port of redwood city presentation to the board of commissioners port of redwood city presentation to...
TRANSCRIPT
Port of Redwood CityPresentation to The Board of Commissioners
December 12, 2012
Presented by: Ahmed Badawi, CPA Partner
Badawi & AssociatesAudit of the
Port of Redwood City
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AgendaAbout the FirmEngagement Team Deliverables and Scope of the AuditAreas of Primary EmphasisAuditors Report and Financial StatementsRequired CommunicationsNew Accounting StandardsConclusion & Discussion/Questions
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About the Firm
Badawi & AssociatesFormed in February 2012Located in Oakland, CASpecialized in auditing governmental agencies, including cities, counties, special districts and transportation agenciesOver 15 years of auditing governmental agencies
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Engagement Team
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Engagement Team
Engagement Partner
Ahmed Badawi,CPA
Engagement Partner
Ahmed Badawi,CPA
Quality Control PartnerJack Georger, CPA
Quality Control PartnerJack Georger, CPA
StaffJohn Neal
StaffJohn Neal
SeniorCathy Zhai
SeniorCathy Zhai
Manager Jennifer, Ye
CPA
Manager Jennifer, Ye
CPAInformation Technology
Robert WucherCISA, CISM, CRISC
Information Technology Robert Wucher
CISA, CISM, CRISC
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Deliverables and Scope of the AuditReport of Independent Auditors on Port of Redwood City Basic Financial StatementsReport on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing StandardsCommunications With Those Charged With Governance
Letter used to summarize communication of various significant matters to those charged with governance.
Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133 (To be issued)
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Areas of Primary Audit EmphasisRevenues & Receivables: Improper revenue recognitions
Test receivables & test revenues/billings Review the allowance for doubtful accounts: ratio analysis & review the aged trial balance with subsequent collections, credit memos, and write-offs
Capital assets: repair/maintenance expenditures may be capitalized
Test of additions to capital assetsTest of significant deletions to capital assets
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Auditors ReportUnqualified opinionAudit performed in accordance with Generally Accepted Auditing Standards and Government Auditing Standards Financial statements are fairly presented in all material respectsSignificant accounting policies have been consistently appliedEstimates are reasonableDisclosures are properly reflected in the financial statements
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Port of Redwood City
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Port of Redwood City
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Port of Redwood City
Port of Redwood City
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Port of Redwood City
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Port of Redwood CityExpense Coverage
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2010 2011 2012
Unrestricted Net Assets 9,799,021$ 10,764,924$ 11,749,489$
Total Expenses 3,760,250$ 3,850,186$ 4,373,258$
Unrestricted Net Asset as
a % of Total Expenses 260.59% 279.59% 268.67%
Number of months 31 34 32
GFOA recommendation 2 - 4
Measure of Port's ability to operate with no revenues using available net assets.
Other Financial InformationPort’s Annual Pension Cost
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The Port’s retirement plan is part of the City of Redwood City’s retirement plan. Information on the funding progress of this plan can be obtained from the City’s Comprehensive Annual Financial Report.
Other Financial InformationPort’s Annual Pension Contribution Rates
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Other Financial InformationPort’s Annual OPEB Cost
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Other Financial InformationPort’s Annual OPEB Contribution Rate
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Other Financial Information
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Required CommunicationsOur Responsibility Under U.S GAAS
• Expression of an opinion on whether financial statements are fairly stated in accordance with U.S GAAP
• Evaluate internal control over financial reporting
• Evaluate compliance with laws, contract and grants
• Evaluate the tone at the top• Ensure financial statements
are clear and transparent• Communicate with the
governing body
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Required CommunicationsManagement Responsibility
• Management is responsible for the financial statements
• Establish and maintain internal control over financial reporting
• Making all financial records available to us
• Adjust the financial statements to correct material misstatements
• Establish internal control to prevent and detect fraud
• Inform us of all known and suspected fraud
• Comply with laws and regulations• Take correction action on audit findings
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Required CommunicationsIndependence
Timing of the Audit
• It is our responsibility to maintain independence
• We will maintain our independence by strict adherence to the AICPA and the Board of Accountancy rules and regulations
• No other services performed that could affect our independence
• Audit was performed in the time frame communicated to the Port in our engagement letter
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Required CommunicationsSignificant Accounting Policies and Unusual Transactions
Management Judgment and Accounting Estimates
There were no changes to significant accounting policies for the year ended June 30, 2012
Significant management estimates impacting the financial statements include the following:• Useful lives of Capital
Assets• Valuation of
Investments• OPEB Obligation
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Required CommunicationsSensitive Disclosures
Difficulties Encountered in Performing the Audit
The most sensitive disclosures affecting the Port’s financial statements are as follow:• Summary of Significant
Accounting Policies• Cash and Investments• Capital Assets• Pension and OPEB
No difficulties were encountered during our audits
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Required CommunicationsSignificant Audit Adjustments and Unadjusted Differences Considered by Management to be Immaterial
Potential Effect on the Financial Statements of Any Significant Risks and Exposures
There were no adjustments and reclassifying entries during the course of the audit.
No significant risks or exposures were identified. Legal matters and potential liabilities are disclosed in the financial statements
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Required CommunicationsDisagreement with Management
Deficiencies in Internal Control
We are pleased to report that there were no disagreements with management
No significant or material weaknesses identified during our audits
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Required CommunicationsRepresentations Requested of Management
Management Consultation with Other Accountants
Management representation letter have been provided to management for review and signature (see attached)
We are not aware of any significant accounting or auditing matters for which management consulted with other accountants
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Required CommunicationsOther Material Written Communications
Material Uncertainties Related to Events and Conditions
Fraud and Illegal Acts
Other than the engagement letter and management representation letter, there have been no other significant communications
There were no material uncertainties relating to events and conditions
We have not become aware of any instances of fraud or illegal acts
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New Accounting Standards2012 • Statement 57-Agent OPEB Plans
• Statement 64-Derivative Terminations
2013• Statement 60-Service Concession Arrangements• Statement 61-Reporting Entity• Statement 62-Codification of AICPA and FASB• Statement 63-Deferrals Presentation
2014
• Statement 65-Assets and Liabilities— Reclassification and Recognition
• Statement 66-Technical Corrections• Statement 67-Financial Reporting for Pension
Plans
2015 • Statement 68-Accounting and Financial Reporting for Pensions
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Thank YouFor Allowing Us to Provide Audit Services
to the Port of Redwood City
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