CITY COUNCIL STAFF REPORT
July 16, 2024 {{section.number}}k
RECEIVE AND FILE THE ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) FOR THE YEAR ENDING JUNE 30, 2023
RECOMMENDATION:
Receive and file the City of Coronado Annual Comprehensive Financial Report for the year ending June 30, 2023.
BACKGROUND:
City staff prepared the Annual Comprehensive Financial Report (ACFR) which provides statements of the financial condition of the City as of June 30, 2023, in accordance with Generally Accepted Accounting Principles for municipal governments. The City engaged the Certified Public Accounting firm of Davis Farr, LLP to examine the City’s financial statements, applying auditing procedures that are in accordance with the auditing standards that they are required to abide by in their profession. As part of the examination, Davis Farr reviews the City’s internal controls and assists City staff in preparing the ACFR.
The ACFR is attached to this report and is available in the Office of the City Clerk, the City’s Library, and online at:
June 30, 2023 Annual Comprehensive Financial Reports
• The Introductory Section of the ACFR contains a transmittal letter, which provides background information about the community and local economy, an organizational chart, and a page that identifies elected and appointed officials. • The Financial Section of the ACFR includes City Management’s Discussion and Analysis (MD&A), the Basic Financial Statements, and Combining and Individual Fund Statements and Schedules. This MD&A is designed to provide a general overview and summary of the results and required supplemental information for the year ending June 30, 2023. The MD&A is intended to be read in conjunction with the financial statements and other information found in the report.
• Accompanying this report are four letters from Davis Farr which constitute their report to the governing body on the scope of work performed as well as their report on matters of internal control and their compliance with auditing standards, single audit report for federal awards expenditure, and report on compliance for the Housing Successor.
Responsibility for the accuracy, completeness, and fair presentation of the ACFR, which includes all disclosures in the financial statements, rests with City management. In addition, management is responsible for establishing and maintaining an internal control structure designed to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles, compliance with applicable laws and regulations, effectiveness and efficiency of financial operations, and assets of the City are protected from loss, theft, and misuse. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met.
ANALYSIS:
At the conclusion of the audit, Davis Farr rendered an unmodified (clean) opinion, which signifies that the financial statements of the City of Coronado for the year ending June 30, 2023, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing that the accounting principles used are appropriate and proper; evaluating the City’s internal control procedures; and determining that the overall financial statement presentation is in accordance with Generally Accepted Accounting Principles for government. Davis Farr conducted fieldwork on two occasions, first to conduct its assessment of the City’s accounting and internal control procedures, and second to conduct tests of financial transactions. Davis Farr has concluded, in its Independent Auditor’s Report (page 1 in the ACFR, which is included separately as a printed document), among other things, that:
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Coronado, as of June 30, 2023, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
As part of the FY 2022-23 engagement, Davis Farr also performed an audit of the City’s compliance with Health and Safety Code sections pertaining to Housing Successor Agencies. The opinion of Davis Farr is that the City has complied in all material respects with the compliance requirements of the Health and Safety Code pertaining to Housing Agencies. The report on compliance has been published on the City’s website for review.
FISCAL IMPACT:
The ACFR shows the City’s financial condition as of June 30, 2023. The filing and receipt of this report does not result in a financial impact.
ALTERNATIVE:
Council may not receive the City of Coronado Annual Comprehensive Financial Report (ACFR) for the year ending June 30, 2023.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not Applicable.
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
1. ACFR for Fiscal Year Ended June 30, 20232. Auditors’ Letter to the Governing Body
3. Auditors’ Agreed Upon Procedures Report over the Gann Limit
4. Single Audit Report on Federal Awards
5. Auditors’ Report on Compliance with Applicable Requirement and on Internal Control Over Compliance for the Housing Successor
Submitted By: Administrative Services Department / John Kim