February 15, 2022
Finance Department
DATE: February 15, 2022
TO: Mayor Butt and Members of the City Council
FROM:
Belinda Brown, Director of Finance
Delmy Cuellar, Accounting Manager
Subject:
City of Richmond Annual Comprehensive Financial
Report for the Fiscal Year Ended June 30, 2021
FINANCIAL IMPACT: There is no fiscal impact to receiving this report.
PREVIOUS COUNCIL
ACTION:
N/A
STATEMENT OF THE
ISSUE:
The City retains an independent auditor to annually
review and express an opinion regarding the accurate
representation of the City’s financial statements.
RECOMMENDED ACTION:
RECEIVE a report on the City’s Annual Comprehensive
Financial Report (ACFR) for Fiscal Year 2020-2021 –
Finance Department (Belinda Brown/Delmy Cuellar 510-
620-6740). This item was continued from the
February 1, 2022, meeting.
DISCUSSION:
The Finance Department issued a Request for Proposals (RFP) to select firms of certified public accountants to audit City’s financial statements, and financial statements AGENDA
REPORT
February 15, 2022
of component entities, including the Richmond Housing Authority, for the fiscal years ending June 30, 2020, through June 30, 2022, with an option to extend the contract in one-year periods, not to exceed a total of two additional fiscal years. Based on the audit RFP and interview rating matrixes, Badawi and Associates scored the highest points and was selected as our external auditors.
Badawi and Associates, the City of Richmond’s external auditors, have audited financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Richmond as of and for the year ended June 30, 2021, and the related notes to the financial statements.
Badawi and Associates have completed the Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2021. The Independent Auditor’s Report states:
Basis for Disclaimer of Opinion
“The financial statements of the Richmond Housing Authority and RHA Properties, RHA Housing Corporation, and RHA RAD LLC have not been audited for the year ended June 30, 2021. The Richmond Housing Authority’s financial activities are included in the City’s basic financial statements as a major enterprise fund and represent 10.85 percent, 22.20 percent, and 6.19 percent of the assets, net position, and revenues, respectively, of the City’s business-type activities. The financial activities of the RHA Properties, RHA Housing Corporation, and RHA RAD LLC are included in the City’s financial activities as discretely presented component units and represent the City’s only discretely presented component units.”
Disclaimer of Opinion
“Because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial statements of the business-type activities, Richmond Housing Authority Enterprise Fund, and the aggregate discretely presented component units of the City. Accordingly, we do not express an opinion on these financial statements.”
Note: Maze and Associates, external auditors for the Richmond Housing Authority (RHA) audits for the fiscal years ended, June 30, 2018, and 2019, are working to complete these respective audits by the end of this current fiscal year. Once these prior audits have been completed, Badawi and Associates will work to complete the RHA audit for the fiscal year ended June 30, 2020, and 2021. As a result, we do not expect to receive a “Disclaimer of Opinion” for our audits ending June 30, 2022.
Unmodified Opinions
“In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the General Fund, the Community Development and Loan Programs Special Revenue Fund, the
February 15, 2022
Port of Richmond Enterprise Fund, the Municipal Sewer Enterprise Fund, and the aggregate remaining fund information of the City as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.”
DOCUMENTS ATTACHED:
Attachment 1 – City of Richmond Annual Comprehensive Financial Report for the year ended June 30, 2021
Attachment 2 – Badawi and Associates fiscal year 2021 Presentation to City Council