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Home My Public Portal About17) 7K Audit Report for Gas Tax Street Improv & Traffic Congestion Relief FundCity Council June 5, 2012 Page 2 ANALYSIS: Revenue deposited into Gas Tax Funds can only be used for street related purposes. During July 1, 2006 through June 30, 2011, Temple City used its Gas Tax to fund Street Cleaning, Traffic Signal and Striping Maintenance, Street Maintenance and Sidewalk Maintenance. During the same period, funds received from the Traffic Congestion Relief Fund was used for Capital Improvement Projects (i.e., Encinita Avenue Street Improvement, Rosemead Boulevard Improvement and Freer Street Improvement.) The State Controller's Office is responsible for conducing reconciliation audits of both Gas Tax Funds and Traffic Congestion Relief Funds . However, due to the State's limited resources and staffing, it is not unusual for the Controller's Office to conduct multiple fiscal year audits for cities and counties at one time in order to catch up. The City's current audit report indicates no financial or compliance issues present. The following report is presented for your review. Special Gas Tax Street Improvement Fund As of FY 2010-11 the ending fund balance from the reconciliation audit of the Special Gas Tax Street Improvement Fund is $1,067,908. Traffic Congestion Relief Fund As of FY 2010 -11 the ending fund balance from the reconciliation audit of the Traffic Congestion Relief Fund is zero . FISCAL IMPACT: No fiscal impact on the FY 2011-12 City Budget. CONCLUSION: Staff is recommending that the City Council receives and files the Gas Tax and Traffic Congestion Relief Fund for the year ended June 30, 2011. ATTACHMENT: A. Audit Report for Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund, July 1, 2006 through June 30 , 2011 . jOHN CHIANG 0Ia1ifornia ~tat.e ([ontroller The Honorable Tom Chavez Mayor of the City ofTemple City 9701 Las Tunas Drive Temple City, CA 91780 Dear Mayor Chavez: May 17, 2012 The State Controller's Office audited the City ofTemple City's Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund for the period of July 1, 2006, through June 30 , 2011. Our audit disclosed that the city accounted for and expended its Special Gas Ta.x: Street Improvement Fund and Traffic Congestion Relief Fund in compliance with requirements, and that no adjustment to the funds is required. If you have any questions, please contact Steven Mar, Chief, Local Government Audits Bureau, at (916) 324-7226. sincre~~~ . /£7 tp!Y K ' f(UVI ~(' (! v lj JEfl~I:REY V. BROWNFIELD Chiet~ Division of Audits JVB/vb Cu:v v[Tt!mple City Spt!cial Gas Tax S treet Improvement Fun d and Traffi c Congestion Rl!iief Fund Contents Audit Report Summary ............................................................................................................................ 1 Background ....................................................................................................................... . Objective, Scope, and Methodology ................................................................................. 1 Conclusion .......................................................................................................................... 2 Follow-Up on Prior Audit Findings................................................................................. 2 Views of Responsible Official........................................................................................... 2 Restricted Use .... ... ... ... . . ... . . .. . .. . .. ....... ... . .. . .. . . .. .. . . .. ... . .. .... . .. ... . .. . ... . ..... ... . . .. . ..... .. . . . ... ... . . . . .. . .. 2 Schedule 1-Reconciliation of Fund Balance...................................................................... 3 City ufTI!mp/e C1ty Audit Report S umm a ry Backg ro und O bj ective, Scope , and Methodo logy Spe::ra! Gas Ta:~ Street Impro vement Fund and Traffic Congestwn Relief Fund The State Controller's Office audited the City of Temple City's Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund for the period of July I, 2006, through June 30, 2011. Our audit disclosed that the city accounted for and expended its Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund in compliance with requirements, and that no adjustment to the funds is required. The State apportions funds monthly from the highway users tax account in the transportation tax fund to cities and counties for the construction, maintenance, and operation of local s treets and roads. The highway users taxes derive from state taxes on the sale of motor vehicle fuels. In accordance with Article XIX of the California Constitution and Streets and Highways Code section 2101, a city must deposit all apportionments of highway users taxes in its Special Gas Tax Street Improvement Fund. A city must expend gas ta.x funds only for street-related purposes. We conducted our audit of the city's Special Gas Tax Street Improvement Fund under the authority of Government Code section 12410. Government Code section 14556.5 created a Traffic Congestion Relief Fund (TCRF) in the State Treasury for allocating funds quarterly to cities and counties for street or road maintenance, reconstruction, and storm damage repair. Cities must deposit funds received into the city account designated for the receipt of state funds allocated for transportation purposes. The city recorded its TCRF allocations in the Traffic Congestion Relief Fund. We conducted our audit of the city's TCRF allocations under the authority of Revenue and Taxation Code section 71 04. Our audit objective was to determine whether the city accounted for and expended the Special Gas Tax Street Improvement Fund and the Traffic Congestion Relief Fund in compliance with Article XIX o f the California Constitution and the Streets and Highways Code. To meet the audit objective. we determined whether the city: • Properly deposited highway users tax apportionments and other appropriate revenues in the Special Gas Tax Street Improvement Fund; • Properly deposited TCRF allocations into an accoun t designated for the receipt of state funds allocated for transportation purposes; • Expended funds exclusi vely fo r authorized street-re lated purposes: and • Made available unexpended fund s for future expenditures. -1- City of Temple City Special Gas Tcl."C Street Improvement Fund and Truffle Cvngesticm Relief Fund Schedule 1- Reconciliation of Fund Balance July 1, 2010, through June 30, 2011 Special Gas Tax Street Improvement Fund 1 Beginning fund balance per city $ 631,768 Revenues 962,716 Total funds available 1,594,484 Expenditures {526,5762 Ending fund balance per city 1,067,908 SCO adjustment Ending fund balance per audit $1 ,06 7,908 Traffic Congestion Relief Fund ~ $ 325,730 2,047 327,777 {327,7772 $ 1 The city receives apportionments from the state highway users tax account, pursuant to Streets and Highways Code sections 2105,2106,2107, and 2107.5. The basis of the apportionments for sections 2105.2106. and 2107 varies, but the money may be used for any street purpose. Streets and Highways Code section 2107.5 restricts apportionments to administration and engineering expenditures. except for cities with populations of fewer than I 0.000 inhabitants. Those cities may use the funds for rights-of-way and for the construction of street systems. The audit period was July I. 2006. through June 30, 20 II; however. this schedule only includes tht! period of July I. 2010, through June 30. 20 II. Government Code section 14556.5 created a Traffic Congestion Relief Fund (TCRF) in the State Treasury for allocating funds quarterly to cities and counties for street and road maintenance, reconstruction. and storm damage repair. The TCRF allocations were recorded in the Traffic Congestion Relief Fund. The audit period was July I. 2006. through June 30, 20 II. -3-