CITY OF HERCULES
Presentation to the City CouncilFor the Fiscal Year Ended June 30, 2023 March 12, 2024
CONTENTS
Scope of Work
Required Communications (AU-C 260)
Overview of the Financial Statements and Financial Indicators Key Pensions and Other Postemployment Benefits Information Financial Audit Results
3/12/2024
SCOPE OF WORK
3/12/2024
SCOPE OF WORK
Audit of the Annual Comprehensive 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 N (formerly as Measure C) – Utility Users Tax Rate Revenues 3/12/2024
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.
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.
Communicate with those charged with governance
3/12/2024
Required Communications (AU-C 260)
3/12/2024
Required Communications (AU-C 260)
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.
Significant Estimates
Investment fair value
Depreciation and amortization on capital assets
Lease receivable
Net pension liability
Net other postemployment benefits (“OPEB”) liability
3/12/2024
Required Communications (AU-C 260)
Sensitive Disclosures
Note 1 - Summary of Significant Accounting Policies
Note 4 – Leases Receivable
Note 8 – Retirement Plans
Note 10 – Other Postemployment Benefits
Note 12 – Commitments and Contingencies
Note 14 – Stewardship, Compliance, and Accountability
Misstatements
There were no material uncorrected misstatement.
3/12/2024
Required Communications (AU-C 260)
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. 3/12/2024
OVERVIEW OF THE FINANCIAL STATEMENTS AND FINANCIAL INDICATORS 3/12/2024
City of HerculesGovernment-Wide Statement of Net PositionJune 30, 2023 3/12/2024
City of HerculesGovernment-Wide Statement of Activities For the Year Ended June 30, 2023 3/12/2024
City of HerculesGovernmental ActivitiesCost of Services to Tax Revenues For the Years Ended June 30, 2023 and 2022 3/12/2024
City of HerculesGeneral Fund SummaryFund BalanceJune 30, 2023 and 2022 3/12/2024
City of HerculesGeneral Fund SummaryRevenues, Expenditures and Changes in Fund Balance For the Years Ended June 30, 2023 and 2022 3/12/2024
City of HerculesGeneral FundUnassigned Fund Balance to Annual Expenditures For the Years Ended June 30, 2023 and 2022 3/12/2024
KEY PENSION AND OPEB INFORMATION
3/12/2024
Net Pension Liability – Misc. Plan
3/12/2024
Net Pension Liability – Safety Plan
3/12/2024
Net OPEB Liability – PEHMCA PLAN
3/12/2024
Net OPEB Liability – SOMAR PLAN
3/12/2024
FINANCIAL AUDIT RESULTS
3/12/2024
AUDIT RESULTS
Financial Statements
Unmodified Opinion
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 N No exceptions were noted
Other Results
No disagreements with management
No material weaknesses in internal controls over financial reporting were reported No accounting issues
3/12/2024
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