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INDEPENDENT ACCOUNTANTS’ REPORT
ON AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of the City Council
City of Orange, California
We have performed the procedure s enumerated below to assist the City of Orange, California (the City) in evaluating the Treasurer’s Report for the month ended June 30, 2023, for compliance with the provisions of the California Government Code (the Code) and with the City’s inves tment policy dated April 12, 2021, (the Policy).
The City’s management is responsible for the Treasurer’s Report for the month ended June 30, 2023, the compliance with the Policy and the Code and for selecting that such criteria are appropriate for your purpose.
The City has agreed to and acknowledged that the procedures per formed are appropriate to meet the intended purpose of evaluating the Treasurer’s Report for the month ended June 30, 2023, for compliance with the provision of the Code and with the Policy. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this rep ort and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
1. We obtained a copy of the Investment Portfolio Report as of June 30, 2023 and agreed individual investments/deposits to supporting documentation obtained from the City and reconciled such to the Investment Portfolio Report. We traced total investments listed on the Investment Portfolio Report to the City’s general ledger.
Finding: No exceptions were noted as a result of this procedure.
2. We compared investments listed in the Investment Portfolio R eport as of June 30, 2023, to the types of investments authorized for the City by the City’s investment po licy and California Government Code Section 53601.
Finding: No exceptions were noted as a result of this procedure.
3. We compared the market value of the investments listed in th e Investment Portfolio Report as of June 30, 2023 to the bank statements and other supporting documentation.
Finding: No exceptions were noted as a result of this procedure.
4. We read the Investment Portfolio Report to ascertain that it co ntained the information/data required by California Government Code Section 53646 and met th e timing requirements of California Government Code Section 53646, as follows:
a. Included the type of investment, issuer, date of maturity, p ar and dollar amount invested on all securities, investments and monies held by the City.
b. Included those funds under management of contracted parties.
c. Included market value (and source) as of the date of the rep ort of all securities held by the City or under management of contracted parties.
To the Honorable Mayor and Members of the City Council
City of Orange, California
d. Stated compliance of the por tfolio to the investment policy of the City.
e. Included a statement address ing the ability of the City to meet the pool’s expenditure requirements for the next six months.
Finding: No exceptions were noted as a result of this procedure.
5. We compared the investments listed in the Investment Portfolio Report as of June 30, 2023, to the prohibited investments listed in California Government Code Section 53601.6.
Finding: No exceptions were noted as a result of this procedure.
6. We calculated the totals (cost basis) for the investment typ es listed in the Investment Portfolio Report as of June 30, 2023 and compared those totals to the limitations impo sed by the City’s investment policy and California Government Code Section 53601 for the specific investment types.
Finding: No exceptions were noted as a result of this procedure.
7. We agreed individual investment maturity dates listed in the Investment Portfolio Report as of June 30, 2023, to the City’s copies of investment statements to determine if they conformed to the maturity requirements of the City’s investment policy and California Government Code section 53601.
Finding: Investment’s between 1 to 365 days comprised 58.72% of the tota l portfolio which is above the maximum allowed percentage of 50%.
8. We obtained and read the third- party custodial agreements and broker/dealer agreements in effect at the date of the Investment Portfolio Report to determine if the agreemen ts contained a clause addressing delivery of securities and that the delivery method conformed to California Government Code section 53601.
Finding: The City does not have a formal agreement or contract with the broker/dealer since they are not required to use the broker/dealer for trades and there are no f ees or commissions charged. The City Treasurer authorizes the use of designated brokers and ens ures that the City has written documentation with the broker’s signature stating that the broker will adhere to the City’s investment policy.
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AIC PA. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on evaluating the Treasurer’s Report for the mont h ended June 30, 2023, for compliance with the provisions of the Code) and with the Policy. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information of the City Council and management of the City of Orange and is not intended to be, and should not be, used by anyone other than these specified parties.
Brea, California
March 27, 2024