HomeMy Public PortalAbout12) 7I Audit Report for South Coast Air Quality Management District SCAQMD 2011-12DATE:
TO:
FROM:
ADMINISTRATIVE SERVICES DEPARTMENT
MEMORANDUM
October 6, 2015
The Honorable City Council
Bryan Cook , City Manager
Via : Tracey L. Hause , Administrative Services Director
By : Lee Ma , Accountant
AGENDA
ITEM 7.1.
SUBJECT: AUDIT REPORT FOR SOUTH COAST AIR QUALITY MANAGEMENT
DISTRICT (SCAQMD) FOR FISCAL YEAR (FY) 2011-12
RECOMMENDATION:
The City Council is requested to receive and file the FY 2011-12 SCAQM D Aud it Report
(Attachment "A ").
BACKGROUND:
1. In 1991 , local governments began receiving subvention funds as a result of the
passage of Assembly Bill (AB) 2766 which implemented programs that redu ce a i r
pollution from motor vehicles .
2 . In Novembe r 2014 , SCAQMD contra cted with the firm of Simpson & Simpson ,
Certified Public Accountants (Si mpson & Simpson) and selected a nu mber of cities
in Los Angeles County to audit. The City of Temple City (City) was among the
selected cities.
3. On February 26 , 2015, Simpson & Simpson completed the ir fieldwork for the FY
2011-12 audit period .
4 . On September 28 , 2015 , t he City re ce iv ed the completed FY 2011-12 SCAQMD
Audit Repo rt.
ANALYSIS:
The AB 2766 subve nti on program provides a funding source for cities and coun ties to
meet requirements of federal and sta te Clean Air Acts, and for imp lemen tation of motor
vehicle emission reduction measures in the SCAQ MD Ai r Qua l ity Management Plan
(AQ MP ). T he legis lation creating this revenue source pro vides for oversight of the use
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City Council
October 6 , 2015
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of these monies by local governments. Cities and counties under SCAQMD's
jurisdiction provide annual program and financial information to the SCAQMD. In
addition , the SCAQMD works with an independent firm to conduct audits of AB 2766 fee
recipients , at least once every two years .
The audit period covered was for FY 2011 -12 . Simpson & Simpson also completed a
review of transactions for FY 2012-13 . However, Simpson & Simpson will not be
providing a formal report of the review of FY 2012-13 transactions .
Simpson & S impson noted that there were no exceptions in the City's FY 2011-12
SCAQMD Audit Report. As result , the City is in compliance with all AB 2766 audit
requirements .
CONCLUSION:
The City Council rs requested to receive and file the FY 2011-12 SCAQMD Audit
Report.
FISCAL IMPACT:
This agenda item does not have a fiscal impact on the FY 2015-16 City Budget.
ATTACHMENT:
A. Air Quality Improvement Fund , Independent Accountant's Report on Applying Agreed
-Upon Procedures Fiscal Year Ended June 30 , 2012
CITY OF TEMPLE CITY, CALIFORNIA
AIR QUALITY IMPROVEMENT FUND
ATTACHMENT A
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED-UPON PROCEDURES
FOR THE YEAR ENDED JUNE 30, 2012
SIMP SON & SIMPSO
CEll. TIRED I'UBLIC ACCOUNTANTS
EO UNQING PARTh'fRS
BIV.INAR.D C. SLW'SON, CPA
MELBA W. SL\\PSON, CPA
The Governing Board of
Independent Accountant's Report
on Applying Agreed-Upon Procedures
The South Coast Air Quality Management District
US. BANK TOWER.
633 WEST 5TH STREET, SUITE 3320
LOS ANGELES, CA 90071
(2!3) 736«>64 TELEPHONE
(2!3) 736«>92 FAX
www.stmpsonandstmpsoncpas.com
We have performed the procedures enumerated below, which were agreed to by the
management of the South Coast Air Q uality Management Di stric t (SCAQMD), solel y to
assi s t you in determining whether automobile registration fee revenues (AB 2766 funds)
distributed to the City of Temple City, California (City) in fi scal year 2011-12 were s pent
on the reduction of air pollution from motor vehicles pursuant to the California Clean Air
Act of 1988 or the SCAQMD's Air Quality Management Plan (AQMP) prepared
pursuant to Article 5 of Chapter 5.5 of Part 3 of th e California Health and Safety Code
(CHSC). This agreed-upon procedures engagement was conducted in accordance with
attes tation s tandards established by the American Institute of Certified Public
Accountants. The suffic ie nc y of these procedures i s solely the res ponsibility of those
parties s pecified in this r eport. Consequently, we make no representation r egardin g the
s uffic ie ncy of the procedures described b e low e ither for the purpose for w hich this report
has been re quested or any other purpose .
Our procedures and r esults are as follows.
1. We conduc ted interviews in order to obtain an understanding of h ow the City
accounts for AB 2766 funds, including whether the fund s are main tai ned in a separate
City fund or if ther e is a separate accounting fo r th e fund s maintained by other means .
R es ult
We note d that the C i ty h as a separate fund , Fund 29 -Air Qual ity Improvement
Fund, a special reve nue f und.
2. We agreed to tal AB 2766 revenues of$ 44,743 f or fi scal year 2011-12 p er the general
ledger to the SCAQMD ' s record of disbursem e n ts.
Result
W e n o te d no exceptio ns to total AB 2766 revenu es.
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The CPA. Never Underestimate The Val ue~
3. We obtained the prior year 's audited ending fund balance, added receipts including
interest, less disbursements to obtain the ending fund balance for fiscal year 2011-12.
We then agreed the ending fund balance to the general ledger.
Result
We noted no exceptions to the ending fund balance.
4. We reconciled cash by obtaining the prior year's audited balance and added revenues ,
payables, and prior year's receivables. We then subtracted expenditures, receivables,
and prior year's payables.
Result
We noted no exceptions to the cash balance.
5. We conducted interviews in order to obtain an understanding of how the City
allocates interest earned and determined the mathematical accuracy of the interest
allocation. We also determined that interes t earned was used for the same purposes
for which AB 2766 funds were allocated to the City.
Result
We noted no exceptions to interest allocation earned or use of interest earned.
6. We tested AB 2766 proj ect expenditures to dete rmine allowability, reasonableness,
and adequacy of supporting documents in accordance with CHSC Section 44220(b),
and that AB 2766 fund expe nditures were incurred solely to reduce air pollution from
motor vehicles and f or related planning, monitoring, enforc ement and technical
studies necessary for implementation of the California Clean Air Act of 1988.
Result
We noted no exceptions to AB 2766 project expenditures for the fiscal year ended
June 30, 2012 ~
7. We tes ted accounts payable and interfund payables for the AB 2766 fund as of the
fiscal year end.
Result
We noted no exceptions to accounts payable f or the AB 2766 fund as of June 30,
2012. There were no interfund payables as of June 30, 2012.
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8. We tested AB 2766 payroll expenditures to determine allowability, reasonableness
and adequacy of supporting documentations in accordance with CHSC Section
44220(b).
Result
We noted that there were no payroll expenditures for the fiscal year ended June 30,
2012.
9. We analyzed AB 2766 administrative expenditures to verify, in accordance with
CHSC Section 44233, that the City did not use more than 5 % of the AB 2766 fees
distributed for administrative expenditures.
Result
We noted that there were no admini strative expenditures for the fiscal year ended
June 30, 2013.
10. We anal yzed AB 2766 program expenditures to verify that the City did not use more
than 10 % of the AB 2766 fees distributed for research and development, public
education, and website development projects, collectively.
Result
We noted no exceptions in performing thi s procedure.
11. We obtained the City's Comprehensive Annual Financial Report and Single Audit
Report for the fiscal year ended June 30, 2012 to determine that the audit was
performed by an independent CPA firm.
Result
We noted that the audit was performed by an independent CPA firm.
We were not engaged to and did not conduct an examination, the objective of which
would be the expression of an opinion on the City 's compliance with the California Clean
Air Act of 1988 or the SCAQMD's Air Quality Management Plan (AQMP) prepared
pursuant to Article 5 of Chapter 5.5 of Part 3 of the California Health and Safety Code
(CHSC). Accordingl y, we do not express s uch an opinion. Had we performed additional
procedures , other matters might have come to our attention that would have been reported
to you.
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Tbis report is intended solely fo r the information and use of the City, governing board
and management of the SCAQMD, and i s not intended to be and should not be used by
anyone other than these specified parties.
Los Angeles , California
February 26, 2015
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