PRESENTATIONS
ITEMS 9 & 10
City of Victorville
Presentation to the Audit Committee
April ϭϱ, 2025
2024 Audit of
City of Victorville
Agenda
3 Our Firm and the Engagement Team
Deliverables and Scope of the Audit
Audit Methodology
Areas of Primary Audit Risk
Auditor’s Report and Financial Statements
Required Communications
New Accounting Standards
Our Firm and the
Engagement Team
5 Years of Experience
Government Audit Clients
City Audit Clients
Employees
Lawsuits, Legal or Disciplinary Actions
25 44
30 0
65 Our Firm – By the Numbers
Engagement Team
Engagement Team
7 Quality Control
Reviewer
Mitesh Desai, CPA
Engagement Partner
Ahmed Badawi, CPA
Audit Manager
Wenwei Zhao, CPA
IT Specialist
Omar Rahman, CPA,
CISA
Audit Staff
Everly Feng
Audit Staff
Mostafa Dawod
Audit Staff
Brett Celani
Acting Senior
Samo Michel, CPA
Deliverables and
Scope of the Audit
Deliverables and Scope of the Audit
9 p
Report on the Annual Comprehensive Financial Report (ACFR) Single Audit Report
Report on Southern California Airport Logistics Authority Basic Financial Statements
Report on Victorville Water District Basic Financial Statements Agreed-upon Procedures on Appropriation Limit Schedule (GANN) Communications with Those Charged with Governance
Audit Methodology
Gather information and
Finalize Timing.
Review Systems, Processes
and Assess Risk.
Test and Validate Significant
Account Balances.
Prepare Necessary
Reports.
Planning ReportingYear-EndInterim
11 Audit Methodology
Areas of Primary
Audit Risk
Areas of Primary Audit Risk
13 Areas of Primary Audit Risk
• Assignment of staff based on consideration of audit risk. • Procedures to incorporate an element of unpredictability in the audit. • Consideration of the selection and application of significant accounting principles.
• Examination of journal entries.
• Review of accounting estimates for bias.
• Evaluation of business rationale for unusual transactions. • Evaluation of the appropriateness of fraud-related inquiries.
Risk of Management Override of Controls – The risk of management override of controls was addressed by the following procedures:
Areas of Primary Audit Risk
14 • Governmental Funds: Confirmed and validated property taxes, sales taxes, and other significant revenues and receivables.
• Proprietary Funds: Performed substantive analytical procedures, performed Utility Billing testing, and performed testing on material revenue items by reviewing backup.
Revenue and Receivables (Taxes, Grants, Notes, etc.) – Improper Revenue Recognitions:
• Tested the backups to ensure existence and effectiveness • Reviewed IT controls by examining policies and system safeguards • Assessed management response to evaluate the risk mitigation actions
Cybersecurity Risk – Risk of Disruptions to IT Systems:
Areas of Primary Audit Risk
15 Areas of Primary Audit Risk
• Fair Value of Investments
• Capital Asset Useful Lives
• Pension related Estimates
• OPEB related Estimates
Estimates – Review of Significant Accounting Estimates:
Auditor’s Report
and Financial
Statements
Auditor’s Report
1717
• Audit performed in accordance with Generally Accepted Auditing Standards
• Audit performed in accordance with Government Auditing Standards
Auditing Standards
• 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 Unmodified Opinions
18 Cash &
Investments
Accounts
Receivable
Notes and
Leases
Receivable
Prepaids,
Inventories, and
Other Assets
Capital Assets
Deferred
Outflows of
Resources
2022 $282,509,655 $47,583,211 $121,052,34 3 $8,199,157 $837,560,265 $22,349,532 2023 $349,796,145 $41,764,606 $130,018,08 2 $7,587,834 $871,185,369 $40,131,494 2024 $406,670,232 $35,509,980 $125,557,16 7 $6,299,567 $885,408,723 $40,557,705 $-
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000 Millions
Assets and Deferred Outflows of Resources
Government-Wide Financial Statements
Government-Wide Financial Statements
19 Accounts
Payable &
Accrued
Liabilities
Unearned
Revenue,
Deposits, and
Other Liabilities
Compensated
Absences Long-term Debt OPEB Liability Net Pension
Liability
Deferred
Inflows of
Resources
2022 $29,745,549 $52,757,687 $5,201,002 $346,913,247 $43,024,034 $43,633,367 $123,737,366 2023 $24,944,307 $48,871,407 $6,035,442 $339,619,369 $35,269,463 $82,263,665 $117,130,978 2024 $31,122,284 $33,190,153 $6,600,039 $332,436,141 $37,306,568 $90,464,647 $106,064,045 $-
$50
$100
$150
$200
$250
$300
$350
$400 Millions
Liabilities and Deferred Inflows of Resources
Government-Wide Financial Statements
20 Net Investment in Capital Assets Restricted Unrestricted 2022 $518,993,069 $90,462,453 $96,362,328
2023 $557,312,795 $100,773,018 $158,409,982
2024 $589,998,561 $117,571,606 $185,570,617
$-
$100
$200
$300
$400
$500
$600
$700 Millions
Net Position
Government-Wide Financial Statements
21 2022 2023 2024
Net Cost of Service $39,967,317 $37,634,825 $69,192,029 Tax Revenue $105,714,545 $109,877,170 $114,779,788
$-
$20
$40
$60
$80
$100
$120
$140 Millions
Net Cost of Service to Tax Revenue - Governmental Activities General Fund
22 2022 2023 2024
Unrestricted Fund Balance $75,466,266 $103,869,672 $132,070,172 Total Expenditures $78,890,656 $99,449,903 $108,854,770 As % of Total Expenditures 96% 104% 121%
Number of Months* 12 13 15
$-
$20
$40
$60
$80
$100
$120
$140 Millions
Expenditure Coverage
* Measure of the City's ability to operate with no revenues using available fund balance. GFOA recommendation no less than 2 months.
Pension Plans
23 2022 2023 2024
1% Decrease $81,909,165 $124,259,983 $115,246,737
Current Rate $43,633,367 $82,263,665 $90,464,647
1% Increase $12,207,986 $47,923,829 $54,167,096
$-
$20
$40
$60
$80
$100
$120
$140 Millions
Total Net Pension Liability
Sensitivity to Discount Rate
OPEB Plans
24 2022 2023 2024
1% Decrease $51,806,504 $41,566,377 $43,887,855
Current Rate $43,024,034 $35,269,463 $37,306,568
1% Increase $36,157,421 $30,235,850 $32,036,781
$-
$10
$20
$30
$40
$50
$60 Millions
Total OPEB Liability
Sensitivity to Discount Rate
Required
Communications
Required Communications
26 Auditor’s Responsibilities
Provide an opinion on whether financial statements
are fairly stated in accordance with U.S. GAAP
Evaluate internal control over financial reporting
including tone at the top
Evaluate compliance with laws, contracts, and grants.
Ensure financial statements are clear and transparent
Communicate with the governing body
Management’s Responsibilities
Take responsibility for the financial statements
Establish and maintain internal control over
financial reporting
Make all financial records available to us
Establish internal control to prevent and detect fraud
Inform us of all known and suspected fraud
Comply with laws and regulations
Take corrective action on audit findings
Required Communications
27 • It is our responsibility to maintain independence
• We maintained our independence by strict adherence to the AICPA and the Board of Accountancy rules and regulations
• Other than preparing the financial st atements, no services performed that could affect our independence.
Independence
• Not within the time frame origina lly communicated to the City in our engagement letters.
Timing of the Audit
• The City adopted the following ne w pronouncement during the year:
• GASB Statement No. 100 – Accounti ng Changes and Error Corrections Significant Accounting Policies and Unusual Transactions Required Communications
28 • No difficulties encountered.
Difficulties Encountered in Performing the Audit
• There were adjustments and reclassifying entries during the course of the audit. Management has posted all proposed audit adjustments.
Significant Audit Adjustments and Unadjusted Differences • No material weaknesses identified
Deficiencies in Internal Control over Financial Reporting New Accounting Standards
29 • GASB Statement No. 101 – Compensated Absences
• GASB Statement No. 102 – Cer tain Risk Disclosures
2025
• GASB Statement No. 103 – Financial Reporting Model
Improvements
• GASB Statement No. 104 – Disclosu re of Certain Capital Assets 2026
Thank You for Allowing
us to Provide Audit
Services to the
City of Victorville.
ITEM 13
La Paz Drive / Seneca Road Traffic Circle
Quick Build Project
CITY COUNCIL MEETING
April 15, 2025
La Paz Dr. / Seneca Rd. Traffic Circle Quick Build Project GOAL E: INVEST IN INFRASTRUCTURE - STRATEGIC PLAN 2023-2026 EExistingg Conditions
¾ Collision reports from 2019-2024 indicate that the causes for all collisions at the La Paz Dr./Seneca Rd. intersection were unsafe speeds followed by improper turns and DUIs. ¾ Five out of the 8 collisions resulted in property damage.
La Paz Dr. / Seneca Rd. Traffic Circle Quick Build Project GOAL E: INVEST IN INFRASTRUCTURE - STRATEGIC PLAN 2023-2026 PProposedd Solution
La Paz Drive
¾ A traffic circle would promote safer, more efficient
traffic flow and reduce the likelihood of
serious accidents ultimately promoting active
transportation.
La Paz Dr. / Seneca Rd. Traffic Circle Quick Build Project GOAL E: INVEST IN INFRASTRUCTURE - STRATEGIC PLAN 2023-2026 220244 Sustainablee Communityy Program (SCP)
¾ Sustainable Community Program (SCP) Funds project s that support Active Transporation modes such as walking, biking and transit, improve road safety, and achieve the mobility goals, planning policies, strategic investments, and implementation strategies of the Connect SoCal 2024. ¾ Funded by Active Transportation Program (ATP) Cycle 7 regional funds, a Fiscal Year (FY) 2023 Safe Streets and Roads for All federal grant, and SCAG matching state funds. ¾ Total Awarded Funds = $503,700, no match required
s
c
Phase Projected Cost
Design $ 130,000
Construction $ 373,700
SCP Funding $ 503,700
Funding Breakdown by Phase
La Paz Dr. / Seneca Rd. Traffic Circle Quick Build Project GOAL E: INVEST IN INFRASTRUCTURE - STRATEGIC PLAN 2023-2026 Quick -Buildd Projects
La Paz Dr. / Seneca Rd. Traffic Circle Quick Build Project GOAL E: INVEST IN INFRASTRUCTURE - STRATEGIC PLAN 2023-2026 CCityy of EEll Montee –– Quickk Builtt Demonstrationn
2024
Phase Final Project Cost
Design $ 160,000
Construction $ 254,761
SCP Funding $ 414,761
Final Cost by Phase
Current Intersection Project Implementation
QQuick --Buildd Process
La Paz Dr. / Seneca Rd. Traffic Circle Quick Build Project
SSCAGG Process
La Paz Dr. / Seneca Rd. Traffic Circle Quick Build Project
RRecommendations
La Paz Dr. / Seneca Rd. Traffic Circle Quick Build Project ¾ Approve the Notice of Exemption; and
¾ Adopt A Resolution 25-023 of the City of Victorville Declaring Intent to Accept a SCAG Competitive Grant Award for the La Paz Drive / Seneca Road Traffic Circle Quick Build Project, Finding the Project Exempt from CEQA, and Authorizing the City Manager to Execute All Necessary Documents to Accept Award (Resolution 25-023)
EEND OF PRESENTATION