We'll get you there.
CPAs 1 CONSULTANTS 1 WEALTH ADVISORS
City of Placentia
2023 Audit Results
©2024 CliftonLarsonAllen LLP. CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See (,1.1j0)p�hlypm/Maimer.
Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC -registered 11711 11 rr((d aMUU// 1 6
Outline
Scope of Services
Auditors' Opinion and Reports
Communication with Those Charged with Governance
Report on Internal Control over Financial Reporting
ACFR Highlights
Citywide
General Fund
©2024 CliftonLarsonAllen LLP
6 Scope of Services
Audit of the annual financial statements for the year ended June 30, 2023 in accordance with Generally Accepted (US) and Governmental Auditing Standards
Audit of federal grant expenditures under Uniform Guidance Agreed Upon -Procedures related to the City's calculation of the GANN limit
©2024 CliftonLarsonAllen LLP
Cwb
3 Auditors' Opinion
Audit of financial statements for the year ended June 30, 2023 Unmodified opinions for June 30, 2023
Management is responsible for preparation and fair presentation of the financial statements
Auditor's responsibility is to express opinions on the financial statements Standards require that audit is planned and performed to obtain reasonable assurance that financial statements are free from material misstatement Audit evidence is sufficient and appropriate to provide a basis of our audit opinions
6 ©2024 CliftonLarsonAllen LLP _( Lay(\ 4
Communication with Those Charged with Governance
The planned scope and timing of the June 30,
2023, audit was communicated during our
planning meeting
Management is responsible for the selection and
use of appropriate accounting policies, which are
described in note 1 to the financial statements.
Change in accounting policies related to
subscriptions by adopting Governmental
Accounting Standards Board (GASB) Statement
No. 96, Subscription -Based Information
Technology Arrangements, effective July 1, 2022
6 ©2024 CliftonLarsonAllen LLP _( Lay(\ i 5
6 Communication with Those Charged with Governance
Significant estimates reported in the financial statements include the following:
Annual required contributions, pension expense, net pension liability and deferred outflows/inflows of resources of CaIPERS defined benefit pension plan
The actuarially determined contributions, OPEB expense, net OPEB liability, and corresponding deferred outflows/inflows of resources for the City's Other Post -Employment Benefit Plan The claims liability for general self-insurance and workers' compensation
©2024 CliftonLarsonAllen LLP
Cwb
6 6
Communication with Those Charged with Governance
The most sensitive disclosures affecting the financial statements include the following:
Note 8 regarding the CaIPERS defined benefit plans
Note 9 regarding City's Other Post -Employment Benefit Plan Uncorrected misstatements:
Interest receivable on Veterans Village promissory notes has not been recorded. As a result, interest receivable and an offsetting deferred inflow of resources — unavailable revenue are understated by $89,087. (General Fund and Housing Successor Special Revenue Fund)
Lease income in prior year was overstated by $61,316 resulting in beginning fund balance being overstated. (General Fund)
The $407,345 net effect of a 2018 transaction involving the acquisition of an easement that was partially financed by a loan from the billboard operators was expensed rather than restating beginning net position of the governmental activities on the government -wide financial statements. ©2024 CliftonLarsonAllen LLP
Cwb
0 Communication with Those Charged with Governance
Corrected misstatements:
o Material:
• An adjustment of approximately $1,700,000 was recorded to correct the accounting treatment for the City's current year OPEB contribution to a post - employment benefits trust. The contribution should have been recorded as an expenditure in the General Fund instead of an asset.
Immaterial:
The accrued liability for certain P -card expenditures was overstated by approximately $232,000.
• Accounts receivable and related deferred inflows of resources — unavailable revenues were overstated by approximately $26,000.
©2024 CliftonLarsonAllen LLP
8 6
Communication with Those Charged with Governance
No disagreements arose during the course of our audit.
Representations related to audit obtained from management in a letter dated April 30, 2024.
To our knowledge, the City did not consult with other
accountants regarding auditing or accounting matters.
©2024 CliftonLarsonAllen LLP
Cwb
9 Report on Internal Control over Financial Reporting
We considered the City's internal control over financial reporting (internal control) to determine the audit
procedures that are appropriate for the purpose of
expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of
the City's internal control.
6 ©2024 CliftonLarsonAllen LLP _( Lay(\ 1 10
Report on Internal Control over Financial Reporting
Material Weakness
c OPEB Trust Contribution
A contribution of $1,706,825 to the City's newly -created post -employment benefits section 115 trust for the purpose of providing other postemployment benefits (OPEB) was
recorded as an asset in the general fund instead of an OPEB contribution expenditure.
Management's Response -City's first contribution to the Section 115 trust, staff now trained on how to properly record future contributions
6 ©2024 CliftonLarsonAllen LLP _( Lay(\ i 11
6 Report on Internal Control over Financial Reporting
Significant Deficiency
GASB 87 Lease Implementation
Assets and liabilities for 12 vehicles were not properly identified for recording as leases in the prior year when the City implemented GASB 87, Leases.
One lease receivable was understated due to the option periods of the lease not being properly identified when recording the lease in the prior year.
One short-term lease for equipment that was modified in March 2023, and became subject to reporting as a right -to -use asset and lease liability was not identified until one year after the modification occurred.
These errors were identified by City staff yet not in a timely manner Management's Response — City contracted with DebtBook for GASB 87 lease implementation services. The listing sent to debtbook included the vehicles yet once returned did not include the vehicles. The City did not reconcile the to lists causing the lease to be omitted during the year of implementation. Moving forward this has been corrected and will not happen in the future as staff now enters all new leases. ©2024 CliftonLarsonAllen LLP _( 3
y(\ 12
FY 22-23 ACF R Highlights
Government -wide Financial Statements
Government -wide net position was $86,986,523, a decrease of $5,361,419 from the prior year.
c Capital Assets Increased by $19.3 million
Total Liabilities Decreased by $8.0 million
Net Pension Liability Increased by $27.7 million
Total OPEB Liability Decreased by $6.6 million
Unearned Revenues Decreased by $6.4 million
General Fund
Ending fund balance was $26,712,756, an increase of $3,128,276 from the prior year
6 ©2024 CliftonLarsonAllen LLP _( Lay(\ 13
158% ,
-
0 ACFR Highlights - General Fund Revenues
FY 2022
Actual
FY 2023
Actual
YTD
FY 2023
Budget
FY 2023
Actual to
Budget %
Taxes
Intergovernmental
Licenses and Permits
Fines and Forfeitures
Investment Income
Charges for Services
Leases and Rents
Miscellaneous
$41,621,461
952,389
2,440,102
$44,429,339
8,640,895
2,643,941
503,302 457,065
(323,152)
67,366
1,263,215 1,364,054
1,422,831
1,572,445
785,684 1,385,763
$43,367,223
11,521,255
2,833,098
102%
75%
93%
377,000 121%
225,001
30%
1,193,830 114%
997,000
745,565 186%
$48,665,832
$60,560,868 $61,259,972
99CM
©2024 CliftonLarsonAllen LLP
14 (3,549,352) 37% A
0 ACFR Highlights - General Fund Expenditures
FY 2022
Actual
FY 2023
Actual
YTD
FY 2023
Budget
FY 2023
Actual to
Budget %
General Government
Public Safety
$12,055,475
$15,748,766
15,441,982 16,357,168
Public Works
Community Development
3,514,281
4,100,553
1,482,732 1,718,087
Community Services
Capital Outlay
2,289,940
2,617,825
5,034,753 14,475,128
Debt Service
Total Expenditures
Net Debt Proceeds
2,271,085
42,090,248
120,000
2,690,838
57,708,365
1,588,047
Net Transfers
(3,341,575) (1,312,274)
Net Change in Fund Balance
$3,354,009 $3,128,276
©2024 CliftonLarsonAllen LLP
$14,505,896
17,574,640
109%
93%
5,393,372
76%
1,955,201 88%
2,722,180
96%
21,577,068 67%
1,671,000
65,399,357
161%
88%
$(7,688,737)
15