ASSESSED AND ESTIMATED ACTUAL
VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Real Property Total Real Total
Fiscal Residential Commercial Industrial Secured Unsecured Total Estimated Direct Year Property Property Property Other Property Property Assessed (a) Full Market (a) Tax Rate (b) 2013 7,265,617,525 $ 1,987,170,644 $ 245,917,096 $ 115,453,836 $ 9,614,159,101 $ 384,534,108 $ 9,998,693,209 $ 9,998,693,209 $ 0.17456% 2014 7,558,708,224 2,009,718,415 245,674,195 130,594,237 9,944,695,071 402,261,887 10,346,956,958 10,346,956,958 0.11985% 2015 7,991,224,952 2,120,065,908 249,864,918 115,675,852 10,476,831,630 417,217,272 10,894,048,902 10,894,048,902 0.11657% 2016 8,511,358,216 2,221,843,976 263,830,302 108,982,883 11,106,015,377 400,942,059 11,506,957,436 11,506,957,436 0.11672% 2017 9,025,896,811 2,390,814,514 267,468,956 135,689,202 11,819,869,483 423,545,667 12,243,415,150 12,243,415,150 0.11693% 2018 9,522,645,933 2,532,439,852 276,751,912 128,305,868 12,460,143,565 417,902,554 12,878,046,119 12,878,046,119 0.11709% 2019 10,042,494,232 2,681,917,170 285,601,803 107,472,477 13,117,485,682 409,129,431 13,526,615,113 13,526,615,113 0.11742% 2020 10,545,909,554 2,850,424,603 293,144,677 127,151,762 13,816,630,596 442,888,708 14,259,519,304 14,259,519,304 0.11724% 2021 11,011,781,157 2,956,073,592 305,080,963 143,953,920 14,416,889,632 460,690,899 14,877,580,531 14,877,580,531 0.11734% 2022 11,516,548,822 3,109,589,216 311,491,969 138,527,146 15,076,157,153 463,320,122 15,539,477,275 15,539,477,275 0.11734% (a)
(b)
Data Source: Marin County Assessor 2012/13 - 2021/22 Combined Tax Rolls The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over-rides. These values are considered to be full market values.
California cities do not set their own direct tax rate. The state constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area.
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Millions
Unsecured Property Secured Property
DRAFT DRAFT REVIEW DRAFT 11-7-22 160 DRAFT
Fiscal School Misc. Special
Year City County (1) Districts Districts Total
2013 0.154 0.295 0.7743 0.0461 1.2691 0.17456%
2014 0.154 0.295 0.7890 0.0461 1.2838 0.11985%
2015 0.154 0.295 0.7651 0.0461 1.2599 0.11657%
2016 0.154 0.295 0.7846 0.0695 1.3028 0.11672%
2017 0.154 0.295 0.8251 0.0553 1.3291 0.11693%
2018 0.154 0.295 0.8127 0.0661 1.3275 0.11709%
2019 0.154 0.295 0.8495 0.0650 1.3635 0.11742%
2020 0.154 0.295 0.8289 0.0635 1.3414 0.11724%
2021 0.154 0.295 0.8221 0.0678 1.3389 0.11734%
2022 0.154 0.295 0.7995 0.0678 1.3160 0.11734%
Notes:
(1) Like other cities, San Rafael includes several property tax rate areas with different rates. A mean average is indicated.
Data Source: Marin County Assessors Office 2012/13 - 2021/22 Tax Rate Tables
CITY OF SAN RAFAEL
PROPERTY TAX RATES
ALL OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
Total
Direct Rate
DRAFT DRAFT REVIEW DRAFT 11-7-22 161 DRAFT
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Basic Levy (1) 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Marin Community College Bonds 0.01780 0.02040 0.01800 0.01650 0.01420 0.03380 0.03390 0.02690 0.02650 0.02750 Marin Healthcare Bond 0.00000 0.00000 0.00000 0.02350 0.00930 0.02010 0.01900 0.01750 0.02180 0.02180 Miller Creek School Bonds 0.01540 0.01500 0.01470 0.04170 0.03830 0.02090 0.03450 0.03280 0.03030 0.01950 Ross Elementary School 0.06640 0.06570 0.06030 0.06150 0.06030 0.06190 0.06180 0.05710 0.05800 0.05760 Ross Valley School Bonds 0.06110 0.05960 0.05700 0.05550 0.05370 0.05680 0.05390 0.05270 0.05190 0.04870 San Rafael Elementary Bonds 0.02170 0.03320 0.02620 0.02570 0.05350 0.05030 0.07290 0.07050 0.06950 0.07400 San Rafael High Bonds 0.04960 0.05130 0.04850 0.04710 0.07100 0.05680 0.06170 0.06000 0.05830 0.04630 Tamalpais Union High School 0.03710 0.03860 0.03520 0.03130 0.02880 0.02690 0.02580 0.02390 0.02260 0.02060 Total Direct & Overlapping Tax Rates 1.26910 1.28380 1.25990 1.30280 1.32910 1.32750 1.36350 1.34140 1.33890 1.31600 City's Share of 1% Levy Per Prop 13 0.12313 0.12306 0.12233 0.12233 0.12233 0.12233 0.12232 0.12232 0.12231 0.12231 Total Direct Rate 0.17456 0.11985 0.11657 0.11672 0.11693 0.11709 0.11742 0.11724 0.11734 0.11734 Notes:
Data Source: Marin County Assessors Office 2012/13 - 2021/22 Tax Rate Tables (1) In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.
CITY OF SAN RAFAEL
PROPERTY TAX RATES
DIRECT & OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS (RATE PER $100 OF ASSESSED VALUE) DRAFT DRAFT REVIEW DRAFT 11-7-22 162 DRAFT
CITY OF SAN RAFAEL
PRINCIPAL PROPERTY TAX PAYERS
CURRENT FY 2020/21 AND FY 2012/2013
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Value Value
California Corporate Center ACQ LLC $ 286,882,364 1.85% MGP XI Northgate LLC 223,376,777 1.44%
NCP Commercial 143,353,203 0.92%
Kaiser 115,687,561 0.74%
Pur San Rafael LLC 105,996,899 0.68%
Bre Properties, Inc 66,994,467 0.43%
South Valley Apartments LLC 56,863,460 0.37%
North Bay 4040 TT LLC 54,228,065 0.35%
Regency Center II Assoc LP 52,307,157 0.34% 42,728,882 $ 0.43% Northbay Properties II 49,196,251 0.32% 42,394,545 0.42% Bay Apartment Communities Inc 40,340,145 0.40%
Northgate Mall Associates 135,444,524 1.35%
SR Corporation Center Phase 1 52,500,001 0.53%
SR Corporation Center Phase 2 70,306,032 0.70%
Sutter Health 49,632,065 0.50%
Robert Dickson Trust 45,189,250 0.45%
Rafael Town Center Investors 35,497,775 0.36%
Marin Sanitary Service 38,365,767 0.38%
Subtotal $ 1,154,886,204 7.43% 552,398,986 $ 5.52%
Total Net Assessed Valuation:
Fiscal Year 2021-2022 $ 15,539,477,275
Fiscal Year 2012-2013 $ 9,998,693,209
FY 2021-2022 FY 2012-2013
DRAFT DRAFT REVIEW DRAFT 11-7-22 163 DRAFT
Delinquent taxes
Fiscal as a Percent of
Year Rate Levies Allocations Collections Apportionments Delinquencies Allocations 2013 1.00 (2) $ 20,883,041 (2) $ 20,883,041 (2) 0.0%
2014 1.00 (2) 22,001,357 (2) 22,001,357 (2) 0.0%
2015 1.00 (2) 22,376,457 (2) 22,376,457 (2) 0.0%
2016 1.00 (2) 23,636,093 (2) 23,636,093 (2) 0.0%
2017 1.00 (2) 25,173,651 (2) 25,173,651 (2) 0.0%
2018 1.00 (2) 26,088,961 (2) 26,088,961 (2) 0.0%
2019 1.00 (2) 27,718,712 (2) 27,718,712 (2) 0.0%
2020 1.00 (2) 28,709,606 (2) 28,709,606 (2) 0.0%
2021 1.00 (2) 29,762,184 (2) 29,762,184 (2) 0.0%
2022 1.00 (2) 31,129,632 (2) 31,129,632 (2) 0.0%
Notes:
(1) Includes deductions for County property tax administration. (2) Information not applicable. All general purpose property taxes are levied by the county and allocated to other governmental entities.
CITY OF SAN RAFAEL
PROPERTY TAX LEVIES AND COLLECTIONS (1)
LAST TEN FISCAL YEARS
$6
$9
$12
$16
$19
$22
$25
$28
$31
$35
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Millions
Allocations Apportionments
DRAFT DRAFT REVIEW DRAFT 11-7-22 164 DRAFT
-
~
----- ...,
- .... .... - - ...,
- -
CITY OF SAN RAFAEL
RATIO OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Pension Lease
Fiscal Note Obligation Revenue
Year Payable Bonds Bonds Total
2013 $ 169,000 $ 4,490,000 $ 4,659,000
2014 528,839 4,490,000 5,018,839
2015 453,667 4,490,000 4,943,667
2016 378,495 4,490,000 4,868,495
2017 303,323 4,390,000 4,693,323
2018 1,308,951 4,185,000 $ 53,612,097 59,106,048
2019 1,233,779 3,765,000 53,104,153 58,102,932
2020 1,084,462 3,320,000 52,596,209 57,000,671
2021 905,751 2,845,000 50,178,265 53,929,016
2022 890,554 2,340,000 47,600,322 50,830,876
Parking Total Percentage
Fiscal Services Note Primary of Personal Per
Year Bonds Payable Total Government Income (a) Capita (a) 2013 6,445,000 $ 6,445,000 $ 11,104,000 $ 0.44% 190.85
2014 6,186,403 61,836 $ 6,248,239 11,267,078 0.43% 192.38 2015 5,942,128 55,020 5,997,148 10,940,815 0.41% 185.87 2016 5,692,853 48,204 5,741,057 10,609,552 0.38% 175.13 2017 5,433,577 41,388 5,474,965 10,168,288 0.35% 167.13 2018 5,164,303 34,572 5,198,875 64,304,923 2.04% 1,060.25 2019 4,890,027 27,755 4,917,782 63,020,714 2.00% 1,049.54 2020 4,605,753 20,939 4,626,692 61,627,363 1.87% 1,030.44 2021 4,316,478 14,123 4,330,601 58,259,617 n/a 987.18
2022 4,017,203 7,305 4,024,508 54,855,384 n/a 905.80
In August 2012, the series 2003 parking services bonds were refunded with series 2012 refunding bonds.
Data Sources:City of San Rafael
State of California, Department of Finance (population) U.S. Department of commerce, Bureau of the Census (income) (a) See Schedule of Demographic and Economic Statistics for personal income and population data.
Governmental Activities
Business-Type Activities
$-
$10
$20
$30
$40
$50
$60
$70
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Millions
Total Governmental
Total Business
DRAFT DRAFT REVIEW DRAFT 11-7-22 165 DRAFT
Cl
•
CITY OF SAN RAFAEL
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
June 30, 2022
2021-22 Assessed Valuation: $ 15,539,477,275
Total Debt City's Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2022 % Applicable (1) Debt 6/30/2022 Marin Community College District $ 584,795,000 17.343% 101,420,997 $ San Rafael High School District 165,382,827 79.145% 130,892,238 Tamalpais Union High School District 84,535,000 0.064% 54,102 Miller Creek School District (Formerly Dixie School District) 28,160,810 67.334% 18,961,800 Ross School District 15,965,600 1.235% 197,175
Ross Valley School District 40,714,478 0.011% 4,479
San Rafael School District 124,227,855 84.549% 105,033,409 Marin Healthcare District 365,425,000 20.766% 75,884,156 Marin Emergency Radio Authority Parcel Tax Obligations 28,020,000 17.318% 4,852,504 City of San Rafael 1915 Act Bonds 1,159,300 100.000% 1,159,300 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 438,460,160 DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Marin County Certificates of Participation $ 76,250,000 17.318% 13,204,975 $ Marin County Pension Obligation Bonds 61,840,000 17.318% 10,709,451 Marin Community College District Certification of Participation 11,913,179 17.343% 2,066,103 San Rafael School District General Fund Obligations 2,825,000 84.549% 2,388,509 City of San Rafael General Fund Obligations 52,515,384 100.000% 52,515,384 (2) City of San Rafael Pension Obligations 2,340,000 100.000% 2,340,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 83,224,422 Less: City of San Rafael obligations supported by enterprise revenues 4,017,203 TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT $ 79,207,219 OVERLAPPING TAX INCREMENT DEBT (Successor Agency) $ 100.000% 2,027,822 2,027,822 $ TOTAL GROSS DIRECT DEBT 54,855,384
TOTAL NET DIRECT DEBT 50,838,181
TOTAL OVERLAPPING DEBT 468,857,021
GROSS COMBINED TOTAL DEBT 523,712,405 (3)
NET COMBINED TOTAL DEBT 519,695,202
(2) Includes $890,554 PG&E notes.
Ratios to 2021-22 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 2.82%
Total Gross Direct Debt ($54,855,384) 0.35%
Total Net Direct Debt ($50,838,181) 0.33%
Gross Combined Total Debt 3.37%
Net Combined Total Debt 3.34%
Ratios to Redevelopment Incremental Valuation ($3,311,940,202) Total Overlapping Tax Increment Debt 0.06%
Data Source: Avenu Insights & Analytics, California Municipal Statistics, Inc. (1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease DRAFT DRAFT REVIEW DRAFT 11-7-22 166 DRAFT
ASSESSED VALUATION: $ 15,539,477,275
BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a) 582,730,398 LESS AMOUNT OF DEBT SUBJECT TO LIMIT: 50,830,876
LEGAL BONDED DEBT MARGIN $ 531,899,522
Total net debt
Total Net Debt Legal applicable to the limit
Fiscal Debt Applicable to Debt as a percentage
Year Limit Limit Margin of debt limit
2013 374,950,995 $ $ 4,659,000 $ 370,291,995 1.26%
2014 388,010,886 5,018,839 382,992,047 1.31%
2015 408,526,834 4,943,667 403,583,167 1.22%
2016 431,510,904 4,868,495 426,642,409 1.14%
2017 459,128,068 4,693,323 454,434,745 1.03%
2018 482,926,729 59,106,048 423,820,681 13.95%
2019 507,248,067 58,102,932 449,145,135 12.94%
2020 534,731,974 57,000,671 477,731,303 11.93%
2021 557,909,270 53,929,016 503,980,254 10.70%
2022 582,730,398 50,830,876 531,899,522 9.56%
NOTE: (a)
Source: City of San Rafael's Finance Department
CITY OF SAN RAFAEL
COMPUTATION OF LEGAL BONDED DEBT MARGIN
June 30, 2022
California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the change in basing assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one-fourth of that value.
DRAFT DRAFT REVIEW DRAFT 11-7-22 167 DRAFT
CITY OF SAN RAFAEL
REVENUE BOND COVERAGE
PARKING FACILITY
LAST TEN FISCAL YEARS
Debt Service Requirements
Net Revenue
Fiscal Gross Operating Available for
Year Revenue (1) Expenses (2) Debt Service Principal Interest Total Coverage 2013 $ 3,994,446 $ 3,121,964 $ 872,481 $ 310,000 240,012$ $ 550,012 1.59 2014 3,716,552 4,489,769 773,217 245,000 210,063 455,063 1.70 2015 4,031,161 5,180,554 1,149,393 245,000 205,163 450,163 2.55 2016 3,739,321 5,226,904 1,487,583 250,000 199,613 449,613 3.31 2017 2,425,281 5,279,801 2,854,520 260,000 192,038 452,038 6.31 2018 4,320,695 5,219,721 899,026 270,000 184,163 454,163 1.98 2019 5,425,883 4,283,754 1,142,130 275,000 176,025 451,025 2.53 2020 5,134,901 4,072,433 1,062,468 284,999 167,700 452,699 2.35 2021 3,355,929 3,332,327 23,602 290,000 161,288 451,288 0.05 2022 3,845,683 1,851,746 1,993,937 300,000 150,338 450,338 4.43 Notes: On March 26, 2003, the City Financing Authority issued lease revenue bonds for the design and construction of a new parking facility.
On August 12, 2012, the City Financing Authority refunded the series 2003 lease revenue bonds with series 2012 lease revenue refunding bonds to take advantage of lower interest rates. (1) Includes all Parking Facility Operating Revenues and Non-operating Interest Revenue (2) Includes all Parking Facility Operating Expenses less Depreciation and Interest Data Source: San Rafael Finance Department Revenue and Expenditure Status Reports
0.00 1.00
2.00 3.00
4.00 5.00
6.00 7.00
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Coverage
DRAFT DRAFT REVIEW DRAFT 11-7-22 168 DRAFT
I --
CITY OF SAN RAFAEL
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
Marin City Personal Per Capita Average
Calendar City County Population Income (2) Personal Unemployment Year Population (1) Population % of County (in thousands) Income (2) Rate (3) 2012 58,182 254,790 22.84% 2,438,291 $ $ 41,908 5.50%
2013 58,566 254,007 23.06% 2,538,895 43,351 4.70%
2014 58,863 255,846 23.01% 2,621,228 44,531 4.50%
2015 60,582 258,972 23.39% 2,699,436 44,558 3.70%
2016 60,842 262,274 23.20% 2,817,497 46,308 3.40%
2017 60,651 263,604 23.01% 2,943,227 48,374 3.30%
2018 60,046 263,886 22.75% 3,152,985 52,509 2.30%
2019 59,807 262,879 22.75% 3,156,708 52,781 2.20%
2020 59,016 257,774 22.89% 3,301,286 55,938 6.70%
2021 60,560 257,135 23.55% 3,390,278 55,982 4.40%
Source: (1) State of California, Department of Finance - Demographic Research Unit. The data represents the City's population as of January 1, of each year.
(2) US Census Bureau, most recent American Community Survey (3) Unemployment Data: California Employment Development Department 0%
5%
10%
15%
20%
25%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
City Population as a % of County
Population
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Total Personal Income (in thousands)
$‐
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Per Capita Personal Income
0%
1%
2%
3%
4%
5%
6%
7%
8%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Average Citywide Unemployment Rate
DRAFT DRAFT REVIEW DRAFT 11-7-22 169 DRAFT
CITY OF SAN RAFAEL
PRINCIPAL EMPLOYERS
FISCAL YEAR 2021-2022
LAST TEN CALENDAR YEARS
Employer # (A) # (A) # (A) # (A)
Kaiser Permanente 2,339 1.82% 2,059 1.64% 2,014 6.22% 2,092 6.62% BioMarin Pharmaceutical Inc. 950 0.74% 950 0.76% 950 2.93% San Rafael Elementary/High Schools Dist(s) 700 0.55% 700 0.56% 700 2.16% 700 2.22% City of San Rafael 412 0.32% 405 0.32% 410 1.27% 410 1.30% Dominican University of California 394 0.31% 394 0.31% 421 1.30% 319 1.01% Buckelew Programs 0.00% 0.00% 103 0.32% 106 0.34%
Lifehouse 0.00% 0.00% 100 0.31%
EO Products 0.00% 108 0.09% 150 0.46%
Toyota Marin 0.00% 0.00% 141 0.44%
Ghilotti Bros., Inc. 298 0.23% 298 0.24%
Community Action Marin 200 0.16% 270 0.21%
Equator Coffees, LLC 95 0.07% 88 0.07%
Totals 5,388 4.20% 5,272 4.20% 4,989 15.40% 4,508 14.27% # Number of FTE employees in Marin locations
(A) Percentage of total employment
2021 2020
Note: From the EDD website, it shows that the Total 2020 Employment in the City of San Rafael was 125,600 of which it is used as the denominator for the 2020 percentages are calculated.
Data Sources: State of California, Employment Development Department, Labor Market Information Division & North Bay Business Journal (Annual Book of Lists)
2019 2018
DRAFT DRAFT REVIEW DRAFT 11-7-22 170 DRAFT
# (A) # (A) # (A) # (A) # (A) # (A)
2,061 6.52% 662 2.02% 1,575 4.82% 1,637 5.26% 1,756 5.74% 1,803 6.68% 700 2.22% 650 1.98% 650 1.99% 600 1.93% 600 1.96% 600 2.22% 454 1.44% 577 1.76% 581 1.78% 666 2.14% 643 2.10% 521 1.93% 456 1.44% 485 1.48% 422 1.29% 354 1.14% 347 1.13% 346 1.28% 240 0.76% 186 0.57%
5,650 17.88% 5,314 16.20% 5,620 17.19% 6,025 19.37% 6,079 19.87% 6,715 24.87% 2017 2016 2015 2014 2013 2012
DRAFT DRAFT REVIEW DRAFT 11-7-22 171 DRAFT
DRAFT DRAFT REVIEW DRAFT 11-7-22 DRAFT
CITY OF SAN RAFAEL
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Function
General Government 53.23 55.11 58.11 60.61 62.11 60.11 63.11 62.11 61.41 63.69 Public Safety 163.00 168.00 171.75 175.75 176.55 175.35 175.65 175.30 181.50 185.00 Public Works and Parks 60.00 61.00 62.00 62.00 63.00 66.67 66.00 68.00 69.00 70.00 Community Development 18.25 17.80 17.80 19.80 20.00 21.00 22.00 21.75 21.75 23.00 Culture and Recreation 80.76 83.66 84.23 84.25 84.35 87.35 85.82 78.07 78.07 78.07 Total 375.24 385.57 393.89 402.41 406.01 410.48 412.58 405.23 411.73 419.76 Data Source: City of San Rafael's Finance Department
0 50
100
150
200
250
300
350
400
450
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
FTE's General Government Public Safety Public Works and Parks Community Development Culture and Recreation DRAFT DRAFT REVIEW DRAFT 11-7-22 173 DRAFT
D ■ ■ ■ ■
CITY OF SAN RAFAEL
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
2013 2014 2015 2016
Function/Program
Public safety:
Fire:
Inspection permit issued 307 261 282 198
Police:
Police calls for service 42,707 51,261 55,805 57,026
Law violations:
Part I crimes 2,523 2,289 2,533 2,523
Physical arrests (adult and juvenile) 2,951 3,227 3,450 3,453 Traffic violations 3,448 4,498 4,168 3,252
Parking violations 30,881 38,814 36,398 34,803
Public works
Street resurfacing (miles) (Eng Div) 2.70 9.00 6.40 6.76 Potholes repaired N/A N/A N/A N/A
Asphalt used for street repairs (tons) 7,500 10,700 11,000 7,195 Culture and recreation:
Recreation class participants 7,082 9,857 10,023 12,725 Recreation Facility Rentals
Childcare School-Age program participants
Library:
Items in collection 125,920 168,620 127,763 227,890
Total items borrowed 392,230 478,960 443,639 469,790
Note: N/A denotes information not available.
DRAFT DRAFT REVIEW DRAFT 11-7-22 174 DRAFT
2017 2018 2019 2020 2021 2022
233 186 123 167 207 195
53,567 51,013 47,919 47,968 43,649 42,901
2,392 2,326 1,893 2,988 2,546 2,015
2,526 2,019 1,923 2,527 1,893 1,945
3,341 2,758 2,944 2,342 2,161 1,710
36,169 36,208 40,407 28,029 24,099 30,178
2.32 2.50 4.30 14.30 5.00 11.70
N/A N/A N/A 967 1,368 1,024
5,800 4,730 7,200 5,885 3,650 5,100
13,493 12,842 N/A N/A N/A N/A
5,146 3,875 1,550 1,962
7,592 6,270 2,132 3,675
117,354 115,812 123,432 140,610 103,399 95,687
327,297 324,452 356,301 199,903 113,385 169,378
DRAFT DRAFT REVIEW DRAFT 11-7-22 175 DRAFT
CITY OF SAN RAFAEL
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
2013 2014 2015 2016
Function/Program
Public safety:
Fire stations 6666
Police stations 1111
Police Fleet
Public works
Miles of streets 173 173 173 173
Street lights 4,435 4,435 4,435 4,435
Parking District lights
Traffic Signals 89 89 89 89
Culture and recreation:
Community services:
City parks 20 20 20 20
City parks acreage 42 42 42 42
Playgrounds 14 14 14 14
City trails 20 20 20 20
Community gardens 1111
Cultural Art Centers
Community centers 4444
Senior centers 0000
Sports centers 0000
Performing arts centers 0000
Swimming pools 1111
Tennis courts 10 10 10 10
Basketball Courts 5555
Baseball/softball diamonds 5555
Soccer/football fields 2222
Library:
City Libraries 2222
Wastewater:
Miles of sanitary sewers 179 145 145 145
Data Source: City of San Rafael's Finance Department
DRAFT DRAFT REVIEW DRAFT 11-7-22 176 DRAFT
2017 2018 2019 2020 2021 2022
66666 6
11111 1
173 173 173 173 173 173
4,435 4,435 4,435 4,435 4,435 4,448
89 89 89 90 90 90
20 20 20 24 24 24
42 42 42 99 99 99
14 14 14 14 14 14
20 20 20 20 20 20
11122 2
11 1
44433 3
00000 0
00000 0
00000 0
11111 1
10 10 10 10 10 10
55566 6
55555 5
22222 2
22222 2
145 145 145 145 145 145
DRAFT DRAFT REVIEW DRAFT 11-7-22 177 DRAFT
DRAFT DRAFT REVIEW DRAFT 11-7-22 DRAFT
INDEPENDENT ACCOUNTANT’S REPORT ON
APPLYING AGREED UPON PROCEDURES FOR
COMPLIANCE WITH THE PROPOSITION 111
2022-2023 APPROPRIATIONS LIMIT INCREMENT
Honorable Mayor and Members of the City Council
City of San Rafael, California
We have performed the procedures enumerated below on the Appropriations Limit Worksheet (Worksheet) of the City of San Rafael, California, for the year ended June 30, 2023. The City’s management is responsible for the Worksheet.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of these procedures, which were suggested by the League of California Cities and presented in their Article XIIIB Appropriations Limitation Uniform Guidelines, were performed solely to assist you in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and associated findings are as follows:
A. We obtained the Worksheet (Exhibit B to the Resolution) and determined that the 2022-2023 Appropriations Limit of $170,762,486 and annual adjustment factors were adopted by Resolution of the City Council. We also determined that the population and inflation options were selected by a recorded vote of the City Council. However, the Resolution indicated that the percent change in California’s per capita personal income was selected, but the Worksheet shows that the larger adjustment factor of the change in assessment roll for nonresidential construction of Marin County was used for the calculation of the 2022-2023 Appropriations Limit.
B. We recomputed the 2022-2023 Appropriations Limit by multiplying the 2021-2022 Prior Year Appropriations Limit by the Total Growth Factor. We recomputed the Total Growth Factor by multiplying the population option by the inflation option.
C. For the Worksheet, we agreed the Per Capita Income Factor, City Population Factor and County Population Factor to California State Department of Finance Worksheets, and the Change in Assessment Roll for Nonresidential Construction Factor to the Marin County Worksheet.
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Worksheet.
Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
DRAFT DRAFT REVIEW DRAFT 11-01-22 DRAFT
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
T 925.930.0902
F 925.930.0135
E [email protected]
w mazeassociates.com
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information and use of management and the City Council and is not intended to be and should not be used by anyone other than those specified parties; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record.
Pleasant Hill, California
November 21, 2022
DRAFT DRAFT REVIEW DRAFT 11-01-22 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
FOR THE YEAR ENDED JUNE 30, 2022
DRAFT DRAFT REVIEW DRAFT 11-08-22 DRAFT
This Page Left Intentionally Blank
DRAFT DRAFT REVIEW DRAFT 11-08-22 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
For the Year Ended June 30, 2022
Table of Contents
Page
Memorandum on Internal Control ................................................................................................... 1 Schedule of Significant Deficiency ......................................................................................... 3
Schedule of Other Matters ....................................................................................................... 5 Status of Prior Year Significant Deficiencies ........................................................................ 19
DRAFT DRAFT REVIEW DRAFT 11-08-22 DRAFT
This Page Left Intentionally Blank
DRAFT DRAFT REVIEW DRAFT 11-08-22 DRAFT
MEMORANDUM ON INTERNAL CONTROL
To the City Council of
the City of San Rafael, California
In planning and performing our audit of the basic financial statements of the City of San Rafael (City) as of and for the year ended June 30, 2022, 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 circumstances 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 City’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 deficiencies and therefore material weaknesses or significant deficiencies may exist that were not identified. In addition, because of inherent limitations in internal control, including the possibility of management override of controls, misstatements due to error or fraud may occur and not be detected by such controls. However, as discussed below, we identified certain deficiencies in internal control that we consider to be significant deficiencies.
A deficiency in internal control 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 City’s financial statements will not be prevented, or detected and corrected on a timely basis. We did not identify any deficiencies in internal control that we consider to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiency in internal control included on the Schedule of Significant Deficiency to be a significant deficiency.
Included in the Schedule of Other Matters are recommendations not meeting the above definitions that we believe are opportunities for strengthening internal controls and operating efficiency.
Government Auditing Standards require the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying Schedule of Significant Deficiency and Schedule of Other Matters. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
DRAFT DRAFT
REVIEW DRAFT 11-08-22 DRAFT
1 Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
T 925.930.0902
F 925.930.0135
E [email protected]
w mazeassociates.com
This communication is intended solely for the information and use of management, City Council, others within the organization, and agencies and pass-through entities requiring compliance with Government Auditing Standards, and is not intended to be and should not be used by anyone other than these specified parties.
Pleasant Hill, California
November 21, 2022
DRAFT DRAFT REVIEW DRAFT 11-08-22 2 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF SIGNIFICANT DEFICIENCY
2022-01 Inaccurate Building Permit Fees
The rates charged in the City’s permit billing system should be consistent with the City’s Master Fee Schedule approved by City Council and on the City’s website.
As noted in the prior year Memorandum on Internal Control comment 2021-01, we again noted that the rates charged in the City’s permit billing system are not consistent with the City’s Master Fee Schedule approved by City Council.
During the fiscal year 2022 audit, we tested twenty-five receipts and recalculated the fees using the City’s Master Fee Schedule and noted five receipts for building permits that we recalculated, but could not arrive at the same amount charged. Based on our recalculations using the City’s Master Fee Schedule, the building permit fees that should have been charged, and the related amount undercharged were as follows:
Receipt Number
Building Permit Fee
Charged
Building Permit Fee That
Should Have Been
Charged Based on
Master Fee Schedule Undercharged
003-00001681 $3,997.00 $4,820.20 $(823.20)
017-00000203 2,317.00 3,140.20 (823.20)
017-00001783 1,210.00 1,714.00 (504.00)
003-00003680 918.10 1,251.64 (333.54)
003-00004064 947.50 1,285.60 (338.10)
We understand that the Community Development Department (CDD) staff determined that the Master Fee Schedule approved by City Council and posted on the City’s website included incorrect building permit fees and CDD staff believed that the correct fees had been charged.
We also noted one receipt for an investigation fee (receipt # 003-00003019) and one receipt for a building permit renewal fee (receipt # 017-00001262) that were not listed on the revised Master Fee Schedule, nor supported by an ordinance or resolution. The CDD staff indicated that the Master Fee Schedule is being updated to incorporate these fees that were charged.
Although City staff believe that the correct fees were charged for the building permits, investigation fee and building permit renewal fees, we were unable to verify that the correct fees were charged based on the Master Fee Schedule approved by City Council. Therefore, the City’s building permit fees, investigation fees, fire prevention inspection fees and building permit renewal fees revenues may be understated.
We understand that the City plans to present an updated Master Fee Schedule to Council to ensure that accurate charges are approved and presented on the City’s website. We recommend that the City develop a process to ensure that the fees approved by City Council are properly entered into the City’s permit billing system to ensure proper fees are charged. In addition, we recommend that the City ensure that the Master Fee Schedule on the City’s website agrees to the Master Fee Schedule approved by City Council.
DRAFT DRAFT REVIEW DRAFT 11-08-22 3 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF SIGNIFICANT DEFICIENCY
2022-01 Inaccurate Building Permit Fees (Continued)
Management’s Response:
The City has been in process of resolving the issue and is currently undergoing a large-scale revision to the master fee schedule which will be presented to council with the December 19, 2022, meeting. Going forward, when a fee change is approved by Council, Finance will be responsible for ensuring the approved fee change has been uploaded to the website, the changes have been entered into the billing system properly and the fee change is implemented on the effective date approved by Council. To formalize this, Finance will create a checklist and will require sign-off as each item is reviewed.
DRAFT DRAFT REVIEW DRAFT 11-08-22 4 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
2022-02 Purchasing Policy Compliance and Clarification of Requirements The City’s Purchasing Policy should indicate when the use of a purchase order, contract, or both is required, including any exceptions, as necessary. The City’s Purchasing Policy defines a contract as including, but not being “limited to, a purchase order, a contract for services, a contract for maintenance, leasing of property or equipment, an addendum or change order, a letter agreement, a memorandum of understanding, or memorandum of agreement.” The Purchasing Policy defines a purchase order as “a standardized form to be utilized in contracts for materials, supplies, labor and equipment.” The Purchasing Policy does not specify whether a purchase order and a contract are required for all purchases, but we understand it is the City’s practice to obtain both documents for purchases.
During the fiscal year 2022 audit, we selected twenty-five disbursements for testing of supporting documentation and compliance with the City’s Purchasing Policy and noted two disbursements for which the disbursements were supported by a contract, however, they were not supported by a purchase order.
We also noted one disbursement that was supported by a purchase order, but not a contract. For similar types of transactions tested, we noted that these types of disbursements were supported by both a purchase order and a contract.
For one of the disbursements noted above, City staff indicated that the staff overseeing the initial project and contract is no longer with the City and that a purchase order was not created for the vendor and contract for the project due to a staff oversight. And, for the second disbursement noted above, City staff indicated that they did not think it was necessary for a purchase order to be created as the vendor is used for on-call repair sidewalk repair services. Lastly, for the third disbursement noted above, City staff indicated that the purchase order was created without a contract, due to a staff oversight. Although that appears reasonable, there does not appear to be such an exemption in the City’s Purchasing Policy for the use of a contract, purchase order or both. Therefore, the City is not in compliance with the Purchasing Policy for these purchases.
We recommend that the City ensure all purchases comply with purchase documentation requirements and revise the Purchasing Policy to clarify those requirements to reflect current practices.
Management’s Response:
The City’s expanded use of purchase orders is relatively new to purchasing procedures within the City and, as the City remains decentralized in administration of contracts and purchase orders, departmental practices for use of purchase orders varies. The City will review its purchasing policy and make and necessary amendments to develop a comprehensive purchasing policy to be adhered to by all departments consistently.
DRAFT DRAFT REVIEW DRAFT 11-08-22 5 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
2022-03 Current Contracts
The City should ensure that all contracts with outside parties are current.
During the fiscal year 2022 audit, we selected twenty-five disbursements for testing of supporting documentation and noted one disbursement in the amount of $97,615 made to the Transportation Authority of Marin, for which the most recent contract in place expired on January 1, 2011.
We understand that the City is currently working on a revised contract with the Transportation Authority of Marin, however, the City should develop procedures to ensure that all contracts are current to ensure that payments to outside parties are valid and properly supported.
Management’s Response:
The City considers the selected payment to be an anomaly, however, will perform a review of contracts with local agencies to ensure the validity of the agreement. The updated agreement in question is currently in process.
DRAFT DRAFT REVIEW DRAFT 11-08-22 6 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
NEW GASB PRONOUNCEMENTS OR PRONOUNCEMENTS NOT YET EFFECTIVE The following comment represents new pronouncements taking affect in the next few years. We have cited them here to keep you informed of developments.
EFFECTIVE FISCAL YEARS 2022, 2023 and 2024:
GASB 99 – Omnibus 2022
The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The practice issues addressed by this Statement are as follows:
Classification and reporting of derivative instruments within the scope of Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, that do not meet the definition of either an investment derivative instrument or a hedging derivative instrument Clarification of provisions in Statement No. 87, Leases, as amended, related to the determination of the lease term, classification of a lease as a short term lease, recognition and measurement of a lease liability and a lease asset, and identification of lease incentives Clarification of provisions in Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, related to (a) the determination of the public-private and public-public partnership (PPP) term and (b) recognition and measurement of installment payments and the transfer of the underlying PPP asset
Clarification of provisions in Statement No. 96, Subscription-Based Information Technology Arrangements, related to the subscription-based information technology arrangement (SBITA) term, classification of a SBITA as a short term SBITA, and recognition and measurement of a subscription liability
Extension of the period during which the London Interbank Offered Rate (LIBOR) is considered an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate swap that hedges the interest rate risk of taxable debt Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program (SNAP)
Disclosures related to nonmonetary transactions
Pledges of future revenues when resources are not received by the pledging government
DRAFT DRAFT REVIEW DRAFT 11-08-22 7 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 99 – Omnibus 2022 (Continued)
Clarification of provisions in Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, as amended, related to the focus of the government-wide financial statements
Terminology updates related to certain provisions of Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position Terminology used in Statement 53 to refer to resource flows statements.
The Requirements of this Statement are Effective as Follows:
The requirements in paragraphs 26–32 related to extension of the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance.
The requirements in paragraphs 11–25 related to leases, PPPs, and SBITAs are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter.
The requirements in paragraphs 4–10 related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023, and all reporting periods thereafter.
Earlier application is encouraged and is permitted by individual topic.
How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will enhance comparability in the application of accounting and financial reporting requirements and will improve the consistency of authoritative literature. Consistent authoritative literature enables governments and other stakeholders to more easily locate and apply the correct accounting and financial reporting provisions, which improves the consistency with which such provisions are applied. The comparability of financial statements also will improve as a result of this Statement. Better consistency and comparability improve the usefulness of information for users of state and local government financial statements.
DRAFT DRAFT REVIEW DRAFT 11-08-22 8 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
EFFECTIVE FISCAL YEAR 2022/23:
GASB 91 – Conduit Debt Obligations
The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures.
A conduit debt obligation is defined as a debt instrument having all of the following characteristics:
There are at least three parties involved:
(1) an issuer
(2) a third-party obligor, and
(3) a debt holder or a debt trustee.
The issuer and the third-party obligor are not within the same financial reporting entity. The debt obligation is not a parity bond of the issuer, nor is it cross-collateralized with other debt of the issuer.
The third-party obligor or its agent, not the issuer, ultimately receives the proceeds from the debt issuance.
The third-party obligor, not the issuer, is primarily obligated for the payment of all amounts associated with the debt obligation (debt service payments).
All conduit debt obligations involve the issuer making a limited commitment. Some issuers extend additional commitments or voluntary commitments to support debt service in the event the third party is, or will be, unable to do so.
An issuer should not recognize a conduit debt obligation as a liability. However, an issuer should recognize a liability associated with an additional commitment or a voluntary commitment to support debt service if certain recognition criteria are met. As long as a conduit debt obligation is outstanding, an issuer that has made an additional commitment should evaluate at least annually whether those criteria are met. An issuer that has made only a limited commitment should evaluate whether those criteria are met when an event occurs that causes the issuer to reevaluate its willingness or ability to support the obligor’s debt service through a voluntary commitment.
This Statement also addresses arrangements—often characterized as leases—that are associated with conduit debt obligations. In those arrangements, capital assets are constructed or acquired with the proceeds of a conduit debt obligation and used by third-party obligors in the course of their activities.
Payments from third-party obligors are intended to cover and coincide with debt service payments.
During those arrangements, issuers retain the titles to the capital assets. Those titles may or may not pass to the obligors at the end of the arrangements.
DRAFT DRAFT REVIEW DRAFT 11-08-22 9 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 91 – Conduit Debt Obligations (Continued)
Issuers should not report those arrangements as leases, nor should they recognize a liability for the related conduit debt obligations or a receivable for the payments related to those arrangements. In addition, the following provisions apply:
If the title passes to the third-party obligor at the end of the arrangement, an issuer should not recognize a capital asset.
If the title does not pass to the third-party obligor and the third party has exclusive use of the entire capital asset during the arrangement, the issuer should not recognize a capital asset until the arrangement ends.
If the title does not pass to the third-party obligor and the third party has exclusive use of only portions of the capital asset during the arrangement, the issuer, at the inception of the arrangement, should recognize the entire capital asset and a deferred inflow of resources. The deferred inflow of resources should be reduced, and an inflow recognized, in a systematic and rational manner over the term of the arrangement.
This Statement requires issuers to disclose general information about their conduit debt obligations, organized by type of commitment, including the aggregate outstanding principal amount of the issuers’ conduit debt obligations and a description of each type of commitment. Issuers that recognize liabilities related to supporting the debt service of conduit debt obligations also should disclose information about the amount recognized and how the liabilities changed during the reporting period.
How the Changes in this Statement will Improve Financial Reporting The requirements of this Statement will improve financial reporting by eliminating the existing option for issuers to report conduit debt obligations as their own liabilities, thereby ending significant diversity in practice. The clarified definition will resolve stakeholders’ uncertainty as to whether a given financing is, in fact, a conduit debt obligation. Requiring issuers to recognize liabilities associated with additional commitments extended by issuers and to recognize assets and deferred inflows of resources related to certain arrangements associated with conduit debt obligations also will eliminate diversity, thereby improving comparability in reporting by issuers. Revised disclosure requirements will provide financial statement users with better information regarding the commitments issuers extend and the likelihood that they will fulfill those commitments. That information will inform users of the potential impact of such commitments on the financial resources of issuers and help users assess issuers’ roles in conduit debt obligations.
DRAFT DRAFT REVIEW DRAFT 11-08-22 10 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 94 – Public-Private and Public-Public Partnerships and Availability Payment Arrangements The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. Some PPPs meet the definition of a service concession arrangement (SCA), which the Board defines in this Statement as a PPP in which (1) the operator collects and is compensated by fees from third parties; (2) the transferor determines or has the ability to modify or approve which services the operator is required to provide, to whom the operator is required to provide the services, and the prices or rates that can be charged for the services; and (3) the transferor is entitled to significant residual interest in the service utility of the underlying PPP asset at the end of the arrangement.
This Statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). As defined in this Statement, an APA is an arrangement in which a government compensates an operator for services that may include designing, constructing, financing, maintaining, or operating an underlying nonfinancial asset for a period of time in an exchange or exchange-like transaction.
PPPs - This Statement requires that PPPs that meet the definition of a lease apply the guidance in Statement No. 87, Leases, as amended, if existing assets of the transferor that are not required to be improved by the operator as part of the PPP arrangement are the only underlying PPP assets and the PPP does not meet the definition of an SCA. This Statement provides accounting and financial reporting requirements for all other PPPs: those that either (1) meet the definition of an SCA or (2) are not within the scope of Statement 87, as amended (as clarified by this Statement). The PPP term is defined as the period during which an operator has a noncancellable right to use an underlying PPP asset, plus, if applicable, certain periods if it is reasonably certain, based on all relevant factors, that the transferor or the operator either will exercise an option to extend the PPP or will not exercise an option to terminate the PPP.
A transferor generally should recognize an underlying PPP asset as an asset in financial statements prepared using the economic resources measurement focus. However, in the case of an underlying PPP asset that is not owned by the transferor or is not the underlying asset of an SCA, a transferor should recognize a receivable measured based on the operator’s estimated carrying value of the underlying PPP asset as of the expected date of the transfer in ownership. In addition, a transferor should recognize a receivable for installment payments, if any, to be received from the operator in relation to the PPP.
Measurement of a receivable for installment payments should be at the present value of the payments expected to be received during the PPP term. A transferor also should recognize a deferred inflow of resources for the consideration received or to be received by the transferor as part of the PPP. Revenue should be recognized by a transferor in a systematic and rational manner over the PPP term.
This Statement requires a transferor to recognize a receivable for installment payments and a deferred inflow of resources to account for a PPP in financial statements prepared using the current financial resources measurement focus. Governmental fund revenue would be recognized in a systematic and rational manner over the PPP term.
DRAFT DRAFT REVIEW DRAFT 11-08-22 11 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 94 – Public-Private and Public-Public Partnerships and Availability Payment Arrangements (Continued)
This Statement also provides specific guidance in financial statements prepared using the economic resources measurement focus for a government that is an operator in a PPP that either (1) meets the definition of an SCA or (2) is not within the scope of Statement 87, as amended (as clarified in this Statement). An operator should report an intangible right-to-use asset related to an underlying PPP asset that either is owned by the transferor or is the underlying asset of an SCA. Measurement of the right-touse asset should be the amount of consideration to be provided to the transferor, plus any payments made to the transferor at or before the commencement of the PPP term, and certain direct costs. For an underlying PPP asset that is not owned by the transferor and is not the underlying asset of an SCA, an operator should recognize a liability measured based on the estimated carrying value of the underlying PPP asset as of the expected date of the transfer in ownership. In addition, an operator should recognize a liability for installment payments, if any, to be made to the transferor in relation to the PPP. Measurement of a liability for installment payments should be at the present value of the payments expected to be made during the PPP term. An operator also should recognize a deferred outflow of resources for the consideration provided or to be provided to the transferor as part of the PPP. Expense should be recognized by an operator in a systematic and rational manner over the PPP term.
This Statement also requires a government to account for PPP and non-PPP components of a PPP as separate contracts. If a PPP involves multiple underlying assets, a transferor and an operator in certain cases should account for each underlying PPP asset as a separate PPP. To allocate the contract price to different components, a transferor and an operator should use contract prices for individual components as long as they do not appear to be unreasonable based on professional judgment or use professional judgment to determine their best estimate if there are no stated prices or if stated prices appear to be unreasonable. If determining the best estimate is not practicable, multiple components in a PPP should be accounted for as a single PPP.
This Statement also requires an amendment to a PPP to be considered a PPP modification, unless the operator’s right to use the underlying PPP asset decreases, in which case it should be considered a partial or full PPP termination. A PPP termination should be accounted for by a transferor by reducing, as applicable, any receivable for installment payments or any receivable related to the transfer of ownership of the underlying PPP asset and by reducing the related deferred inflow of resources. An operator should account for a termination by reducing the carrying value of the right-to-use asset and, as applicable, any liability for installment payments or liability to transfer ownership of the underlying PPP asset. A PPP modification that does not qualify as a separate PPP should be accounted for by remeasuring PPP assets and liabilities.
APAs - An APA that is related to designing, constructing, and financing a nonfinancial asset in which ownership of the asset transfers by the end of the contract should be accounted for by a government as a financed purchase of the underlying nonfinancial asset. This Statement requires a government that engaged in an APA that contains multiple components to recognize each component as a separate arrangement. An APA that is related to operating or maintaining a nonfinancial asset should be reported by a government as an outflow of resources in the period to which payments relate.
DRAFT DRAFT REVIEW DRAFT 11-08-22 12 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 96 – Subscription-Based Information Technology Arrangements This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended.
A SBITA is defined as a contract that conveys control of the right to use another party’s (a SBITA vendor’s) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction.
The subscription term includes the period during which a government has a noncancelable right to use the underlying IT assets. The subscription term also includes periods covered by an option to extend (if it is reasonably certain that the government or SBITA vendor will exercise that option) or to terminate (if it is reasonably certain that the government or SBITA vendor will not exercise that option).
Under this Statement, a government generally should recognize a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability. A government should recognize the subscription liability at the commencement of the subscription term, —which is when the subscription asset is placed into service. The subscription liability should be initially measured at the present value of subscription payments expected to be made during the subscription term. Future subscription payments should be discounted using the interest rate the SBITA vendor charges the government, which may be implicit, or the government’s incremental borrowing rate if the interest rate is not readily determinable. A government should recognize amortization of the discount on the subscription liability as an outflow of resources (for example, interest expense) in subsequent financial reporting periods.
The subscription asset should be initially measured as the sum of (1) the initial subscription liability amount, (2) payments made to the SBITA vendor before commencement of the subscription term, and (3) capitalizable implementation costs, less any incentives received from the SBITA vendor at or before the commencement of the subscription term. A government should recognize amortization of the subscription asset as an outflow of resources over the subscription term.
Activities associated with a SBITA, other than making subscription payments, should be grouped into the following three stages, and their costs should be accounted for accordingly:
Preliminary Project Stage, including activities such as evaluating alternatives, determining needed technology, and selecting a SBITA vendor. Outlays in this stage should be expensed as incurred. Initial Implementation Stage, including all ancillary charges necessary to place the subscription asset into service. Outlays in this stage generally should be capitalized as an addition to the subscription asset.
DRAFT DRAFT REVIEW DRAFT 11-08-22 13 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 96 – Subscription-Based Information Technology Arrangements (Continued) Operation and Additional Implementation Stage, including activities such as subsequent implementation activities, maintenance, and other activities for a government’s ongoing operations related to a SBITA. Outlays in this stage should be expensed as incurred unless they meet specific capitalization criteria.
In classifying certain outlays into the appropriate stage, the nature of the activity should be the determining factor. Training costs should be expensed as incurred, regardless of the stage in which they are incurred.
If a SBITA contract contains multiple components, a government should account for each component as a separate SBITA or nonsubscription component and allocate the contract price to the different components. If it is not practicable to determine a best estimate for price allocation for some or all components in the contract, a government should account for those components as a single SBITA.
This Statement provides an exception for short-term SBITAs. Short-term SBITAs have a maximum possible term under the SBITA contract of 12 months (or less), including any options to extend, regardless of their probability of being exercised. Subscription payments for short-term SBITAs should be recognized as outflows of resources.
This Statement requires a government to disclose descriptive information about its SBITAs other than short-term SBITAs, such as the amount of the subscription asset, accumulated amortization, other payments not included in the measurement of a subscription liability, principal and interest requirements for the subscription liability, and other essential information.
How the Changes in this Statement will Improve Financial Reporting The requirements of this Statement will improve financial reporting by establishing a definition for SBITAs and providing uniform guidance for accounting and financial reporting for transactions that meet that definition. That definition and uniform guidance will result in greater consistency in practice.
Establishing the capitalization criteria for implementation costs also will reduce diversity and improve comparability in financial reporting by governments. This Statement also will enhance the relevance and reliability of a government’s financial statements by requiring a government to report a subscription asset and subscription liability for a SBITA and to disclose essential information about the arrangement. The disclosures will allow users to understand the scale and important aspects of a government’s SBITA activities and evaluate a government’s obligations and assets resulting from SBITAs.
DRAFT DRAFT REVIEW DRAFT 11-08-22 14 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
EFFECTIVE FISCAL YEAR 2023/24:
GASB 100 – Accounting for Changes and Error Corrections The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability This Statement defines accounting changes as changes in accounting principles, changes in accounting estimates, and changes to or within the financial reporting entity and describes the transactions or other events that constitute those changes. As part of those descriptions, for (1) certain changes in accounting principles and (2) certain changes in accounting estimates that result from a change in measurement methodology, a new principle or methodology should be justified on the basis that it is preferable to the principle or methodology used before the change. That preferability should be based on the qualitative characteristics of financial reporting—understandability, reliability, relevance, timeliness, consistency, and comparability. This Statement also addresses corrections of errors in previously issued financial statements.
This Statement prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections. This Statement requires that (a) changes in accounting principles and error corrections be reported retroactively by restating prior periods, (b) changes to or within the financial reporting entity be reported by adjusting beginning balances of the current period, and (c) changes in accounting estimates be reported prospectively by recognizing the change in the current period. The requirements of this Statement for changes in accounting principles apply to the implementation of a new pronouncement in absence of specific transition provisions in the new pronouncement. This Statement also requires that the aggregate amount of adjustments to and restatements of beginning net position, fund balance, or fund net position, as applicable, be displayed by reporting unit in the financial statements.
This Statement requires disclosure in notes to financial statements of descriptive information about accounting changes and error corrections, such as their nature. In addition, information about the quantitative effects on beginning balances of each accounting change and error correction should be disclosed by reporting unit in a tabular format to reconcile beginning balances as previously reported to beginning balances as restated.
Furthermore, this Statement addresses how information that is affected by a change in accounting principle or error correction should be presented in required supplementary information (RSI) and supplementary information (SI). For periods that are earlier than those included in the basic financial statements, information presented in RSI or SI should be restated for error corrections, if practicable, but not for changes in accounting principles.
DRAFT DRAFT REVIEW DRAFT 11-08-22 15 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
EFFECTIVE FISCAL YEAR 2024/25:
GASB 101 – Compensated Absences
The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures.
Recognition And Measurement
This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. Leave is attributable to services already rendered when an employee has performed the services required to earn the leave. Leave that accumulates is carried forward from the reporting period in which it is earned to a future reporting period during which it may be used for time off or otherwise paid or settled. In estimating the leave that is more likely than not to be used or otherwise paid or settled, a government should consider relevant factors such as employment policies related to compensated absences and historical information about the use or payment of compensated absences. However, leave that is more likely than not to be settled through conversion to defined benefit postemployment benefits should not be included in a liability for compensated absences.
This Statement requires that a liability for certain types of compensated absences—including parental leave, military leave, and jury duty leave—not be recognized until the leave commences. This Statement also requires that a liability for specific types of compensated absences not be recognized until the leave is used.
This Statement also establishes guidance for measuring a liability for leave that has not been used, generally using an employee’s pay rate as of the date of the financial statements. A liability for leave that has been used but not yet paid or settled should be measured at the amount of the cash payment or noncash settlement to be made. Certain salary-related payments that are directly and incrementally associated with payments for leave also should be included in the measurement of the liabilities.
With respect to financial statements prepared using the current financial resources measurement focus, this Statement requires that expenditures be recognized for the amount that normally would be liquidated with expendable available financial resources.
Notes To Financial Statements
This Statement amends the existing requirement to disclose the gross increases and decreases in a liability for compensated absences to allow governments to disclose only the net change in the liability (as long as they identify it as a net change). In addition, governments are no longer required to disclose which governmental funds typically have been used to liquidate the liability for compensated absences.
DRAFT DRAFT REVIEW DRAFT 11-08-22 16 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 101 – Compensated Absences (Continued)
How the Changes in this Statement Will Improve Financial Reporting The unified recognition and measurement model in this Statement will result in a liability for compensated absences that more appropriately reflects when a government incurs an obligation. In addition, the model can be applied consistently to any type of compensated absence and will eliminate potential comparability issues between governments that offer different types of leave.
The model also will result in a more robust estimate of the amount of compensated absences that a government will pay or settle, which will enhance the relevance and reliability of information about the liability for compensated absences.
DRAFT DRAFT REVIEW DRAFT 11-08-22 17 DRAFT
This Page Left Intentionally Blank
DRAFT DRAFT REVIEW DRAFT 11-08-22 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
STATUS OF PRIOR YEAR SIGNIFICANT DEFICIENCIES
2021-01 Inaccurate Building Permit Fees
The rates charged in the City’s permit billing system should be consistent with the City’s Master Fee Schedule approved by City Council and on the City’s website.
We tested twenty-five receipts and recalculated the fees using the City’s Master Fee Schedule and we noted one receipt for a building permit in the amount of $78,946 that we recalculated, but could not arrive at the same amount. Based on our recalculation using the City’s Master Fee Schedule, the building permit fee that should have been charged was $83,137.
The Community Development Department (CDD) staff determined that the Master Fee Schedule approved by City Council and posted on the City’s website included incorrect building permit fees and CDD staff believed that the correct fees had been charged, resulting in the fee of $78,946.
Although City staff believe that the correct fees were charged, we were unable to verify that the correct fees were charged based on the Master Fee Schedule approved by City Council. Therefore, the City’s building permit fees may be understated due to the use of a lower fee schedule.
We understand that the City plans to present an updated Master Fee Schedule to Council to ensure that accurate charges are approved and presented on the City website. We recommend that the City develop a process to ensure that the fees approved by City Council are properly entered into the City’s permit billing system to ensure proper fees are charged. In addition, we recommend that the City ensure that the Master Fee Schedule on the City’s website agree to the Master Fee Schedule approved by City Council.
Current Status:
See current year comment 2022-01.
2021-02 Schedule of Expenditures of Federal Awards (SEFA) Preparation The City should report all Federal awards expended in the Schedule of Expenditures of Federal Awards (SEFA) each fiscal year in accordance with the requirements of OMB Uniform Administrative Requirements Subpart D Section 200.302(b)(1).
During our testing of the City’s June 30, 2020 SEFA provided for our audit, we noted that the City incorrectly included non-federal expenditure amounts in the SEFA. After further research by the City, it was determined that the SEFA overstated federal expenditures of $299,054 for the Highway Planning and Construction Program (CFDA # 20.205) and $398,282 for the Disaster Grants Program (CFDA # 97.036).
After those corrections were made, it was determined that the City did not need a Single Audit for the year ended June 30, 2020.
We understand that the City accounts for federal award expenditures in the same general ledger accounts that the City accounts for local match expenditures. During the preparation of the SEFA by the City’s outside consultant, the entire account balance was used, and the amounts reported did not exclude the nonfederal amounts.
Incorrect reporting not only misstates the SEFA, but it also means the City is not in compliance with the reporting requirements of the OMB Uniform Administrative Requirements. As a result, future federal funding could be adversely affected.
DRAFT DRAFT REVIEW DRAFT 11-08-22 19 DRAFT
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
STATUS OF PRIOR YEAR SIGNIFICANT DEFICIENCIES
2021-02 Schedule of Expenditures of Federal Awards (SEFA) Preparation (Continued) The City should develop procedures and policies to centralize the reporting of grant activity to ensure that all data is readily available when year-end grant activity reporting is necessary. The procedures and policies should facilitate the preparation of the SEFA so that annual expenditures for all grant programs are accurately included on the SEFA. In addition, City staff, including those in departments other than Finance that manage grants, must familiarize themselves with the guidelines for determining federal awards expended contained in the Uniform Guidance.
Current Status:
Implemented.
DRAFT DRAFT REVIEW DRAFT 11-08-22 20 DRAFT
CITY OF SAN RAFAEL
REQUIRED COMMUNICATIONS
FOR THE YEAR ENDED JUNE 30, 2022
DRAFT DRAFT REVIEW DRAFT 11-01-22 DRAFT
This Page Left Intentionally Blank
DRAFT DRAFT REVIEW DRAFT 11-01-22 DRAFT
CITY OF SAN RAFAEL
REQUIRED COMMUNICATIONS
For the Year Ended June 30, 2022
Table of Contents
Page
Required Communications .................................................................................................................. 1 Significant Audit Matters:
Qualitative Aspects of Accounting Practices ..................................................................... 1 Difficulties Encountered in Performing the Audit ............................................................. 3 Corrected and Uncorrected Misstatements ......................................................................... 3 Disagreements with Management ....................................................................................... 3 Management Representations .............................................................................................. 3 Management Consultations with Other Independent Accountants ................................... 4 Other Audit Findings or Issues ............................................................................................ 4 Other Matters .............................................................................................................................. 4 DRAFT DRAFT REVIEW DRAFT 11-01-22 DRAFT
This Page Left Intentionally Blank
DRAFT DRAFT REVIEW DRAFT 11-01-22 DRAFT
REQUIRED COMMUNICATIONS
To the City Council of
the City of San Rafael, California
We have audited the basic financial statements of the City of San Rafael (City) for the year ended June 30, 2022. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated July 20, 2022. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Accounting Policies - Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted, and the application of existing policies was not changed during the year, except as follows:
GASB 87 – Leases
The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities.
A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. Any contract that meets this definition should be accounted for under the leases guidance, unless specifically excluded in this Statement.
The pronouncement became effective, and as disclosed in Note 1S to the financial statements required a prior period restatement for the cumulative effect on the financial statements. 1 DRAFT DRAFT REVIEW DRAFT 11-01-22 DRAFT
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
T 925.930.0902
F 925.930.0135
E [email protected]
w mazeassociates.com
The following pronouncements became effective, but did not have a material effect on the financial statements:
GASB 89 – Accounting for Interest Cost Incurred before the End of a Construction Period GASB 90 – Majority Equity Interests (an amendment of GASB Statements No. 14 and No. 61) GASB 92 – Omnibus 2020
GASB 93 – Replacement of Interbank Offered Rates
GASB 97 – Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans—An Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32
GASB 99 – Omnibus 2022 (paragraphs 26-32)
Unusual Transactions, Controversial or Emerging Areas - We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting Estimates - Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:
Estimated Net Pension Asset (Liability) and Pension-Related Deferred Outflows and Inflows of Resources: Management’s estimates of the net pension asset (liability) and related deferred outflows/inflows of resources are disclosed in Note 9 to the financial statements and are based on an actuarial study and accounting valuation determined by the Marin County Employees’ Retirement Association which are based on the experience of the City. We evaluated the key factors and assumptions used to develop the estimates and determined they are reasonable in relation to the basic financial statements taken as a whole.
Estimated Net OPEB Liability and OPEB-Related Deferred Outflows and Inflows of Resources:
Management’s estimates of the net OPEB liability and related deferred outflows/inflows of resources are disclosed in Note 11 to the financial statements and are based on an actuarial study determined by a consultant, which is based on the experience of the City. We evaluated the key factors and assumptions used to develop the estimates and determined they are reasonable in relation to the basic financial statements taken as a whole.
Estimate of the depreciation: Management’s estimate of depreciation is based on useful lives determined by management. These lives have been determined by management based on the expected useful life of assets as disclosed in Note 1K to the financial statements. We evaluated the key factors and assumptions used to develop the depreciation estimate and determined that it is reasonable in relation to the basic financial statements taken as a whole.
Estimated Fair Value of Investments: As of June 30, 2022, cash and investments were measured by fair value, as disclosed in Note 2 to the financial statements. Fair value is essentially market pricing in effect as of June 30, 2022. These fair values are not required to be adjusted for changes in general market conditions occurring subsequent to June 30, 2022. 2 DRAFT DRAFT REVIEW DRAFT 11-01-22 DRAFT
Estimated Long-Term Receivable from San Rafael Sanitation District: Management’s estimate of the long-term receivable from the District is disclosed in Note 4F to the financial statements and is based on the District’s estimated liability for pension and post-employment health care benefits incurred by the City for the District staff, but not yet funded. We evaluated the key factors and assumptions used to develop the long-term receivable from the District in determining that it is reasonable in relation to the financial statements taken as a whole.
Estimated Claims Liabilities: Management’s estimate of the claims liabilities payable is disclosed in Note 13 to the financial statements and is based on actuarial studies determined by a consultant, which are based on the claims experience of the City. We evaluated the key factors and assumptions used to develop the estimate and determined that it is reasonable in relation to the basic financial statements taken as a whole.
Estimate of Compensated Absences: Accrued compensated absences which are comprised of accrued vacation, holiday, and certain other compensating time is estimated using accumulated unpaid leave hours and hourly pay rates in effect at the end of the fiscal year as disclosed in Note 1L to the financial statements. We evaluated the key factors and assumptions used to develop the accrued compensated absences and determined that it is reasonable in relation to the basic financial statements taken as a whole.
Disclosures - The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
Professional standards require us to accumulate all known and likely uncorrected misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. We have no such misstatements to report to the City Council.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in a management representation letter dated November 21, 2022.
3 DRAFT DRAFT REVIEW DRAFT 11-01-22 DRAFT
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to the required supplementary information that accompanies and supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information.
We were engaged to report on the supplementary information that accompanies the financial statements, but is not required supplementary information. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the Introductory and Statistical Sections which accompany the financial statements, but are not required supplementary information. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance them.
******
This information is intended solely for the use of City Council and management and is not intended to be, and should not be, used by anyone other than these specified parties.
Pleasant Hill, California
November 21, 2022
4 DRAFT DRAFT REVIEW DRAFT 11-01-22 DRAFT
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
This Page Left Intentionally Blank
i
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
FOR THE YEAR ENDED JUNE 30, 2022
Table of Contents
Page
INTRODUCTORY SECTION:
Table of Contents ........................................................................................................................................... i FINANCIAL SECTION:
Independent Auditor’s Report .................................................................................................................. 1 Basic Financial Statements
Balance Sheet ......................................................................................................................................... 3 Statement of Revenue, Expenditures and Changes in Fund Balance ................................................... 4 Notes to Basic Financial Statements ...................................................................................................... 5 Supplementary Information
Schedule of Federal, State and Local Awards ..................................................................................... 10 Combining Statement of Revenues, Expenditures and Changes in Fund Balance ........................... 11 Schedule of Expenditures by State Categories .................................................................................... 12 Schedule of Claimed Administrative Costs ......................................................................................... 13 Schedule of Claimed Equipment Expenditures ................................................................................. 14 Schedule of Claimed Expenditures for Renovations and Repairs ...................................................... 15 Audited Attendance and Fiscal Reports/Audited Fiscal Reports:
CSPP 1283 – California State Preschool Programs .......................................................................... 16 Audited Reserve Account Activity Report ........................................................................................ 24 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .................................................... 25 Summary of Findings and Questioned Costs ................................................................................ 27 Current Status of Prior Year Findings ........................................................................................... 28 I
I
I
I
I
I
I
I
I
I
I
I
I
■
■
■
This Page Left Intentionally Blank
INDEPENDENT AUDITOR’S REPORT
To the Honorable Members of the City Council
City of San Rafael, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the City of San Rafael Child Development Program (Program) of the City of San Rafael, California, as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the Program’s basic financial statements as listed in the Table of Contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Program as of June 30, 2022, and the changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirement relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management’s for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Program’s ability to continue as a going concern for twelve months beyond the financial statement date, including any known information that may raise substantial doubt shortly thereafter.
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
T 925.930.0902
F 925.930.0135
E [email protected]
w mazeassociates.com
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Program’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in aggregate, that raise substantial doubt about the Program’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the basic financial statements that collective comprise the Program’s basic financial statements. The accompanying Supplementary Information, as listed in the Table of Contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures and in conformity with the CDE Audit Guide, issued by the California Department of Education, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplementary Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 1, 2022 on our consideration of the Program’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Program’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Program’s internal control over financial reporting and compliance.
Pleasant Hill, California
November 1, 2022
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
BALANCE SHEET
JUNE 30, 2022
ASSETS
Cash (Note 3) $340,211
Accounts receivable 16,509
Grants receivable (Note 4) 104,375
Total Assets $461,095
LIABILITIES AND FUND BALANCE
Accounts payable $29,723
Unearned grant and State reserves 79,842
Total Liabilities 109,565
Fund balance, restricted (Note 5) 351,530
Total Liabilities and Fund Balance $461,095
See accompanying notes to financial statements
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2022
REVENUES
Restricted:
State grants:
Current year grants $320,598
First five school readiness grants 106,098
Local grant 77,962
Unrestricted:
Interest 1,461
Parent fees 2,669,140
Other 9,720
Total Revenues 3,184,979
EXPENDITURES
Certified salaries 68,244
Classified Salaries 1,592,151
Employee benefits 1,157,961
Training and instruction 6,738
Office supplies 419
Books and supplies 130,946
Utilities and housekeeping services 27,511
Rentals 16,723
Travel and conference 1,604
Services and other operating expenditures 187,399
Equipment 52,097
Insurance 28,490
Renovation and repair 71,216
Total Expenditures 3,341,499
CHANGE IN FUND BALANCE (156,520)
FUND BALANCE,
Beginning of year 508,050
End of year $351,530
See accompanying notes to financial statements
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30, 2022
NOTE 1 - ORGANIZATION
The City of San Rafael operates the Child Development Program encompassing eight childcare centers within the City of San Rafael. One of these centers provides day care services to subsidized families under the Child Development Program funded by the California Department of Education, which includes the Preschool program. The City is financially accountable for the activities of the Program. The Program has no employees and substantially all staff services which it requires are performed by the City's personnel. Costs incurred by the City to provide such services including compensation, retirement, and other benefit costs are reimbursed by the Program. These basic financial statements present only the activities of the Program and are not intended to present the financial position of the City of San Rafael, California, or the results of its operations. The financial statements of the Program are included as a Special Revenue Fund in the City's financial statements.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Accounting
The accounting and reporting treatment applied to a fund is determined by its measurement focus.
Governmental funds are accounted for on a spending or “current financial resources” measurement focus. Accordingly, only current assets and current liabilities generally are included on the balance sheets. Operating statements of governmental funds present increases (revenues and other financial sources) and decreases (expenditures and other financial uses) in net current assets.
The Program’s financial activities are accounted for using the modified accrual basis of accounting.
Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred.
Revenues considered susceptible to accrual include charges for services, federal and state grants, and interest. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable.
B. Fund Balance
Fund Balance is the excess of all the Program’s assets over all its liabilities.
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30, 2022
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement.
NOTE 3 - CASH AND INVESTMENTS
The Program’s cash is included in a City-wide cash and investment pool, the details of which are presented in the City’s basic financial statements. The Program pools cash from all sources with the City of San Rafael so that it can be invested at the maximum yield, consistent with safety and liquidity, while individual funds can make expenditures at any time. The City’s investment policy and the California Government Code permit investments in Securities of the U.S. Government or its agencies, Certificates of Deposit, Negotiable Certificates of Deposit, Banker’s Acceptances, Commercial Paper, the State of California Local Authority Investment Fund (LAIF Pool), Repurchase Agreements, Medium-Term Corporate Notes, Limited Obligation Improvement Bonds related to special assessment districts and special tax districts, and Money Market/Mutual Funds.
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The City of San Rafael pooled investments is an uncategorized input not defined as Level 1, Level 2, or Level 3 input.
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30, 2022
NOTE 4 – GRANTS RECEIVABLE
The Program has the following grants receivable at June 30, 2022:
Agency Grant Amount
arin County First 5 Grant $36,622
lifornia Department of Education State Preschool Program 67,753 Total $104,375
NOTE 5 – FUND BALANCES
Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash and receivables, less its liabilities.
The City’s fund balances are classified based on spending constraints imposed on the use of resources. For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint.
Nonspendable represents balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed or assigned, then Nonspendable amounts are required to be presented as a component of the applicable category.
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose. Nonspendable amounts subject to restrictions are included along with spendable resources.
Committed fund balances have constraints imposed by formal action of the City Council which may be altered only by formal action of the City Council. Nonspendable amounts subject to council commitments are included along with spendable resources.
Assigned fund balances are amounts constrained by the City’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Council or its designee and may be changed at the discretion of the City Council or its designee. This category includes nonspendables, when it is the City’s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed.
Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds.
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30, 2022
NOTE 6 – CONTINGENCIES AND COMMITMENTS
The Program participates in Federal, State and County grant programs that are fully or partially funded by grants received from other governmental units. Expenditures financed by grants are subject to audit by the appropriate grantor government. If expenditures are disallowed due to noncompliance with grantor program regulations, the City may be required to reimburse the grantor government. As of June 30, 2022, some amounts of grant expenditures have not been audited, but the City believes that disallowed expenditures, if any, based on subsequent audits will not have a material effect on any individual governmental funds or the overall financial condition of the City.
SUPPLEMENTARY INFORMATION
This Page Left Intentionally Blank
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF FEDERAL, STATE AND LOCAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2022
Program
Federal
Assistance
Listing
Number
Pass-Through Identifying
Number
Award
Amount Revenue Expenditures
Federal Awards
US Department of Housing and Urban Development,
Due from State
Pass-through the County of Marin
Community Development Block Grant 14.218 40CDBG22CD4527 $21,941 $21,941 $21,941 City to provide source of grant here (e.g. US Department of XXX) City to provide pass-through agency, if applicable (e.g. State of California) City to provide name of grant here City to provide City to provide, if applicable City to provide 27,600 City to provide source of grant here (e.g. US Department of XXX) City to provide pass-through agency, if applicable (e.g. State of California) City to provide name of grant here City to provide City to provide, if applicable City to provide 24,806 Total Federal Awards $21,941 $74,347 $21,941
State Awards
Child Development Division
State Preschool Program FY2022 CSPP-1283 $328,967 $320,598 $320,598 Total State Awards $328,967 $320,598 $320,598
County Award
County of Marin
First Five - Preschool CSRI-21-009-11 $106,098 $106,098 $106,098 2021 Honorary CSPP QRIS Block Grant N/A $5,106 $5,106 $5,106 Total County Awards $111,204 $111,204 $111,204
Local Awards
Marin Child Care Council N/A $50,915 $50,915 $50,915
Total Local Awards $50,915 $50,915 $50,915
Total State, Federal Awards, and Local $507,921 $551,958 $499,552
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2022
State Preschool
Program Total CDE Non-CDE
(CSPP1283) CD Contracts Programs Total
REVENUES
Restricted:
State grants:
Current year grants $320,598 $320,598 $320,598
CDBG preschool grant
First Five school readiness grants $106,098 106,098
Local grants 77,962 77,962
Unrestricted:
Interest 1,461 1,461
Parent fees - noncertified children 2,669,140 2,669,140 Other 9,720 9,720
Total Revenues 320,598 320,598 2,864,381 3,184,979
EXPENDITURES
Certified salaries 68,244 68,244 68,244
Classified salaries 86,266 86,266 1,505,885 1,592,151
Employee benefits 135,855 135,855 1,022,106 1,157,961
Training and instruction 6,738 6,738
Office supplies 419 419
Books and supplies 12,325 12,325 118,621 130,946
Utilities and housekeeping services 27,511 27,511
Travel and conference 1,604 1,604
Rentals 16,723 16,723
Services and other operating expenditures 17,908 17,908 169,491 187,399 Equipment 52,097 52,097
Insurance 28,490 28,490
Renovation and repair 71,216 71,216
Total Expenditures 320,598 320,598 3,020,901 3,341,499
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (156,520) (156,520) CHANGE IN FUND BALANCE ($156,520) ($156,520)
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF EXPENDITURES BY STATE CATEGORIES
FOR THE YEAR ENDED JUNE 30, 2022
CSPP-1283
State Preschool
Program Totals
EXPENDITURES:
1000 Certified personnel salaries $68,244 $68,244
Due from State
1100 Teachers' salaries 68,244 68,244
1200 Administration
1300 Supervisors' salaries
1600 Infant educators
2001 Classified personnel salaries $86,266 $86,266
2100 Instructional aides' salaries 86,266 86,266
2300 Clerical and other office salaries
2500 Food services salaries
2600 Transportation salaries
3000 Employee benefits $135,855 $135,855
3200 Payroll taxes (Medicare) 2,050 2,050
3300 Other benefits 95,140 95,140
3400 Health and welfare 36,965 36,965
3600 Workers' compensation insurance 1,700 1,700
4000 Books and supplies $12,325 $12,325
4200 Other books
4300 Instructional materials and supplies 12,325 12,325 4500 Other supplies
4600 Food supplies
5000 Services and other operating expenditures $17,908 $17,908 5100 Lecturer
5200 Travel and conferences
5300 Memberships and dues
5400 Insurance 1,041 1,041
5500 Utilities and housekeeping services 59 59
5600 Rentals, leases and repairs
5700 Audit expense
5800 Other direct services & admin. 16,808 16,808
6000 Capital Outlay
6100 Sites and improvements of sites
6200 Buildings and improvements of buildings
6400 Equipment (program-related)
6500 Equipment replacement (program related)
Depreciation
Costs capitalized as Fixed Assets
TOTAL OF REIMBURSABLE AND
NONREIMBURSABLE EXPENDITURES $320,598 $320,598
We have examined the claims filed for reimbursement and the original records supporting the transactions recorded under the contracts listed above to an extent considered necessary to assure ourselves that the amounts claimed by the contractor were eligible for reimbursement, reasonable, necessary, and adequately supported, according to governing laws, regulations, and contract provisions.
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF CLAIMED ADMINISTRATIVE COSTS
FOR THE YEAR ENDED JUNE 30, 2022
CSPP-1283
State Preschool
Program
Administrative Costs (Audit Fees) $7,097
Total Administrative Costs $7,097
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF CLAIMED EQUIPMENT EXPENDITURES
FOR THE YEAR ENDED JUNE 30, 2022
Expenditures Under $7,500 Expenditures Over $7,500 Expenditures Over $7,500 Unit Cost Unit Cost with CDD Approval Unit Cost Without CDD Approval Cost Item Cost Item Cost Item
None None None
SCHEDULE OF RENOVATION AND REPAIR EXPENDITURES UTILIZING CONTRACT FUNDS Expenditures Under $10,000 Expenditures Over $7,500 Expenditures Over $10,000 Unit Cost Unit Cost with CDD Approval Unit Cost Without CDD Approval Cost Item Cost Item Cost Item
None None None
Reimbursable Expenditures for Renovations and Repairs CSPP-1283 None $0
Total $0
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF CLAIMED EXPENDITURES FOR RENOVATIONS AND REPAIRS FOR THE YEAR ENDED JUNE 30, 2022
Fiscal Year Ended: June 30, 202
Contractor Name: California Department of Education Audited Enrollment, Attendance and Fiscal Report for California State Preschool Program Contract Number:
Vendor Code:
Section 1 – Number of Counties Where Services are Provided Number of counties where the agency provided services to certified children (Form 1): Number of counties where the agency provided mental health consultation services to certified children (Form 2): Number of counties where the agency provided services to non-certified children (Form 3): Number of counties where the agency provided mental health consultation services to non-certified children (Form 4):
Total enrollment and attendance forms to attach: Note: For each of the above categories, submit one July-December form and one form for each service county for January-June.
Section 2 – Days of Enrollment, Attendance and Operation Enrollment and Attendance Form Summary
Column A
Cumulative FY
per CPARIS
Column B
Audit
Adjustments
Column C
Cumulative FY
per Audit
Column D
Adjusted Days
per Audit
Total Certified Days of Enrollment Total &HUWLILHG'D\VRI(QUROOPHQWZLWKMental Health Consultation Services Days of Attendance (including MHCS) N/A Total Non-Certified Days of Enrollment Total 1RQ&HUWLILHG'D\VRI(QUROOPHQWZLWKMental Health Consultation Services Days of Operation
Column A
Cumulative FY
per CPARIS
Column B
Audit
Adjustments
Column C
Cumulative FY
per Audit
Column D
Adjusted Days
per Audit
Days of Operation N/A
AUD 8501 Page 1 of 6 Audit Report Page
City of San Rafael Child Development Program CSPP 1283
2193
1 0
0 0
2 5,035 5,035 5,035.0000
0 5,012 5,012
00 175 175
Contractor Name: Contract Number:
Section 3 – Revenue
Restricted Income Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Child Nutrition Programs County Maintenance of Effort (EC Section 8279) Other: Other:
TOTAL RESTRICTED INCOME
Transfer from Reserve Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Transfer from Reserve
Other Income Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Waived Family Fees for Certified Children Interest Earned on Child Development Apportionment Payments Fees for Non-Certified Children Unrestricted Income: Head Start Other: Other:
AUD 8501 Page 2 of 6 Audit Report Page
0000
000
0000000
City of San Rafael Child Development Program CSPP 1283
Contractor Name: Contract Number:
Section 4 - Reimbursable Expenses
Cost Category Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Direct Payments to Providers (FCCH only) 1000 Certificated Salaries 2000 Classified Salaries 3000 Employee Benefits 4000 Books and Supplies 5000 Services and Other Operating Expenses 6100/6200 Other Approved Capital Outlay 6400 New Equipment (program-related) 6500 Equipment Replacement (program-related) Depreciation or Use Allowance Start-up Expenses (service level exemption) Indirect Costs (include in Total Administrative Cost)
TOTAL REIMBURSABLE EXPENSES
Does the agency have an indirect cost rate approved by its cognizant agency (Select YES or NO)? <HV 1RApproved Indirect Cost Rate:
Specific Items of Reimbursable Expenses Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Total Administrative Cost (included in Reimbursable Expenses) Total Staff Training Cost (included in Reimbursable Expenses) AUD 8501 Page 3 of 6 Audit Report Page
126833/(0(17$/5(9(18((;3(16(6&KHFNWKLVER[DQGRPLWSDJH 0 68,244 68,24486,266 86,266
135,855 135,855
12,325 12,32517,908 17,908
000000
320,598 0 320,598
7,097 7,097
0 City of San Rafael Child Development Program CSPP 1283 ✔
Contractor Name: Contract Number:
Section 5 - Supplemental Funding
Supplemental Revenue Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Enhancement Funding Other: Other:
TOTAL SUPPLEMENTAL REVENUE
Supplemental Expenses Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit 1000 Certificated Salaries 2000 Classified Salaries 3000 Employee Benefits 4000 Books and Supplies 5000 Services and Other Operating Expenses 6000 Equipment / Capital Outlay Depreciation or Use Allowance Indirect Costs Non-Reimbursable Supplemental Expenses
TOTAL SUPPLEMENTAL EXPENSES
AUD 8501 Page 4 of 6 Audit Report Page
5,106 5,106
00 5,106 0 5,106
000
543 543
0 4,002 4,002
000
4,545 0 4,545
City of San Rafael Child Development Program CSPP 1283
Contractor Name: Contract Number:
Section 6 - Summary
Description Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Total Certified Days of Enrollment (including MHCS) Days of Operation Days of Attendance (including MHCS) Total Certified Adjusted Days of Enrollment N/A N/A Total Non-Certified Adjusted Days of Enrollment N/A N/A Restricted Program Income Transfer from Reserve Interest Earned on Apportionment Payments Direct Payments to Providers Start-up Expenses (service level exemption) Total Reimbursable Expenses Total Administrative Cost Total Staff Training Cost Non-Reimbursable Cost (State Use Only) N/A N/A AUD 8501 Page 5 of 6 Audit Report Page
5,035 0 5,035
175 0 175
5,012 0 5,012
5,035.0000
0.0000
000000000000000
320,598 0 320,598
0 7,097 7,097000
City of San Rafael Child Development Program CSPP 1283
Contractor Name: Contract Number:
Section 7 – Auditor’s Assurances Independent auditor's assurances on agency's compliance with the contract funding terms and conditions and program requirements of the California Department of Education, Early Education Division:
Eligibility, enrollment and attendance records are being maintained as required (Select YES or NO): <HV 1RReimbursable expenses claimed in Section 4 are eligible for reimbursement, reasonable, necessary, and adequately supported (Select YES or NO): <HV 1R Section 8 – Comments Include any comments in the comment box. If necessary, attach additional sheets to explain adjustments. AUD 8501 Page 6 of 6 Audit Report Page ✔
✔
Adjustments identified in Column B are adjustments made to report audit fees as administrative costs.
City of San Rafael Child Development Program CSPP 1283
California Department of Education Fiscal Year Ending: June 30, 2022 Audited 3UHVFKRROReserve Account Activity Report Vendor Code:
Contractor Name:
Section 1 – Prior Year Reserve Account Activity
Beginning Balance (2020–21 $8'
$Ending Balance):
Plus Transfers to Reserve Account:
2020–21 Contract No.
Per 2020–21
Post-Audit
&'FS 9530
Total Transferred from 2020–21 Contracts
Less Excess Reserve to be Billed:
2020–21 &')6
5HVHUYH%DODQFH$IWHU%LOOLQJ:
6ection 2 – Current Year Reserve Account Activity
Plus Interest Earned This Year on Reserve:
Description Column A
SHU&3$5,6
Column B
Audit Adjustments
Column C
Total per Audit
Interest Earned
6. Less Transfers to Contracts from Reserve:
2021–22 Contract No. Column A
SHU&3$5,6
Column B
Audit Adjustments
Column C
Total per Audit
Total Transferred to Contracts
7. Ending Balance:
Description Column A
SHU&3$5,6
Column B
Audit Adjustments
Column C
Total per Audit
Ending Balance on June 30, 2022
COMMENTS – If necessary, attach additional sheets to explain adjustments.
AUD 9530A Page 1 of 1 Audit Report Page
2193
City of San Rafael Child Development Program
10,697
0287
0 10,697
11 1283 0
0 0
0 00
10,698 0 10,698
INDEPENDENT AUDITOR’S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Members of the City Council
City of San Rafael, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of the City of San Rafael Child Development Program (Program), California, as of and for the year ended June 30, 2022, and have issued our report thereon dated November 1, 2022.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Program's internal control over financial reporting (internal control) as a basis for designing of audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Program’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the Program’s internal control.
A deficiency in internal control 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 Program’s financial statements will not be prevented, or detected and corrected on a timely basis.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weakness or significant deficiencies may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Program's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
T 925.930.0902
F 925.930.0135
E [email protected]
w mazeassociates.com
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Program’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Program’s internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
Pleasant Hill, California
November 1, 2022
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
SUMMARY OF FINDINGS AND QUESTIONED COSTS
For the Year Ended June 30, 2022
None noted.
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
CURRENT STATUS OF PRIOR YEAR FINDINGS
For the Year Ended June 30, 2022
None noted.