CITY OF ALAMEDA
INDEPENDENT ACCOUNTANTS REPORT ON
APPLYING AGREED UPON PROCEDURES FOR
TESTING THE CITYS COMPLIANCE WITH
CERTAIN PROVISIONS OF THE CITYS
2024 INVESTMENT POLICY
FOR THE YEAR ENDED JUNE 30, 2024
Exhibit 10
This Page Left Intentionally Blank
INDEPENDENT ACCOUNTANTS REPORT ON APPLYING AGREED UPON PROCEDURES FOR TESTING THE CITYS COMPLIANCE WITH CERTAIN PROVISIONS OF THE CITYS 2024 INVESTMENT POLICY FOR THE YEAR ENDED JUNE 30, 2024 Honorable Mayor and Members of the City Council City of Alameda, California We have performed the procedures enumerated below on testing the City of Alamedas (City) compliance with certain provisions of the Citys 2024 Investment Policy as of June 30, 2024. The Citys management is responsible for the Citys compliance with the Citys 2024 Investment Policy. The City of Alameda has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of testing the Citys compliance with certain provisions of the Citys 2024 Investment Policy. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The procedures and associated findings are as follows: 1. We obtained and read the Citys 2024 Investment Policy adopted by City Council on September 5, 2023. 2. Section V. Internal Controls of the Investment Policy and Section VI. Investment Procedures and Delegation of Authority require the City to have a written system of internal controls related to the investment function. We obtained the written procedures for fiscal year 2024, that were updated in September 2024. We did note that the prior written procedures were dated October 2022. 3. We tested the Citys compliance with the following provisions of the Investment Policy: VI. Investment Procedures and Delegation of Authority We tested whether the Citys investment managers are registered under the Investment Advisers Act of 1940 on February 16, 2024 and November 8, 2024 and noted the following: Chandler Asset Management (CRD # 107287/SEC#:801-44378) is registered as an investment advisor with a registration status of Approved per https://adviserinfo.sec.gov/firm/summary/107287 PFM Fund Distributors, Inc. (dba PFM Asset Management) (CRD#: 114474/SEC#: 8-53496) is registered as a brokerage firm, with a registration status of Withdrawal Pending as of October 2024 per https://brokercheck.finra.org/firm/summary/114474. Upon further review, per the following website, it appears PFM consolidated into its parent company, U.S. Bancorp Asset Management, Inc. on October 1, 2024. The website confirms that the consolidation of PFMAM into USBAM does not involve a change in actual control or management of the Funds investment adviser and the same individuals will continue to provide portfolio management services to the Funds under the same investment management fee schedule. In addition, it is expected that there will be no change to the leadership, marketing and client services teams for the Funds. Because there is no actual change in control or management of the investment adviser, this consolidation does not constitute an assignment of the investment advisory agreement for purposes of the Investment Company Act of 1940. https://www.sec.gov/Archives/edgar/data/1696729/000089418924006087/pfmconsolidationsupplement.htm VII. Safekeeping and Custody We obtained the June 30, 2024 US Bank third party custodian statement and reconciled it to the June 2024 Quarterly Investment Report to determine that all securities included in the Quarterly Investment Report were held by the Citys third-party custodian without exception. We noted that Local Agency Investment Fund (LAIF) account, Bank of Marin Certificate of Deposit account, and Beacon Business Bank Certificate of Deposit Account were not included in the Quarterly Investment Report. Per City staff, the Quarterly Investment Reports only include accounts with transactions in that quarter, and noted these accounts are included in the Annual Investment portfolio Summary Report. IX. Authorized Investments, Maximum Maturities and Investment Accounts We tested the composition of the Citys June 2024 Monthly Investment Report for compliance with the types of securities held and the maximum holdings, maximum per issuer and maximum maturity limitations, without exception. We selected 10 investment purchase transactions from July 1, 2023 to June 30, 2024 out of 99 total purchases for fiscal year 2024 and tested for the following, without exception: Authorization Compliance with bid requirements, as applicable Investment rating at time of purchase to Moodys or S&P and for compliance with Investment Policy minimum rating requirement, as applicable Addition to the safekeeping statement in the month purchased Addition to the Quarterly Investment Report in the quarter purchased X. Due Diligence: Adding Investment Pools/ Mutual Funds/ Money Market Funds The City did not add any of the account types listed during the year ended June 30, 2024. The City had two existing accounts at June 30, 2024, therefore, we selected one account (Local Agency Investment Fund (LAIF)) for testing of the last time the City obtained the information from the pool. The Investment Policy requires that 12 points of information be obtained on a regular basis. City staff did obtain the information from the LAIF pool on September 10, 2024. The information was previously obtained in October 2023.
XII. Collateralization The City did not have any time deposits in savings and loans at June 30, 2024 and did not have non-negotiable certificates of deposit in excess of $250,000 outstanding at June 30, 2024, therefore we did not select 10% of such investments to trace to collateralization documentation and test whether in compliance with the collateralization requirements of the California Government Code and the Investment Policy. 4. We did not test for compliance with the following provisions of the Investment Policy: I. Statement of Purpose and Adoption of Policy II. Scope III. Objectives and Performance Standards IV. Prudence and Risk Tolerance VIII. Authorized Banks and Financial Securities Dealers and Institutions (the City contracts with an outside investment manager) XI. Diversification XIII. Ethics and Conflicts of Interest XIV. Investment Advisory Committee / Reporting Requirements Attachment A. Glossary We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Citys compliance with certain provisions of the Citys 2024 Investment Policy for the year ended June 30, 2024. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. We are required to be independent of the City of Alameda and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. ******************** This report is intended solely for the information and use of management and the City Council and is not intended to be and should not be used by anyone other than those specified parties; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record.
Pleasant Hill, California December 30, 2024
This Page Left Intentionally Blank