ITEM TITLE:
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Approval of the 2016 Financial Audit
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SUBMITTED BY: Brian Carlson, Finance Director
FISCAL NOTES:
Expenditure Required: N/A
Unencumbered Balance: N/A
Funding Source: N/A
RECOMMENDATION:
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Approve the 2016 Financial Audit
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SUMMARY STATEMENT:
The attached Basic Financial Statements, Federal and State Single Audit, and Audit Wrap-up comprise final deliverables for the 2016 third-party financial audit. Following Council approval, staff will make numerous filings, due 9/30/2017, to satisfy state statutes and bond covenants.
For the October 3rd Council agenda, Finance staff will include both the June 30 financial summary reflecting audited year-end fund balances, and a fund balance review and analysis that will provide context for the upcoming Council budget work sessions.
BACKGROUND:
This is the fourth year of the City's five-year contract with BDO (three years plus two one-year extensions). This year's audit included two weeks of on-site work in Valdez, and regular status meetings with the Audit Committee, including a "kick-off" meeting with staff and the Audit Committee, arrival/exit meetings each week and a post-audit meeting.
ANALYSIS:
The 2016 Audit contains two findings:
1. Significant Deficiency, defined as a deficiency or combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
This item pertains to invoices booked in 2017 for products or services procured in 2016. (see: Audit Wrap Up, page 7). This was the result of newly-hired staff being unfamiliar with year-end invoicing conventions.
2. Material Weakness, defined as a deficiency or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, detected, nor corrected on a timely basis.
This item pertains to an error in posti...
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