Resolution No. 73671 RESOLUTION NO, 7367
2
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
3 VERNON APPROVING AND AUTHORIZING THE EXECUTION OF AN
AGREEMENT FOR PROFESSIONAL AUDITING SERVICES BY AND
4 BETWEEN THE CITY OF VERNON AND MACIAS, GINI &
COMPANY LLP
5
6 WHEREAS, the City of Vernon desires to retain the services of
7 a reputable auditing service to perform the audit for the fiscal year
8 ending June 30, 1999; and
9 WHEREAS, Macias, Gini & Company LLP ("MG & Co.) has submitted
10 a proposal to the City of Vernon dated May 24, 1999, to provide
11 professional auditing services for the fiscal year ending June 30,
12 1999; and
13 WHEREAS, MG & Co. is qualified to provide the City of Vernon
14 with the professional auditing services it desires; and
15 WHEREAS, certain individuals employed by MG & Co. have
16 previously provided auditing services to the City with the auditors
17 previously used by the City and, therefore, can assist in providing a
18 smooth transition to a different and less expensive auditing service;
19 and
20 WHEREAS, Bruce V. Malkenhorst, Director of Finance, by letter
21 dated June 17, 1999, has recommended that the City of Vernon retain
22 the services of MG & Co. for auditing services for this fiscal year at
23 an approximate cost of Forty -Nine Thousand Seven Hundred Fifty Dollars
24 and No Cents ($49,750.00), and the Finance Committee approved said
25 recommendation on June 17, 1999; and
26 WHEREAS, the City of Vernon and MG & Co. wish to enter into
27 an Agreement for Professional Auditing Services setting forth the
28 terms and conditions of the services to be performed.
I w
1 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
2 CITY OF VERNON AS FOLLOWS:
3 SECTION 1: The City Council of the City of Vernon does
4 hereby find and determine that the recitals contained hereinabove are
5 true and correct.
6 SECTION 2: The City Council of the City of Vernon hereby
7 approves the Agreement for Professional Auditing Services with MG &
8 Co., an original of which has been presented to the City Council
9 concurrently with this resolution, and the City Council hereby orders
10 said Agreement to be received and filed by the City Clerk.
11 SECTION 3: The City Council of the City of Vernon hereby
12 authorizes the Mayor and the City Clerk to execute said Agreement for,
13 and on behalf of, the City of Vernon.
14 SECTION 4: The City Clerk of the City of Vernon shall
15 certify to the passage of this resolution and thereupon and thereafter
16 the same shall be in full force and effect.
17 APPROVED AND ADOPTED this 13TH day of July, 1999.
18
LEONIS C. MALB RG, Mayor
19 ATTES
20
BRUCE V. MALKENHORST, City Clerk
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being.Resolution No.
7367, was duly adopted by the City Council of the City of Vernon at an
adjourned regular meeting of the City Council duly held on Tuesday,
July 13, 1999, and thereafter was duly signed by the Mayor of the City
of Vernon.
(SEAL)
v
BRUCE V. MALKENHORST, City Clerk
-3-
SUPPORTING
DOCUMENTS
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro -Tern
WM. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX (323) 826-1438
January 24, 2003
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
Macias, Gini & Company LLP
515 South Figueroa Street, Suite 325
Los Angeles, California 90071
EDUARDO OLIVO
City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Municipal Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323) 826-1481
We are providing this letter in connection with your audit of the general purpose financial
statements of City of Vernon, California (City) a d for the fiscal year t en
ended for the purpose of expressing an opinion as to whether the general purpose financial
statements present fairly, in all material respects, the financial position of the City and the results
of its operations and the cash flows of its proprietary fund types in conformity with accounting
principles generally accepted in the United States of America. We confirm that we are
responsible for the fair presentation in the general purpose financial statements of financial
position, results of operations, and cash flows of the proprietary fund types in conformity with
accounting principles generally accepted in the United States of America. We are also
responsible for adopting sound accounting policies, establishing and maintaining internal control,
and preventing and detecting fraud.
Certain representations in this letter are described as being limited to matters that are material.
Items are considered material for this purpose if they involve a misstatement or omission larger
than $50,000 or, if in the light of surrounding circumstances, it would be probable that the
judgment of a reasonable person relying on the information would be changed or influenced by
the omission or misstatement regardless of its size.
We confirm, to the best of our knowledge and belief, as of January 24, 2003, the following
representations made to you during your audit.
1. The financial statements referred to above are fairly presented in conformity with
generally accepted accounting principles and include all properly classified funds and
account groups of the primary government and all component units required by
accounting principles generally accepted in the United States of America to be included
in the financial reporting entity.
2. We have made available to you all —
a. Financial records and related data and. all audit or relevant monitoring reports, if
any, received from funding sources.
b. Minutes of the meetings of the City Council or summaries of actions of recent
meetings for which minutes have not yet been prepared.
3. There have been no communications from regulatory agencies concerning
noncompliance with, or deficiencies in, financial reporting practices.
4. There are no material transactions that have not been properly recorded in the accounting
records underlying the financial statements.
5. We believe the effects of the uncorrected financial statement reclassifications
summarized in the attached schedule are immaterial, both individually and in the
aggregate, to the financial statements taken as a whole.
6. There has been no —
a. Fraud involving management or employees who have significant roles in internal
control.
b. Fraud involving others that could have a material effect on the financial
statements.
7. The City has no plans or intentions that may materially affect the carrying value or
classification of assets, liabilities, or fund equity.
8. The following, if any, have been properly recorded or disclosed in the financial
statements:
a. Related party transactions, including revenues, expenditures/expenses, loans,
transfers, leasing arrangements, and guarantees, and amounts receivable from or
payable to related parties.
b. Guarantees, whether written or oral, under which the City is contingently liable.
c. All accounting estimates that could be material to the financial statements,
including the key factors and significant assumptions underlying those estimates,
and we believe the estimates are reasonable in the circumstances.
d. Participation in the Independent Cities Risk Management Authority, a public
entity risk pool.
9. We are responsible for compliance with the laws, regulations, and provisions of contracts
and grant agreements applicable to us; and we have identified and disclosed to you all
laws, regulations and provisions of contracts and grant agreements that we believe have a
direct and material effect on the determination of financial statement amounts.
10. There are no —
a. Violations or possible violations of budget ordinances, laws and regulations
(including those pertaining to adopting and amending budgets), provisions of
contracts and grant agreements, tax or debt limits, and any related debt covenants
whose effects should be considered for disclosure in the financial statements or as
a basis for recording a loss contingency.
b. Unasserted claims or assessments that our lawyer has advised us are probable of
assertion and must be disclosed in accordance with Financial Accounting
Standards Board (FASB) Statement No. 5, Accounting for Contingencies.
c. Other liabilities or gain or loss contingencies that are required to be accrued or
disclosed by FASB Statement No. 5.
d. Reservations or designation of fund equity that were not properly authorized and
approved.
11. The City has satisfactory title to all owned assets, and there are no liens or encumbrances
on such assets nor has any asset been pledged as collateral.
12. The City has complied with all aspects of contractual agreements that would have a
material effect on the general-purpose financial statements in the event of
noncompliance.
13. Receivables recorded in the financial statements represent valid claims against debtors
for transactions arising on or before the balance sheet date and have been appropriately
reduced to their estimated net realizable value.
14. Provision, when material, has been made to reduce excess or obsolete inventories to their
estimated net realizable value.
15. We are in the process of evaluating the impact that will result from adopting
Governmental Accounting Standards Board (GASB) Statements No. 34, 37, 38 and
Interpretation #6, as discussed in Note 10. The City is therefore unable to disclose the
impact that adopting GASB Statements No. 34, 37, 38, and Interpretation #6 will have on
its financial position and results of operations when the pronouncements are adopted.
r
16. We are in agreement with all adjusting entries made as a result of the audit of our
financial statements.
17. City management is responsible for certain estimates included in the financial statements,
and has specifically approved the methodology for the determination of a cost allocation
basis to allocate services provided by the City's General Fund to its Light and Power and
Water Enterprise Funds. The methodology used to allocate costs to the Light and Power
and Water Enterprise Funds represents the market value of service provided to such
Enterprise Funds and are directly related to the operations of such utilities. Actual costs
incurred are used to estimate the value of services provided, and such costs are based on
the prior year's audited financial statements.
18. Except as described in Note 11, to the best of our knowledge and belief, no events,
including instances of noncompliance, have occurred subsequent to the balance sheet date
and through the date of this letter that would require adjustment to or disclosure in the
aforementioned financial statements.
Signed:
eoni�CM�alburg�,ay�or
Signed:sG.
Bruce V. Malkenhorst,
City Administrator/City Clerk
Signed:,~,
Sharon Johnson, u get Auditor/
Deputy City Treasurer