1101 S. Milliken Ave. Ste E #933
Ontario, CA 91761
A E POWELL, INC. 1101 S. MILLIKEN AVE. STE E #933, ONTARIO, CA 91761 AN INDEPENDENT AUDITOR’S REPORT
1 INDEPENDENT AUDITOR’S REPORT
To City of San Bernardino
Director of Economic Development
Mr. Kenneth Chapa
We have examined the golf management contract with the management company of Local Golf Management, LLC for the period June 1, 2023 to June 30, 2024 for compliance with the agreement. The City’s management is responsible for identifying the subject matter, for this examination. Our responsibility is to express an opinion on the Management Company’s adherence to the agreement for the elements identified by the City based on our examination.
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether Management is in compliance with its contract with the City is in accordance with the criteria, in all material respects. An examination involves performing procedures to obtain evidence about operations, management, and procedures. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material misstatement of, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
We are required to be independent of The City of San Bernardino and Local Golf Management, LLC. and to meet our other ethical responsibilities in accordance with relevant ethical requirements relating to the engagement.
We were not contracted to perform a full financial audit. Our contract is limited in scope to specific elements indicated by The City of San Bernardino.
The notes included in this report is an integral part of this report and should be reviewed fully in conjunction with the subject management agreement to gain a complete understanding of the information presented.
In our opinion, Local Golf Management, LLC is following the terms and conditions of the management agreement with The City of San Bernardino entered into on June 9, 2023, in all material respects.
Ontario, CA
December 13, 2024
2 Shandin Hills Golf Club
Notes to Independ Auditor’s Report
For the period June 1, 2023 to June 30, 2024
Background: We were engaged to audit management’s execution of the agreement between the City of San Bernardino and Local Golf Management, LLC for the management of the Shandin Hills Golf Club. Below will list out each element as contracted by the City to examine with any exceptions or findings noted.
1) Monthly Bank Statements for Operations –
a. The operating account was established and monthly statements were obtained and reviewed for each month subject to this report.
2) Operating Account was established in accordance with Section 6.1 of the Management Agreement – a. The account was established at a bank of the City’s choosing. b. Signers have been established for the account
Finding: The city has not provided or made attempts to have a signer properly added to the account.
Management has made several appoints at the bank to have a City signer added and the City representatives have not shown up at the appointments.
Recommendation: City need to make it a priority to have a signer added to the account.
3) Annual Plan submitted to the City at least 60 days in advance of each operating year under management. a. The plan was submitted to the city in a timely manner.
4) Determine overall financial compliance with management agreement. a. Based on interviews of management and staff, inspection of policies and procedures, and inspection of records the management company is in compliance with the management agreement.
5) Verify monthly and annual reports required to be delivered to the City under Section 6.7 of the agreement were delivered for the period.
a. Based on inspection of records the reports were delivered in accordance with Section 6.7 of the agreement.
6) Sample review of the balance sheet, income statement, general ledger and supporting schedules for the period.
a. Based on a review of the subject reports there are no findings
7) Conduct an internal control assessment of the Manager’s operations. a. Other than noted below the internal controls of Manager’s operations are adequate.
Finding: Revenue Reconciliation – Merchant Processing statements are not being reconciled to deposits into the checking account.
Recommendation: Merchant processing statements should be reconciled monthly as part of the month end closing procedures.
Finding: Safe which contains 2 – 3 days of cash deposits, only 1 person has the combination to the safe with no backup.
Recommendation: Protocols are established to have the combination stored in a second location as back up.
Finding: Inventory was not counted at least monthly.
Recommendation: Monthly inventory counts conducted and reconciled to books. Note, management has recently implemented this process, but it was not in place during period covered under this engagement.