CITY OF PASADENA, CALIFORNIA
Independent Accountants’ Report on Applying
Agreed-Upon Procedures
for a Review of Deferred Compensation
For the Period
July 1, 2022 through June 30, 2023
Attachment K
1611 E. Fourth Street, Suite 200
Santa Ana, CA 92701
(714) 569-1000
203 N. Brea Blvd, Suite 203
Brea, CA 92821
(714) 672-0022
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The Woodlands, TX 77380
(936) 828-4587
2151 River Plaza Dr., Suite 150
Sacramento, CA 95833
(916) 503-9691
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Laguna Hills, CA 92653
(949) 829-8299
www.lslcpas.com
INDEPENDENT ACCOUNTANTS' REPORT ON AGREED-UPON PROCEDURES
APPLIED FOR A REVIEW OF DEFERRED COMPENSATION PLAN
To the Honorable Mayor and Members of the City Council
City of Pasadena
Pasadena, California
We have performed the procedures enumerated below, which were a greed to by the City Council and the management of the City of Pasadena, California (the City), sole ly to assist the City in evaluating the deferred compensation plan for the fisca l year ended June 30, 2023. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the s ufficiency of the procedures described below, either for the purpose for which this report has been requested or for any other purpose.
Scope of the Procedures Performed and Related Findings
The procedures performed and the results obtained from the performance thereof were as follows:
1. Procedure Performed: We obtained payroll registers for four periods for the fiscal y ear ending June 30, 2023. Traced the amounts withheld relating to the 457 deferred compensation plan to the liability recorded in the benefits fund liability amount payable to the d eferred compensation provider (Great-West Financial Services).
Result: LSL noted variances between the amounts withheld relating to the 457 deferred compensation plan per the payroll registers and the liability recorded in the ben efits fund payable to Great-West Financial Services. These differences result from payroll being processed in batches, which may include dates from the prior and/or following pay periods. It was also noted that the payments made to the deferred compensation provider exceed the amounts withheld per the payroll registers.
Management Response:
As noted by the Auditors these differences result from payroll being processed in batches. These batches do not always match up so that 100 percent of the payments remitte d are matched within the same pay period that the employee withholding occurred in. Withholdings are accounted for based on pay period ending dates and remittance to the deferred compensation provider, Great-Wes t Financial Services, are based on pay days. A number of special payrolls are run each pay period for special items such as terminations and retirements. Depending on when Accounting runs the payroll jou rnal load process, some portion of these may be posted in the following pay period resulting in minor ti ming differences. When reviewed with all pay periods, all withholdings are remitted to the deferred compensation provider.
To the Honorable Mayor and Members of the City Council
City of Pasadena
Pasadena, California
2. Procedure Performed: For each of the four pay periods selected, we agree the amoun t withheld to the payments issued to the provider.
Result: LSL noted variances between the amounts withheld relating to t he 457 deferred compensation plan per the payroll registers and the liability recorded in the ben efits fund payable to Great-West Financial Services. These differences result from payroll being processed in batches, which may include dates from the prior and/or following pay periods. It was also noted that the payments made to the deferred compensation provider exceed the amounts withheld per the payroll registers.
Management Response:
As noted by the Auditors these differences result from payroll being processed in batches. These batches do not always match up so that 100 percent of the payments remitte d are matched within the same pay period that the employee withholding occurred in. Withholdings are accounted for based on pay period ending dates and remittance to the deferred compensation provider, Great-Wes t Financial Services, are based on pay days. A number of special payrolls are run each pay period for special items such as terminations and retirements. Depending on when Accounting runs the payroll jou rnal load process, some portion of these may be posted in the following pay period resulting in minor ti ming differences. When reviewed with all pay periods, all withholdings are remitted to the deferred compensation provider.
3. Procedure Performed: We reviewed the selected payments to determine that the withh oldings were remitted to the provider for investment within fifteen days fol lowing the close of the month, in accordance with Internal Revenue Code Section 457.
Result: No exceptions were noted as a result of our procedures.
This report is intended solely for the information and use of t he City Council and management of the City of Pasadena and is not intended to be, and should not be used by anyone other than these specified parties.
Brea, California
December 28, 2023