2511 Garden Road 379 West Market Street
Suite A180 Salinas, CA 93901
Monterey, CA 93940 831-424-2737
831-373-3337 Fax 831-424-7936
Fax 831-373-3437
Gerald Ray, CPA | Patricia Kaufman, CPA, CGMA | Smriti Shrestha, CPA
Daniel McGilloway Jr, CPA | Sarita Shannon, CPA | Sukhdev Singh, CPA | Whitney Ernest, CPA | Laura Armbruster, CPA | Rose Maxwell, CPA | Eleonora Garra, CPA
City Council and Management of
City of Salinas
200 Lincoln Ave.
Salinas, California 93901
In planning and performing our audit of the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Salinas (City) as of and for the year ended June 30, 2021, in accordance with auditing standards generally accepted in the United States of America, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the cir cumstances for the purpose of expressing our opinions 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 C ity’s internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficienci es and therefore material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control that we consider to be material weaknesses.
A deficiency in internal c ontrol 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. We consider the f ollowing deficiencies in internal control to be material weaknesses:
During the audit process, it was noted that staffing shortages caused by multiple rotations in management and COVID related absences led to a delay in applying the year -end closing procedures that had previously been applied consistently . Certain audit schedules were received after the start of the audit, resulting in delays and journal entries provided to the auditor after the scheduled timing of the audit. There was no evidence to suppor t a timely review of the year -end process before the trial balances were deemed final by management resulting in incomplete and inaccurate trial balances that did not match management prepared reconciliations. This led to twelve material audit adjustments.
Internal controls over performing the accounting period close that is designated by the City’s governing body, management, and personnel to address risks and to provide reasonable assurance that the trial balances used in the financial statement preparati on process are final, contain all valid journal entries made, and are in balance are an integral process in the financial statement close. We recommend that management evaluate the
2 causes of the deficiencies noted above and incorporate necessary processes to ensure that the controls in place to perform the accounting period close are consistently applied.
This communication is intended solely for the information and use of, management City Council, and others within the City of Salinas , and is not intended to be, and should not be, used by anyone other than these specified parties.
McGilloway, Ray, Brown & Kaufman
Salinas, California
May XX, 2022