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HomeMy Public PortalAbout12 December 1, 2004 Budget & Implementation70x0 RIVERSIDE COUNTY TRANSPORTA TION COMMISSION BUDGET AND IMPLEMENTATION COMMITTEE AUDIT AD HOC COMMITTEE AGENDA TIME: 1:30 p.m. DATE: Wednesday, December 1, 2004 LOCATION: Conference Room B Riverside County Transportation Commission 4080 Lemon Street, 3rd Floor Riverside, California 1. FISCAL YEAR 2003-2004 Commission Audit Results O vervie w This item is for the Committee to: 1) Receive and file the Fiscal Year 2003-04 Comprehensive Annual Financial Report; 2) Receive and file the Fiscal Year 2003-04 Local Transportation Fund Audited Financial Statements; 3) Receive and file the Fiscal Year 2003-04 State Transit Assistance Fund Audited Financial Statements; 4) Receive and file the Fiscal Year 2003-04 Compliance Report; 5) Receive and file the Fiscal Year 2003-04 Audit Results Report; 6) Receive and file the Fiscal Year 2003-04 Agreed -Upon Procedures Report related to the Commuter Assistance Program incentives; 7) Receive and file the Fiscal Year 2003-04 Agreed -Upon Procedures Report related to the Appropriation Limit Calculation; and 8) Forward to the Commission for final action. RIVERSIDE COUNTY TRANSPORTA TION COMMISSION DATE: December 1, 2004 TO: Audit Ad Hoc Committee FROM: Theresia Trevino, Chief Financial Officer THROUGH: Eric Haley, Executive Director SUBJECT: Fiscal Year 2003-2004 Commission Audit Results STAFF RECOMMENDATION: This item is for the Committee to: 1) Receive and file the Fiscal Year 2003-04 Comprehensive Annual Financial Report; 2) Receive and file the Fiscal Year 2003-04 Local Transportation Fund Audited Financial Statements; 3) Receive and file the Fiscal Year 2003-04 State Transit Assistance Fund Audited Financial Statements; 4) Receive and file the Fiscal Year 2003-04 Compliance Report; 5) Receive and file the Fiscal Year 2003-04 Audit Results Report; 6) Receive and file the Fiscal Year 2003-04 Agreed -Upon Procedures Report related to the Commuter Assistance Program incentives; 7) Receive and file the Fiscal Year 2003-04 Agreed -Upon Procedures Report related to the Appropriation Limit Calculation; and 8) Forward to the Commission for final action. BACKGROUND INFORMATION: In April 2003, McGladrey & Pullen LLP was selected to perform an audit of the Commission's basic financial statements included in the Comprehensive Annual Financial Report (CAFR), the Local Transportation Fund, the State Transit Assistance Fund, and federal awards. Additionally, it was requested to perform agreed -upon procedures related to the annual Appropriations Limit Calculation and the Commuter Assistance Program incentives. The audits and agreed -upon procedures for the fiscal year ended June 30, 2004 have been completed, and all reports have been issued by McGladrey & Pullen. The Commission's CAFR consists of three sections: introductory, financial, and statistical. While the introductory and statistical sections were not audited by McGladrey & Pullen, the financial section was audited by McGladrey & Pullen. The Commission received an unqualified opinion on its basic financial statements from McGladrey & Pullen, which is the highest form of assurance. The audit report also includes an explanatory paragraph related to the change in classification of the Local Transportation Fund from a fiduciary fund to a governmental fund, because some of the assets in the fund could be used for the Commission's commuter rail program. Limited procedures were performed related to the required supplementary information, including Management's Discussion and Analysis; such information was not audited. The other supplementary information was subject to the auditing procedures applied in the audit of the basic financial statements, and, in the opinion of the auditors, it is fairly stated in relation to the basic financial statements. The basic financial statements reflect the new reporting model as required by the Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements —and Management's Discussion and Analysis —for State and Local Governments. The new reporting model was implemented in Fiscal Year 2001-2002; this is the third consecutive year under the new reporting model. The basic financial statements include government -wide financial statements and fund financial statements. Additionally, Management's Discussion and Analysis is required and provides a narrative overview and analysis of the Commission's financial activities for the fiscal year. Financial highlights include net assets of $215,606,433 at June 30, 2004, representing an increase of $72,594,229 from the prior year, and governmental funds fund balances of $245,374,366 at June 30, 2004, representing an increase of $52,184,203 from the prior year. The audit reports related to the separately issued financial statements of the Local Transportation Fund and the State Transit Assistance Fund also reflect unqualified opinions from McGladrey & Pullen. These financial statements are required to be issued separately under the Transportation Development Act; however, they are also included in the fund financial statements in the CAFR. These reports noted no matters considered to be a material weakness in internal control and no instances of noncompliance. The Compliance Report, often referred to as the Single Audit Report, includes the reports on compliance and internal control over financial reporting and over federal awards. These reports noted no matters considered to be material weaknesses in internal control and no instances of noncompliance. A management letter which usually includes recommendations for improvements and operational efficiencies related to internal control and other matters noted during the audit was not issued, as McGladrey & Pullen did not have any recommendations. The Appropriations Limit Calculation and Commuter Assistance Program reports are based on specific procedures agreed to by the Commission and other agencies. The auditors noted no exceptions or findings related to the procedures performed. Professional auditing standards require the auditors to communicate to the audit committee, or an equivalent group, to ensure that it is provided with additional information regarding the scope and results of the audit that may assist the group in overseeing management's financial reporting and disclosure process. Such required communications will be discussed with the Committee in a presentation by McGladrey & Pullen. Attachments: Fiscal Year Ended June 30, 2004 Comprehensive Annual Financial Report June 30, 2004 Local Transportation Fund Financial and Compliance Report June 30, 2004 State Transit Assistance Fund Financial Report June 30, 2004 Compliance Report June 30, 2004 Agreed -Upon Procedures Report on Appropriations Limit Calculation June 30, 2004 Agreed -Upon Procedures Report on Commuter Assistance Program incentives Communications to the Audit Ad Hoc Committee