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City of San Leandro <br />Meeting Date: May 5, 2014 <br />Staff Report <br />Agenda Section:File Number:14-139 CONSENT CALENDAR <br />Agenda Number:8.D. <br />TO:City Council <br />FROM:Chris Zapata <br />City Manager <br />BY:David Baum <br />Finance Director <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:Staff Report on the Independent Auditor’s City of San Leandro Memorandum <br />on Internal Control and Required Communications for the Year Ended June <br />30, 2013 <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends that the City Council accept the City’s Memorandum on Internal Control <br />(MOIC) and Required Communications for the year ended June 30, 2013. <br />BACKGROUND <br />On February 3, 2014, the City Council accepted the Comprehensive Annual Financial Report <br />(CAFR) for the year ended June 30, 2013. In planning and performing the audit of the <br />financial statements, the City’s independent auditors considered the City’s internal control <br />over financial reporting (internal control) as a basis for designing the auditing procedures for <br />the purpose of expressing opinions on the financial statements. At the completion of the <br />audit, an unqualified, clean opinion was rendered by Maze & Associates. <br />DISCUSSION <br />The City’s independent auditor completed audits of the City’s financial statements , including <br />the MOIC. The audit found material weaknesses in the internal controls. Maze identified one <br />“material weakness”, which is the timeliness of the General Ledger Closing and the Private <br />Purpose Trust Fund accounting . Other matters discussed in the MOIC are Super-User Rights <br />of the Financial System, Investment Policy, new accounting rules and progress toward <br />addressing items mentioned in the prior year MOIC. <br />Based on the MOIC, staff has increased its efforts during fiscal year 2013-14 to comply with <br />the standards identified by Maze & Associates. <br />Page 1 City of San Leandro Printed on 4/29/2014