City of Patterson
Abandoned Vehicle Abatement Program
Patterson, California
Independent Auditors’ Reports
and Financial Statements
For the Year Ended June 30, 2022
City of Patterson
Abandoned Vehicle Abatement Program
For the Year Ended June 30, 2022
Table of Contents
Page
Independent Auditors’ Report on Financial Statements .......................................................................................... 1 Independent Auditors’ 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.
2121 North California Blvd., Suite 290
Walnut Creek, California 94596
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
Report on the Audit of the Financial Statements
Opinion
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, California (the “City”) as of and for the year ended June 30, 2022, and the related notes to the financial statement, as listed in the table of contents.
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, 2022 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
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. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Program, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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, 2022, 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.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Program’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
2 To the Honorable Mayor and Members of the City Council of the City of Patterson
Patterson, California
Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit 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 Program’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Program’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
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 May 3, 2023, 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
May 3, 2023
2121 North California Blvd., Suite 290
Walnut Creek, California 94596
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 (the “City”), for the year ended June 30 2022, and the related notes to the financial statement, and have issued our report thereon dated May 3, 2023.
Report on 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 or significant deficiencies may exist that have not been identified.
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
4 Report on 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
May 3, 2023
FINANCIAL STATEMENTS
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6 REVENUES:
Registration fees $ 21,095
Total revenues 21,095
EXPENDITURES:
Personnel 17,184
Services and supplies 3,889
Total expenditures 21,073
Net change in fund balance 22
FUND BALANCE:
Beginning of year 33,721
End of year $ 33,743
City of Patterson
Abandoned Vehicle Abatement Program
Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2022
See accompanying Notes to the Basic Financial Statement. 7 This page intentionally left blank.
8 9
NOTES TO THE FINANCIAL STATEMENT
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City of Patterson
Abandoned Vehicle Abatement Program
Notes to the Financial Statement
For the Year Ended June 30, 2022
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 Program’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 (the “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. 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 U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.
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