CITY OF STOCKTON
Presentation to the City Council
For the Fiscal Year Ended June 30, 2022
February 7, 2023
City Council Meeting
Agenda Item 15.4
2 CONTENTS
• Scope of Work
• Required Communications (AU-C 260)
• Audit Results
• Thank You!
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3 SCOPE OF WORK
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4 SCOPE OF WORK
• Audit of the Annual Comprehensive Financial Report
• Report on internal control over financia l reporting and on compliance in accordance with Government Auditing Standards
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5 OUR RESPONSIBILITY IN ACCORDANCE
WITH PROFESSIONAL STANDARDS
• Form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. • Our responsibility is to plan and perform the audit to obtain “reasonable” assurance (not “absolute” assurance) about whether the financial statements are free of material misstatements. • Exercise professional judgment and maintain professional skepticism throughout the audit. • We considered internal control over financial reporting. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. • 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 the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. • Communicate with those charged with governance.
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6 REQUIRED COMMUNICATIONS (AU-C 260)
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7 REQUIRED COMMUNICATIONS (AU-C 260)
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• Ethics and Independence
• Complied with ALL relevant ethica l requirements regarding independence • Significant Accounting Policies
• The City disclosed all significant accounting policies in Note 1 to the financial statements. • The City implemented GASB Statement No. 87, Leases
• Significant Estimates
• Investment Fair Market Value
• Depreciation and Amortization on Capital Assets and Lease Assets (Right-to-Use Assets) • Lease receivable
• Lease payable
• Net Pension Liability
8 REQUIRED COMMUNICATIONS (AU-C 260)
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• Sensitive Disclosures
• Note 1 – Summary of Significant Accounting Policies
• Note 4 – Lease Receivable
• Note 12 – Retirement Plans
• Note 15 – Individual Fund Disclosures
• Note 16 – Commitments and Contingencies
• Note 19 – Prior Period Adjustments
• Misstatements
• There were no uncorrected misstatement reported.
• Consultation with Other Accountants
• Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and other matters.
9 REQUIRED COMMUNICATIONS (AU-C 260)
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• Significant Difficulties
• We encountered no significant difficulties in dealing with management. • Disagreement with Management
• We did not have any disagreement with manageme nt in terms of accounting treatments nor audit procedures performed.
10 OVERVIEW OF THE FINANCIAL STATEMENTS
AND FINANCIAL INDICATORS
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11 City of Stockton
Government-Wide Statement of Net Position
June 30, 2022
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Governmental Business-Type
Activities Activities Total
Assets 1,759,213,000$ 1,088,686,000 $ 2,847,899,000 $ Deferred Outflows of Resources 59,815,000 16,635,000 76,450,000 Liabilities 537,706,000 434,001,000 971,707,000 Deferred Inflows of Resources 164,155,000 6,432,000 170,587,000 Net Position:
Net investment in capital assets 764,271,000 438,675,000 1,202,946,000 Restricted 524,406,000 25,394,000 549,800,000 Unrestricted (deficit) (171,510,000) 200,819,000 29,309,000 Total Net Position 1,117,167,000$ 664,888,000 $ 1,782,055,000 $ 12 City of Stockton
Government-Wide Statement of Activities
For the Year Ended June 30, 2022
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Governmental Business-Type
Activities Activities Total
Program Revenues:
Charges for Services 72,491,000 $ 156,777,000 $ 229,268,000 $ Operating Grants and Contributions 100,879,000 2,499,000 103,378,000 Capital Grants and Contributions 47,352,000 12,231,000 59,583,000 Total Program Revenues 220,722,000 171,507,000 392,229,000 Expenses 321,619,000 135,873,000 457,492,000
Net Cost of Services (100,897,000) 35,634,000 (65,263,000) General Revenues (Loss) 289,018,000 (7,018,000) 282,000,000 Transfers 438,000 (438,000) -
Changes in Net Position 188,559,000$ 28,178,000 $ 216,737,000 $ 13 City of Stockton
General Fund Summary
Fund Balance
June 30, 2022 and 2021
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2022 2021 Change
Fund Balance:
Nonspendable 2,077,000 $ 2,215,000 $ (138,000) $ Restricted 5,289,000 5,385,000 (96,000) Committed 123,754,000 77,638,000 46,116,000
Assigned 4,285,000 4,526,000 (241,000)
Unassigned 43,208,000 41,093,000 2,115,000
Total Fund Balance 178,613,000$ 130,857,000 $ 47,756,000 $ 14 City of Stockton
General Fund Summary
Revenues, Expenditures and Changes in Fund Balance
For the Years Ended June 30, 2022 and 2021
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2022 2021 Change
Revenues 303,970,000$ 286,396,000 $ 17,574,000 $
Expenditures (244,157,000) (238,195,000) (5,962,000) Revenues over Expenditures 59,813,000 48,201,000 11,612,000 Other Financing Uses (12,056,000) (31,955,000) 19,899,000 Change in Fund Balance 47,757,000$ 16,246,000 $ 31,511,000 $ 15 FINANCIAL AUDIT RESULTS
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16 AUDIT RESULTS
• Unmodified Opinion
• Financial Statements are fairly presented in all material respects • Significant accounting policies have been consistently applied • Estimates are reasonable
• Disclosures are properly reflected in the financial statements • AU-C 265, Communicating Internal Control Related Matters Identified in an Audit
• 2022-001 Internal Control Over Financial Reporting
• Prior Period Adjustments
• Stale Receivable and Payable
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