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HomeMy Public PortalAbout09_7G_LACMTA_AUDIT MTA (PROP A C MEASURE R M TDA) 3-2-21ADMINISTRATIVE SERVICES DEPARTMENT MEMORANDUM DATE: March 2, 2021 TO: The Honorable City Council FROM: Bryan Cook, City Manager Via: Susan Paragas, Administrative Services Director By: Lee Ma, Accountant SUBJECT: AUDIT REPORTS FOR PROPOSITION A, PROPOSITION C, MEASURE R, TRANSPORTATION DEVELOPMENT ACT ARTICLE 3 AND MEASURE M FOR FISCAL YEAR (FY) 2019-20 RECOMMENDATION: The City Council is requested to receive and file FY 2019-20 Proposition A, Proposition C, Measure 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. AGENDA ITEM 7.G. City Council March 2, 2021 Page 2 of 3 5. In September 2020, the firm of Simpson & Simpson LLP conducted field work for the annual audits of Proposition A (Prop A), Proposition C (Prop C), Measure R (Meas R), Transportation Development Act Article 3 (TDA) and Measure M (Meas M). A separate audit of the City of Temple City’s Prop A, Prop C, Meas R, TDA and Meas 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 February 8, 2021, 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. In the auditor’s opinion, the financial statements of Prop A, Prop C, Meas R, TDA and Meas M were presented fairly and in accordance with accounting principles generally accepted in the United States of America. The following reports are presented for your review. Proposition A During FY 2019-20, the City received a total of $748,838 in revenues for Prop A funds which include bus pass sales revenues of $27,365 and interest income of $17,770. The total expenditures for FY 2019-20 were $1,253,695. The City of Temple City utilized Prop 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%); • Direct Administration; and • Proposition A Fund Exchange with Foothill Transit. Proposition C During FY 2019-20, the City received $611,390 of revenues for Prop C which also include interest income of $27,667. FY 2019-20 expenditures for Prop C were $437,562 for the Las Tunas Drive Resurfacing Project. Measure R The City received a total of $454,681 in revenues for Meas R funds which include interest City Council March 2, 2021 Page 3 of 3 income of $17,515. FY 2019-20 expenditures for Meas R were $12,229 for the Pavement Management Street Resurfacing Project. Transportation Development Act Article 3 TDA provides for construction of pedestrian and bicycle facilities including ADA wheelchair ramps. FY 2019-20 expenditures for TDA were $32,023 for the Sidewalk and Curb Ramps ADA Improvement Project and $23,000 for the Las Tunas Drive Resurfacing Project. The City received the full reimbursable amount of $55,023 for these two projects. Measure M The City received a total of $504,834 in revenues for Meas M funds which also includes interest income of $12,890. The expenditures for Meas M were $155,178 for the Pavement Management Street Resurfacing Project in FY 2019-20. Auditor Findings The auditors identified three deficiencies in internal control. Two 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 finding is the City expenditures prior to the approval from LACMTA for the Prop A Fund Exchange with Foothill Transit. The amount was subsequently approved by LACMTA. CITY STRATEGIC GOALS: Receiving and filing the LACMTA audit report will further the City’s Strategic Goal to promote Good Governance. . FISCAL IMPACT : This agenda item does not have a fiscal impact on the FY 2020-21 City Budget. ATTACHMENT: A.Annual Financial Report of Prop A, Prop C, Meas R, TDA and Meas M Funds Simpson & Simpson, LLP Certified Public Accountants CITY OF TEMPLE CITY 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 TRANSPORTATION DEVELOPMENT ACT ARTICLE 3 FUND FOR THE FISCAL YEARS ENDED JUNE 30, 2020 AND 2019 ATTACHMENT A i CITY OF TEMPLE CITY TABLE OF CONTENTS FINANCIAL SECTION PAGE Independent Auditor’s Report 1 Proposition A Local Return Fund: Financial Statements: Balance Sheets 3 Statements of Revenues, Expenditures and Changes in Fund Balance 4 Supplementary Information: Schedule of Expenditures – Actual and Metro Approved Project Budget 5 Schedule of Capital Assets 6 Proposition C Local Return Fund: Financial Statements: Balance Sheets 7 Statements of Revenues, Expenditures and Changes in Fund Balance 8 Supplementary Information: Schedule of Expenditures –Actual and Metro Approved Project Budget 9 Schedule of Capital Assets 10 Measure R Local Return Fund: Financial Statements: Balance Sheets 11 Statements of Revenues, Expenditures and Changes in Fund Balance 12 Supplementary Information: Schedule of Expenditures –Actual and Metro Approved Project Budget 13 Schedule of Capital Assets 14 Measure M Local Return Fund: Financial Statements: Balance Sheets 15 Statements of Revenues, Expenditures and Changes in Fund Balance 16 Supplementary Information: Schedule of Expenditures – Actual and Metro Approved Project Budget 17 Schedule of Capital Assets 18 Transportation Development Act Article 3 Fund: Financial Statements: Balance Sheets 19 Statements of Revenues, Expenditures and Changes in Fund Balance 20 Supplementary Information: Schedule of Transportation Development Act Allocation for Specific Projects 21 Notes to Financial Statements 22 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements 27 Performed in Accordance with Government Auditing Standards ATTACHMENT A ii CITY OF TEMPLE CITY TABLE OF CONTENTS (Continued) COMPLIANCE SECTION Independent Auditor’s Report on Compliance 29 Compliance Matrix 32 Schedule of Findings and Recommendations 36 EXIT CONFERENCE 39 ATTACHMENT A FINANCIAL SECTION ATTACHMENT A 1 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 We have audited the accompanying financial statements of the Proposition A Local Return Fund (PALRF), 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), of the City of Temple City, California (the City) as of and for the years ended June 30, 2020 and 2019, and the related notes to the financial statements, as listed 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 responsibility 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 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers 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 evaluating 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. U.S. BANK TOWER 633 WEST 5TH STREET, SUITE 3320 LOS ANGELES, CA 90071 ___________________________________________________________________________________________________________________ (213) 736-6664 TELEPHONE (213) 736-6692 FAX www.simpsonandsimpsoncpas.com SIMPSON & SIMPSON CERTIFIED PUBLIC ACCOUNTANTS FOUNDING PARTNERS BRAINARD C. SIMPSON, CPA MELBA W. SIMPSON, CPA ATTACHMENT A 2 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the PALRF, PCLRF, MRLRF, MMLRFand TDAA3F of the City of Temple City, California, as of June 30, 2020 and 2019, 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 discussed in Note 2, the financial 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 of June 30, 2020 and 2019, 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 October 12, 2020, on our consideration of the City’s internal control over the Funds’ financial reporting and on our tests of its compliance with certain provisions 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 compliance. 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, California October 12, 2020 ATTACHMENT A 2020 2019 Cash and investments $ 1,433,938 $ 1,238,184 Prepaid expenditures 10,838 - Other receivable 7,227 7,227 Total assets $ 1,452,003 $ 1,245,411 Liabilities Accounts payable $ 775,495 $ 64,046 Total liabilities 775,495 64,046 Fund Balance Restricted 676,508 1,181,365 Total fund balance 676,508 1,181,365 Total liabilities and fund balance $ 1,452,003 $ 1,245,411 LIABILITIES AND FUND BALANCE CITY OF TEMPLE CITY PROPOSITION A LOCAL RETURN FUND BALANCE SHEETS June 30 ASSETS The accompanying notes are an integral part of the financial statements. 3 ATTACHMENT A 2020 2019 REVENUES Proposition A $ 703,703 $ 730,549 Project generated revenue (Note 8)27,365 43,916 Interest income 17,770 14,103 Total revenues 748,838 788,568 EXPENDITURES Various projects 1,253,695 497,638 Total expenditures 1,253,695 497,638 Excess (deficiency) of revenues over expenditures (504,857) 290,930 Fund balance at beginning of year 1,181,365 890,435 Fund balance at end of year $676,508 $1,181,365 For the Fiscal Years Ended June 30 PROPOSITION A LOCAL RETURN FUND STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE CITY OF TEMPLE CITY The accompanying notes are an integral part of the financial statements. 4 ATTACHMENT A Variance Project Metro Favorable 2019 Code Project Name Budget Actual (Unfavorable) Actual 130-01 Special Service Paratransit $ - $ - $ - $ 266,631 130-05 Dial-A-Ride 525,000 349,542 175,458 - 140-02 Recreational Transit 55,000 29,879 25,121 61,873 170-04 Bus Shelter Maintenance 14,000 9,000 5,000 12,525 250-03 User-Side Subsidy 61,480 36,621 24,859 61,974 270-02 San Gabriel Valley Council of Governments Membership 11,000 11,000 - 10,880 410-00 Proposition A Fund Exchange with Foothill Transit (Note 9)750,000 750,000 - - 480-05 Direct Administration 73,255 67,653 5,602 83,755 $1,489,735 $1,253,695 $236,040 $497,638 Total expenditures ACTUAL AND METRO APPROVED PROJECT BUDGET For the Fiscal Year Ended June 30, 2020 (With Comparative Actual Amount for the Fiscal Year Ended June 30, 2019) CITY OF TEMPLE CITY PROPOSITION A LOCAL RETURN FUND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES 2020 The accompanying notes are an integral part of the financial statements. 5 ATTACHMENT A Date Balance Balance Acquired Description 7/1/2019 Additions Deletions 6/30/2020 None $- $- $ - $- Total $- $- $- $- SCHEDULE OF CAPITAL ASSETS June 30, 2020 CITY OF TEMPLE CITY PROPOSITION A LOCAL RETURN FUND SUPPLEMENTARY INFORMATION The accompanying notes are an integral part of the financial statements. 6 ATTACHMENT A 2020 2019 Cash and investments $ 1,933,412 $ 1,759,584 Total assets $ 1,933,412 $ 1,759,584 Liabilities Accounts payable $- $- Total liabilities - - Fund Balance Restricted 1,933,412 1,759,584 Total fund balance 1,933,412 1,759,584 Total liabilities and fund balance $ 1,933,412 $ 1,759,584 PROPOSITION C LOCAL RETURN FUND BALANCE SHEETS CITY OF TEMPLE CITY ASSETS LIABILITIES AND FUND BALANCE June 30 The accompanying notes are an integral part of the financial statements. 7 ATTACHMENT A 2020 2019 REVENUES Proposition C $ 583,723 $ 605,970 Interest income 27,667 26,046 Total revenues 611,390 632,016 EXPENDITURES Various projects 437,562 260,000 Total expenditures 437,562 260,000 173,828 372,016 Fund balance at beginning of year 1,759,584 1,387,568 Fund balance at end of year $1,933,412 $1,759,584 Excess of revenues over expenditures 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 The accompanying notes are an integral part of the financial statements. 8 ATTACHMENT A Variance Project Metro Favorable 2019 Code Project Name Budget Actual (Unfavorable) Actual 130-05 Dial-A-Ride $ - $ - $ - $ 260,000 440-01 Las Tunas Drive Resurfacing 1,200,000 437,562 762,438 - $1,200,000 $437,562 $762,438 $260,000 (With Comparative Actual Amount for the Fiscal Year Ended June 30, 2019) 2020 Total expenditures 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, 2020 The accompanying notes are an integral part of the financial statements. 9 ATTACHMENT A Date Balance Balance Acquired Description 7/1/2019 Additions Deletions 6/30/2020 None $ - $ - $ - $ - Total $- $- $- $- SCHEDULE OF CAPITAL ASSETS June 30, 2020 CITY OF TEMPLE CITY PROPOSITION C LOCAL RETURN FUND SUPPLEMENTARY INFORMATION The accompanying notes are an integral part of the financial statements. 10 ATTACHMENT A 2020 2019 Cash and investments $ 1,485,561 $ 1,043,109 Total assets $ 1,485,561 $ 1,043,109 Liabilities Accounts payable $- $- Total liabilities -- Fund Balance Restricted 1,485,561 1,043,109 Total fund balance 1,485,561 1,043,109 Total liabilities and fund balance $1,485,561 $1,043,109 LIABILITIES AND FUND BALANCE CITY OF TEMPLE CITY MEASURE R LOCAL RETURN FUND BALANCE SHEETS June 30 ASSETS The accompanying notes are an integral part of the financial statements. 11 ATTACHMENT A 2020 2019 REVENUES Measure R $ 437,166 $ 454,608 Interest income 17,515 12,531 Total revenues 454,681 467,139 EXPENDITURES Pavement Management: Street Resurfacing 12,229 - Total expenditures 12,229 - Excess of revenues over expenditures 442,452 467,139 Fund balance at beginning of year 1,043,109 575,970 Fund balance at end of year $1,485,561 $1,043,109 CITY OF TEMPLE CITY MEASURE R LOCAL RETURN FUND STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE For the Fiscal Years Ended June 30 The accompanying notes are an integral part of the financial statements. 12 ATTACHMENT A Variance Project Metro Favorable 2019 Code Project Name Budget Actual (Unfavorable) Actual 1.05 Pavement Management: Street Resurfacing $750,000 $12,229 $737,771 $- $ 750,000 $12,229 $737,771 $- (With Comparative Actual Amount for the Fiscal Year Ended June 30, 2019) 2020 Total expenditures CITY OF TEMPLE CITY MEASURE R LOCAL RETURN FUND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES ACTUAL AND METRO APPROVED PROJECT BUDGET For the Fiscal Year Ended June 30, 2020 The accompanying notes are an integral part of the financial statements. 13 ATTACHMENT A Date Balance Balance Acquired Description 7/1/2019 Additions Deletions 6/30/2020 None $ - $ - $ - $ - Total $- $- $- $- CITY OF TEMPLE CITY MEASURE R LOCAL RETURN FUND SUPPLEMENTARY INFORMATION SCHEDULE OF CAPITAL ASSETS June 30, 2020 The accompanying notes are an integral part of the financial statements. 14 ATTACHMENT A 2020 2019 Cash and investments $ 1,093,879 $ 673,046 Due from Metro -41,376 Total assets $ 1,093,879 $ 714,422 Liabilities Accounts payable $ 30,075 $ 274 Total liabilities 30,075 274 Fund Balance Restricted 1,063,804 714,148 Total fund balance 1,063,804 714,148 Total liabilities and fund balance $1,093,879 $714,422 LIABILITIES AND FUND BALANCE CITY OF TEMPLE CITY MEASURE M LOCAL RETURN FUND BALANCE SHEETS June 30 ASSETS The accompanying notes are an integral part of the financial statements. 15 ATTACHMENT A 2020 2019 REVENUES Measure M $ 491,944 $ 512,161 Interest income 12,890 7,381 Total revenues 504,834 519,542 EXPENDITURES Pavement Management: Street Resurfacing 155,178 3,605 Total expenditures 155,178 3,605 Excess of revenues over expenditures 349,656 515,937 Fund balance at beginning of year 714,148 198,211 Fund balance at end of year $1,063,804 $714,148 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 The accompanying notes are an integral part of the financial statements. 16 ATTACHMENT A Variance Project Metro Favorable 2019 Code Project Name Budget Actual (Unfavorable) Actual 1.05 Pavement Management: Street Resurfacing $ 400,000 $ 155,178 $ 244,822 $ 3,605 1.05 Las Tunas Drive Resurfacing 400,000 - 400,000 - $800,000 $155,178 $644,822 $3,605 2020 Total expenditures 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, 2020 (With Comparative Actual Amount for the Fiscal Year Ended June 30, 2019) The accompanying notes are an integral part of the financial statements. 17 ATTACHMENT A Date Balance Balance Acquired Description 7/1/2019 Additions Deletions 6/30/2020 None $ - $ - $ - $ - Total $- $- $- $- CITY OF TEMPLE CITY MEASURE M LOCAL RETURN FUND SUPPLEMENTARY INFORMATION SCHEDULE OF CAPITAL ASSETS June 30, 2020 The accompanying notes are an integral part of the financial statements. 18 ATTACHMENT A 2020 2019 Due from Metro $ 55,023 $- Total assets $ 55,023 $- Liabilities Due to General Fund $ 55,023 $- Total liabilities 55,023 - Fund Balance Restricted - - Total fund balance - - Total liabilities and fund balance $ 55,023 $- LIABILITIES AND FUND BALANCE CITY OF TEMPLE CITY TRANSPORTATION DEVELOPMENT ACT ARTICLE 3 FUND (PURSUANT TO PUBLIC UTILITIES CODE SECTION 99234) BALANCE SHEETS June 30 ASSETS The accompanying notes are an integral part of the financial statements. 19 ATTACHMENT A 2020 2019 REVENUES TDA 3 $ 55,023 $- Interest income - 1,006 Total revenues 55,023 1,006 EXPENDITURES Various projects 55,023 - Total expenditures 55,023 - OTHER FINANCING USE Funds returned to Metro - (63,357) Total other financing use - (63,357) - (62,351) Fund balance at beginning of year - 62,351 Fund balance at end of year $- $- 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 Deficiency of revenues under expenditures and other financing use The accompanying notes are an integral part of the financial statements. 20 ATTACHMENT A Program Unexpended Project Project Description Year Allocations Expenditures Allocations Status Local allocations 2019-20 $32,023 $ 32,023 $- Completed 2019-20 23,000 23,000 - On-going Total $55,023 $ 55,023 $- Interest income - Fund balance at beginning of year - Fund balance at end of year $- 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, 2020 Las Tunas Drive Resurfacing Project Sidewalks and Curb Ramps ADA Improvements The accompanying notes are an integral part of the financial statements. 21 ATTACHMENT A CITY OF TEMPLE CITY NOTES TO FINANCIAL STATEMENTS For the Fiscal Years Ended June 30, 2020 and 2019 22 NOTE 1 – 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), 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-balancing accounts that comprise their assets, liabilities, fund balance, revenues and expenditures. PALRF and PCLRF represent 25% and 20%, respectively, of the ½ cent Proposition A and ½ 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 ½ 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 ½ 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 the 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. The statement of revenues, expenditures and changes in fund balance for Special Revenue Funds generally present increases (revenues 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. ATTACHMENT A CITY OF TEMPLE CITY NOTES TO FINANCIAL STATEMENTS For the Fiscal Years Ended June 30, 2020 and 2019 (Continued) 23 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 2020 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 of June 30, 2020: 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. ATTACHMENT A CITY OF TEMPLE CITY NOTES TO FINANCIAL STATEMENTS For the Fiscal Years Ended June 30, 2020 and 2019 (Continued) 24 NOTE 3 - 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 Proposition A and Proposition C Local Return approved programs. See accompanying Compliance Matrix. NOTE 4 – 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. See accompanying Compliance Matrix. NOTE 5 – MEASURE M LOCAL RETURN COMPLIANCE REQUIREMENTS 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 REQUIREMENTS 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, 2020 and 2019 consisted of the following: 2020 2019 Bus Pass Sales $ 27,365 $ 43,916 Total $ 27,365 $ 43,916 ATTACHMENT A CITY OF TEMPLE CITY NOTES TO FINANCIAL STATEMENTS For the Fiscal Years Ended June 30, 2020 and 2019 (Continued) 25 NOTE 9 – PROPOSITION A FUND EXCHANGE WITH FOOTHILL TRANSIT - PALRF In fiscal year 2020, the City entered into an agreement on May 19, 2020 with Foothill Transit to exchange $1 of Proposition A Local Return Funds for every $.75 (or 75 cents) of General Fund. Accordingly, the City received $562,500 of Foothill Transit’s General Funds on July 8, 2020 and assigned $750,000 of its Proposition A Local Return Funds to Foothill Transit on July 7, 2020. NOTE 10 – TRANSPORTATION DEVELOPMENT ACT FUND REVENUE ALLOCATION The revenue allocation for the years ended June 30, 2020 and 2019 consisted of the following: 2020 2019 FY 2015-16 allocation $ 23,034 $- FY 2016-17 allocation 24,044 - FY 2017-18 allocation 7,945 - Total payment requested $ 55,023 $ - NOTE 11 – 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 Transportation Fund (LTF) 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, 2020 and 2019, the City has funds on reserve as follows: 2020 2019 FY 2015-16 allocation $- $ 23,034 FY 2016-17 allocation -24,044 FY 2017-18 allocation 15,857 23,802 FY 2018-19 allocation 24,676 24,676 FY 2019-20 allocation 26,199 - Available reserve balance $ 66,732 $ 95,556 ATTACHMENT A CITY OF TEMPLE CITY NOTES TO FINANCIAL STATEMENTS For the Fiscal Years Ended June 30, 2020 and 2019 (Continued) 26 NOTE 12 – SUBSEQUENT EVENTS On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern" and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries. To date, it is unknown how long these conditions will last and what the complete financial effect will be to businesses and other affected organizations, including local governmental entities. The City has evaluated subsequent events through October 12, 2020, the date the financial statements were available to be issued and concluded no other events have occurred that require disclosure or adjustments to the financial statements. ATTACHMENT A 27 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 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 (collectively, the Funds) of the City of Temple City, California (the City), as of and for the year ended June 30, 2020, and the related notes to the financial statements, and have issued our report thereon dated October 12, 2020. 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 procedures 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 design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material 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 deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than 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 paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. U.S. BANK TOWER 633 WEST 5TH STREET, SUITE 3320 LOS ANGELES, CA 90071 ___________________________________________________________________________________________________________________ (213) 736-6664 TELEPHONE (213) 736-6692 FAX www.simpsonandsimpsoncpas.com SIMPSON & SIMPSON CERTIFIED PUBLIC ACCOUNTANTS FOUNDING PARTNERS BRAINARD C. SIMPSON, CPA MELBA W. SIMPSON, CPA ATTACHMENT A 28 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 October 12, 2020 ATTACHMENT A COMPLIANCE SECTION ATTACHMENT A 29 Independent Auditor’s Report on Compliance To the Honorable Members of the City Council of the City of Temple City, California and the Los Angeles County Metropolitan Transit Authority Report on Compliance We have audited the compliance of the City of Temple City, California (the City) with the Proposition A and Proposition C Local Return Guidelines, Measure R Local Return Guidelines, Measure M Local Return Guidelines, Transportation Development Act Article 3, and the Los Angeles County Metropolitan Transportation Authority’s Funding and Allocation Guidelines for the Transportation Development Act Article 3 Bicycle and Pedestrian Funds (collectively, the Guidelines) for the year ended June 30, 2020. 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 types of compliance requirements referred to above that could have 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, and Transportation Development Act Article 3 Program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance with the Guidelines. However, our audit does not provide a legal determination of the City’s compliance with the Guidelines. Opinion on Each Local Return Program and 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, 2020. U.S. BANK TOWER 633 WEST 5TH STREET, SUITE 3320 LOS ANGELES, CA 90071 ___________________________________________________________________________________________________________________ (213) 736-6664 TELEPHONE (213) 736-6692 FAX www.simpsonandsimpsoncpas.com SIMPSON & SIMPSON CERTIFIED PUBLIC ACCOUNTANTS FOUNDING PARTNERS BRAINARD C. SIMPSON, CPA MELBA W. SIMPSON, CPA ATTACHMENT A 30 Other Matters 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. 2020-001, 2020-002, 2020-003. Our opinion on each local return program and Transportation Development Act Article 3 program is not modified with respect to these matters. The City’s responses 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 control 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. 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 under the Guidelines on a timely basis. A material weakness in internal control over compliance 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. 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. Our consideration of internal control over compliance was for the limited purpose described in the first 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. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we did identify deficiencies in internal control over compliance described in the accompanying Schedule of Findings and Recommendations as Finding Nos. 2020-002 and 2020-003 that we consider to be significant deficiencies. The City’s responses to the internal control over compliance 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. ATTACHMENT A 31 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 October 12, 2020 ATTACHMENT A CITY OF TEMPLE CITY COMPLIANCE MATRIX Year Ended June 30, 2020 32 Compliance Requirement In Compliance Questioned Costs If no, provide details and management response. Yes No N/A A. Proposition A and Proposition C Local Return Funds 1. Uses the State Controller’s Uniform System of Accounts and Records. X None 2. Timely use of funds.X None 3. Funds expended were approved and have not been substituted for property tax. X None See Finding No. 2020- 001 on Schedule of Findings and Recommendations. 4. Expenditures that exceeded 25% of approved project budget have approved amended project Description Form (Form A). X None 5. Administrative expenses are within the 20% cap of the total annual Local Return Expenditures. X None 6. All on-going and carryover projects were reported in Form B. X None 7. Annual Project Summary Report (Form B) was submitted on time. X None 8. Annual Expenditure Report (Form C) was submitted on time. X None 9. Cash or cash equivalents are maintained.X None 10. Accounting procedures, record keeping and documentation are adequate. X None 11. Pavement Management System (PMS) is in place and being used for Street Maintenance or Improvement Projects Expenditures. X None 12. Local Return Account is credited for reimbursable expenditures. X None 13. Self-Certification was completed and submitted for Intelligent Transportation Systems projects or elements. X None 14. Signed Assurances and Understandings form was on file. X None 15. Recreational transit form was submitted on time. X None ATTACHMENT A CITY OF TEMPLE CITY COMPLIANCE MATRIX Year Ended June 30, 2020 (Continued) 33 Compliance Requirement In Compliance Questioned Costs If no, provide details and management response. Yes No N/A B. Measure R Local Return Fund 1. Funds were expended for transportation purposes. X None 2. Funds were used to augment, not supplant, existing local revenues being used for transportation purposes unless there is a funding shortfall. X None 3. Signed Assurances and Understandings form was on file. X None 4. Separate Measure R Local Return Account was established. X None 5. Revenues received including allocations, project generated revenues and interest income was properly credited to the Measure R Local Return Account. X None 6. Funds were expended with Metro’s approval. X None 7. Expenditure Plan (Form One) was submitted on time. X None See Finding No. 2020- 002 on Schedule of Findings and Recommendations. 8. Expenditure Report (Form Two) was submitted on time. X None 9. Timely use of funds.X None 10. Administrative expenditures are within the 20% cap. X None 11. Fund exchanges were approved by Metro.X None 12. A separate account was established for Capital reserve funds and Capital reserve was approved by Metro. X None 13. Recreational transit form was submitted on time. X None ATTACHMENT A CITY OF TEMPLE CITY COMPLIANCE MATRIX Year Ended June 30, 2020 (Continued) 34 Compliance Requirement In Compliance Questioned Costs If no, provide details and management response. Yes No N/A C. Measure M Local Return Fund 1. Funds were expended for transportation purposes. X None 2. Funds were used to augment, not supplant existing local revenues being used for transportation purposes unless there is a fund shortfall. X None 3. Signed Assurances and Understandings was on file. X None 4.Separate Measure M Local Return Account was established. X None 5. Revenue received including allocations, project generated revenues and interest income was properly credited to the Measure M Local Return Account. X None 6. Funds were expended with Metro’s approval. X None 7. Expenditure Plan (Form M-One) was submitted on time. X None See Finding No. 2020- 003 on Schedule of Findings and Recommendations. 8. Expenditure Report (Form M-Two) was submitted on time. X None 9. Timely use of funds.X None 10. Administrative expenses are within the 20% cap. X None 11. Fund exchanges were approved by Metro.X None 12. A separate account was established for Capital reserve funds and Capital reserve was approved by Metro. X None 13. Recreational transit form was submitted timely.X None ATTACHMENT A CITY OF TEMPLE CITY COMPLIANCE MATRIX Year Ended June 30, 2020 (Continued) 35 Compliance Requirement In Compliance Questioned Costs If no, provide details and management response. Yes No N/A D. Transportation Development Act Article 3 Fund 1. Timely use of funds.X None 2. Expenditures were incurred for activities relating to pedestrian and bicycle facilities and amenities. X None ATTACHMENT A CITY OF TEMPLE CITY SCHEDULE OF FINDINGS AND RECOMMENDATIONS Year Ended June 30, 2020 36 PALRF: Finding No. 2020-001 Compliance Reference According to Proposition A and Proposition C Local Return Guidelines, Section I (C), Project Description Form (Form A): Jurisdictions shall submit for approval a Project Description Form prior to the expenditure of funds." Condition The City incurred expenditures prior to receiving approval from LACMTA for PALRF's Project Code 410-00, Proposition A Fund Exchange with Foothill Transit, in the amount of $750,000. However, the project was subsequently approved on September 29, 2020. Cause Due to miscommunication amongst the staff, the City mistakenly did not submit a request for budget approval from LACMTA for PALRF’s Proposition A Fund Exchange with Foothill Transit. Effect The City did not comply with the Guidelines when expenditures for PALRF project are incurred prior to LACMTA's approval. Recommendation We recommend that the City establish procedures to ensure that it obtains approval from LACMTA prior to implementing any Proposition A and Proposition C Local Return projects. Management’s Response Moving forward, the City will ensure that the necessary forms are submitted and official approvals from LACMTA are acquired before expending PALRF funds on any projects. Finding Corrected During the Audit LACMTA Program Manager granted retroactive approval of the said expenditures on September 29, 2020. No follow-up is required. ATTACHMENT A CITY OF TEMPLE CITY SCHEDULE OF FINDINGS AND RECOMMENDATIONS Year Ended June 30, 2020 (Continued) 37 MRLRF: Finding No. 2020-002 Compliance Reference According to Measure R Local Return Guidelines, Section B (II.1),Expenditure Plan (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, 2019 deadline for submission of Form One. However, the City submitted the Form One on August 16, 2019. This is a repeat finding from the prior fiscal year. Cause The former Director of Parks and Recreation who was responsible for the submission of the reports has since retired from the City. As a result, the submission of the form was overlooked. Effect Because the City’s Form One was not submitted timely, the City did not comply with the Measure R Local Return Guidelines. Recommendation We recommend that the City establish procedures 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 Response The new Director of Parks and Recreation has now taken charge to ensure the necessary forms are submitted by the reporting deadlines. Finding Corrected During the Audit The City subsequently submitted the Form One on August 16, 2019. No follow-up is required. ATTACHMENT A CITY OF TEMPLE CITY SCHEDULE OF FINDINGS AND RECOMMENDATIONS Year Ended June 30, 2020 (Continued) 38 MMLRF: Finding No. 2020-003 Compliance Reference According to Measure M Local Return Guidelines, Reporting Requirements Section XXV, Expenditure Plan (Form M-One), “To maintain legal eligibility and meet Measure M LR Program compliance requirements, Jurisdictions shall submit to Metro an Expenditure Plan (Form M-One), annually, by August 1 of each year.” Condition The City did not meet the August 1, 2019 deadline for submission of Form M-One. However, the City submitted the Form M-One on August 16, 2019. This is a repeat finding from the prior fiscal year. Cause The former Director of Parks and Recreation who was responsible for the submission of the reports has since retired from the City. As a result, the submission of the form was overlooked. Effect Because the City’s Form M-One was not submitted timely, the City did not comply with the Measure M Local Return Guidelines. Recommendation We recommend that the City establish procedures to ensure that the Form M-One 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 confirmation of receipt by LACMTA to indicate the form was submitted in a timely manner. Management’s Response The new Director of Parks and Recreation has now taken charge to ensure the necessary forms are submitted by the reporting deadlines. Finding Corrected During the Audit The City subsequently submitted the Form M-One on August 16, 2019. No follow-up is required. ATTACHMENT A EXIT CONFERENCE ATTACHMENT A 39 CITY OF TEMPLE CITY 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 EXIT CONFERENCE June 30, 2020 An exit conference was held on November 24, 2020, 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 two (2) significant deficiencies and three (3) 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 ATTACHMENT A Simpson & Simpson, LLP 633 West 5th 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 RETURN FUND, MEASURE R LOCAL RETURN FUND, MEASURE M LOCAL RETURN FUND, AND TRANSPORTATION DEVELOPMENT ACT ARTICLE 3 FUND FOR THE FISCAL YEARS ENDED JUNE 30, 2020 AND 2019 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, 2020 and 2019 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 ATTACHMENT A