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FINANCIAL INFORMATION <br />City Budget & Budgetary Controls <br />The City Council is required to adopt a final budget through the passage of a resolution no later than <br />June 30, the close of the fiscal year, following a public hearing process conducted to obtain taxpayer <br />comments. This annual budget serves as the foundation for the City’s financial planning and control. <br />The budget is prepared by fund, function (e.g., public safety) and department (e.g., police). The legal <br />level of budgetary control is at the fund level. The City Manager is authorized to transfer budgeted <br />amounts between departments and line items within any fund; however, any revisions which alter the <br />total expenditures of any fund must be approved by the City Council. Transfers between funds must <br />be approved by the City Council. At the end of the fiscal year, encumbered appropriations are carried <br />forward and become part of the following year’s budget while appropriations that have not been <br />encumbered lapse, unless otherwise authorized by the City Council and the City Manager. <br />Accounting System <br />The City’s accounting records for general government operations are maintained on a modified <br />accrual basis, with the revenues being recorded when measurable and available. Expenditures are <br />recorded when the services or goods are received and the liabilities incurred. Accounting records <br />for the City’s proprietary activities are maintained on the full accrual basis, with revenues recorded <br />when earned and expenses when incurred. In maintaining the City’s accounting system, <br />consideration is given to the adequacy of internal controls. Internal controls are designed to <br />provide reasonable assurance regarding the safeguarding of assets and to ensure the reliability of <br />financial records and maintaining accountability for assets. The concept of reasonable assurance <br />recognizes that the cost of control should not exceed the benefits likely to be derived. The <br />evaluation of costs and benefits requires continuing estimates and judgments by City management. <br />We believe that the City’s system of internal accounting controls continues to adequately safeguard <br />assets and provide reasonable assurance that financial transactions are properly recorded. <br />Risk Management <br />The City maintains a program of commercial insurance combined with self-insurance for substantially <br />all of its governmental operations, except for major construction projects and contractor-supplied <br />services. In such circumstances, insurance to protect the City is provided by each contractor. The <br />City is a member of the Local Agency Workers’ Compensation Excess Joint Powers Authority <br />(LAWCX). The City is also a member of California Joint Powers Risk Management Authority <br />(CJPRMA), which provides annual general liability coverage in an aggregate up to $40 million. <br />Additional information on the City’s risk management activity can be found in the notes to the financial <br />statements. <br />OTHER INFORMATION <br />Certificate of Achievement <br />The Government Finance Officers Association of the United States and Canada (GFOA) awarded a <br />Certificate of Achievement for Excellence in Financial Reporting to the City of San Leandro for its <br />CAFR for the fiscal year ended June 30, 2016. This was the 21st consecutive year that the City of San <br />Leandro has received this prestigious award. In order to be awarded a Certificate of Achievement, a <br />470