HomeMy WebLinkAbout0002_1_Independent Annual Audit - SR4
REPORT TO MEASURE Z CITIZEN COMMITTEE
To: Honorable Members of the Committee
From: Jason Simpson, City Manager
Prepared by: Nicole Dailey, Deputy City Manager
Date: February 24, 2022
Subject: Independent Annual Audit for Measure Z Fiscal Year Ended June 30, 2021
Recommendation
Receive and file the Independent Annual Audit for Measure Z as included in the City’s
Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2021.
Background
On November 3, 2020, residents of the City of Lake Elsinore voted in favor of Measure Z, a
locally controlled one-cent, or one percent, transactions and use tax to generate unrestricted
general fund dollars to address City service, public safety, and local recovery needs.
As part of the passage of Measure Z, the City established an independent Citizens Committee
to serve in an advisory role to the City Council regarding the expenditure of revenues generated
by the transactions and use tax. The Measure Z Citizen Committee's primary role is to
independently review and provide advice and guidance concerning the expenditure of Measure
Z revenues. Specifically, the Committee must annually review and report on the City's proposed
and actual expenditure of proceeds generated by the transactions and use tax along with
reviewing the independent annual audit of those revenues and expenditures prepared by a
Certified Public Accounting firm.
Section 3.30.050 of Chapter 3.30 Transactions and Use Tax of the Lake Elsinore Municipal
Code states that the proceeds resulting from Measure Z shall be deposited into the City’s
general fund and shall be subject to the same independent annual audit requirements as other
general fund revenue. The independent auditor’s report is to include an accounting of the
revenues received and expenditures made from Measure Z.
Discussion
Every year, the City of Lake Elsinore completes a Comprehensive Annual Financial Report
(CAFR), which is the summarization of the City’s financial activity for the previous fiscal year
ending June 30, 2021. The report includes summarization of significant milestones that were
accomplished during the year by department, fiscal policies, and statistical information.
Independent Annual Audit for Measure Z
February 24, 2022
Page 2
As part of the City’s CAFR, state statutes require an annual audit by independent certified public
accountants. Lance, Soll, & Lunghard (LSL), LLP., a firm of licensed certified public
accountants, audited the City’s financial statement and issued an independent auditor’s report
(Exhibit B) dated December 29, 2021. This report was included in the City’s CAFR. The goal of
this independent audit is to provide reasonable assurance that the City’s financial statements
are free of material misstatement. The independent audit firm concluded that there was
reasonable basis for rendering an unmodified opinion that the City of Lake Elsinore’s financial
statements for the year ended June 30, 2021 were fairly presented in conformity with generally
accepted accounting principles (GAAP).
Attached in Exhibit A is a Combining Balance Sheet for Nonmajor Governmental Funds, which
is the related financial statement for Measure Z as audited for the CAFR. This statement shows
all revenues generated by Measure Z through June 30, 2021. However, since Measure Z did
not officially go into effect until April 1, 2021, there were no expenditures related to Measure Z in
fiscal year ended 2021.
The CAFR was presented to the City Council on January 11, 2022 and is available for public
review on the City’s website.
Fiscal Impact
None.
Exhibits
A – Combining Balance Sheet Nonmajor Governmental Funds
B – Independent Auditor’s Report