&,7<2)2$./$1'
$/$0('$&2817<75$163257$7,21
&200,66,21
0($685(%%)81'6
),1$1&,$/67$7(0(176
-81(
&,7<2)2$./$1'
$/$0('$&2817<75$163257$7,21&200,66,21
0($685(%%)81'6
),1$1&,$/67$7(0(176
-81(
7$%/(2)&217(176
3DJH1R
,QGHSHQGHQW$XGLWRU¶V5HSRUW«««««««««««««««««««
)LQDQFLDO6WDWHPHQWV
%DODQFH6KHHW««««««««««««««««««««««
6WDWHPHQWVRI5HYHQXHV([SHQGLWXUHVDQG&KDQJHVLQ)XQG%DODQFH«
1RWHVWR)LQDQFLDO6WDWHPHQWV««««««««««««««««
,QGHSHQGHQW$XGLWRU¶V5HSRUW2Q,QWHUQDO&RQWURO
2YHU)LQDQFLDO5HSRUWLQJ$QG2Q&RPSOLDQFH$QG
2WKHU0DWWHUV%DVHG2Q$Q$XGLW2I)LQDQFLDO
6WDWHPHQWV3HUIRUPHG,Q$FFRUGDQFH:LWK
Government Auditing StandardV«««««««««««««««««««
,QGHSHQGHQW$XGLWRU¶V5HSRUW2Q&RPSOLDQFH:LWK0HDVXUH%%5HTXLUHPHQWV«
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB +HJHQEHUJHU5RDG6XLWH2DNODQG&DOLIRUQLD
7
_)
ZZZJUDQWDQGVPLWKFSDFRP
,1'(3(1'(17$8',725¶65(3257
7RWKH+RQRUDEOH0D\RUDQG0HPEHUVRIWKH
&LW\&RXQFLORIWKH&LW\RI2DNODQG
2DNODQG&DOLIRUQLD
5HSRUWRQWKH$XGLWRIWKH)LQDQFLDO6WDWHPHQWV
Opinions
:H KDYH DXGLWHG WKH DFFRPSDQ\LQJ ILQDQFLDO VWDWHPHQWV RI WKH $ODPHGD &RXQW\ 7UDQVSRUWDWLRQ &RPPLVVLRQ
$ODPHGD&7&
0HDVXUH%%)XQGVRIWKH&LW\RI2DNO DQG&DOLIRUQLD WKH&LW\
DV
RI DQG IRU WKH \HDU HQGHG -XQH DQG WKH UHODWHG QRWHVWR WKH ILQDQFLDO VWDWHPHQWV ZKLFK FROOHFWLYHO\FRPSULVHWKH&LW\¶VEDVLFILQDQFLDOVWDWHPHQWVDVOLVWHGLQWKHWDEOHRIFRQWHQWV ,QRXURSLQLRQWKHILQDQFLDOVWDWHPHQWVUHIHUUHGWRDERYHSUHV HQWIDLUO\LQDOOPDWHULDOUHVSHFWVWKH UHVSHFWLYHILQDQFLDOSRVLWLRQRIWKH&LW\DVRI-XQHDQGWKHUHVSHFWLYHFKDQJHVLQILQDQFLDO SRVLWLRQIRUWKH\HDUWKHQHQGHGLQDFFRUGDQFHZLWKDFFRXQWLQJ SULQFLSOHVJHQHUDOO\DFFHSWHGLQWKH 8QLWHG6WDWHVRI$PHULFD
Basis for Opinions
:HFRQGXFWHGRXUDXGLWLQDFFRUGDQFHZLWKDXGLWLQJVWDQGDUGVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHV RI $PHULFD DQG WKH VWDQGDUGV DSSOLFDEOH WR ILQDQFLDO DXGLWV FRQWDLQHG LQ Government Auditing StandardsLVVXHGE\WKH&RPSWUROOHU*HQHUDORIWKH8QLWHG6WDWHV 2XUUHVSRQVLELOLWLHVXQGHUWKRVH
VWDQGDUGV DUH IXUWKHU GHVFULEHG LQ WKH $XGLWRU¶V 5HVSRQVLELOLWLH V I R U W K H $ X G L W R I W K H ) L Q D Q F L D O 6WDWHPHQWVVHFWLRQRIRXUUHSRUW:HDUHUHTXLUHGWREHLQGHSHQGHQWRIWKH&LW\DQGWRPHHWRXURWKHU HWKLFDOUHVSRQVLELOLWLHVLQDFFRUGDQFHZLWKWKHUHOHYDQWHWKLFDOUHTXLUHPHQWVUHODWLQJWRRXUDXGLW:H EHOLHYHWKDWWKHDXGLWHYLGHQFHZHKDYHREWDLQHGLVVXIILFLHQW DQGDSSURSULDWHWRSURYLGHDEDVLVIRU RXUDXGLWRSLQLRQV
Responsibilities of Management for the Financial Statements 0DQDJHPHQWLVUHVSRQVLEOHIRUWKHSUHSDUDWLRQDQGIDLUSUHVHQWD WLRQRIWKHILQDQFLDOVWDWHPHQWVLQ DFFRUGDQFHZLWKDFFRXQWLQJSULQFLSOHVJHQHUDOO\DFFHSWHGLQWKH 8QLWHG6WDWHVRI$PHULFDDQGIRU WKHGHVLJQLPSOHPHQWDWLRQDQGPDLQWHQDQFHRILQWHUQDOFRQWURO UHOHYDQWWRWKHSUHSDUDWLRQDQGIDLU SUHVHQWDWLRQRIILQDQFLDOVWDWHPHQWVWKDWDUHIUHHIURPPDWHULDOPLVVWDWHPHQWZKHWKHUGXHWRIUDXGRU HUURU
,Q SUHSDULQJ WKH ILQDQFLDO VWDWHPHQWV PDQDJHPHQW LV UHTXLUHG W R HYDOXDWH ZKHWKHU WKHUH DUH FRQGLWLRQVRUHYHQWVFRQVLGHUHGLQWKHDJJUHJDWHWKDWUDLVHVXEVWDQWLDOGRXEWDERXWWKH&LW\¶VDELOLW\ WRFRQWLQXHDVDJRLQJFRQFHUQIRUWZHOYHPRQWKVEH\RQGWKHILQDQFLDOVWDWHPHQWGDWHLQFOXGLQJDQ\ FXUUHQWO\NQRZQLQIRUPDWLRQWKDWPD\UDLVHVXEVWDQWLDOGRXEWVKRUWO\WKHUHDIWHU
Ϯ
,1'(3(1'(17$8',725¶65(3257
&217,18('
Auditor’s Responsibilities for the Audit of the Financial Statements 2XU REMHFWLYHV DUH WR REWDLQ UHDVRQDEOH DVVXUDQFH DERXW ZKHWKHU WKH ILQDQFLDO VWDWHPHQWV DVD ZKROHDUHIUHHIURPPDWHULDOPLVVWDWHPHQWZKHWKHUGXHWRIUDXGRUHUURUDQGWRLVVXHDQDXGLWRU¶V UHSRUWWKDWLQFOXGHVRXURSLQLRQV5HDVRQDEOHDVVXUDQFHLVDKL JKOHYHORIDVVXUDQFHEXWLVQRW DEVROXWHDVVXUDQFHDQGWKHUHIRUHLVQRWDJXDUDQWHHWKDWDQDXG LWFRQGXFWHGLQDFFRUGDQFHZLWK JHQHUDOO\DFFHSWHGDXGLWLQJVWDQGDUGVDQG Government Auditing Standards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overnment Auditing StandardsZH
x ([HUFLVH SURIHVVLRQDO MXGJPHQW DQG PDLQWDLQ SURIHVVLRQDO VNHSWLFLVP WKURXJKRXW WKH DXGLW
x ,GHQWLI\DQGDVVHVVWKHULVNVRIPDWHULDOPLVVWDWHPHQWRIWKHILQDQFLDOVWDWHPHQWVZKHWKHU GXHWRIUDXGRUHUURUDQGGHVLJQDQGSHUIRUPDXGLWSURFHGXUHV UHVSRQVLYHWRWKRVHULVNV 6XFKSURFHGXUHVLQFOXGHH[DPLQLQJRQDWHVWEDVLVHYLGHQFHUH JDUGLQJWKHDPRXQWVDQG GLVFORVXUHVLQWKHILQDQFLDOVWDWHPHQWV
x 2EWDLQDQXQGHUVWDQGLQJRILQWHUQDOFRQWUROUHOHYDQWWRWKHDXG LWLQRUGHUWRGHVLJQDXGLW SURFHGXUHVWKDWDUHDSSURSULDWHLQWKHFLUFXPVWDQFHVEXWQRWIRUWKHSXUSRVHRIH[SUHVVLQJ DQ RSLQLRQ RQ WKH HIIHFWLYHQHVV RI WKH &LW\¶V LQWHUQDO FRQWURO $FFRUGLQJO\ QR VXFK RSLQLRQLVH[SUHVVHG
x (YDOXDWH WKH DSSURSULDWHQHVV RI DFFRXQWLQJ SROLFLHV XVHG DQG WK H UHDVRQDEOHQHVV RI VLJQLILFDQW DFFRXQWLQJ HVWLPDWHV PDGH E\ PDQDJHPHQW DV ZHOO DV HYDOXDWH WKH RYHUDOO SUHVHQWDWLRQRIWKHILQDQFLDOVWDWHPHQWV
x &RQFOXGH ZKHWKHU LQ RXU MXGJPHQW WKHUH DUH FRQGLWLRQV RU HYHQWV FRQVLGHUHG LQ WKH DJJUHJDWH WKDW UDLVH VXEVWDQWLDO GRXEW DERXW WKH &LW\¶V DELOLW\ WR FRQWLQXH DV D JRLQJ FRQFHUQIRUDUHDVRQDEOHSHULRGRIWLPH
:HDUHUHTXLUHGWRFRPPXQLFDWHZLWKWKRVHFKDUJHGZLWKJRYHUQDQ FHUHJDUGLQJDPRQJRWKHU PDWWHUVWKHSODQQHGVFRSHDQGWLPLQJRIWKHDXGLWVLJQLILFDQWDXGLWILQGLQJVDQGFHUWDLQLQWHUQDO FRQWUROUHODWHGPDWWHUVWKDWZHLGHQWLILHGGXULQJWKHDXGLW ϯ
,1'(3(1'(17$8',725¶65(3257
&217,18('
Emphasis of Matter
$VGLVFXVVHGLQ1RWHWKHILQDQFLDOVWDWHPHQWVRIWKH$ODPHGD &7&±0HDVXUH%%)XQGVRI WKH&LW\SUHVHQWRQO\WKH0HDVXUH%%)XQGVDQGDUHQRWLQWHQGHG WRSUHVHQWIDLUO\WKHILQDQFLDO SRVLWLRQ RI WKH &LW\ DQG WKH UHVXOWV RI LWV RSHUDWLRQV LQ FRQIRUPLW\ ZLWK JHQHUDOO\ DFFRXQWLQJ SULQFLSOHVDFFHSWHGLQWKH8QLWHG6WDWHVRI$PHULFD
2WKHU5HSRUWLQJ5HTXLUHGE\Government Auditing Standards ,Q DFFRUGDQFH ZLWK Government Auditing Standards ZH KDYH DOVR LVVXHG RXU UHSRUW GDWHG 'HFHPEHU
RQRXUFRQVLGHUDWLRQRIWKH&LW\¶VLQWHUQDO FRQWURORYHUILQDQFLDOUHSRUWLQJ DQG RQ RXU WHVWV RI LWV FRPSOLDQFH ZLWK FHUWDLQ SURYLVLRQV RI ODZV UHJXODWLRQV FRQWUDFWV DQG JUDQWDJUHHPHQWVDQGRWKHUPDWWHUV7KHSXUSRVHRIWKDWUHSRUW LVVROHO\WRGHVFULEHWKHVFRSHRI RXU WHVWLQJ RI LQWHUQDO FRQWURO RYHU ILQDQFLDO UHSRUWLQJ DQG FRPSOLDQFH DQG WKH UHVXOWV RI WKDW WHVWLQJ DQG QRW WR SURYLGH DQ RSLQLRQ RQ WKH HIIHFWLYHQHVV RIWKH &LW\¶V LQWHUQDO FRQWURO RYHU ILQDQFLDO UHSRUWLQJ RU RQ FRPSOLDQFH 7KDW UHSRUW LV DQ LQWHJUDO SDUW RI DQ DXGLW SHUIRUPHG LQ DFFRUGDQFH ZLWK Government Auditing Standards LQ FRQVLGHULQJ &LW\¶V LQWHUQDO FRQWURO RYHU ILQDQFLDOUHSRUWLQJDQGFRPSOLDQFH
2DNODQG&DOLIRUQLD
'HFHPEHU
&,7<2)2$./$1'
$/$0('$&2817<75$163257$7,21&200,66,21
0($685(%%)81'6
%$/$1&(6+((7
$62)-81(
6WUHHWV %LNH
5RDGV 3HGHVWULDQV 3DUDWUDQVLW 7RWDO
$66(76
&DVK ,QYHVWPHQWV
5HFHLYDEOHV
0HDVXUH%%$OORFDWLRQ
,QWHUHVW
3UHSDLG([SHQGLWXUHV
727$/$66(76
/,$%,/,7,(6 )81'%$/$1&(
/,$%,/,7,(6
$FFRXQWV3D\DEOH
727$//,$%,/,7,(6
)81'%$/$1&(
5HVWULFWHGIRU0HDVXUH%%4XDOLILHG3URMHFWV 3URJUDPV 727$//,$%,/,7,(6 )81'%$/$1&(
See accompanying notes.
&,7<2)2$./$1'
$/$0('$&2817<75$163257$7,21&200,66,21
0($685(%%)81'6
67$7(0(172)5(9(18(6(;3(1',785(6$1'&+$1*(6,1)81'%$/$1&( )257+(<($5(1'('-81(
6WUHHWV %LNH
5RDGV 3HGHVWULDQV 3DUDWUDQVLW 7RWDO
5(9(18(6
0HDVXUH%%$OORFDWLRQ
,QWHUHVWRQ,QYHVWPHQWV 8QUHDOL]HG*DLQ
/RVV
LQ0DUNHW
727$/5(9(18(6
(;3(1',785(6
7UDQVSRUWDWLRQ 2SHUDWLRQ
3ODQQLQJ(QJLQHHULQJ &RQVWUXFWLRQ
727$/(;3(1',785(6
5(9(18(629(5
81'(5
(;3(1',785(6
%(*,11,1*)81'%$/$1&(
(1',1*)81'%$/$1&( See accompanying notes.
&,7<2)2$./$1'
$/$0('$&2817<75$163257$7,21&200,66,21
0($685(%%)81'6
127(672),1$1&,$/67$7(0(176
-81(
127(6800$5<2)6,*1,),&$17$&&2817,1*32/,&,(6
*HQHUDO
Reporting Entity - 0HDVXUH%%DSSURYHGE\WKHYRWHUVRI$ODPHGD&RXQW\RQ1RYHPEH U DXWKRUL]HG $ODPHGD &RXQW\ 7UDQVSRUWDWLRQ &RPPLVVLRQ $ODPHGD &7&
WR DGPLQLVWHU
WKHSURFHHGVIURPWKHH[WHQVLRQRQHKDOIFHQWVDOHVDQGXVHWD[VFKHGXOHGWRWHUPLQDWHRQ0DUFK DQGWKHDXJPHQWDWLRQRIWKHWD[E\RQHKDOIRIRQHSH UFHQW7KHGXUDWLRQRIWKHWD[ ZLOO EH \HDUV IURP LQLWLDO \HDU RI FROOHFWLRQ ZKLFK EHJLQV $SULO ZLWK VDLG WR WHUPLQDWHH[SLUH RQ 0DUFK 7UDQVDFWLRQV RI WKH $ODPHGD&7& 0HDVXUH %% )XQGV RI WKH&ity of OaklandDUHLQFOXGHGDVVHSDUDWHIXQGVLQWKHEDVLFILQDQFLDOVWDWHP HQWVRIWKH&LW\ RI 2DNODQG XVHV 0HDVXUH %% )XQGV WR DFFRXQW IRU H[SHQGLWXUHV LQFXUUHG LQ 7KH &LW\¶V /RFDO 6WUHHWVDQG5RDGV%LNHDQG3HGHVWULDQ:D\VDQG3DUDWUDQVLWSURJUDPV
Local Streets and Roads – 7RPDLQWDLQWKH&LW\¶VORFDOVWUHHWVDQGURDGV7KHVHIXQGVKHO SWKH &LW\UHSDYHVWUHHWVILOOSRWKROHVLQVWDOOWUDIILFVLJQDOVDQ GVWUHHWVLJQVVSHHGEXPSVDVZHOODV UHSDLUVLGHZDONVDQGDGGUHVVWUDIILFVDIHW\LVVXHV
Bike and Pedestrian Safety – 7KHIXQGVDUHXVHGIRUSODQQLQJFRQVWUXFWLRQDQGPDLQWHQDQFHR I ELF\FOHDQGSHGHVWULDQSURMHFWVDQGSURJUDPVZLWKIRFXVRQKLJ KSULRULW\SURMHFWVLQ2DNODQG¶V %LF\FOH0DVWHU3ODQDQG3HGHVWULDQ0DVWHU3ODQ
Paratransit ±7RSURYLGHWUDQVLWVHUYLFHVIRUWKHHOGHUO\DQGSHRSOHZLWKGLVDELOLWLHV
0HDVXUH %% )XQGV DUH DFFRXQWHG IRU LQ VSHFLDO UHYHQXH IXQGV RIWKH &LW\ RI 2DNODQG¶V WKH
&LW\
ILQDQFLDODFFRXQWLQJUHFRUGV7KHILQDQFLDOVWDWHPHQWVRI WKH 0HDVXUH %% )XQGV SUHVHQW RQO\WKHILQDQFLDODFWLYLWLHVRIWKH0HDVXUH%%)XQGVDQGDUHQ RWLQWHQGHGWRIDLUO\SUHVHQWWKH ILQDQFLDO SRVLWLRQ DQG FKDQJHV LQ ILQDQFLDO SRVLWLRQ RI WKH &LW\ LQ FRQIRUPLW\ ZLWK DFFRXQWLQJ SULQFLSOHVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI$PHULFD
0HDVXUHPHQW)RFXVDQG%DVLVRI$FFRXQWLQJ
7KH DFFRPSDQ\LQJ ILQDQFLDO VWDWHPHQWV DUH UHSRUWHG XVLQJ WKH current financial resources measurement focus DQG WKH modified accrual EDVLV RI DFFRXQWLQJ 5HYHQXHV DUH UHFRJQL]HG DV VRRQDVWKH\DUHERWKPHDVXUDEOHDQGDYDLODEOH5HYHQXHVDUHFR QVLGHUHG DYDLODEOH ZKHQ WKH\ DUHFROOHFWHGZLWKLQWKHFXUUHQWSHULRGRUVRRQHQRXJKWKHUHDIW HUWRSD\OLDELOLWLHVRIWKHFXUUHQW SHULRG)RUWKLVSXUSRVHWKH&LW\FRQVLGHUVUHYHQXHVWREHDYD LODEOHLIWKH\DUHFROOHFWHGZLWKLQ GD\VDIWHUWKHHQGRIWKHFXUUHQWILVFDO\HDU([SHQGLWXUHV DUHUHFRUGHGZKHQWKHOLDELOLW\LV LQFXUUHGDQGLVH[SHFWHGWREHOLTXLGDWHGZLWKH[SHQGDEOHDYDLODEOHUHVRXUFHV
&,7<2)2$./$1'
$/$0('$&2817<75$163257$7,21&200,66,21
0($685(%%)81'6
127(672),1$1&,$/67$7(0(176
-81(
&DVKDQG,QYHVWPHQWV
&DVKDQGLQYHVWPHQWVIRU0HDVXUH%%)XQGVDUHPDLQWDLQHGLQWKH &LW\¶VFDVKDQGLQYHVWPHQW SRRO )XQGV DUH LQYHVWHG DFFRUGLQJ WR WKH LQYHVWPHQW SROLF\ DGR SWHG E\ WKH &LW\ &RXQFLO ,QYHVWPHQWVDUHJHQHUDOO\FDUULHGDWIDLUYDOXH
,QIRUPDWLRQUHJDUGLQJWKHFKDUDFWHULVWLFVRIWKHHQWLUHLQYHVWPHQWSRROFDQEHIRXQGLQWKH&LW\¶V -XQH $QQXDO &RPSUHKHQVLYH )LQDQFLDO 5HSRUW $&)5
XQGH U WKH EDVLF ILQDQFLDO
VWDWHPHQWV,QFRPHHDUQHGRUORVVHVDULVLQJIURPWKHLQYHVWPHQW RISRROHGFDVKDUHDOORFDWHGRQ DPRQWKO\EDVLVWRWKHSDUWLFLSDWLQJIXQGVEDVHGRQWKHLUSURSRUWLRQDWHVKDUHRIWKHDYHUDJHGDLO\ FDVKEDODQFH
)XQG%DODQFHV
5HVHUYDWLRQV RI IXQG EDODQFHV LQGLFDWH WKRVH SRUWLRQV RI IXQG HTXLW\ WKDW DUH QRW DYDLODEOH IRU DSSURSULDWLRQ IRU H[SHQGLWXUH RU ZKLFK KDYH EHHQ OHJDOO\ UHVWUL FWHG WR VSHFLILF XVH (QFXPEUDQFHV RXWVWDQGLQJ DW ILVFDO \HDU HQG DUH UHSRUWHG DV UHVHUYDWLRQ RI IXQG EDODQFHV DQG WKH UHODWHG DSSURSULDWLRQ LV DXWRPDWLFDOO\ FDUULHG IRUZDUG LQWR W K H Q H [ W I L V F D O \ H D U (QFXPEUDQFHV GR QRW FRQVWLWXWH H[SHQGLWXUHV RU OLDELOLWLHV EHFDXVH WKH FRPPLWPHQWV ZLOO EH KRQRUHGGXULQJWKHVXEVHTXHQWILVFDO\HDU
(VWLPDWHV
7KH SUHSDUDWLRQ RI ILQDQFLDO VWDWHPHQWV LQ FRQIRUPLW\ ZLWK DFFR XQWLQJ SULQFLSOHV JHQHUDOO\ DFFHSWHG LQ WKH 8QLWHG 6WDWHV RI $PHULFD UHTXLUHV PDQDJHPHQW WR PDNH HVWLPDWHV DQG DVVXPSWLRQVWKDWDIIHFWFHUWDLQUHSRUWHGEDODQFHV$FFRUGLQJO\ DFWXDOUHVXOWVFRXOGGLIIHUIURP WKRVHHVWLPDWHV
127(±6(/),1685$1&(
7KH&LW\RI2DNODQGLVH[SRVHGWRYDULRXVULVNVRIORVVUHODWHG WRWRUWV WKHIWRIGDPDJHWRDQG
GHVWUXFWLRQRIDVVHWVHUURUVDQGRPLVVLRQV
LQMXULHVWRHPSOR\HHV
DQGQDWXUDOGLVDVWHUV7KH&LW\
LVVHOILQVXUHGIRULWVJHQHUDOOLDELOLW\ZRUNHU¶VFRPSHQVDWLR QPDOSUDFWLFHOLDELOLW\JHQHUDODQG DXWROLDELOLW\DQGKDVH[FHVVUHLQVXUDQFHZLWKWKH&DOLIRUQLD6WDWH$VVRFLDWLRQRI&RXQWLHV
127(±&200,70(176$1'&217,1*(1&,(6
$VRI-XQHRI0HDVXUH%%6WUHHWVDQG5RDGV )XQGV RI0HDVXUH
%%%LNHDQG3HGHVWULDQ)XQGVDQG
RI0HDVXUH%%3DUDWU DQVLW)XQGVZHUHFRPPLWWHG
WRFRYHUDQWLFLSDWHGFRVWVRIFRPSOHWLQJYDULRXVSURMHFWVDQGSURJUDPV
&,7<2)2$./$1'
$/$0('$&2817<75$163257$7,21&200,66,21
0($685(%%)81'6
127(672),1$1&,$/67$7(0(176
-81(
127(±&200,70(176$1'&217,1*(1&,(6
&RQWLQXHG
2I WKH EDODQFH RI
WKH &LW\ KDV DSSURSULDWHG IRU YDULRXV FDSLWDO LPSURYHPHQWVSURMHFWV7KHVHDPRXQWVPD\RUPD\QRWUHVXOWLQDFWXDOH[SHQGLWXUHV
127(±0($685(%%)81'6,17+(&,7<¶6%$6,&),1$1&,$/67$7(0(176
0HDVXUH%%)XQGVDUHJURXSHGZLWKRWKHUIXQGVXQGHU³7UDIILF6D IHW\DQG&RQWURO´DVDSDUWRI 1RQ0DMRU*RYHUQPHQWDO)XQGV
6SHFLDO5HYHQXH)XQGV
LQWKH&LW \¶V-XQH$QQXDO
&RPSUHKHQVLYH)LQDQFLDO5HSRUW
$&)5
XQGHUWKHEDVLFILQDQFLDO VWDWHPHQWV7KDWUHSRUWPD\ EH REWDLQHG E\ ZULWLQJ WR WKH )LQDQFLDO 0DQDJHPHQW $JHQF\ $FFRXQWLQJ 'LYLVLRQ &LW\ RI 2DNODQG)UDQN+2JDZD3OD]D6XLWH2DNODQG&DOLIRUQLD
6HHWKH&LW\¶V$QQXDO&RPSUHKHQVLYH)LQDQFLDO5HSRUW
$&)5
IRU GLVFORVXUHVUHODWHGWRFDVK
DQGLQYHVWPHQWVDVSUHVFULEHGE\*RYHUQPHQWDO$FFRXQWLQJ6WDQGD UGV%RDUG7KH$&)5PD\ EHREWDLQHGIURPWKH&LW\¶VILQDQFHGHSDUWPHQW
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB +HJHQEHUJHU5RDG6XLWH2DNODQG&DOLIRUQLD
7
_)
ZZZJUDQWDQGVPLWKFSDFRP
,1'(3(1'(17$8',725¶65(325721,17(51$/&21752/29(5),1$1&,$/ 5(3257,1*$1'21&203/,$1&($1'27+(50$77(56%$6('21$1$8',7 2)),1$1&,$/67$7(0(1763(5)250(',1$&&25'$1&(:,7+
GOVERNMENT AUDITING STANDARDS
7RWKH+RQRUDEOH0D\RUDQG0HPEHUVRIWKH
&LW\&RXQFLORIWKH&LW\RI2DNODQG
2DNODQG&DOLIRUQLD
:HKDYHDXGLWHGLQDFFRUGDQFHZLWKWKHDXGLWLQJVWDQGDUGVJHQH UDOO\DFFHSWHGLQWKH8QLWHG6WDWHV RI $PHULFD DQG WKH VWDQGDUGV DSSOLFDEOH WR ILQDQFLDO DXGLWV FRQWDLQHG LQ Government Auditing StandardsLVVXHGE\WKH&RPSWUROOHU*HQHUDORIWKH8QLWHG6WDWHVWKHIL QDQFLDOVWDWHPHQWVRIWKH $ODPHGD&RXQW\7UDQVSRUWDWLRQ&RPPLVVLRQ
$ODPHGD&7&
0HDVXU H%%)XQGVRIWKH&LW\RI
2DNODQG&DOLIRUQLD
WKH&LW\
DVRIDQGIRUWKH\HDUHQGHG-X QHDQGWKHUHODWHGQRWHVWR WKH ILQDQFLDO VWDWHPHQWV ZKLFK FROOHFWLYHO\ FRPSULVH &LW\¶V EDVLF ILQDQFLDO VWDWHPHQWV DQG KDYH LVVXHGRXUUHSRUWWKHUHRQGDWHG'HFHPEHU
5HSRUWRQ,QWHUQDO&RQWURORYHU)LQDQFLDO5HSRUWLQJ
,QSODQQLQJDQGSHUIRUPLQJRXUDXGLWRIWKHILQDQFLDOVWDWHPHQW VZHFRQVLGHUHGWKH&LW\¶VLQWHUQDO FRQWURORYHUILQDQFLDOUHSRUWLQJ
LQWHUQDOFRQWURO
DVDEDVLV IRUGHVLJQLQJDXGLWSURFHGXUHVWKDWDUH
DSSURSULDWH LQ WKH FLUFXPVWDQFHV IRU WKH SXUSRVH RI H[SUHVVLQJ RXU RSLQLRQV RQ WKH ILQDQFLDO VWDWHPHQWVEXWQRWIRUWKHSXUSRVHRIH[SUHVVLQJDQRSLQLRQRQWKHHIIHFWLYHQHVVRIWKH&LW\¶VLQWHUQDO FRQWURO$FFRUGLQJO\ZHGRQRWH[SUHVVDQRSLQLRQRQWKHHIIHFWLYHQHVVRIWKH&LW\¶VLQWHUQDOFRQWURO $ deficiency in internal control H[LVWV ZKHQ WKH GHVLJQ RU RSHUDWLRQ RI D FRQWURO GRHV QRW DOORZ PDQDJHPHQWRUHPSOR\HHVLQWKHQRUPDOFRXUVHRISHUIRUPLQJWKH LUDVVLJQHGIXQFWLRQVWRSUHYHQW RUGHWHFWDQGFRUUHFWPLVVWDWHPHQWVRQDWLPHO\EDVLV$ material weaknessLVDGHILFLHQF\RUD FRPELQDWLRQ RI GHILFLHQFLHV LQ LQWHUQDO FRQWURO VXFK WKDW WKHUH LV D UHDVRQDEOH SRVVLELOLW\ WKDW D PDWHULDO PLVVWDWHPHQW RI WKH HQWLW\¶V ILQDQFLDO VWDWHPHQWV ZLOO QRW EH SUHYHQWHG RU GHWHFWHG DQG FRUUHFWHGRQDWLPHO\EDVLV$significant deficiencyLVDGHILFLHQF\RUDFRPELQDWLRQRIGHILFLHQFLHV LQLQWHUQDOFRQWUROWKDWLVOHVVVHYHUHWKDQDPDWHULDOZHDNQHVV\HWLPSRUWDQWHQRXJKWRPHULWDWWHQWLRQ E\WKRVHFKDUJHGZLWKJRYHUQDQFH
2XUFRQVLGHUDWLRQRILQWHUQDOFRQWUROZDVIRUWKHOLPLWHGSXUSR VHGHVFULEHGLQWKHILUVWSDUDJUDSKRI WKLVVHFWLRQDQGZDVQRWGHVLJQHGWRLGHQWLI\DOOGHILFLHQFLHVLQLQWHUQDOFRQWUROWKDWPLJKWEHPDWHULDO ZHDNQHVVHVRUVLJQLILFDQWGHILFLHQFLHV*LYHQWKHVHOLPLWDWLRQVGXULQJRXUDXGLWZHGLGQRWLGHQWLI\ DQ\GHILFLHQFLHVLQLQWHUQDOFRQWUROWKDWZHFRQVLGHUWREHPDW HULDOZHDNQHVVHV+RZHYHUPDWHULDO ZHDNQHVVHVRUVLJQLILFDQWGHILFLHQFLHVPD\H[LVWWKDWZHUHQRWLGHQWLILHG
ϭϬ
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
*29(510(17$8',7,1*67$1'$5'6
(Continued)
5HSRUWRQ&RPSOLDQFHDQG2WKHU0DWWHUV
$VSDUWRIREWDLQLQJUHDVRQDEOHDVVXUDQFHDERXWZKHWKHUWKH&LW \¶VILQDQFLDOVWDWHPHQWVDUHIUHH IURPPDWHULDOPLVVWDWHPHQWZHSHUIRUPHGWHVWVRILWVFRPSOLDQFHZLWKFHUWDLQSURYLVLRQVRIODZV UHJXODWLRQVFRQWUDFWVDQGJUDQWDJUHHPHQWVQRQFRPSOLDQFHZLWKZKLFKFRXOGKDYHDGLUHFWDQG PDWHULDOHIIHFWRQWKHILQDQFLDOVWDWHPHQWV+RZHYHUSURYLGLQJ DQRSLQLRQRQFRPSOLDQFHZLWK WKRVHSURYLVLRQVZDVQRWDQREMHFWLYHRIRXUDXGLWDQGDFFRUGL QJO\ZHGRQRWH[SUHVVVXFKDQ RSLQLRQ7KHUHVXOWVRIRXUWHVWVGLVFORVHGQRLQVWDQFHVRIQRQ FRPSOLDQFHRURWKHUPDWWHUVWKDW DUHUHTXLUHGWREHUHSRUWHGXQGHUGovernment Auditing Standards 3XUSRVHRI7KLV5HSRUW
7KHSXUSRVHRIWKLVUHSRUWLVVROHO\WRGHVFULEHWKHVFRSHRIR XUWHVWLQJRILQWHUQDOFRQWURODQG FRPSOLDQFHDQGWKHUHVXOWVRIWKDWWHVWLQJDQGQRWWRSURYLGH DQRSLQLRQRQWKHHIIHFWLYHQHVVRI WKHHQWLW\¶VLQWHUQDOFRQWURORURQFRPSOLDQFH7KLVUHSRUWLVDQLQWHJUDOSDUWRIDQDXGLWSHUIRUPHG LQDFFRUGDQFHZLWK Government Auditing Standards LQFRQVLGHULQJWKHHQWLW\¶VLQWHUQDOFRQWURO DQGFRPSOLDQFH$FFRUGLQJO\WKLVFRPPXQLFDWLRQLVQRWVXLWDEOHIRUDQ\RWKHUSXUSRVH 2DNODQG&DOLIRUQLD
'HFHPEHU
_____________________________________________________________________________________________ 333 Hegenberger Road, Suite 325, Oakland, California 94621 T: 510 832 0257| F:510 272 9757 www.grantandsmithcpa.com 11 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH
MEASURE BB REQUIREMENTS
To the Honorable Mayor and Members of the
City Council of the City of Oakland
Oakland, California
Report on Compliance for Measure BB Funds
Opinion on Measure BB Funds
We have audited Alameda County Transportation Commission (Alameda CTC) - Measure BB Funds of the City of Oakland, California (the City)’s compliance with the types of compliance requirements identified in the agreement between the City and Alameda County Transportation Commission Applicable to Measure BB Funds, that could have a direct on the City’s Measure BB Funds, for the year ended June 30, 2023
In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on Measure BB Funds for the year ended June 30, 2023.
Basis for Opinion on Measure BB Funds
We conducted our audit of compliance in accordance with auditin g standards generally accepted in the United States of America; the standards applicable to finan cial audits contained in Government Auditing Standards , issued by the Comptroller Gene ral of the United States; and t he audit requirements of Alameda County Transportation Commission applic able to Measure BB. Our responsibilities under those sta ndards and the Uniform Guidance a r e f u r t h e r d e s c r i b e d i n t h e Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our o ther ethical responsibilities, in accordance with 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 opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for com pliance with the requirements referred to above and for the design, implementation, and mainte nance of effective internal c ontrol over compliance with the requirements of laws, statutes, regulations, rules, and provisi ons of contracts or grant agreements applicable to the City’s Measure BB programs.
,1'(3(1'(17$8',725¶65(325721&203/,$1&(:,7+
0($685(%%5(48,5(0(176
&RQWLQXHG
Auditor’s Responsibilities for the Audit of Compliance
2XUREMHFWLYHVDUHWRREWDLQUHDVRQDEOHDVVXUDQFHDERXWZKHWKHU PDWHULDOQRQFRPSOLDQFHZLWK WKH FRPSOLDQFH UHTXLUHPHQWV UHIHUUHG WR DERYH RFFXUUHG ZKHWKHU GXH WR IUDXG RU HUURU DQG H[SUHVVDQRSLQLRQRQWKH&LW\¶VFRPSOLDQFHEDVHGRQRXUDXGLW 5HDVRQDEOHDVVXUDQFHLVDKLJK OHYHO RI DVVXUDQFH EXW LV QRW DEVROXWH DVVXUDQFH DQG WKHUHIRUHLV QRWD JXDUDQWHH WKDW DQ DXGLW FRQGXFWHG LQ DFFRUGDQFH ZLWK JHQHUDOO\ DFFHSWHG DXGLWLQJ VWDQGD UGV Government Auditing Standards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¶VFRPSOLDQFHZLWKWKHUHTXLUHPHQWVRIHDFKPDMRUIHGHUDOSURJUDPDVDZKROH ,QSHUIRUPLQJDQDXGLWLQDFFRUGDQFHZLWKJHQHUDOO\DFFHSWHGDX GLWLQJVWDQGDUGV Government Auditing StandardsDQGWKH8QLIRUP*XLGDQFHZH
x ([HUFLVH SURIHVVLRQDO MXGJPHQW DQG PDLQWDLQ SURIHVVLRQDO VNHSWLFLVP WKURXJKRXW WKH DXGLW
x ,GHQWLI\DQGDVVHVVWKHULVNVRIPDWHULDOQRQFRPSOLDQFHZKHWKH UGXHWRIUDXGRUHUURU DQG GHVLJQ DQG SHUIRUP DXGLW SURFHGXUHV UHVSRQVLYH WR WKRVH ULVNV 6XFK SURFHGXUHV LQFOXGH H[DPLQLQJ RQ D WHVW EDVLV HYLGHQFH UHJDUGLQJ WKH &LW\¶V FRPSOLDQFH ZLWK WKH FRPSOLDQFHUHTXLUHPHQWVUHIHUUHGWRDERYHDQGSHUIRUPLQJVXFKR WKHUSURFHGXUHVDVZH FRQVLGHUHGQHFHVVDU\LQWKHFLUFXPVWDQFHV
x 2EWDLQDQXQGHUVWDQGLQJRIWKH&LW\¶VLQWHUQDOFRQWURORYHUFRP SOLDQFHUHOHYDQWWRWKH DXGLWLQRUGHUWRGHVLJQDXGLWSURFHGXUHVWKDWDUHDSSURSULDWHLQWKHFLUFXPVWDQFHVDQGWR WHVWDQGUHSRUWRQLQWHUQDOFRQWURORYHUFRPSOLDQFHLQDFFRUGDQ FHZLWK$ODPHGD&RXQW\ 7UDQVSRUWDWLRQ &RPPLVVLRQ EXW QRW IRU WKH SXUSRVH RI H[SUHVVLQJ DQ RSLQLRQ RQ WKH HIIHFWLYHQHVVRIWKH&LW\¶VLQWHUQDOFRQWURORYHUFRPSOLDQFH$FFRUGLQJO\QRVXFKRSLQLRQ LVH[SUHVVHG
:HDUHUHTXLUHGWRFRPPXQLFDWHZLWKWKRVHFKDUJHGZLWKJRYHUQDQ FHUHJDUGLQJDPRQJRWKHU PDWWHUVWKHSODQQHGVFRSHDQGWLPLQJRIWKHDXGLWDQGDQ\VLJQ LILFDQWGHILFLHQFLHVDQGPDWHULDO ZHDNQHVVHVLQLQWHUQDOFRQWURORYHUFRPSOLDQFHWKDWZHLGHQWLILHGGXULQJWKHDXGLW 5HSRUWRQ,QWHUQDO&RQWURORYHU&RPSOLDQFH
$deficiency in internal control over complianceH[LVWVZKHQWKHGHVLJQRURSHUDWLRQRIDFRQWURO RYHUFRPSOLDQFHGRHVQRWDOORZPDQDJHPHQWRUHPSOR\HHVLQWKH QRUPDOFRXUVHRISHUIRUPLQJ WKHLU DVVLJQHG IXQFWLRQV WR SUHYHQW RU GHWHFW DQG FRUUHFW QR QFRPSOLDQFH ZLWK D W\SH RI FRPSOLDQFHUHTXLUHPHQWRIDIHGHUDOSURJUDPRQDWLPHO\EDVLV$material weakness in internal control over
,1'(3(1'(17$8',725¶65(325721&203/,$1&(:,7+
0($685(%%5(48,5(0(176
&RQWLQXHG
5HSRUWRQ,QWHUQDO&RQWURORYHU&RPSOLDQFH
&RQWLQXHG
complianceLVDGHILFLHQF\RUDFRPELQDWLRQRIGHILFLHQFLHVLQLQWHUQDOFRQWURORYHUFRPSOLDQFH VXFKWKDWWKHUHLVDUHDVRQDEOHSRVVLELOLW\WKDWPDWHULDOQRQFRPSOLDQFHZLWKDW\SHRIFRPSOLDQFH UHTXLUHPHQWRIDIHGHUDOSURJUDPZLOOQRWEHSUHYHQWHGRUGHWH FWHGDQGFRUUHFWHGRQDWLPHO\ EDVLV
$significant deficiency in internal control over complianceLVDGHILFLHQF\RUDFRPELQDWLRQRI GHILFLHQFLHV LQ LQWHUQDO FRQWURO RYHU FRPSOLDQFH ZLWK D W\SH RI FRPSOLDQFH UHTXLUHPHQW RI D IHGHUDOSURJUDPWKDWLVOHVVVHYHUHWKDQDPDWHULDOZHDNQHVVLQLQWHUQDOFRQWURORYHUFRPSOLDQFH \HWLPSRUWDQWHQRXJKWRPHULWDWWHQWLRQE\WKRVHFKDUJHGZLWKJRYHUQDQFH 2XUFRQVLGHUDWLRQRILQWHUQDOFRQWURORYHUFRPSOLDQFHZDVIRUW KHOLPLWHGSXUSRVHGHVFULEHGLQ WKH$XGLWRU¶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
2DNODQG&DOLIRUQLD
'HFHPEHU