©2024 CliftonLarsonAllen LLP. CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor.
Audit Exit Presentation
Year ended June 30, 2024
City of Placentia, California
1 ©2024 CliftonLarsonAllen LLP
Agenda
•Audit Scope
•Audit Process
•Audit Opinions and Results
•Governance Communications
•ACFR Highlights
o Government-Wide
o General Fund
•Upcoming GASB Standards
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Audit Scope
Report on the
City’s financial
statements
Required
governance
communications
letter
Report on internal
control over
financial reporting
and on compliance
and other matters
Report on
compliance for each
major federal
program, report on
internal control over
compliance, and
report on the
schedule of
expenditures of
federal awards
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Audit Process
4 Override of internal
controls Revenue recognition
Significant estimates
RISK-BASED APPROACH
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Financial statement
One material weakness noted –
Financial Close and Reporting
No significant deficiencies noted
Federal awards
No material weaknesses noted
No significant deficiencies noted
Financial statements
Unmodified opinions
Federal awards
Unmodified opinion on
compliance
AUDIT OPINIONS AUDIT RESULTS
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Governance Communications
Most Sensitive Estimates
•OPEB liability and related deferred
outflows/inflows of resources (Note 9)
•Claims payable (Note 10)
Other
•Uncorrected misstatements - Immaterial - 4
•Corrected misstatements - Material - 5;
Immaterial - 1
•Material weakness in internal control over
financial reporting – Financial close and
reporting
Overall
•Accounting policy change – GASB 100
•Audit standards change – SAS 143-145
•No unusual transactions identified
•Received management representation
letter dated February 28, 2025
Difficulties
•None encountered
•No disagreements
•No consultations with other
accountants identified
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What changed
Governmental Accounting Standards Board (GASB) Statement No. 100, Accounting Changes and Error Corrections – An
Amendment to GASB Statement No. 62
Effective for reporting periods beginning after June 15, 2023 New requirements
Enhanced accounting and financial reporting for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability.
Impact
More time evaluating accounting changes and error corrections More changes to the financial statement presentation and note disclosures
NEW ACCOUNTING CHANGES
Governance Communications
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•Uncorrected misstatements:
o 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 both understated by $110,727. (City Wide Developer Impact Fund and Housing Successor Special Revenue Fund) o Interest income overstatement of $116,296. (General Fund) o Understatement of revenue and overstatement of unavailable revenue for $22,381 for a receivable collected within the City’s availability period (Opioid Settlement Fund). o Understatement of beginning net position of $51,172 for a vehicle purchase that was expensed in the prior year that should have been capitalized (Equipment Replacement Fund).
Governance Communications
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•Corrected misstatements:
o Material:
Pension related deferred inflow of resources for government wide governmental activities was adjusted for an overstatement of approximately $1,467,000. Approximately $6,150,000 of completed capital projects were moved from construction in progress to various capital assets being depreciated categories. Cash and accounts payable were adjusted by approximately $461,000 to correct an overstatement in each account balance. The net OPEB liability for the refuse fund was adjusted for an overstatement of approximately $419,000. Other financing sources and capital outlay for the general fund were adjusted to correct an understatement in each account balance of approximately $1,299,000. o Immaterial:
Long-term debt for government wide governmental activities was adjusted for an overstatement of approximately $62,000.
Governance Communications
9 ©2024 CliftonLarsonAllen LLP
FY 23-24 ACFR Highlights
•Government-wide Financial Statements
o Government-wide net position was $88,565,622, an increase of $1,579,099 from the prior year.
o Capital Assets Increased by $22.3 million
o Total Liabilities Increased by $6.0 million
o Net Pension Liability Increased by $3.7 million
o Net OPEB Liability Decreased by $4.3 million
o Unearned Revenues Decreased by $1.4 million•General Fund o Ending fund balance was $18,371,773, a decrease of $8,340,983 from the prior year
10 ©2024 CliftonLarsonAllen LLP
ACFR Highlights - General Fund Revenues
FY 2023
Actual
FY 2024
Actual
YTD
FY 2024
Budget
FY 2024
Actual to
Budget %
Taxes $44,429,339 $45,847,060 $45,274,180 101%
Intergovernmental 8,640,895 2,717,309 4,380,950 62%
Licenses and Permits 2,643,941 2,535,885 2,851,000 89%
Fines and Forfeitures 457,065 548,960 465,000 118%
Investment Income 67,366 1,175,860 600,000 196%
Charges for Services 1,364,054 1,441,304 1,350,500 107% Leases and Rents 1,572,445 1,677,641 1,061,000 158%
Miscellaneous 1,385,763 1,125,980 805,500 140%
Total $60,560,868 $57,069,999 $56,788,130 100%
11 ©2024 CliftonLarsonAllen LLP
ACFR Highlights - General Fund Expenditures and Other Financing Sources (Uses) FY 2023
Actual
FY 2024
Actual
YTD
FY 2024
Budget
FY 2024
Actual to
Budget %
General Government $15,748,766 $15,336,829 $15,560,790 99% Public Safety 16,357,168 18,491,792 19,044,953 97%
Public Works 4,100,553 5,350,268 4,956,521 108%
Community Development 1,718,087 1,809,970 1,824,507 99% Community Services 2,617,825 3,431,853 3,339,704 103%
Capital Outlay 14,475,128 22,021,540 29,992,467 73%
Debt Service 2,690,838 2,598,299 1,671,000 155%
Total Expenditures 57,708,365 69,040,551 76,396,142 90% Net Debt Proceeds 1,588,047 2,017,510 -
Net Transfers (1,312,274)1,612,059 (5,522,409)(29)%
Net Change in Fund Balance $3,128,276 $3,629,569 $(25,130,421) 12 ©2024 CliftonLarsonAllen LLP. CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor.
Upcoming GASB Standards
13 ©2024 CliftonLarsonAllen LLP©2025 CliftonLarsonAllen LLP Examples include
•Sick leave not paid
at termination
•Parental leave
•Military leave and jury duty
that has commenced
Text
GASB 101 Compensated
Absences
14 Effective date
December 31, 2024
Updated framework
•Revaluate leave policies
•Liability must include any
accumulated leave that is
unused or used but unpaid
•Footnote disclosures will
be enhanced
CLA can help by
evaluating the standard
related to compensated
absences and assisting with
or evaluating in financial
statement disclosures
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GASB 102 Certain Risk
Disclosures
15 Effective date
June 30, 2025
Increased footnote disclosures surrounding risk:
•Limitations on raising revenues
•Concentrations related to tax revenue or vendors
•Debt or mandated spending — especially unfunded mandates •Impact of major employer leaving the community
•Collective bargaining agreements
CLA can help by
assisting with or
evaluating financial
statement
disclosure updates
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assisting with or
evaluating financial
statement
disclosure updates
Text
GASB 103 Financial
Reporting Module
16 Effective date
June 30, 2026
Impacts financial statement presentation
Updated disclosure guidance for:
•MD&A consistency
•Clearer definition of unusual or infrequent items
•Presentation of proprietary fund statements
•Major component unit information
•Budgetary comparison information
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GASB 104 – Disclosure of Certain
Capital Assets
17 Likely effective date
June 30, 2026
Will clarify how
capital assets are
disclosed in financials:
•Capital assets held for sale
and related pledged debt
•Leased assets
•Subscription assets
•Right to use PPP assets
•Other intangible assets
CLA can help by
assisting with or evaluating
financial statement
disclosure updates
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