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PG City CAFR 2009

PG City CAFR 2009

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Published by Mark Dierolf
Audited Comprehensive Annual Financial Report for fiscal year ending in 2009.
Audited Comprehensive Annual Financial Report for fiscal year ending in 2009.

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Published by: Mark Dierolf on May 13, 2012
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02/09/2014

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CITY OF PACIFIC GROVE300 Forest Avenue, Pacific Grove, California 93950AGENDA REPORTTO:
Honorable Mayor and Members of the City Council
FROM:
James L. Becklenberg, Acting Deputy City Manager
MEETING DATE:
February 17, 2010
SUBJECT:COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THEFISCAL YEAR ENDED JUNE 30, 2009CEQA:
Does not constitute a “project” under California Environmental QualityAct (CEQA) guidelines.
RECOMMENDATION
Receive the Comprehensive Annual Financial Report, which includes the Auditor’s Opinion onthe City’s financial statements, from the City’s independent financial auditor, Vargas andCompany.
DISCUSSION
The City contracted with Vargas and Company, licensed certified public accountants, to audit theCity of Pacific Grove’s financial statements. The goal of the independent audit is to providereasonable assurance about whether the basic financial statements for the fiscal year ended June30, 2009 are free from material misstatement. The enclosed auditors’ opinion indicates that thefinancial statements present fairly, in all material respects, the financial position of the City.
Thisunqualified, or “clean”, opinion is the optimal type of opinion to receive from an externalauditor and represents continuous improvement in financial management and reporting from theFY 2005/06 financial statements
,
for which an “adverse” opinion was rendered.
For the fiscal year ended June 30, 2006, the auditors could not verify the fair representation of the City’s financial statements. In the subsequent year, the City Council made significantinvestments in financial management, hiring a Director of Management and Budget andreplacing incumbent senior financial staff with a bona fide public sector senior accountant.Audits for the two fiscal years since the year of the adverse opinion have received “qualified”opinions from the auditors, indicating improved basic accounting practices, but reflectingresidual fundamental problems with incomplete capital assets listings and underfunded self-insurance liabilities. Based on current compliance with capital asset accounting standards,steady progress over the last three years in correcting the under-funded liabilities, and increasingfund balances in the General Fund, the auditors believe the City has effectively managedprevious material risks to its financial integrity and its accounting systems are sound.The auditors note that the City continues to carry a substantial unfunded liability in the workers’compensation fund. Unfunded liabilities are not a new concern for the City, but are a primaryreason the City needs to restore reserves to higher levels.
Page 1 of 2
Regular Agenda Item No. 10.A
 
At a special meeting of the Ad Hoc Audit Committee on February 5, 2010, the Committeereviewed and discussed the report, along with the auditor’s Letter to Management and OtherReport, which contain suggestions for administrative improvement. The Committeeacknowledged the importance of the unqualified auditor’s opinion and stronger cash balances inmany funds, yet recommended that the City Council consider directing additional transfers tofunds that continue to carry negative cash balances. The subject of reserves and fundingpriorities will be the focus of City Council budget discussions in coming months.
FISCAL IMPACT
 None
ATTACHMENTS
 Comprehensive Annual Financial Report for the fiscal year ended June 30, 2009RESPECTFULLY SUBMITTED: REVIEWED BY:_______________________________ _____________________________Jim Becklenberg Thomas FrutcheyActing Deputy City Manager City Manager
Page 2 of 2
Regular Agenda Item No. 10.A
 
Regular Agenda Item No. 10.A ATTACHMENT

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