HomeMy WebLinkAboutStaff Report 12107
City of Palo Alto (ID # 12107)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 4/6/2021
City of Palo Alto Page 1
Summary Title: Approval of FY2020 Single Audit Report
Title: Approval of the Macias Gini & O’Connell’s Single Audit Report for the
Year Ended June 30, 2020
From: City Manager
Lead Department: City Auditor
RECOMMENDATION
The Office of the City Auditor and Staff recommend that the Finance Committee approve and
forward to Council for consent the following audit reports for the fiscal year ended June 30,
2020 prepared by Macias Gini & O’Connell (“MGO”). These reports are collectively referred to
as the Single Audit.
1. Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements in Accordance
With Government Auditing Standards.
2. Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on
Internal Control Over Compliance; and Report on the Schedule of Federal Awards
Required by the Uniform Guidance.
SUMMARY
At the January 11, 2021 City Council Meeting, the City Council approved the following audit
reports prepared by MGO:
a) Report to the City Council (the “Management Letter”)
b) Cable TV Franchise, Independent Auditor’s Report and Statements of Franchise
Revenues and Expenses for the years ended December 31, 2019 and 2018
c) Palo Alto Public Improvement Corporation (a component unit of the City of Palo Alto)
Annual Financial Report for the year ended June 30, 2020
d) Regional Water Quality Control Plant, Independent Auditor’s Report and Financial
Statements for the year ended June 30, 2020
e) Independent Accountant’s Report on Applying Agreed-Upon Procedures related to the
Article XIII-B Appropriations (GANN) Limit for the year ended June 30, 2020
City of Palo Alto Page 2
At that time, guidance necessary for the completion of the Single Audit had not yet been
released by Federal Office of Management and Budget. The Single Audit report has since been
completed, thus the recommended action within this report.
MGO reports the following within the Single Audit Report:
- Unmodified opinions as it pertains to both the Financial Statements and to Federal
Awards
- No material weaknesses or significant deficiencies in internal controls over financial
reporting or over major programs
- No findings or questioned costs
STAKEHOLDER ENGAGEMENT
This report has been prepared by the Office of the City Auditor in coordination with the
Administrative Services Division.
Attachments:
• City of Palo Alto - Single Audit Report FY2020
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'ƌĂŶƚŽƌ &ĞĚĞƌĂů
/ĚĞŶƚŝĨLJŝŶŐ &^ƵďƌĞĐŝƉŝĞŶƚƐ
'ƌĂŶƚŽƌͬWĂƐƐͲdŚƌŽƵŐŚ'ƌĂŶƚŽƌͬWƌŽŐƌĂŵdŝƚůĞ EƵŵďĞƌ EƵŵďĞƌ džƉĞŶĚŝƚƵƌĞƐ džƉĞŶĚŝƚƵƌĞƐ
h͘^ĞƉĂƌƚŵĞŶƚŽĨ,ŽƵƐŝŶŐĂŶĚhƌďĂŶĞǀĞůŽƉŵĞŶƚ
ŝƌĞĐƚ
'Ͳ ŶƚŝƚůĞŵĞŶƚ'ƌĂŶƚƐůƵƐƚĞƌ
ŽŵŵƵŶŝƚLJĞǀĞůŽƉŵĞŶƚůŽĐŬ'ƌĂŶƚƐͬ ŶƚŝƚůĞŵĞŶƚ'ƌĂŶƚƐ ŶͬĂ ϭϰ͘Ϯϭϴ ϲϬϲ͕ϬϲϮΨ ϱϭϲ͕ϴϭϵΨ
h͘^͘ĞƉĂƌƚŵĞŶƚŽĨ:ƵƐƚŝĐĞ
ŝƌĞĐƚ
ƵůůĞƚƉƌŽŽĨsĞƐƚWĂƌƚŶĞƌƐŚŝƉ ŶͬĂ ϭϲ͘ϲϬϳ ϭ͕ϴϮϴ Ͳ
h͘^͘ĞƉĂƌƚŵĞŶƚŽĨdƌĂŶƐƉŽƌƚĂƚŝŽŶ
ŝƌĞĐƚ
WƵďůŝĐdƌĂŶƐƉŽƌƚĂƚŝŽŶZĞƐĞĂƌĐŚ͕dĞĐŚŶŝĐĂůƐƐŝƐƚĂŶĐĞ
ĂŶĚdƌĂŝŶŝŶŐ ͲϮϬϭϳͲϬϮϬͲϬϬ ϮϬ͘ϱϭϰ ϱϴϲ͕ϯϳϴ Ͳ
ŝƌƉŽƌƚ/ŵƉƌŽǀĞŵĞŶƚWƌŽŐƌĂŵ ϯͲϬϲͲϬϭϴϮͲϬϭϰͲϮϬϭϴ ϮϬ͘ϭϬϲ ϱ͕ϰϴϭ͕ϰϱϬ Ͳ
^ƵďƚŽƚĂůͲŝƌĞĐƚǁĂƌĚƐ ϲ͕Ϭϲϳ͕ϴϮϴ Ͳ
WĂƐƐͲƚŚƌŽƵŐŚĨƌŽŵ^ƚĂƚĞŽĨĂůŝĨŽƌŶŝĂĞƉĂƌƚŵĞŶƚŽĨdƌĂŶƐƉŽƌƚĂƚŝŽŶ
,ŝŐŚǁĂLJWůĂŶŶŝŶŐĂŶĚŽŶƐƚƌƵĐƚŝŽŶ Z>^ͲϱϭϬϬ;ϬϭϳͿ ϮϬ͘ϮϬϱ ϰϯ͕ϭϯϵ Ͳ
,ŝŐŚǁĂLJWůĂŶŶŝŶŐĂŶĚŽŶƐƚƌƵĐƚŝŽŶ D>ͲϱϭϬϬ;ϬϮϳͿ ϮϬ͘ϮϬϱ ϲϬϴ͕ϴϰϲ Ͳ
WĂƐƐͲƚŚƌŽƵŐŚĨƌŽŵ^ĂŶƚĂůĂƌĂsĂůůĞLJdƌĂŶƐƉŽƌƚĂƚŝŽŶƵƚŚŽƌŝƚLJ
,ŝŐŚǁĂLJWůĂŶŶŝŶŐĂŶĚŽŶƐƚƌƵĐƚŝŽŶ ^>ϭϳϬϬϮϭ ϮϬ͘ϮϬϱ ϮϬϳ͕ϵϳϲ Ͳ
^ƵďƚŽƚĂůͲ,ŝŐŚǁĂLJWůĂŶŶŝŶŐĂŶĚŽŶƐƚƌƵĐƚŝŽŶϴϱϵ͕ϵϲϭ Ͳ
dŽƚĂůh͘^͘ĞƉĂƌƚŵĞŶƚŽĨdƌĂŶƐƉŽƌƚĂƚŝŽŶ ϲ͕ϵϮϳ͕ϳϴϵ Ͳ
EĂƚŝŽŶĂů ŶĚŽǁŵĞŶƚĨŽƌƚŚĞ,ƵŵĂŶŝƚŝĞƐ
ŝƌĞĐƚ
DƵƐĞƵŵƐĨŽƌŵĞƌŝĐĂ DͲϭϬͲϭϳͲϬϯϮϳͲϭϳ ϰϱ͘ϯϬϭ ϲϵ͕ϰϬϱ Ͳ
WĂƐƐͲƚŚƌŽƵŐŚĨƌŽŵĂůŝĨŽƌŶŝĂ^ƚĂƚĞ>ŝďƌĂƌLJ
'ƌĂŶƚƐƚŽ^ƚĂƚĞƐ DͲϭϭͲϭϱͲϬϭϬϰͲϭϱ ϰϱ͘ϯϭϬ ϭϳ͕ϭϲϬ Ͳ
dŽƚĂůEĂƚŝŽŶĂů ŶĚŽǁŵĞŶƚĨŽƌƚŚĞ,ƵŵĂŶŝƚŝĞƐ ϴϲ͕ϱϲϱ Ͳ
dKd>& Z>&/EE/>tZ^ϳ͕ϲϮϮ͕ϮϰϰΨ ϱϭϲ͕ϴϭϵΨ
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^ĐŚĞĚƵůĞŽĨ džƉĞŶĚŝƚƵƌĞƐŽĨ&ĞĚĞƌĂůǁĂƌĚƐ
&ŽƌƚŚĞzĞĂƌ ŶĚĞĚ:ƵŶĞϯϬ͕ϮϬϮϬ
^ĞĞĂĐĐŽŵƉĂŶLJŝŶŐŶŽƚĞƐƚŽWKH6FKHGXOHRI([SHQGLWXUHVRI)HGHUDO$ZDUGV
/dzK&W>K>dK
EŽƚĞƐƚŽƚŚĞ^ĐŚĞĚƵůĞŽĨ džƉĞŶĚŝƚƵƌĞƐŽĨ&ĞĚĞƌĂůǁĂƌĚƐ
zĞĂƌ ŶĚĞĚ:ƵŶĞϯϬ͕ϮϬϮϬ
EKd ϭʹZ WKZd/E' Ed/dz
dŚĞƐĐŚĞĚƵůĞŽĨĞdžƉĞŶĚŝƚƵƌĞƐŽĨĨĞĚĞƌĂůĂǁĂƌĚƐ;ƚŚĞ^ĐŚĞĚƵůĞͿŝŶĐůƵĚĞƐĞdžƉĞŶĚŝƚƵƌĞƐŽĨĨĞĚĞƌĂůĂǁĂƌĚƐ
ĨŽƌƚŚĞŝƚLJŽĨWĂůŽůƚŽ͕ĂůŝĨŽƌŶŝĂ;ŝƚLJͿ͕ĂŶĚŝƚƐĐŽŵƉŽŶĞŶƚƵŶŝƚĂƐĚŝƐĐůŽƐĞĚŝŶƚŚĞŶŽƚĞƐƚŽƚŚĞďĂƐŝĐ
ĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͘
EKd Ϯʹ^/^K&KhEd/E'
ĂƐŝƐ ŽĨ ĂĐĐŽƵŶƚŝŶŐ ƌĞĨĞƌƐ ƚŽ ǁŚĞŶ ƌĞǀĞŶƵĞƐ ĂŶĚ ĞdžƉĞŶĚŝƚƵƌĞƐ Žƌ ĞdžƉĞŶƐĞƐ ĂƌĞ ƌĞĐŽŐŶŝnjĞĚ ŝŶ ƚŚĞ
ĂĐĐŽƵŶƚƐĂŶĚƌĞƉŽƌƚĞĚŝŶƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͕ƌĞŐĂƌĚůĞƐƐŽĨ ŵĞĂƐƵƌĞŵĞŶƚ ĨŽĐƵƐ ĂƉƉůŝĞĚ͘ ůů
ŐŽǀĞƌŶŵĞŶƚĂůĨƵŶĚƐĂƌĞĂĐĐŽƵŶƚĞĚĨŽƌƵƐŝŶŐƚŚĞŵŽĚŝĨŝĞĚĂĐĐƌƵĂůďĂƐŝƐŽĨĂĐĐŽƵŶƚŝŶŐ͘ůůƉƌŽƉƌŝĞƚĂƌLJ
ĨƵŶĚƐĂƌĞĂĐĐŽƵŶƚĞĚĨŽƌƵƐŝŶŐƚŚĞĂĐĐƌƵĂůďĂƐŝƐŽĨĂĐĐŽƵŶƚŝŶŐ͘ džƉĞŶĚŝƚƵƌĞƐŽĨĨĞĚĞƌĂůĂǁĂƌĚƐƌĞƉŽƌƚĞĚ
ŝŶƚŚĞ^ĐŚĞĚƵůĞĂƌĞƌĞĐŽŐŶŝnjĞĚǁŚĞŶŝŶĐƵƌƌĞĚĂŶĚĂůůĞůŝŐŝďŝůŝƚLJƌĞƋƵŝƌĞŵĞŶƚƐŚĂǀĞďĞĞŶŵĞƚ͘^ƵĐŚ
ĞdžƉĞŶĚŝƚƵƌĞƐ ĂƌĞ ƌĞĐŽŐŶŝnjĞĚ ĨŽůůŽǁŝŶŐ ƚŚĞ ĐŽƐƚ ƉƌŝŶĐŝƉůĞƐ ĐŽŶƚĂŝŶĞĚ ŝŶ Ϯ &Z ϮϬϬ͕ ^ƵďƉĂƌƚ ;ŽƐƚ
WƌŝŶĐŝƉůĞƐͿ͕ǁŚĞƌĞŝŶĐĞƌƚĂŝŶƚLJƉĞƐŽĨĞdžƉĞŶĚŝƚƵƌĞƐĂƌĞŶŽƚĂůůŽǁĂďůĞŽƌĂƌĞůŝŵŝƚĞĚĂƐƚŽƌĞŝŵďƵƌƐĞŵĞŶƚ͘
dŚĞŝƚLJĚŝĚŶŽƚĞůĞĐƚƚŽƵƐĞƚŚĞϭϬйĚĞŵŝŶŝŵŝƐĐŽƐƚƌĂƚĞĂƐĐŽǀĞƌĞĚŝŶϮ&ZϮϬϬ͘ϰϭϰ;&ΘͿĐŽƐƚƐ͘
EKd ϯʹ/Z dE/E/Z d;W^^Ͳd,ZKh',Ϳ& Z>tZ^
&ĞĚĞƌĂůĂǁĂƌĚƐŵĂLJďĞŐƌĂŶƚĞĚĚŝƌĞĐƚůLJƚŽƚŚĞŝƚLJďLJĂĨĞĚĞƌĂůŐƌĂŶƚŝŶŐĂŐĞŶĐLJŽƌŵĂLJďĞŐƌĂŶƚĞĚƚŽ
ŽƚŚĞƌŐŽǀĞƌŶŵĞŶƚĂŐĞŶĐŝĞƐǁŚŝĐŚƉĂƐƐͲƚŚƌŽƵŐŚĨĞĚĞƌĂůĂǁĂƌĚƐƚŽƚŚĞŝƚLJ͘dŚĞ^ĐŚĞĚƵůĞŝŶĐůƵĚĞƐďŽƚŚ
ŽĨƚŚĞƐĞƚLJƉĞƐŽĨĨĞĚĞƌĂůĂǁĂƌĚƉƌŽŐƌĂŵƐǁŚĞŶƚŚĞLJŽĐĐƵƌ͘
EKd ϰʹZ >d/KE^,/WdK& Z>&/EE/>Z WKZd^
ŵŽƵŶƚƐƌĞƉŽƌƚĞĚŝŶƚŚĞ^ĐŚĞĚƵůĞĂŐƌĞĞƚŽŽƌĐĂŶďĞƌĞĐŽŶĐŝůĞĚǁŝƚŚƚŚĞĂŵŽƵŶƚƐƌĞƉŽƌƚĞĚŝŶƚŚĞ
ƌĞůĂƚĞĚĨĞĚĞƌĂůĨŝŶĂŶĐŝĂůƌĞƉŽƌƚƐ͘
EKd ϱʹZ >d/KE^,/WdK^/&/EE/>^dd D Ed^
&ĞĚĞƌĂůĂǁĂƌĚƐĂŶĚĞdžƉĞŶĚŝƚƵƌĞƐĂŐƌĞĞƚŽŽƌĐĂŶďĞƌĞĐŽŶĐŝůĞĚǁŝƚŚƚŚĞĂŵŽƵŶƚƐƌĞƉŽƌƚĞĚŝŶƚŚĞŝƚLJ͛Ɛ
ďĂƐŝĐĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͘
/dzK&W>K>dK
^ĐŚĞĚƵůĞŽĨ&ŝŶĚŝŶŐƐĂŶĚYƵĞƐƚŝŽŶĞĚŽƐƚƐ
zĞĂƌ ŶĚĞĚ:ƵŶĞϯϬ͕ϮϬϮϬ
^ĞĐƚŝŽŶ/ ^ƵŵŵĂƌLJŽĨƵĚŝƚŽƌ͛ƐZĞƐƵůƚƐ
&ŝŶĂŶĐŝĂů^ƚĂƚĞŵĞŶƚƐ͗
dLJƉĞŽĨĂƵĚŝƚŽƌ͛ƐƌĞƉŽƌƚŝƐƐƵĞĚ͗hŶŵŽĚŝĨŝĞĚ
/ŶƚĞƌŶĂůĐŽŶƚƌŽůŽǀĞƌĨŝŶĂŶĐŝĂůƌĞƉŽƌƚŝŶŐ͗
xDĂƚĞƌŝĂůǁĞĂŬŶĞƐƐĞƐŝĚĞŶƚŝĨŝĞĚ͍EŽ
x^ŝŐŶŝĨŝĐĂŶƚĚĞĨŝĐŝĞŶĐŝĞƐŝĚĞŶƚŝĨŝĞĚƚŚĂƚĂƌĞ
ŶŽƚĐŽŶƐŝĚĞƌĞĚƚŽďĞŵĂƚĞƌŝĂůǁĞĂŬŶĞƐƐĞƐ͍EŽŶĞƌĞƉŽƌƚĞĚ
EŽŶĐŽŵƉůŝĂŶĐĞŵĂƚĞƌŝĂůƚŽƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐŶŽƚĞĚ͍ EŽ
&ĞĚĞƌĂůǁĂƌĚƐ͗
/ŶƚĞƌŶĂůĐŽŶƚƌŽůŽǀĞƌŵĂũŽƌƉƌŽŐƌĂŵƐ͗
xDĂƚĞƌŝĂůǁĞĂŬŶĞƐƐĞƐŝĚĞŶƚŝĨŝĞĚ͍EŽ
x^ŝŐŶŝĨŝĐĂŶƚĚĞĨŝĐŝĞŶĐŝĞƐŝĚĞŶƚŝĨŝĞĚƚŚĂƚĂƌĞ
ŶŽƚĐŽŶƐŝĚĞƌĞĚƚŽďĞŵĂƚĞƌŝĂůǁĞĂŬŶĞƐƐĞƐ͍EŽŶĞƌĞƉŽƌƚĞĚ
dLJƉĞŽĨĂƵĚŝƚŽƌ͛ƐƌĞƉŽƌƚŝƐƐƵĞĚŽŶĐŽŵƉůŝĂŶĐĞǁŝƚŚŵĂũŽƌ
ƉƌŽŐƌĂŵƐ͗hŶŵŽĚŝĨŝĞĚ
ŶLJĂƵĚŝƚĨŝŶĚŝŶŐƐƌĞƋƵŝƌĞĚƚŽďĞƌĞƉŽƌƚĞĚŝŶĂĐĐŽƌĚĂŶĐĞ
ǁŝƚŚϮ&ZϮϬϬ͘ϱϭϲ;ĂͿ͍EŽ
DĂũŽƌƉƌŽŐƌĂŵ͗
&EƵŵďĞƌ EĂŵĞŽĨ&ĞĚĞƌĂůWƌŽŐƌĂŵŽƌůƵƐƚĞƌ
ϮϬ͘ϭϬϲ ŝƌƉŽƌƚ/ŵƉƌŽǀĞŵĞŶƚWƌŽŐƌĂŵ
ϮϬ͘ϱϭϰ WƵďůŝĐdƌĂŶƐƉŽƌƚĂƚŝŽŶZĞƐĞĂƌĐŚ͕dĞĐŚŶŝĐĂůƐƐŝƐƚĂŶĐĞ͕ĂŶĚ
dƌĂŝŶŝŶŐ
ŽůůĂƌƚŚƌĞƐŚŽůĚƵƐĞĚƚŽĚŝƐƚŝŶŐƵŝƐŚďĞƚǁĞĞŶ
dLJƉĞĂŶĚdLJƉĞƉƌŽŐƌĂŵƐΨϳϱϬ͕ϬϬϬ
ƵĚŝƚĞĞƋƵĂůŝĨŝĞƐĂƐĂůŽǁͲƌŝƐŬĂƵĚŝƚĞĞ͍zĞƐ
^ĞĐƚŝŽŶ// &ŝŶĂŶĐŝĂů^ƚĂƚĞŵĞŶƚ&ŝŶĚŝŶŐƐ
EŽŶĞƌĞƉŽƌƚĞĚ͘
^ĞĐƚŝŽŶ/// &ĞĚĞƌĂůǁĂƌĚƐ&ŝŶĚŝŶŐƐĂŶĚYƵĞƐƚŝŽŶĞĚŽƐƚƐ
EŽŶĞƌĞƉŽƌƚĞĚ͘
/dzK&W>K>dK
^ƵŵŵĂƌLJ^ĐŚĞĚƵůĞŽĨWƌŝŽƌƵĚŝƚ&ŝŶĚŝŶŐƐ
zĞĂƌ ŶĚĞĚ:ƵŶĞϯϬ͕ϮϬϮϬ
WƌŝŽƌĂƵĚŝƚĨŝŶĚŝŶŐƐǁĞƌĞŶŽƚƌĞƉŽƌƚĞĚ͘