City of Hercules
AU-C 260 Communication With Those Charged With Governance For the Year Ended June 30, 2022
February 14, 2023
CONTENTS
Scope of Work
Required Communications (AU-C 260)
Overview of Financial Statements
Audit Results
Thank You!
12/2/2020
SCOPE OF WORK
12/2/2020
SCOPE OF WORK
Audit of the Comprehensive Annual Financial Report
Audit of the Hercules Wastewater Fund
Report on internal control over financial reporting and on compliance in accordance with Government Auditing Standards Agreed Upon Procedures:
GANN Limit
Measure B – Transactions and Use Tax Revenues
Measure C – Utility Users Tax Rate Revenues
Communication with Those Charged with Governance
12/2/2020
OUR RESPONSIBITY IN ACCORDANCE WITH PROFESSIONAL STANDARDS Form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America Our responsibility is to plan and perform the audit to obtain “reasonable” assurance (not “absolute” assurance) about whether the financial statements are free of material misstatements.
Exercise professional judgment and maintain professional skepticism throughout the audit.
We considered internal control over financial reporting. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
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.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. 2/6/2023
Required Communications (AU-C 260)(Report to the City Council) 12/2/2020
Required Communications (AU-C 260)
12/2/2020
Ethics and Independence
Complied with ALL relevant ethical requirements regarding independence Significant Accounting Policies
The City disclosed all significant accounting policies in Note 1 to the financial statements.
The City implemented GASB Statement No. 87, Leases
Significant Estimates
Fair Value on Investments
Depreciation and Amortization on Capital and Lease Assets Lease Receivable and related Deferred Inflows of Resources Lease Payable
Net Pension Liability
Net OPEB Liability
Required Communications (AU-C 260)
12/2/2020
Sensitive Disclosures
Note 4 – Lease Receivable
Note 8 – Retirement Plans
Note 9 – Deferred Compensation Plan
Note 10 – Other Postemployment Benefits
Note 11 – Risk Management
Note 12 – Commitments and Contingencies
Note 13 – Joint Powers Agreements
Note 17 – Special Items
Note 18 – Restatement
Required Communications (AU-C 260)
12/2/2020
Misstatements
There were uncorrected misstatement reported.
Consultation with Other Accountants
Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and other matters.
Significant Difficulties
We encountered no significant difficulties in dealing with management.
Disagreement with Management
We did not have any disagreement with management in terms of accounting treatments nor audit procedures performed.
OVERVIEW OF THE FINANCIAL STATEMENTS
12/2/2020
Net Position @ June 30, 2022
12/2/2020
Changes in Net Position
2/6/2023
General Fund Balance @ June 30, 2022 and 2021
2/6/2023
Net Pension Liability
2/6/2023
Net OPEB Liability (Asset)
2/6/2023
AUDIT RESULTS
12/2/2020
Audit Results
12/2/2020
Financial Statements
Unmodified Opinions
Financial Statements are fairly presented in all material respects Significant accounting policies have been consistently applied Estimates are reasonable
Disclosures are properly reflected in the financial statements Agreed Upon Procedures – GANN, Measure B, and Measure C No exceptions were noted
AU-C 265, Communicating Internal Control Related Matters Identified in an Audit None Reported