City of Patterson
Abandoned Vehicle Abatement Program
Patterson, California
Independent Auditors’ Reports
and Financial Statements
For the Year Ended June 30, 2021
City of Patterson
Abandoned Vehicle Abatement Program
For the Year Ended June 30, 2021
Table of Contents
Page
Independent Auditors’ Report on Financial Statements .......................................................................................... 1 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 Government Auditing Standards and the Abandoned Vehicle Abatement Program Handbook ........................................................................... 3 Financial Statements:
Statement of Revenues, Expenditures, and Changes in Fund Balances ................................................................... 7 Notes to the Financial Statements ............................................................................................................................. 11 This page intentionally left blank.
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
Report on the Financial Statement
We have audited the accompanying Statement of Revenues, Expenditures and Changes in Fund Balance (the “Statement”) of the Abandoned Vehicle Abatement Program (the “Program”) of the City of Patterson as of and for the year ended June 30, 2021, and the related notes to the financial statement, as listed in the table of contents.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and certain provisions of the Abandoned Vehicle Abatement Program Handbook (AVA Program Handbook), issued by the California Highway Patrol. Those standards and the AVA Program Handbook require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Statement referred to above presents fairly, in all material respects, the revenues, expenditures and changes in fund balance of the program for the year ended June 30, 2021 in conformity with accounting principles generally accepted in the United States of America.
2121 North California Blvd., Suite 290,Walnut Creek, California 94596 Tel: 925-974-3394 • Fax: 949-777-8850
www.pungroup.cpa
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
2 Emphasis of Matter
As described in Note 1, the Statement is intended to present only the results of operations of the Program of the City.
It does not purport to, and does not, present fairly the financial position of the City as of June 30, 2021, and change in fund balance for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Other Reporting Required by Government Auditing Standards and the AVA Program Handbook In accordance with Government Auditing Standards and the AVA Program Handbook, we have also issued our report dated January 11, 2022, on our consideration of the Program’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and the AVA Program Handbook in considering the Program’s internal control over financial reporting and compliance.
Walnut Creek, California
January 11, 2022
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS AND
THE ABANDONED VEHICLE ABATEMENT PROGRAM HANDBOOK
Independent Auditors’ Report
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, and certain provisions of the Abandoned Vehicle Abatement Program Handbook (AVA Program Handbook), the financial statement of the Abandoned Vehicle Abatement Program (the “Program”) of the City of Patterson, California (City), for the year ended June 30 2021, and the related note to the financial statement, and have issued our report thereon dated January 11, 2022.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statement, we considered the Program’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statement, but not for the purpose of expressing an opinion on the effectiveness of the Program’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Program’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 2121 North California Blvd., Suite 290,Walnut Creek, California 94596 Tel: 925-974-3394 • Fax: 949-777-8850
www.pungroup.cpa
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
4 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Program’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or the AVA Program Handbook.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal controls and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Program’s internal controls or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards and the AVA Program Handbook in considering the Program’s internal controls and compliance. Accordingly, this communication is not suitable for any other purpose.
Walnut Creek, California
January 11, 2022
FINANCIAL STATEMENTS
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6 REVENUES:
Registration fees $ 15,812
Total revenues 15,812
EXPENDITURES:
Personnel 13,997
Services and supplies 1,784
Total expenditures 15,781
Net change in fund balance 31
FUND BALANCE:
Beginning of year 33,690
End of year $ 33,721
City of Patterson
Abandoned Vehicle Abatement Program
Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2021
See accompanying Notes to the Basic Financial Statement. 7 This page intentionally left blank.
8 9
NOTES TO THE FINANCIAL STATEMENT
10 This page intentionally left blank.
City of Patterson
Abandoned Vehicle Abatement Program
Notes to the Financial Statement
For the Year Ended June 30, 2021
11 Note 1 – Summary of Significant Accounting Policies
The Statement of Revenues, Expenditures and Change in Fund Balance (the “Statement”) of the Abandoned Vehicle Abatement Program (the “Program”) of the City of Patterson, California (the “City), have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below.
A. The Reporting Entity
The Abandoned Vehicle Abatement Program is a statewide program administered by the California Highway Patrol (CHP). The City administers and operates the local vehicle abatement program pursuant to Section 22710 of the Vehicle Code, Patterson Municipal City Code Section 10.24.010 et seq., and the Stanislaus Council of Governments (StanCOG) Abandoned Vehicle Program and Plan. Section 9250.7 of the Vehicle code establishes the funding source for the abatement of abandoned vehicles by a county-based Service Authority (Authority), pursuant to the provisions of Section 22710 of the Vehicle Code. The Vehicle Code imposes a service fee of one dollar ($1) on vehicles registered to an owner with an address in the county that establishes the Authority. This fee is paid to the Department of Motor Vehicles (DMV) at the time of registration or renewal of registration. The DMV, after deducting its administrative costs, at least quarterly transmits the net amount collected to the State Controller’s Office (SCO) for deposit in the Abandoned Vehicle Trust Fund. All money in the fund is continuously appropriated to the SCO for allocation to an Authority that has an approved Program, and for payment of the administrative costs of the SCO. StanCOG, the Authority, distributes Program funds to participating entities based on the allocation determined in the Vehicle Abatement Services Agreement.
The Statement is intended to present the results of operations, and those program revenues and expenditures of the Program that are accounted for within the General Fund of the City of Patterson (City). They are not intended to present the financial position or results of operations of the City as a whole.
B. Basis of Accounting and Measurement Focus
Basis of accounting refers to when revenues and expenditures/expenses are recognized in the accounts and reported in the financial statements.
Governmental funds are accounted for using the modified accrual basis of accounting and "current financial resources" measurement focus. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Revenues are recognized in the accounting period in which they become measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The Program’s accrual period is generally 60 days after fiscal year end. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred.
C. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 12 This page intentionally left blank.