April 12, 2022
OFFICE OF THE CITY AUDITOR
Long Beach, California
HONORABLE MAYOR AND CITY COUNCIL
City of Long Beach
California
RECOMMENDATION:
C-2
LAURA L. DOUD, CPA
City Auditor
Receive and file the Quarterly Report of Cash and Investments for the quarter ending September 30, 2021.
DISCUSSION:
Pursuant to Section 803 of the City Charter, the Office of the City Auditor is charged with verifying cash in the City Treasury on a quarterly basis and providing a written report to the City Council. Attached is the Quarterly Report of Cash and Investments for the quarter ending September 30, 2021.
TIMING CONSIDERATIONS:
This item is not time sensitive.
FISCAL IMPACT:
There is no fiscal impact.
SUGGESTED ACTION:
Approve recommendation.
Respectfully submitted,
Laura L. Doud, CPA
CITY AUDITOR
attachment
411 West Ocean Boulevard, 8th Floor, Long Beach, California 90802 (562) 570-6751 [email protected] CityAuditorlauraDoud.com
THE CITY OF LONG BEACH
OFFICE OF THE CITY AUDITOR
QUARTERLY AUDIT OF (ASH AND INVESTMENTS
1 WINDES
TABLE OF CONTENTS
Executive Summary ......................................................................................... 1 Background ................................................................................................. 1-2 Audit Objectives, Scope, and Methodology .......................................................... 2-3 Results and Conclusions ................................................................................... 4 Attachment I: Pooled and Non-Pooled Cash and Investment Balances By Fund .............. 5-9 Attachment II: Pooled and Non-Pooled Cash and Investment Balances By Security Type .......................................................................................... 10 WINDES
EXECUTIVE SUMMARY
Long Beach ! Irvine I Los Angeles
www.windes,com
844.4W!NDES
We have conducted a performance audit of the cash and investment balances of the City of Long Beach (the City) as of September 30, 2021. The City of Long Beach's management is responsible for the cash and investment balances. As of September 30, 2021, the City's cash and investment portfolio totaled approximately $2.1 billion.
We conducted this performance audit in accordance with Generally Accepted Government Auditing Standards. Those standards require that we plan and perform the audit to obtain sufficient and appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
BACKGROUND
City Charter Mandate
Pursuant to Section 803 of the Charter of the City of Long Beach, California, the Office of the City Auditor is charged with verifying cash and investment balances in the City Treasury on a quarterly basis and providing a written report to the City Council. The Office of the City Auditor has contracted Windes, Inc. to perform the September 30, 2021 audit.
The audit of cash and investment balances of the City of Long Beach includes verifying cash and investments with outside depositories, and evaluating the City Treasurer's compliance with the relevant provisions of the California Government Code and the City's Investment Policy, which is adopted annually by the City Council.
Pooled Cash and Investments
The City's pooled cash is a grouping of the City's available cash for investments. The larger amount of money involved in a pool allows t.11.e City to earn a higher rate of return than each fund could receive by itself. Pooled funds that are not needed for operations are invested by the Treasury Bureau. The interest income earned in pooled cash and investments is apportioned to funds based on the ratio of daily cash balances to the total of pooled cash and investments.
Non-pooled Cash and Investments
Generally, non-pooled cash and investments are used for specific project operations or pledged for reserves or interest payments of outstanding debt.
1 BACKGROUND (CONTINUED)
Chandler Asset Management
The City has an agreement with Chandler Asset Management ("Chandler") to provide investment advisory and management services related to the City's pooled investment portfolio.
The term of the agreement beginning January 1, 2015 was extended through December 31, 2023. Chandler manages the City's pooled investment portfolio on a non-discretienary basis and provides ongoing oversight of investment activity, including "best practice" recommendations, updates on both financial and regulatory developments, investment strategy review, and performance and credit analysis related to investments in the City's investment pool.
AUDIT OBJECTIVES, SCOPE, AND METHODOLOGY
The objectives of our performance audit were to reconcile cash and investments as to the amount and description recorded on the City's books with outside depositories and to evaluate the City's compliance with the relevant provisions of the California Government Code Section 53601 and the City's Investment Policy.
The scope of this audit was limited to the quarter ended September 30, 2021.
We performed the following procedures:
• Obtained an understanding of the internal controls surrounding the City's cash and investment process.
• Obtained confirmations of cash held by banks and investments held by the City Treasurer's safekeeping agent and other custodians as of September 30, 2021 and reconciled them to the City's general ledger.
• Reconciled the balance of total investments on the City Treasurer's Investment Activity Portfolio Statistics Report (Sympro) at September 30, 2021 to the City's general ledger. • Obtained bank and investment reconciliations at September 30, 2021 and traced balances to the City's general ledger. This also included testing, on a sample basis, the adjustments made on the reconciliation to ensure they are valid adjustments. 2 AUDIT OBJECTIVES, SCOPE, AND METHODOLOGY (CONTINUED)
• Compared investments listed on the City Treasurer's Investment Activity Portfolio Statistics Report (Sympro) at September 30, 2021 to the types of investments authorized for the City in accordance with the City's Investment Policy and the relevant provisions of the California Government Code.
• Compared the portfolio mix of investment types listed in the City Treasurer's Investment Activity Portfolio Statistics Report (Sympro) at September 30, 2021 to the portfolio mix limitations imposed by the City's Investment Policy and the relevant provisions of the California Government Code.
• Reviewed supporting documentation on a sample basis, the purchase, sale and maturity of individual investments to determine compliance with the following provisions of the California Government Code and the City's Investment Policy:
o Purchases of investments meet minimum rating requirements and maximum allowable maturity periods.
o All sections of the investment transaction record are properly completed and authorized by the City Treasurer.
o Transactions are supported by documentation from third-party sources (individual broker confirmations, safekeeping statements, custodian statements, etc.)
• Recalculated accrued interest (in aggregate) to determine if accrued interest for investments held at September 30, 2021 was accurately stated on the City's general ledger.
The allocation of accrued interest and pooled cash and investments between funds was outside the scope of this audit. As such, the Schedule of Pooled and Non-Pooled Cash and Investment Balances by Fund and the Schedule of Pooled and Non-Pooled Cash and Investment Balances by Security Type are attached for informational purposes only. 3 RESULTS AND CONCLUSIONS
The City's cash and investment balances as of September 30, 2021 are summarized as follows:
Pooled Cash and Investments
Non-Pooled Cash and Investments
Total Cash and Investments
$ 1,964,377,411
122,682,079
$ 2,087,059,490
Based on the results of audit procedures performed, cash and investment balances as recorded on the City's books at September 30, 2021, materially agree as to the amount and description with outside depositories. Also, we found the City to be in compliance with all other relevant provisions of the California Government Code and the City's Investment Policy.
MANAGEMENT COMMENTS
Management concur that investment activity for the subject period was in full compliance with the applicable sections of the California Government Code and City's Investment Policy.
Long Beach, California
March 25, 2022
4 Fund
Number
1000
1009
1010
1011
1020
1030
1040
1041
1042
1043
1090
1100
2000
2001
2010
2015
2020
2025
2030
2035
2040
2041
2100
2150
2200
2210
2300
2310
2400
2500
2501
2550
2600
2650
2710
ATTACHMENT I
POOLED AND NON-POOLED CASH AND INVESTMENT BALANCES
BY FUND AT SEPTEMBER 30, 2021
Wlffl COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
Pooled Non-Pooled Total at
September 30, September 30, September 30,
Name of Fund 2021 2021 2021
GF - Operating $ 64,112,696 $ 1,371,202 $ 65,483,898
GF - District Priority 1,062,527 1,062,527
GF - Cap/Oper Grants 2,496,428 2,496,428
GF - Long Beach Recovery Act 71,159,123 71,159,123
GF - Clb Measure A 8,857,169 8,857,169
GF - Clb Measure Ma
GF - Asset Seizure Federal 811,304 811,304
GF - Asset Seizure Us Treasury 972,546 972,546
GF - Asset Seizure State 973,801 973,801
GF - Asf Priority Intvntn Prgm 78,412 78,412
GF - CLB Measure M Escrow 9,000,000 9,000,000
GF - Uplands Oil Operating 12,815,106 12,815,106
SR - General Grants (2,172,639) (2,172,639)
SR - American Rescue Plan Act (3,785, 736) (3,785, 736) SR - City Manager Grants 863,774 863,774
SR - Parks Grants 70,035 70,035
SR - Police Grants 1,653,334 1,653,334
SR - City Prosecutor Grants 312,747 312,747
SR - Fire Grants 216,989 216,989
SR - Developmentsrvc Grants 522,042 522,042
SR - Library Grants 2,708,468 2,708,468
SR - Library Grants Annual (4,785) (4,785)
SR - Ps Oil Prod Tax - Fire (6,764) (6,764)
SR - Ps Oil Prod Tax - Police 163,149 163,149
SR - Health Operating 12,414,243 800 12,415,043
SR - Health Grants (12,200,846) (12,200,846)
SR - Cupa Operating 569,010 569,010
SR - Cupa Grant (9,328) (9,328)
SR - Spec Adver/Prom Operating 4,674,585 4,674,585
SR - Housing Operations 5,279,952 5,279,952
SR - Housing Annual 14,166,305 29,294 14,195,599
SR - Lb Community Invest Co 10,502,272 10,502,272
SR - Belmont Shre Pkg Mtr 134,161 134,161
SR - Business Assistance 586,277 586,277
SR - Workforce Development Grants (5,692,685) 33,035 (5,659,650) 5 Total at
September 30,
2020
$ 85,714,165
1,069,449
2,488,397
2,912,824
(7,188,709)
'.751,946
1,278,148
882,304
62,988
3,000,000
12,057,387
251,778
(2,476,419)
(1,654,700)
976,780
345,040
380,255
545,077
1,725,395
3,886
176,607
14,125,979
(3,719,804)
1,191,320
7,638,405
4,389,827
15,514,685
9,390,167
231,030
76,583
(1,537,690)
Fund
Number
2711
2713
2760
2761
2800
2810
2811
2812
2813
4005
4505
5010
5015
5020
5120
5200'
5310
5320
5411
5412
5413
5414
5416
5417
5418
5420
5500
5501
6000
6005
6020
6100
6110
6120
6200
ATTACHMENT I
POOLED AND NON-POOLED CASH AND INVESTMENT BALANCES
BY FUND AT SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
(Continued)
Pooled Non-Pooled Total at
September 30, September 30, September 30,
Name of Fund 2021 2021 2021
SR - Comm Dev Grants - Hud 1,085,457 (54) 1,085,403
SR - Comm Dev - Other Grants 23,324,947 23,324,947
SR - Housing Auth Grnts 300,745 300,745
SR - Housing Auth Annual 24,782,141 2,183,072 26,965,213 SR - Gas Tax
SR - Dif-Traffic Mitigation Fees 7,539,964 7,539,964
SR - Dif-Parks Impact Fees 6,261,325 6,261,325
SR - Dif-Police Impact Fees 3,113,141 3,113,141
SR - Dif-Fire Impact Fees 1,324,992 1,324,992
DS - General Debt Service 16,647,910 2,285,497 18,933,407 DS - Successor Agency 16,961,551 16,961,551
CP - Capital Grants 1,163,721 1,163,721
CP - Bond Proceeds (285,701) (285,701)
CP - Capital Projects 80,045,942 80,045,942
CP - Special Assessmt Projects 1,775,589 34,090 1,809,679 CP - Legislative 4,912,736 4,912,736
CP - Transport Capital Project (281,168) (281,168)
CP - State Gas Taxcp Projects 12,649,378 12,649,378
CP - County Prop C Metro 23,239,930 23,239,930
CP - County Measure R Metro 6,719,241 6,719,241
CP - State Ab2766 Air Quality 1,026,377 1,026,377
CP - County Measure M Metro 8,795,564 8,795,564
CP - County Prop A Metro 12,795,330 12,795,330
CP - State Rmra Local Return 13,687,776 13,687,776
CP - County Measure W 5,971,343 5,971,343
CP- State Pt Tran Dev Act Sb821 (3,475) (3,475)
CP - Successor Agney Operating
CP - Successor Agney Annual 8,501,557 32,677 8,534,234
IS - Civic Center Operating 3,638,385 3,638,385
IS - Civic Center Debt 528,964 528,964
IS - Civic Center Capital (3,920,042) (3,920,042)
IS - Genral Services Operating 8,732,982 1,575,141 10,308,123 IS - General Service Grants (103,087) (103,087)
IS - General Services Capital 16,646,133 3,205 16,649,338 IS - Fleet Operating 2,508,575 2,508,575
6 Total at
September 30,
2020
5,894,286
493,483
20,143,020
202,910
6,655,081
4,147,731
2,651,699
1,473,626
22,455,507
21,510,195
20,943,433
(42,617)
61,952,115
1,837,294
4,912,736
(367,060)
11,962,610
21,005,396
1,625,559
759,499
1,421,301
12,587,633
13,605,788
(336,765)
(3,448)
3,285,072
7,266,751
520,004
521,555
(991,887)
13,690,371
(456,463)
17,961,648
2,458,773
Fund
Number
6205
6210
6220
6230
6300
6350
6390
6400
6401
6402
6403
6405
7000
7005
7020
7035
7100
7101
7105
7106
7120
7121
7200
7205
7220
7300
7310
7320
7350
7355
7400
7410
7411
7412
7420
ATTACHMENT I
POOLED AND NON-POOLED CASH AND INVESTMENT BALANCES
BY FUND AT SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
(Continued)
Pooled Non-Pooled Total at
September 30, September 30, September 30,
Name of Fund 2021 2021 2021
IS - Fleet Debt 125,009 125,009
IS - Fleet Grants 1,546,933 1,546,933
IS - Fleet Capital 4,293,210 4,293,210
IS - Fleet Replacement 44,722,912 44,722,912
IS - Workers' Compensation 38,154,341 38,154,341
IS - General Liability 92,712 92,712
IS - Disaster Recovery 630,841 630,841
IS - Bbf - Operating 63,731,748 63,731,748
IS - Ebf - Operating 16,850,682 16,850,682
IS - Ebf - Operating (17,031,562) (17,031,562)
IS - Ebf - Operating 26,087,678 26,087,678
IS - Ebf - Pension & Retiremnt (60,437,190) (60,437,190) BF - Gas Operating 36,442,017 750 36,442,767
EF - Gas Debt 65,103 27,173,316 27,238,419
EF - Gas Cap/Oper Proj 21,642,183 21,642,183
EF - Gas Prepay (Lbbfa) 559 559
EF - Water Operating 25,021,131 20,000 25,041,131
BF - Water Reclaimed Operating 1,000,000 1,000,000
BF - Water Debt 1,621,771 2,885,050 4,506,821
BF - Water Debt Others
BF - Water Capital Projects
EF - Water Capital Projects
EF - Sewer Operating 12,261,232 12,261,232
EF - Sewer Debt 303,667 303,667
BF - Sewer Capital Projects
EF - Sol Waste Operating 7,624,138 3,000 7,627,138
BF - Sol Waste Cap/Oper Grants 687,212 687,212
BF - Sol Waste Cap/Oper Proj (424,955) (424,955)
BF - Serrf Operations 15,495,049 15,495,049
BF - Serrf Jpa Debt 148 148
EF - Airport Operating 38,447,466 100 38,447,566
EF - Airport Grants (4,659,862) (4,659,862)
EF - Airport Passnger Fae Chrg 4,480,143 4,480,143
EF - Airport Customer Fae Chrg 12,631,588 12,631,588
EF - Airport Cap/Oper Proj 2,072,790 2,072,790
7 Total at
September 30,
2020
134,247
1,567,228
3,687,242
42,798,707
28,878,928
(544,358)
630,841
3,413,551
14,190,623
(2,723,094)
86,734,685
12,842,440
26,028,324
25,632,810
21,016,725
1,462,579
19,052,167
1,000,000
4,506,045
13,451,921
303,667
7,650,256
794,677
(424,955)
17,151,550
138
28,838,138
(12,119,971)
26,106,340
12,347,074
11,385,634
Fund
Number
7425
7500
7510
7520
7550
7600
7605
7610
7620
7630
7631
7635
7700
7710
7750
7770
7800
7850
7885
7900
7905
7910
7920
7933
7934
7935
7936
7937
7938
7939
7940
7941
7942
7943
7944
ATTACHMENT I
POOLED AND NON-POOLED CASH AND INVESTMENT BALANCES
BY FUND AT SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
(Continued)
Pooled Non-Pooled Total at
September 30, September 30, September 30,
Name of Fund 2021 2021 2021
EF - Airport Debt (2,588,070) 14,426,318 11,838,248
EF - Developrnnt Svcs Operating 38,277,235 38,277,235
EF - Developrnnt Svcs Grants (2,036,587) (2,036,587)
EF - Develprnnt Svc Casp Sbl186 444,082 444,082
EF - Towing Operating 1,466,897 1,700 1,468,597
EF - Tidelands Operating 85,555,980 2,000 85,557,980
EF - Tidelands Debt 531 26,533 27,064
EF - Tidelands Capital Grants 79,776 79,776
EF - Tideland Capital Projects 342,905 342,905
EF - Tidelands Parking
EF - Tidelands Parking Annual 2,992,033 2,992,033
EF - Tf Convntn Ctr Pkg Surchg 3,468,308 3,468,308
EF - Tf Marina Operating 36,219,179 8,732,223 44,951,402 EF - Tf Marina Capital Grant 1,606,987 1,606,987
EF - Tf Queen Mry Project Oper 2,418,581 2,418,581
EF - Tf Queen Mry Capitl Proj 314,716 314,716
EF - Tidelands Oil 51,905,459 51,905,459
EF - Tf Subsidence 191,150,182 191,150,182
EF - Tf Aqua Of The Pac Debt 10,407,531 32,665,660 43,073,191 EF - Harbor Operating 3,860,365,296 900 3,860,366,196
EF - Harbor Debt - Locs & Othr
EF - Harbor Cap/Oper Grants 115,665,395 115,665,395
EF - Harbor Cap/Oper Proj (3,262,569,297) (3,262,569,297) EF - Ha Debt 2014B Bonds 219,375 219,375
EF - Ha Debt 2015A Bonds 5,798,063 5,798,063
EF - Ha Debt 2015B Bonds 377,438 377,438
EF - Ha Debt 2015C Bonds 1,239,094 1,239,094
EF - Ha Debt 2015D Bonds 1,253,719 1,253,719
EF - Ha Debt 2017A Bonds 1,905,188 1,905,188
EF - Ha Debt 2017B Bonds 487,219 487,219
EF - Ha Debt 2017C Bonds 799,875 799,875
EF - Ha Debt 2018A Bonds
EF - Ha Debt 2019A Bonds 3,024,563 3,024,563
EF - Ha Debt 2020A Bonds 980,906 980,906
EF - Ha Debt 2020B Bonds 8,885,194 8,885,194
8 Total at
September 30,
2020
17,373,005
47,147,503
(311,942)
350,322
247,596
111,656,394
(90,323)
79,776
2,151,149
1,845,692
3,396,030
40,256,645
1,606,987
2,633,484
1,533,312
41,261,385
190,936,805
23,380,603
3,526,096,716
2,500
110,613,381
(3,090,319,897)
219,375
2,305,595
377,438
1,241,294
1,255,919
1,905,188
487,219
799,875
4,769,481
3,027,575
982,260
8,548,195
ATTACHMENT I
POOLED AND NON-POOLED CASH AND INVESTMENT BALANCES
BY FUND AT SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
( Continued)
Pooled Non-Pooled Total at Total at
Fund September 30, September 30, September 30, September 30, Number Name of Fund 2021 2021 2021
7946 EF - Ha Debt 2020C Notes Const
7947 EF - Ha Debt 2020C Notes Cap I
7948 EF - HA Debt 2021 TIFIA 2,654,072 2,654,072
8000 CS - Fiduciary Operating 3,911,214 3,911,214
8010 CS - Prisoner Welfare 302,242 1,500 303,742
8100 CS - Asmt Cfd5 Lb Towne Center 210,024 2,163,673 2,373,697 8105 CS-- Asmt Cfd6 Pike Pub Imprv 46,329 5,629,110 5,675,439 8110 CS - Asmt Cfd7-1 Douglas Pk Cm 51,851 1,181,366 1,233,217 8115 CS - Asmt Cfd7-2 Belmont Shore 65,644 435,193 500,837 8120 CS - Asmt Cfd8-1 Toledo U gd Ut 37,024 164,134 201,158 8125 CS - Asmt Cfdl 1-1 Douglas Pk N (59,258) (59,258)
8190 CS - Other Special Assessment 149,080 149,080
8200 CS - Ictf Jpa Operating 6,499,612 6,499,612
8300 CS - Earthquake Asmt Dist 90-3 267,944 267,944
8310 CS - Earthquake Asmt Dist 93-1 558,330 558,330
8400 CS - Los Cerritos Wetlands Aut 241,462 241,462
8500 CS - Pkg & Bus Area Improve 635,854 635,854
8550 CS - Pkg & Bus Area Improve 481,474 481,474
8600 PP - Expendable Trust (58,528) (58,528)
8610 PP - Library Miller Trust 671,213 671,213
8620 PP - Homeless Expendable Trust 5,080 5,080
TOTAL CASH AND INVESTMENTS $ 1,964,377,411 $ 122,682,079 $ 2,087,059,490 $ * The City's pooled cash and investments was audited in aggregate and the allocation among funds was outside the scope of the performance audit. The allocation is presented for informational purposes only. 9 2020
65,457,000
5,823,517
3,737,086
286,346
2,329,253
5,587,445
1,195,043
485,439
195,881
7,457
149,240
8,160,975
268,320
559,174
133,688
522,265
438,064
(58,080)
708,467
5,089
1,981,902,301
ATTACHMENT II
POOLED AND NON-POOLED CASH AND INVESTMENT BALANCES
BY SECURITY TYPE AT SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
Pooled Non-Pooled Total at
September 30, September 30, September 30,
2021 2021 2021
CASH
Cash in Banks $ 204,066,947 $ 2,511,666 $ 206,578,613 $ Cash with Fiscal Agents 93,085,385 93,085,385
Total Cash $ 204,066,947 $ 95,597,051 $ 299,663,998 $
INVESTMENTS
U.S. Treasury Notes $ 1,234,243,486 $ - $ 1,234,243,486 $ Federal Farm Credit Bank 7,283,222 7,283,222
Federal Horne Loan Bank 83,926,679 83,926,679
Federal National Mortgage Association (FNMA) 127,438,066 127,438,066 Federal Horne Loan Mortgage Corporation (FHLMC) 58,088,429 58,088,429 Local Agency Investment Fund 221,623,054 221,623,054
Guaranteed Investment Contracts 27,085,028 27,085,028
Equities 27,707,528 27,707,528
Money Market
Total Investments $ 1,760,310,464 $ 27,085,028 $ 1,787,395,492 $ TOTAL CASH AND INVESTMENTS $ 1,964,377,411 $ 122,682,079 $ 2,087,059,490 $ 10 Total at
September 30,
2020
286,070,284
95,519,758
381,590,042
986,716,628
12,482,982
139,277,416
167,131,924
76,173,440
192,281,568
25,499,214
749,087
1,600,312,259
1,981,902,301