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Wednesday, January 19, 2011

Audit of City Finances for FY 2009-2010 Passes Muster

• No ‘Material Misstatements’ Found

BY BILL KOENEKER


The City of Malibu’s independent auditors finished their review of the city’s finances and concluded they found no irregularities and that the city’s financial report reflected accurately the finances that transpired during the past fiscal year.
“In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund and the aggregate remaining fund information of the City of Malibu as of June 30, 2010,” stated a letter issued by certified public accountants Lance, Soll and Lunghard.
The accounting firm indicated they looked to see if they could obtain “reasonable assurance about whether the financial statements are free of material misstatement.”
The firm indicated the audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement.
An audit, according to the consultants, also includes assessing the accounting principles used and significant estimates made by city managers, a well as evaluating the overall financial statement presentation.
The financial review also tests for the city’s compliance with certain laws, regulations, contracts, grant agreements and other matters.
“ We believe that our audit provides a reasonable basis for our opinions.”
The auditors explain that their review was conducted with the purpose of forming opinions on the financial statements that “collectively comprise the city’s basic financial statements.”
The city’s annual financial report for fiscal year 2009-2010 reflects total fund balances of $29.3 million at the end of the fiscal year, an increase of over $7.5 million from the previous year, due to the certificates of participation issued but not yet spent for the improvements to City Hall, according to Reva Feldman the city’s assistant city manager.
The general fund reserve totaled $26.7 million at the fiscal year’s end. Of that amount, over $1.9 million was reserved for encumbrances and prepaid expenses, $7.8 million was reserved for the improvements to City Hall. $1 million was reserved for Bluffs Park /Landon Center improvements, $1.1 million was designed for deferred maintenance. $4.3 million was set aside for capital improvement projects and $61,511 was reserved for vehicles and information technology, according to Feldman.
The special revenue funds, which account for all restricted monies designated for specific uses, ended the fiscal year with a fund balance of $3.4 million representing an increase of $400,000 from the previous fiscal year, Feldman added.
“The auditors issued a management letter that had no findings indicating that the standards applicable to financial audits contained in the government auditing standards have been adhered to by the City of Malibu,” wrote Feldman, in a memo to city council members.

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