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CITY OF SAN LEANDRO <br />MEMORANDUM <br />DATE March 2, 2010 <br />TO Council Finance Committee <br />FROM Perry H. Carter, Interim Finance Director <br />VIA Stephen Hollister, City Manager <br />SUBJECT Auditor's Management Letter for 2008-09 <br />BACKGROUND <br />The City's independent auditors have completed their audit of the City's financial statements for <br />the year ended June 30, 2009. The auditors have issued their opinion on the City's financial <br />statements, which is included in the City's Comprehensive Annual Financial Report (CAFR) for <br />2008-09. Staff submitted the CAFR to the Finance Committee for its review at the Committee's <br />January 2010 meeting. At that time staff was pleased to report that the City had received a <br />"clean" opinion (one that is without any reservation or qualification on the opinion) which is the <br />highest level of assurance that can be rendered by the auditors. <br />In connection with the audit, the auditors also prepare a management letter which discusses <br />several key audit areas and communicates that information to the governing body. In the <br />following Discussion section, staff summarizes the auditor's comments with respect to each of <br />these areas along with staff's response. A copy of the management letter is attached for the <br />Committee's review. <br />DISCUSSION <br />Management Letter <br />The following discussion is organized to follow the key audit areas as contained in the Auditor's <br />management letter. <br />Qualitative Aspects of Accounting Practices: In this section the auditors note that the City <br />implemented Governmental Accounting Standards Board Statement (GASB) No. 45 which deals <br />with financial reporting for Other Post Employment Benefits (OPEB). <br />The GASB 45 implementation timetable required that the City implement this standard in 2008- <br />09 and staff is pleased to report the successful implementation of this important standard. <br />Further, in this section, there were no negative audit findings reported and the auditors noted that <br />"We noted no transactions entered into by the governmental unit during the year for which there <br />