AUDITED FINANCIAL STATEMENTS
FOR FISCAL YEAR 2023-2024
Item 3.4 Annual Comprehensive Financial Report
Item 9.1 SARA Audited Financial Statements
Item 3.5 Report to Those Charged with Governance
Prepared by the Finance Department
COUNCIL AGENDA: 12/10/2024
Presenters:
Drew Corbett, Acting Director of Finance
Victor Lo, CPA, Deputy Director – Accounting
Ben Lau, CPA, Partner: Macias, Gini & O’Connell LLP
PRESENTATION OVERVIEW
Item 3.4 Annual Comprehensive Financial Report
Audited Financial Statements Overview
Item 9.1 Successor Agency to the Redevelopment Agency (SARA) Audited Financial Statements Overview
Item 3.5 Report to those Charged with Governance
Independent Auditor’s Report
Accounting Standards Implemented
Audit Results
Management Response
2 AUDITS AND ENGAGEMENTS
City of San José Annual Comprehensive Financial Report (ACFR) GANN Appropriation Limitation – Agreed-Upon Procedures San José Mineta International Airport ACFR and Compliance Reports Wastewater Treatment System Financials
San José Clean Energy Financials
Successor Agency to the Redevelopment Agency (SARA) Financials San José Convention Center and Cultural Facilities
Bond Funds Financial Statements and Compliance Reports Measure O (2000) – Branch Library Projects
Measure P (2000) – Parks Projects
Measure T (2018) – Public Safety and Infrastructure Projects 3 In Progress
Complete and available on the City Auditor website under External Financial Audits. https://www.sanjoseca.gov/your-government/appointees/city-auditor/external-financial-audits
AUDITS AND ENGAGEMENTS
Library Parcel Tax Measure S (2004)
San José Semi-Annual Investment Program Compliance – Agreed-Upon Procedures South Bay Water Recycling Program
Deferred Compensation Plan
Executive Management and Professional Employees Tier 3 Defined Contribution 401(a) Plan City of San José Voluntary Employee Beneficiary Association (“VEBA”) Plans San José Clean Energy Agreed-Upon Procedures
Bicycle/Pedestrian Facilities Grant
Single Audit (including Airport Compliance)
4 In Progress
Complete and available on the City Auditor website under External Financial Audits. https://www.sanjoseca.gov/your-government/appointees/city-auditor/external-financial-audits ITEM 3.4
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR FISCAL YEAR 2023-2024
5 MAJOR SECTIONS OF THE ACFR
Introductory Section
Financial Section
Required Supplemental Information (Unaudited)
Supplemental Information
Statistical Section (Unaudited)
6 STATEMENT OF NET POSITION
7 STATEMENT OF ACTIVITIES (IN MILLIONS)
8 FY 2023 FY 2024 FY 2023 FY 2024 FY 2023 FY 2024
Total Revenues 2,191$ 2,290$ 1,159$ 1,206$ 3,350$ 3,496$ Total Expenses and Transfers 2,201 2,331 914 969 3,115 3,300 Change in Net Position (10) (41) 245 237 235 196 Net Position at beginning of year 2,369 2,359 1,611 1,856 3,980 4,215 Net Position at end of year 2,359$ 2,318$ 1,856$ 2,093$ 4,215$ 4,411$ Governmental Business-type
Activities Activities Totals
GASB PRONOUNCEMENTS
9 GASB No. GASB Title
Implementation in
Fiscal Year Ending
99 Omnibus 2022 (Derivative Instruments) June 30, 2024
100 Accounting Changes and Error Corrections June 30, 2024 ITEM 9.1
SARA AUDITED FINANCIAL STATEMENTS
FOR FISCAL YEAR 2023-2024
10 STATEMENT OF FIDUCIARY NET POSITION
• Ending net position is negative $0.967 billion; net position will keep improving with the repayment of the outstanding bonds until it reaches $0 when the bonds are fully repaid on 8/1/2035.
11 FY 2023 FY 2024
Assets 136$ 139$ 2.2%
Deferred outflows of resources 24 21 -12.5% Liabilities (1,235) (1,127) 8.7%
Net position held in trust (1,075)$ (967)$ 10.0%
(In millions) %
Change
STATEMENT OF CHANGES IN FIDUCIARY NET
POSITION
12 FY 2023 FY 2024
Additions 196$ 203$ 3.6%
Deductions (93) (95) 2.2%
Change in net position 103 108 4.9% Net position, beginning of year (1,178) (1,075) 8.7% Net position, end of year (1,075)$ (967)$ 10.0% (In millions) %
Change
ITEM 3.5
EXTERNAL AUDITOR’S REPORT TO THOSE
CHARGED WITH GOVERNANCE
FOR FISCAL YEAR 2023-2024
13 Audit Results
14 Required Communications
15 Accounting Updates
16 MANAGEMENT RESPONSE
This is the third consecutive year the City has received a “Report to Those Charged with Governance” with no new findings.
• Robust year-end close processes ensuring accurate and timely financial reporting.
• Investment in modernized financial systems and automation, enhancing transparency and efficiency in financial data management. • Comprehensive training programs that build capacity and consistency across departments.
• Proactive measures to adapt to evolving accounting standards and regulatory requirements.
17 RECOMMENDATIONS
Acceptance of FY 2023-2024 reports:
Item 3.4 – Annual Comprehensive Financial Report
Item 3.5 – Report to Those Charged with Governance
Item 9.1 – SARA Audited Financial Statements
18 Drew Corbett, Acting Director of Finance
Victor Lo, CPA, Deputy Director – Accounting
Ben Lau, CPA, Partner: Macias, Gini & O’Connell LLP
QUESTIONS