages if necessary) Very trul y yours, Name Title Date