Measure W
Public Safety Tax Fund
of the City of Stockton
Stockton, California
Independent Auditors’ Reports
and Financial Schedules
For the Years Ended June 30, 2021 and 2020
ATTACHMENT D
ATTACHMENT D
City of Stockton
Measure W Public Safety Tax Fund
For the Years Ended June 30, 2021 and 2020
Table of Contents
Page
Independent Auditors’ Report ..................................................................................................................................... 1 Schedules of Revenues, Expenditures, and Change in
Fund Balances ........................................................................... 3 Notes to the Financial Schedules ..................................................................................................................................... 4 Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of the Financial Schedules Performed in Accordance with Government Auditing Standards ..................................... 5
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ATTACHMENT D
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
of City of Stockton
City of Stockton, California
Report on Financial Schedules
We have audited the financial schedules of the Measure W Public Safety Tax Fund (t he “Fund”) of the City of Stockton, California (the “City”) which comprise the schedules of revenues, expenditures and change in fund balance (the “Financial Schedules”) for the years ended June 30, 2021 and 2020 and the re lated notes to the Financial Schedules.
Management’s Responsibility for the Financial Schedules
Management is responsible for the preparation and fair presentation of the Financial Schedules in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control re levant to the preparation and fair pr esentation of Financial Schedules that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the Financial Schedules based on our audits. We conducted our audits in accordance with auditing standards genera lly accepted in the United States of Amer ica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the Financial Schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Schedules. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Financial Schedules, whether due to fra ud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the Financial Schedules in order to design audit procedures that are appropriate in the circum stances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Financial Schedules.
We believe that the audit evidence we have obtained is sufficient and approp riate to provide a basis for our audit opinion.
Opinion
In our opinion, the Financial Schedules referred to above presents fairly, in all material respects, the revenues, expenditures and change in fund balance of the Fund of th e City of Stockton, for the years ended June 30, 2021 and 2020 in conformity with accounting principles generally accepted in the United States of America. 200 E. Sandpointe Ave., Suite 600, Santa Ana, California 92707 Tel: 949-777-8800 • Fax: 949-777-8850
www.pungroup.cpa
3939352 Pun & McGeady_L_final.pdf 2 1/14/14 3:48 PM
ATTACHMENT D
To the Honorable Mayor and Members of the City Council
of City of Stockton
City of Stockton, California
2 Emphasis of Matter
As discussed in Note 1, the Financial Schedules presents onl y the revenues, expenditures and change in fund balance of the Fund and does not purport to, and does not, present fa irly the financial position of the Fund or City as of June 30, 2021 and 2020, nor the change in financial position of the City for the years then ended in accordance with accounting principles generally accepted in th e United States of America. Our opinion is not modified with respect to this matter.
Other Reporting required by Government Auditing Standards
In accordance with Government Auditing Standards , we have also issued our repor t dated March 4, 2022, on our consideration of the City’s internal control over the Fund’s 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 financ ial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral pa rt of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over the Fund’s financial reporting and compliance.
Santa Ana, California
March 4, 2022
ATTACHMENT D
City of Stockton
Measure W Public Safety Tax Fund
Schedules of Revenues, Expenditures, and Change in Fund Balance For the Years Ended June 30, 2021 and 2020
See accompanying Notes to the Financial Schedules.
3 Police Fire Total Police Fire Total
REVENUES :
Tax es:
Sales - levied by City 6,947,881$ 6,947,881$ 13,895,762$ 5,688,479$ 5,688,479$ 11,376,958$ Investment (expense) income: 2,345 2,104 4,449 78,870 83,128 161,998 Total revenues 6,950,226 6,949,985 13,900,211 5,767,349 5,771,607 11,538,956 EXPENDITURES - PUBLIC SAFETY:
Payroll:
Salaries 2,411,867 2,581,277 4,993,144 2,440,204 2,492,709 4,932,913 Benefits 2,347,114 2,420,994 4,768,108 2,165,025 2,204,039 4,369,064 Total Payroll 4,758,981 5,002,271 9,761,252 4,605,229 4,696,748 9,301,977 Equipment, services and supplies:
Tax collection fee 97,543 97,544 195,087 113,421 113,420 226,841 Sales Tax Review Service - - - 2,029 2,029 4,058 Liability Insurance 158,243 173,696 331,939 128,349 130,247 258,596 Vehicle rental charges 319,766 206,529 526,295 275,254 203,529 478,783 Radio rental charges 50,162 22,543 72,705 44,672 23,992 68,664 Materials and Services 31,140 83,787 114,927 18,330 12,937 31,267 Fuel Charges 81,411 8,669 90,080 75,302 8,657 83,959 Capital outlay/equipment - 102,603 102,603 - 258,449 258,449 Total equipment, services and supplies 738,265 695,371 1,433,636 657,357 753,260 1,410,617 Total expenditures 5,497,246 5,697,642 11,194,888 5,262,586 5,450,008 10,712,594 NET CHANGE IN FUND BALANCES 1,452,980 1,252,343 2,705,323 504,763 321,599 826,362 FUND BALANCES, BEGINNING OF YEAR 2,861,040 2,630,535 5,491,575 2,356,277 2,308,936 4,665,213 FUND BALANCES, END OF YEAR 4,314,020$ 3,882,878$ 8,196,898$ 2,861,040$ 2,630,535$ 5,491,575$ 2021 2020
ATTACHMENT D
City of Stockton
Measure W Public Safety Tax Fund
Notes to the Financial Schedules
For the Years Ended June 30, 2021 and 2020
4 Note 1 – Summary of Significant Accounting Policies
A. Description of Reporting Entity
The Measure W Public Safety Tax Fund (Fund) of the C ity of Stockton, California (the “City”) accounts for the Measure W Taxes collected and spent fo r police and fire purposes. The Fund is included in the basic financial statements of the City. These financial schedules are intended to present only the revenues, expenditures and change in fund balance of the Fund of the City. It does not present fairly the financial position of the Fund or the City, nor the change in financial position of the City in conformity with accounting principles generally accepted in the United States of America.
The accounting policies of the Fund conform to generally accepted accounting principles in the United States of America as they are applicable to governmental un its. The Governmental Accounting Standards Board (the “GASB”) is the standard setting body for establishing governmental accounting and financial reporting principles.
The more significant policies reflected in the financial schedules are summarized below.
B. Basis of Presentation, Measurement Focus and Basis of Accounting
The activities of the Fund are recorded in a special revenue fund and accounted for using the modified accrual basis of accounting. Special revenue funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specified purposes. Under the modified accrual basis of accounting, revenues are recognized wh en they become susceptible to accrual (i.e. both measurable and available). Measurable means that the amount of the transaction can be determined. Available means the funds are collectible within 90 days after yea r-end. Expenditures of governmental funds are generally recognized when the related fund liability is incurred.
C. Sales and Use Tax – Measure W
The people of the City approved Measure W on November 2, 2004, which authorized Ordinance No. 038-04 CS that added a new Part of Chapter 8 of the Stockton Municipal Code. This Ordinance provided authorization for an additional one-quarter of one percent transaction and use ta x, the proceeds of which sh all be used to maintain current police and fire protection service levels and to contract with the Stat e of California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of the tax.
D. Allocation of Revenue and Expenditures between Police and Fire Department
Tax revenue collected is distributed evenly between th e Police and Fire Department. Investment expense and investment income are allocated between the Police and Fire Department based on share of total fund balance reduced by expenditures incurred in each department during the year. All other expenditures are recorded based on actual amount incurred in respective department.
ATTACHMENT D
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL SCHEUDLES PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditors’ Report
To the Honorable Mayor and Members of the City Council
of the City of Stockton
City of Stockton, California
We have audited the schedules of revenues, expenditures and change in fund balance (the “Financial Schedules”) of the Measure W Public Safety Tax Fund (the “Fund”) of the City of Stockton, California (the “City”), for the years ended June 30, 2021 and 2020, and have issued our repor t thereon dated March 4, 2022. Our report contained an explanatory paragraph describing that the schedules only presents the revenu es, expenditures and change in fund balance of the Fund and not the City. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standa rds applicable to financ ial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audits of the Financial Schedules, we considered the City’s internal control over the Fund’s financial reporting (“internal c ontrol”) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the Financial Schedules, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control over the Fund’s financial reporting. Accordingly, we do not express an opinion on the effectiveness of City’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 assi gned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a de ficiency, or a combination of deficiencies, in internal control, such that there is a reasonabl e possibility that a material misstatement of the City’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 over the Fund’s Financial Schedules 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 audits we did not identify any deficiencies in internal control that we consider to be material wea knesses. However, material weaknesses may exist that have not been identified.
200 E. Sandpointe Ave., Suite 600, Santa Ana, California 92707 Tel: 949-777-8800 • Fax: 949-777-8850
www.pungroup.cpa
3939352 Pun & McGeady_L_final.pdf 2 1/14/14 3:48 PM
ATTACHMENT D
To the Honorable Mayor and Members of the City Council
of City of Stockton
City of Stockton, California
6 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Financial Schedules are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contra cts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of Financial Schedules amounts. 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 or other matters that are required to be reported under Government Auditing Standards
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 City’s internal control or on compliance as they relate to the Fund. This report is an inte gral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Santa Ana, California
March 4, 2022
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