CITY OF FULLERTON, CALIFORNIA
AIR QUALITY IMPROVEMENT TRUST FUND
FOR THE YEAR ENDED JUNE 30, 2024 AUDIT REPORT
CITY OF FULLERTON, CALIFORNIA
AIR QUALITY IMPROVEMENT TRUST FUND
Audit Report
For the Year Ended June 30, 2024
CITY OF FULLERTON, CALIFORNIA
AIR QUALITY IMPROVEMENT TRUST FUND
Audit Report
For the Year Ended June 30, 2024
Table of Contents
Page
Number
Independent Auditors’ Report ..................................................................................................................................... 1
Financial Statements
Balance Sheet/Stateme nt of Net Position ............................................................................................................ 4
Statements of Revenues, Expenditures and
Changes in Fund Balance/ Statement of Activities ............ ............................................................................... 5
Notes to Financial Statements ................................ ............................................................................................. 6
Required Supplementary Information
Budgetary Compari son Schedule ........................................................................................................................ 8
Independent Auditors’ Report on Compliance with Applicable Requirements and on Internal Control Over Compliance .......................................................................................... 9
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 .......................................................... 12
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
City of Fullerton, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the Ai r Quality Management District special revenue fund (the “Fund”) of the City of Fullerton, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Fund of the City, as of June 30, 2024, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit 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. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial State ments section of our report. We are required to be independent of the City and to meet our other ethical responsib ilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Fund and do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2024, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accou nting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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 Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to is sue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted a uditing standards and Government Auditing Standards will always detect a material misstatement when it exists.
To the Honorable Mayor and Members of the City Council
City of Fullerton, California
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, mi srepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted au diting standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skept icism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to th ose risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of inter nal control relevant to the audit 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 City’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States o f America require that the budgetary comparison information, as listed on the t able of contents, be presented t o supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operat ional, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assuran ce on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplem ent the basic financial statements. Such missing information, although not a part of the basic financial stateme nts, is required by the Governmental Accounting Standards Board who considers it to be an essential part of fin ancial reporting for placing the basic financial statements in an appropriate operational, economic, or historic al context. Our opinion on the basic financial statements is not affected by this missing information.
2 To the Honorable Mayor and Members of the City Council City of Fullerton, California
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2024, on our consideration of the City’s internal control over the Fund’s 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 solely to describe the scope of our testing of intern al control over financial reporting and compliance and the results of that testing, and not to provide an opinion on t he effectiveness of the City’s internal control over the Fund’s 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 inter nal control over the Fund’s fin ancial reporting and compliance.
Irvine, California
December 20, 2024
3 CITY OF FULLERTON
AIR QUALITY IMPROVEMENT TRUST FUND
Balance Sheet / Statement of Net Position
June 30, 2024
Reclassification
Governmental and Statement
Funds Eliminations of Net Position
Assets:
Cash 1,037,907$ - $ 1,037,907$
Accrued interest 4,884 - 4,884
Capital assets, net of depreciation - 42,831 42,831 Total Assets 1,042,791$ 42,831$ 1,085,622$ Fund Balance/Net Position:
Invested in Capital Assets -$ 42,831 42,831$ Restricted for AQMD activities 1,042,791 - 1,042,791 Total Fund Balance/Net Position 1,042,791 42,831$ 1,085,622$ Total Liabilities and Fund Balance 1,042,791 $
4 CITY OF FULLERTON
AIR QUALITY IMPROVEMENT TRUST FUND
Statement of Revenues, Expenditures and
Changes in Fund Balance / Statement of Activities
For the Year Ended June 30, 2024
Governmental Statement
Funds Adjustments of Activities
Revenues:
Intergovernmental 240,444$ - $ 240,444$ Use of money and property 50,426 - 50,426 Total Revenues 290,870 - 290,870 Expenditures:
Current:
Community development 5,505 4,283 9,788 Total Expenditures 5,505 4,283 9,788 Excess (Deficiency) of Revenues
Over (Under) Expenditures 285,365 (4,283) 281,082 Other Financing Sources (Uses):
Transfers out (232,287) - (232,287) Total Other Financing Sources (Uses) (232,287) - (232,287) Net Change in Fund Balance/Net Position 53,078 (4,283) 48,795 Fund Balance/Net Position - Beginning 989,713 47,114 1,036,827 Fund Balance/Net Position - Ending 1,042,791$ 42,831$ 1,085,622$ 5 &,7<2))8//(5721
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7 CITY OF FULLERTON
AIR QUALITY IMPROVEMENT TRUST FUND
Budgetary Comparison Schedule
For the Year Ended June 30, 2024
Variance with
F inal Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:
Intergovernmental 181,000$ 181,000 $ 240,444 $ 59,444$ Use of money and property 15,600 15,600 50,426 34,826 Total Revenues 196,600 196,600 290,870 94,270 Expenditures:
Current:
Community development 23,050 23,050 5,505 17,545 Capital outlay 265,000 265,000 - 265,000 Total Expenditures 288,050 288,050 5,505 282,545 Excess (Deficiency) of Revenues
Over (Under) Expenditures (91,450) (91,450) 285,365 376,815 Other Financing Sources (Uses):
Transfers out - (480,948) (232,287) 248,661 Total Other Financing Sources (Uses) - (480,948) (232,287) 248,661 Net Change in Fund Balance (91,450)$ (572,398)$ 53,078 625,476$ Fund Balance - Beginning 989,713
Fund Balance - Ending 1,042,791$
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10 To the Honorable Mayor and Members of the City Council City of Fullerton, California
Purpose of this Report
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 AB 2766 and the Guide.
Accordingly, this report is not suitable for any other purpose.
Irvine, California
December 20, 2024
11 LSLCPAS.COM
INDEPENDENT AUDITORS’ 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 Mayor and Members of the City Council
City of Fullerton, California
We have audited, in accordance with the auditing standards gene rally 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 stateme nts of the Air Quality Management District special revenue fund of the City of Fu llerton, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Fund’s basic financial statements, and have issued our report thereon dated December 20, 2024.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over the Fund’s financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the 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 allo w 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 b asis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less s evere 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 contr ol 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 or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the require ments of California Assembly Bill 2766, Chapter 1705 (44220 through 44247), noncompliance with which could have a direct and material effec t on the financial statements. However, providing an opinion on compliance with those provisions was not an objec tive of our audit, 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.
To the Hon
orable Mayor and Members of the City Council
City of Fullerton, California
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 results of that testing, and not to provide an opinion on the e ffectiveness of the City’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 City’s inter nal control and compliance. Acco rdingly, this communication is not suitable for any other purpose.
Irvine, California
December 20, 2024
13