RPVCCA_IA_SR_2012_02_07_04_FY10-11_IA_Audited_Financial_ReportCrrvOF
MEMORANDUM
RANCHO PALOS VERDES
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
Project Manager:
HONORABLE CHAIR &COMMISSION MEMBERS
DENNIS McLEAN,DIRECTOR OF FINANCE &Dt/LC
INFORMATION TECHNOLOGY lC lD ~
FEBRUARY 7,2012
FY10-11 IMPROVEMENT AUTHORITY AUDITED
FINANCIAL REPORT
CAROLYN LEHR,CHIEF ADMINISTRATIVE OFFICE~.ca--<:'L
Kathryn Downs,Deputy Director of Finance &Information
Technology
RECOMMENDATION
Receive and file the FY10-11 audited financial report of the Rancho Palos Verdes Joint
Powers Improvement Authority.
DISCUSSION
The terms of the Reimbursement and Settlement Agreement (Horan Agreement)
require an annual independent audit of the Improvement Authority.The Authority's
auditors,White Nelson Diehl Evans,LLP,have completed their audit for FY10-11.The
financial report (see attached)includes an unqualified (clean)opinion issued by the
>auditors.
A copy of the report is available for public review at the front counter located in the
reception area of City Hall.Additionally,the City Clerk's office has a copy of the report
on file for permanent retention.
IA 4-1
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
COMPONENT UNIT FINANCIAL STATEMENTS
WITH REPORT ON AUDIT
BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
JUNE 30,2011
IA 4-2
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
TABLE OF CONTENTS
June 30,2011
Independent Auditors'Report
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Assets
Statement ofActivities
Fund Financial Statements:
Balance Sheet -Governmental Funds
Statement of Revenues,Expenditures and Changes in
Fund Balances -Governmental Funds
Notes to Financial Statements
Required Supplementary Information:
Budgetary Comparison Schedule -Portuguese Bend
Special Revenue Fund
Note to Required Supplementary Information
Supplementary Information:
Schedule of Revenues,Expenditures and Changes in
Fund Balance -Budget and Actual:
Abalone Cove Permanent Fund
Independent Auditors'Report on Internal Control Over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
Page
Number
1-2
3
4
5
6
7
9-15
17
18
19
21
22
23 -24
IA 4-3
INDEPENDENT AUDITORS?REPORT
The Commissioll ofthe
Rancho Palos Verdes Joint Powers
ImproveUTentAllthority .
RanchoPalQs Verdes,caJ:ifottUf.!.
We.have atldlted the aeCqmJan~financial statementS ofthegp¥el:fim:ental activities and each UTajor
mndof the Rancho Palos V\$des]o'int~owers Improvement .Attthon1)t (the Authority),a component
unit of the City ofRanehoPale:s"\1erdes,Califotnl%as of andiQ1;'the yem-ended 1une 30,2011,which
coI1ectivelyCOO),prise th:e:Authorlitts basic .fmcialstawments as listed in the table of contents.Thcese
basic financial state11l.cents are the respon$pilit¥,of the Authority's mana;~meilt.DUl'reSPOnsibility is to
express opinions on these basi~financial statements based on OUt audit.
We conducted oUt allditinac~;tdf.l1l,cewith auditing stand.ards generally accepted.in the United States
ofAtnericamdthe stan~,aJ?pn~ble tQ:6mt:tt~a1 allditseontainedin.Government Auditing
Standards issued by the Camp1tolletGenetalof the United States.Those standards requite that we plan
and petfonn the au:d:i:t to obtain reasonable assurance abo,ut whether the basic financial stateweJ;tts are
free ofmatetial misstatement.Auf.!.1lditmcludesconsideration of internal control over finanCial
reporting as a basis for designing audit procedures 'that artl.appr<llprlate in th~eirCU111stances,hut not for
the purpose of~pressing an opinion on the'effeotiveness of the Authotity'$internal control over
fin.anoial reporting,Acoordingly;we express :no such opinion..An audit.inc1udesexarnining,on a test
basis,evidence supporting the lUl101lllfs:and disclo.sures in thetiP,ancial statements.An audit also
includeS assessiu'gthe Recounting prinoiples l1sedand ,significant estil1J.atesm~e by management,as
weUasevalul'l.ting the {)vercall bas~c fi;n:ancial statement presentation.We believe that our audit
provides areasonabl~basismr ouropini()nS:.
In our opinion,the basic financial statementsreferroo to above present fafrl~man material respects,
the respective financial position oftheg.Qv~ntal activities and each major fund of the Rancho
Palos Verdes Joint Powers Improvement Authority as of J1llle 30,2011,and the respective changes in
financial position.thereof for the fear then ended in conformity with a(;counting principles generally
accepted in the United States:ofA'a1eriea.
As described in Note 1 to the basic financial statements,the Authority haslmplewented the ptQvisions
of GoveJtll1'1leJ;ttal Acco1lll'tingSiandards ;Boa;r:dStatement NUmber 54,"Fund Balance Reporting and
Governmental Fund Type Definitions",fur the year ended JtlUe30:,201:~.
1
2875 Michen¢;Drtve,'$u'flte 300,ltvtne,CA 92606 •Tel:714S178.BOO •Pax:714.978.7893
Offices !'aca.ted in Orange a.na San Diego Counties
IA 4-4
In accordance with Government Auditing Standards,we have also issued our report dated
January 6,2012 on our consideration of the Rancho Palos Verdes Joint Powers Improvement
Authority's intemal control over financial reporting and our tests of its compliance with certain
provisions of laws,regulations,contracts and grant agreements and other matters.The purpose of that
report is to describe the scope of our testing of intemal control over financial reporting and compliance
and the results of that testing,and not to provide an opinion on the intemal control over financial
reporting or on compliance.That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be considered in assessing the results of our audit.
The budgetary comparison schedule,identified as required supplementary information in the table of
contents,is not a required part of the basic financial statements but is supplementary information
required by the accounting principles generally accepted in the United States of America.This
information is an essential part of financial reporting for placing the basic financial statements in an
appropriate operational,economic or historical context.The budgetary comparison schedule and
related note have been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures,including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements
or to the basic financial statements themselves,and other additional procedures in accordance with
auditing standards generally accepted in the United States ofAmerica.In our opinion,the inform.ation
is fairly stated in all material respects in relation to the basic financial statements taken as a whole..
The Authority has omitted the management's discussion and analysis information that accounting
principles generally accepted in the United States ofAmerica require to be presented to supplement the
basic financial statements.Such missing information is considered to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational,economic,or
historical context.Our opinion on the basic financial statements is not affected by this missing
information.\ .
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Rancho Palos Verdes Joint Powers Improvement Authority's basic financial
statements.The schedule of revenues,expenditures and changes in fund balance -budget and actual
Abalone Cove Permanent Fund,identified as supplemental information in the table of contents,is
presented for additional analysis and is not a required part of the basic financial statements of the
Authority.Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the financial statements.The
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional.procedures,including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements
or to the financial statements themselves,and other additional procedures in accordance with auditing
standards generally accepted in the United States of America.In our opinion,the information is fairly
stated in all material respects in relation to the basic financial statements taken as a whole.
January 6,2012
Irvine,California
2
,';..~..'.IA 4-5
BASIC FINANCIAL STATEMENTS
3
IA 4-6
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
STATEMENT OF NET ASSETS
June 30,2011
Governmental
Activities
ASSETS:
Cash and investments $1,604,736
LIABILITIES:
Accounts payable and accrued liabilities 9,629
NET ASSETS:
Restricted for infrastructure maintenance
Nonexpendable 1,000,000
Expendable 292,777
Restricted for infrastructure maintenance 302,330
TOTAL NET ASSETS $1,595,101;
See independent auditors'report and notes to financial statements.
4
IA 4-7
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
STATEMENT OF ACTIVITIES
For the year ended June 30,2011
Net (Expense)
Revenue and
Changes in
Program Revenues Net Assets
Charges Operating Capital
for Grants and Grants and Governmental
Services Contributions Contributions Activities
$$101,000 $$(24,488)
$$101,000 $(24,488)
125,488
125,488
Expenses
Total governmental activities $======
Functions/programs
Governmental Activities:
Public works $
General revenues:
Investment income 3,051
Change in net assets (21,437)
Net assets -beginning of year 1,616,544
Net assets -end ofyear $1,595,107
See independent auditors'report and notes to financial statements.
5
IA 4-8
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
BALANCE SHEET-GOVERNMENTAL FUNDS
June 30,2011
Special
Revenue
Fund
Portuguese
Bend
ASSETS
Permanent
Fund
Abalone
Cove
Total
Governmental
Funds
Cash and investments $308,524 $1,296,212 $1,604,736
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable and accrued liabilities $6,194 $3,435 $9,629
FUND BALANCES:
Nonspendable:
Reimbursement settlement agreement 1,000,000 1,000,000
Restricted for:
Infrastructure maintenance 302,330 292,777 595,107
TOTAL FUND BALANCES 302,330 1,292,777 1,595,107
TOTAL LIABILITIES
AND FUND BALANCES $308,524 $1,296,212 $1,604,736
See independent auditors'report and notes to financial statements.
6
IA 4-9
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
STATEMENT OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS
For the year ended June 30,2011
Special
Revenue Permanent
Fund Fund Total
Portuguese Abalone Governmental
Bend Cove Funds
REVENUES:
Investment income $473 $2,578 $3,051
Contributions from the City of Rancho Palos Verdes 101,000 101,000
TOTAL REVENUES 101,473 2,578 104,051
EXPENDITURES:
Current:
Public works 82,464 43,024 125,488
NET CHANGE IN FUND BALANCES 19,009 (40,446)(21,437)
FUND BALANCES -BEGINNlNG OF YEAR 283,321 1,333,223 1,616,544
FUND BALANCES -END OF YEAR $302,330 $1,292,777 $1,595,107
See independent auditors'report and notes to financial statements.
7
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8
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NOTES TO FINANCIAL STATEMENTS
9
IA 4-12
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
June 30,2011
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The accounting policies of the Rancho Palos Verdes Joint Powers hnprovement Authority (the
Authority)confonn to accounting principles generally accepted in the United States ofAmerica as
applicable to governments.The Governmental Accounting Standards Board (GASB)is the
accepted standard setting body for governmental accounting and financial reporting principles.The
following is a summary ofthe Authority's significant accounting policies.
Reporting Entity:
The Authority is a separate legal governmental entity created on September 4,1990,in accordance
with the provisions of the Reimbursement and Settlement Agreement,dated October 27,1987,
entered into by the City of Rancho Palos Verdes (the City),the Rancho Palos Verdes
Redevelopment Agency (the Agency)and the County of Los Angeles in connection with the Horan
lawsuit.The Authority is considered a component unit of the City of Rancho Palos Verdes for
purpose of the City's annual fmancial report.The Agreement requires funds to be set aside and
expended by the Authority to maintain landslide abatement improvements installed and constructed
by the Agency.
The members ofthe City Council are also members of the Commission of the Authority.Similarly,
the officers of the City serve as officers of the Authority.Facilities and equipment,administrative,
financial and legal services are provided to the Authority by the City.
The Portuguese Bend Special Revenue Fund is financed through annual contributions from the
general fund of the City.The exclusive source of revenue for the Abalone Cove portion of the
Authority comes from investment income on the $1,000,000 principal held in the Pennanent Fund.
Measurement Focus,Basis of Accounting and Financial Statement Presentation:
The basic financial statements ofthe Authority are composed of the following:
•Government-wide financial statements
•Fund financial statements
•Notes to financial statements
See independent auditors'report.
10
IA 4-13
RANCHO PALOS VERDES
JOINT PO'VERS IMPROVEMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30,2011
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Measurement Focus,Basis of Accounting and Financial Statement Presentation (Continued):
Government-wide Financial Statements:
The government-wide financial statements (i.e.,the statement of net assets and the statement of
activities)report information on all of the activities of the Authority.For the most part,the effect
of interfund activity has been removed from these statements.Governmental activities,which
normally are supported by taxes and intergovernmental revenues,are reported separately from
business-type activities,which rely to a significant extent on fees and charges for support.The
Authority has no business-type activities.
The statement of activities demonstrates the degree to which the direct expenses of a given
function are offset by program revenues.Direct expenses are those that are clearly identifiable
with a specific function.Program revenues include 1)charges to customers who purchase,use,or
directly benefit from goods,services,or privileges provided by a given function and 2)grants and
contributions that are restricted to meeting the operational or capital requirements of a particular
function.Other items not properly included among program revenues are reported,instead,as
general revenues.
Fund Financial Statements:
Fund financial statements for the Authority's governmental funds are presented after the
government-wide financial statements.These statements display information about major funds
individually and other governmental funds in the aggregate for governmental funds.
The accounting system of the Authority is organized and operated on the basis of separate funds,
each of which is considered to be a separate accounting entity.Each fund is accounted for by
providing a separate set of self-balancing accounts that constitute its assets,liabilities,fund equity,
revenues,and expenditures.
The Authority reports the following major governmental funds:
The Portuguese Bend Special Revenue Fund is used to account for maintenance and repairs of
landslide abatement improvements in the Portuguese Bend Project Area.
The Abalone Cove Permanent Fund is used to account for monies received as part of a July 1991
Reimbursement and Settlement Agreement with the County of Los Angeles.As a part of this
Agreement,the Authority received a $1,000,000 deposit of nonexpendable principal.The interest
income on this principal is used to pay for maintenance and repairs of Abalone Cove landslide
abatement improvements.
See independent auditors'report.
11
IA 4-14
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30,2011
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Measurement Focus,Basis ofAccounting and Financial Statement Presentation (Continued):
Measurement Focus:
Measurement focus is a term used to describe "which"transactions are recorded within the various
financial statements.
In the government-wide statement of net assets and the statement of activities,activities are
presented using the economic resources measurement focus.Under the economic resources
measurement focus,all (both current and long-term)economic resources and obligations of the
government are reported.
In the fund financial statements,all governmental funds are accounted for on a spending or
"financial flow"measurement focus.This means that only current assets and current liabilities are
generally included on the balance sheets.The reported fund balances (net current assets)are
considered a measure of "available spendable resources".Governmental fund operating statements
present increases (revenues and other financing sources)and decreases (expenditures and other
financing uses)in net current assets. Accordingly,they are said to present a summary of sources
and uses of available spendable resources during a period.Noncurrent portions of long-term
receivables due to governmental funds are reported on the balance sheets,in spite of the
measurement focus.However,special reporting treatments are used to indicate that they should not
be considered "available spendable resources"since they do not represent net current assets.
Recognition of governmental fund type revenue represented by noncurrent receivables is deferred
until they become current receivables.Noncurrent portions of other long-term receivables are
reported as nonspendable or restricted fund balances.Revenues, expenses,gains,losses,assets,
and liabilities resulting from nonexchange transactions are recognized in accordance with the
requirements ofGASB Statement No.33.
When both restricted and unrestricted resources are available for use,it is the Authority's policy to
use restricted resources first,then unrestricted resources as they are needed.
See independent auditors'report.
12
IA 4-15
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30,2011
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Measurement Focus,Basis ofAccounting and Financial Statement Presentation (Continued):
Basis of Accounting:
Basis of accounting refers to "when"transactions are recorded,regardless of the measurement
focus applied.
In the government-wide statement of net assets and statement of activities,the governmental
activities are presented using the accrual basis of accounting.Under the accrual basis of
accounting,revenues are recognized when earned and expenses are recorded when the liability is
incurred or economic asset used,regardless of the timing of related cash flows.Revenues,
expenses,gains,losses,assets,and liabilities resulting from exchange and exchange-like
transactions are recognized when the exchange takes place.
In the fund financial statements,governmental funds are presented using the modified-accrual basis
of accounting.Revenues are recognized when they become measurable and available as net
current assets.Measurable means that the amounts can be estimated or otherwise determined.
Available means that the amounts were collected during the reporting period or soon enough
thereafter to be available to finance the expenditures accrued for the reporting period.Revenue
recognition is subject to the measurable and available criteria for the governmental funds in the
fund financial statements.The Authority considers investment earnings to be available if they are
collected within 60 days of the end ofthe current fiscal period.
Exchange transactions are recognized as revenues in the period in which they are earned (i.e.,the
related goods or services are provided).Locally-imposed derived tax revenues are recognized as
revenues in the period in which the underlying exchange transaction upon which they are based
takes place.Imposed nonexchange transactions are recognized as revenues in the period for which
they were imposed.If the period of use is not specified,they are recognized as revenues when an
enforceable legal claim to the revenues arises or when they are received,whichever occurs first.
Government-mandated and voluntary nonexchange transactions are recognized as revenues when
all applicable eligibility requirements have been met.
For the current fiscal year,the Authority did not have any items that needed to be reconciled
between the fund financial statements and government-wide financial statements as a result of
difference in measurement focus or basis of accounting.
See independent auditors'report.
13
IA 4-16
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30,2011
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Measurement Focus,Basis ofAccounting and Financial Statement Presentation (Continued):
Investments:
Investments are stated at fair value (quoted market price or the best available estimate thereof).
Governmental Fund Balance Classifications:
The Authority has implemented Governmental Accounting Standards Board Statement No.54,
"Fund Balance Reporting and Governmental Fund Type Definitions",for the year ended
June 30,2011.The fund balances reported on the fund statements now consist of the following
categories:
Nonspendable Fund Balance -This classification includes amounts that cannot be spent because
they are either (a)not in spendable form or (b)legally or contractually required to be maintained
intact.
Restricted Fund Balance -This classification includes amounts that can be spent only for specific
purposes stipulated by constitution,external resource providers or through enabling legislation.
Committed Fund Balance -This classification includes amounts that can be used only for the
specific purposes determined by a formal action of the government's highest level of
decision-making authority.
Assigned Fund Balance -This classification includes amounts to be used by the government for
specific purposes but do not meet the criteria to be classified as restricted or committed.In
governmental funds,other than the general fund,assigned fund balance represents the remaining
amount that is not restricted or committed.
Unassigned Fund Balance -This classification includes the residual balance for the government's
fund balance and includes all spendable amounts not contained in other classifications.In other
funds,the unassigned classification is used only to report a deficit balance resulting from
overspending for specific purposes for which amounts had been restricted,committed or assigned.
When an expenditure is incurred for purposes for which both restricted and unrestricted fund
balances are available,the Agency's policy is to apply restricted fund balance first.
When an expenditure is incurred for purposes for which committed,assigned or unassigned fund
balances are available,the Agency's policy is to apply committed fund balance first,then assigned
fund balance,and finally unassigned fund balance.
See independent auditors'report.
14
IA 4-17
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30,2011
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Use of Estimates:
The preparation of basic financial statements in conformity with accounting principles generally
accepted in the United States ofAmerica requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the basic financial statements and the reported amounts of revenues and
expenditures during the reporting period.Actual results could differ from those estimates.
2.CASH AND INVESTMENTS:
Cash and Investments:
Cash and investments at June 30,2011,consisted of the following:
Cash and investments pooled with
the City of Rancho Palos Verdes
Allocation ofInterest Income among Funds:
$1.604,736
Interest income from pooled investments is allocated to those funds which are required by law or
administrative code to receive interest.Interest is allocated on a quarterly basis,based on the
monthly ending cash balances in each fund receiving interest.
See independent auditors'report.
15
IA 4-18
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30,2011
2.CASH AND INVESTMENTS (CONTINUED):
Investments Authorized by the California Government Code and the Authority's Investment
Policy:
The table below identifies the investment types that are authorized for the Authority by the
California Government Code (or the Authority's investment policy,where more restrictive).The
table also identifies certain provisions of the California Government Code (or the Authority's
investnient policy,where more restrictive)that address interest rate risk,credit risk,and
concentration of credit risk
Authorized Investment Type
United States Treasury Obligations
Certificates of Deposit
Repurchase Agreements
Money Market Mutual Funds
Local Authority Investment Fund (LAIF)
Money Market SavingslDemand Deposits
N/A -Not Applicable
Disclosures Relating to Interest Rate Risk:
Maximum
Maturity
3 years
N/A
7 days
N/A
N/A
N/A
Maximum
Percentage
or Amount
of Portfolio
None
None
15%
15%
None
$5 million
Maximum
Investment
in One Issuer
None
None
None
15%
None
15%
As the total amount of the Authority's cash and investments of $1,604,736 were pooled with the
City at June 30,2011,the Authority's credit risk,custodial credit risk,concentration of credit risk,
and interest rate risk,were those applicable to the City's portfolio.These risks are disclosed in the
City's Comprehensive Annual Financial Report (CAFR).
See independent auditors'report.
16
IA 4-19
REQUIRED SUPPLEMENTARY INFORMATION
17
IA 4-20
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
BUDGETARY COMPARISON SCHEDULE
PORTUGUESE BEND SPECIAL REVENUE FUND
For the year ended June 30,2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
mvestment income $1,030 $1,030 $473 $(557)
Contributions from the
City of Rancho Palos Verdes 101,000 101,000 101,000
TOTAL REVENUES 102,030 102,030 101,473 (557)
EXPENDITURES:
Current:
Public works 141,700 141,700 82,464 59,236
NET CHANGE IN
FUND BALANCE (39,670)(39,670)19,009 58,679
FUND BALANCE -
BEGINNING OF YEAR 283,321 283,321 283,321
FUND BALANCE-END OF YEAR $243,651 $243,651 $302,330 $58,679
See independent auditors'report.
18
IA 4-21
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
June 30,2011
The Authority adopts an annual budget using the modified-accrual basis of accounting for the special
revenue and permanent funds.Budgetary controls are established at the department level.At
year-end,unexpended appropriations lapse.
The Authority's Chief Administrative Officer may transfer budget appropriations between major
categories within a fund in confonnance with the policies set by the Authority's Commission.Any
interfund changes or amendments must be approved by the Authority's Commission.Adopted budget
and budget amendments made during the year are reflected in the Budgetary Comparison Schedule..
See independent auditors'report.
19
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20
IA 4-23
SUPPLEMENTARY INFORMATION
21
IA 4-24
RANCHO PALOS VERDES
JOINT POWERS IMPROVEMENT AUTHORITY
SCHEDULE OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
ABALONE COVE PERMANENT FUND
For the year ended June 30,2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Investment income $6,500 $6,500 $2,578 $(3,922)
EXPENDITURES:
Current:
Public works 109,490 109,490 43,024 66,466
NET CHANGE IN
FUND BALANCE (102,990)(102,990)(40,446)62,544
FUND BALANCE -
BEGINNING OF YEAR 1,333,223 1,333,223 1,333,223
FUND BALANCE -END OF YEAR $1,230,233 $1,230,233 $1,292,777 $62,544
See independent auditors'report.
22
IA 4-25
INDEPENDENT AUDITORS'REPORT ON INTERNAL CONTROL OVER
FINANCrALREPORTING:AND.ON COMPLrANCE AND OTHER.MATTER.S
:BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Commission of the
Rancho p·a;Los V¢:t'des ,Jomt,Pruwers
Improvement A:ut1:lotity.
R.an,c::hP Palos Verdes"'CalOOr.tWL
We have audited the finanoial statem:entsof cthegQ'\tet\.11:1.len:ta;l aetiviti~and eaQhma.jor fund of the
Ranoho Palos Ve1"deS Jom,tP<nvers Improvement Authority (the AuthorityJ,aoomponen:tUliit of the
City of Rancho Palos V&1tdes~CalifQ:t'1:1iaas of andfuxthe year ended June 30}2011 which.collectively
comprise the Auth(}ri1:Y~s hasic :f:manoial stafements andha.ve issued ow report thereon dated
Jao:uary 6~2o.12.WeOOJ;lducted our audit in aceorclande With auditing standardsgenel'ally accepted in
the United.8tates ·pf Amerle.a·l!lJ1~..the:$mndar:~.:f4;pplicable to finanCial audits contained in Goveroment
Auditing Standards,.issued 'by the CompttollerGeneral of·fhe 'tJtlited .states.
Managem~tof the Authority is xeB.p.onsiblefutestablishing and maintaining effective intemaI control
over :financial ,repotting.Inplanni'ng andp.erronning our .audit,we considered the Authonty'sintemal
control 0ver financialtepomngasabasls fOr des~gtrin.g our auditing prm.,edures fOfthe putposeof
l'iixpres:sing our opinions on,thefinan~ial statements,btlt .not f01"the:pl.1!'Po$~:of:e"l?t~sing an opinion
on the effectivell€)$s 'Of the Authw.1ty"s internal control o;ver Mancial reporting.Acoordingly,We do not
express an opinion on the'efffletiveness ofthe,Aqthority'sintemal control ovetfinanoial reporting,
A defio:i.enoy in intemaI,control exists when the design :Otoperation of a.oon'ttOl does not allow
management or employees,in the norm,fil CQw:&e ofperforming thett assigned functions,to prevent,or
detect and correct misstatm.entsoll :a 'tU,tJ,ely basl'$.A material weakness is a deficiency,or a
combination ofde:m:oienciesi In mternal eontrol such that there is'a reasonable possibiUtythat a material
misstatementof'9J.e entity"s .financial statements will not be prevented,Or deteotedand corr.ected on a.
timely basis.
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2815 MtehelleDrive,{Suite .300,Irvine,CA 92606-Tel:714<978.1300 •Fax;714.978.7893
Qfiitf~)lq(/l1ted)it\-Dtangedmt Sdn Diego Cou:n.tits
IA 4-26
Internal Control Over Financial Reporting (Continued)
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control
over financial reporting that might be deficiencies,significant deficiencies or material weaknesses.We
did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses,as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the basic financial statements of the Authority
are free of material misstatement,we performed tests of its compliance with certain provisions of laws,
regulations,contracts and grant agreements,noncompliance with which could have a direct and
material effect on the determination of financial statement 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 and other matters
that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of Commission,management,and others
within the Rancho Palos Verdes Joint Powers Improvement Authority and federal awarding agencies
and pass-through entities and is not intended to be and should not be used by anyone other than these
specified parties.
January 6,2012
Irvine, California
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IA 4-27