2. Subscribe to comments Edit your comment Cancel Linda - Welcome and
housekeeping remarks. Linda to cover administrative items Linda - will include
in intro of Dave: David has frequently presented various topics to MGO
employees, to clients, and to professional organizations, including the
Association of Government Accountants, the California County Audit Chiefs
Association, and BDOâ——s Government Industry Group. David - Thank you Linda,
and
welcome everyone â—¦ glad you could join us on such short notice. I gave a
similar presentation almost two weeks ago on May 10 th to the east bay chapter
of CSMFO, but was waiting for the release of the CCMA White Paper before going
with the larger webinar broadcast. As it just got finalized on Monday, we
wanted to get the information out to our clients as quickly as possible.
Hence, short notice. We plan to revisit â——redevelopment agenciesâ—— in our
annual
client trainings â—¦ so stay tuned for another opportunity to discuss these
matters. Before we get started â—¦ we have two quick polling Qs â—¦ in order
to
get a feel of those in attendance. Very closely â—— meaning, you are on the
distribution list or have been forwarded copies of the drafts all along or you
have read the final document. Somewhat closely â—— meaning, you are aware of
the
White Paper and have seen a draft somewhere along the way â—¦ aware of key
points. On a limited basis â—— meaning, you have heard about it through others
.. But have not actually seen it. Not at all â—— meaning, who the heck is
CCMA,
and the only white paper Iâ——ve seen is the paper Iâ——ve stuck into my printer
this week â—¦ which has nothing to do with redevelopment. Whoâ——s in the
audience?
Here is todayâ——s agenda â—¦ the objectives of this webinar is to provide a
better
understanding of the suggested guidance outlined in the CCMA White Paper, as
listed in the following categories â—¦ (read categories on slide). David â——
We
wanted to share an abridged version of something our Oakland clients wrote
which impressed us â—¦ as they were able to find some levity in the challenges
theyâ——re facing. Linda â—— to read story. David â—— Theyâ——ve identified a
very good
point â—— that the dissolution of redevelopment agencies has some similarity
to
dealing with someoneâ——s estate after theyâ——ve passed away. First of all,
Successor Agencies are â——the county, city or city and countyâ—— â—¦ that
authorized
the creation of each redevelopment agency â—¦ or, as provided by the Health
and
safety code, could be another entity if the county or city did not accept this
responsibility. Legal counsel for the State Controllerâ——s Office made a
determination that Successor Agencies are not legally separate entities,
corporate or politic. This is consistent with the organizational structure
written up in the Goldfarb Lipman law alerts earlier this year (1/19/12 and
2/10/12), which stated that the governing board of the Successor Agency will
be the Sponsoring Communityâ——s governing board (City Council or the Board of
Supervisors). Therefore, if it does not have separate legal standing â—¦ then,
it cannot be a component unit. CCMA is the â——California Committee on
Municipal
Accountingâ——, a joint committee comprised of representatives of the League of
3. California Cities and the California Society of Certified Public Accountants .
The CCMA publishes â——White Papersâ—— as needed from time to time. While CCMA
does
not promulgate GAAP, it is a widely recognized body for providing accounting
and reporting guidance, and therefore, most likely will be the general
consensus. CCMAâ——s basis of conclusions, supporting a position of Private
Purpose Trust Fund, is based on the premise that Successor Agencies are not a
separate legal entities, and instead, acting as custodians over the assets and
activities of the former RDA post-dissolution with substantial control by an
oversight board. As such and with the concurrence of senior staff at GASB and
GFOA â—¦ it was determined the nature of this custodial role should be
reported
as a fiduciary fund (specifically, a private-purpose trust fund), acting on
behalf of taxing entities and creditors of enforceable obligations. While
there is no specific trust document, the Bill acts in lieu. Economic resources
measurement focus and accrual basis of accounting Combine individual sub-funds
into one reporting fund The government-wide financial statements should
display information about the reporting government as a whole (for instance,
the primary government and its component units), and should NOT include any
fiduciary activities â—¦ therefore, while the beginning balances will
carryover
FY2011 position â—¦ the ending balances at June 30, 2012 will no longer
contain
assets and liabilities of the former RDA. For many organizations, the
redevelopment funds were treated as a blended component unit and often
presented as Major Funds. Thus, the impact to governmental funds may be
significant â—¦ the governmental funds of the former RDA will be brought to
zero
and transferred to the Successor Agency (now a fiduciary fund) and to the
Housing Successor Agency (which may be another governmental or enterprise fund
or may even be outside the organization). If the former RDA funds were
significant governmental funds, than it stands to reason that it will have a
huge impact to the major fund determination for purposes of presenting funds
in the basic financial statements. Read last two bullets. Transmittal Letter
â——
discuss the impacts of dissolution â—¦ however, GASB encourages not to
duplicate
information contained in MD&A. More of a global discussion. MD&A - should
focus on the primary government, and NOT fiduciary funds. However, there
should be significant discussion on changes as a result of comparing 2012
amounts to 2011. FN â—— separating fiduciary activity from governmental
activities. Combining â—— changes related to any non-major governmental funds
of
the former RDA and possibly new fund related to the Housing successor agency
â—¦
and possibly Private-Purpose Trust Fund, if needed at combining level. Stats
â——
mostly 10 year trend information and lots of debt disclosures. Successor
Agency means â——the county, city or city and countyâ—— that authorized the
creation of each redevelopment agency or another entity, as provided by the
Health and Safety Code. Legal counsel for the SCOâ——s Office has made a
determination that successor agencies are not separate legal entities !
Therefore, no longer a Component Unit. Under the Bill, agencies that accept
the role of successor agency will serve as a custodian for the assets of the
former redevelopment agency pending distribution to the appropriate taxing
entities. Based upon the nature of this custodial role, upon dissolution of
assets of the former redevelopment agency should be reported in a fiduciary
fund (private-purpose trust fund) of the City. This determination was made by
4. the CCMA after consultation with senior staff members of GASB and GFOA. This
is the general definition of governmental funds This is an agency fund. Purely
custodial capacity means that assets equal liabilities. Correct answer. GASB
34 states that trust funds generally are associated with a trust agreement. A
formal trust agreement may or may not exist with respect to the fiduciary role
served by the successor agency. However, the use of the term â——generallyâ——
in
paragraph 69 of GASB 34 suggests that there are circumstances when
professional judgment would lead to a proper reporting of a private-purpose
trust fund without the existence of a trust agreement. Because of the
fiduciary responsibilities that are assigned to successor agencies by the
Bill, the Bill may be considered to effectively function as an informal trust
arrangement for the purposes of applying this definition. This is an
enterprise fund. Dissolution February 1, 2012 â—¦ split the year between old
presentation and new presentation. CRA provided guidance earlier this year to
simply change the name of the fund, rather than create new funds. If you
followed that guidance, it might add complexity to the accounting as the
previous treatment may have been governmental funds, but now fiduciary funds,
which has different measurement focus and basis of accounting. Important to
have clear â——cut-offâ—— between the old and new activity! New fund is
required
(34170.5) â—¦ Redevelopment Obligation Retirement Fund, which is intended as
the
repository for property taxes received from the County Auditor-Controller to
pay enforceable obligations and administrative costs listed on the ROPS as
payable from the Redevelopment Property Tax Trust Fund (RPTTF) administered by
the County, as indicated in 34185. Extraordinary items are transactions or
other events that are both unusual in nature and infrequent in occurrence.
Accounting Principles Board (APB) Opinion No. 30, Reporting the Results of
Operationsâ——Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions , as
amended and interpreted, defines the terms unusual in nature and infrequency
of occurrence. Extraordinary items should be reported separately at the bottom
of the statement of activities, after general revenues and special items, if
any, and before transfers. For the Fiduciary Fund â—¦ we would suggest to
treat
the establishment of the fund as an addition .. Not an extraordinary
gain/loss. Read slide. For example, Capital Assets â—¦ need to calculate
depreciation through 1/31/12 â—¦ to get proper carrying value to Fiduciary
Fund
on 2/1/12. Same for long-term debt related items .. Premiums, discounts,
deferred amounts on refunding â—¦ etc. Read slide. For unpaid advances from
the
City/County (for example, the General Fund) â—¦ due to being invalid, should
recognize an extraordinary gain in the redevelopment fund and an extraordinary
loss in the fund that reported the interfund receivable (advance). At this
point, this treatment assumes you will not collect it â—¦ however, if your
legal
counsel has a basis that the collection of the interagency loan is probable
â—¦
then you may have basis to keep it on the books. Uncertainty over these areas.
Property held for resale = net realizable value Capital assets = historical
cost, less depreciation Read slide. Bullet #1 â—— extraordinary gains/losses
Bullet #2 â—— Transfers in/out Read slide. a - Special Item - Significant
transactions or other events within the control of management that are either
unusual in nature or infrequent in occurrence d - 143 Extraordinary items are
6. Agency. In addition, Davidcurrently serves as the contracted controller forthe
Contra Costa County RedevelopmentAgency. www.mgocpa.com 3
4. Polling Question #1To what extent have you been following the draftsof the
CCMA White Paper on RedevelopmentAgencies â—¦ or have you had the opportunity
toread the final copy?c) Very closelyd) Somewhat closelye) On a limited
basisf) Not at all 4
5. Polling Question #2What are your roles and responsibilities relating tothe
Accounting and Financial Reporting ofSuccessor Agencies?c) Accounting
Department of a Successor Agencyd) Auditor-Controllerâ——s Office of a
California
Countye) An Independent Auditor of a CPA Firmf) Other 5
6. Todayâ——s Agendaï—§ Structure and Presentationï—§ Accounting and
Reportingï—§ Audit
Requirementsï—§ Q&A 6
7. Finding Levity Amidst the ChallengesIN MEMORIAM â——â—— OAKLAND
REDEVELOPMENT
AGENCY, 1956â—— 2012OAKLAND, CA â——â—— The Oakland Redevelopment Agency passed
away
peacefully atmidnight on February 1 at age 55. Cause of death was listed as
ABX 26 flu, complicatedby acute EOPS poisoning. ORA, as she was affectionately
known, was born on October10, 1956. During ORAâ——s busy life, she was best
known
for transforming downtownOakland... She was especially proud of the thousands
of affordable housing units shehelped produce for low income renters and
homeowners. She even helped build the Stateof Californiaâ——s downtown
headquarters, but was later abandoned by an ungrateful Statelegislature and
supreme court. She was estranged from her former CEO, Edmund G.Brown of San
Francisco, Calif. They had a whirlwind romance in the early part of
thiscentury as ORA worked hard to make Mr. Brownâ——s 10K housing plan a
reality;
but he laterleft her for higher office and even tried to seize her life
savings, which he claimed was hiscommunity property. 7
8. Structure and Presentation ï—§ Successor Agency means â——the county, city
or
city and countyâ—— that authorized the creation of each redevelopment agency
or
another entity, as provided by HSC. ï—§ Legal counsel for the SCOâ——s Office
has
made a determination that successor agencies are not separate legal entities!
ï—— Therefore, no longer a Component Unit 8
9. Structure and Presentationï—§ CCMA: Reporting Fund is to be a Private
Purpose
Trust Fund â—¢ What does that mean? â—— Fiduciary Fund â—— Report assets held
in a
trustee or agency capacity for others, therefore cannot be used to support the
governments own programs â—— Economic resources measurement focus and accrual
basis of accounting â—— Combine individual sub-funds into one reporting fund 9
10. Structure and Presentationï—§ No balances in Government-Wide financial
statements at June 30, 2012!ï—§ Impact to Governmental Fundsï—§ Major Fund
Determination â—¢ For 2012, could be a significant change in the calculation
of
major funds â—— No ending assets or liabilities and only seven months of
revenues and expenditures â—¢ Suggestion: keep the treatment consistent with
2011, regardless of quantified results 10
11. Structure and Presentationï—§ Other Considerations â—¢ Transmittal letter
(CAFR only) â—¢ Managementâ——s Discussion and Analysis â—¢ Notes to the basic
financial statements â—¢ Combining statements and schedules â—¢ Statistical
section (CAFR only) 11
12. Polling Question #3Successor Agencies should be reported in thefinancial
statements as:c) Component unitd) Governmental fundse) Enterprise fundsf)
7. Fiduciary funds 12
13. Polling Question #3 DebriefSuccessor Agencies should be reported in
thefinancial statements as:d) Fiduciary funds 13
14. Polling Question #4A private purpose trust fund is used to:b) Account for
tax-supported activities.c) Report resources held by the reportinggovernment
in a purely custodial capacity.d) Report all trust arrangements under which
theprincipal and income benefit individuals, privateorganizations, or other
governments.e) Report an activity for which a fee is charged toexternal users
for goods and services. 14
15. Polling Question #4 DebriefA private purpose trust fund is used to:c)
Report all trust arrangements under which the principal and income benefit
individuals, private organizations, or other governments. 15
16. Accounting and Reportingï—§ AB X1 26 requires dissolution on 2/1/12 â—¢
Final
seven months will continue to be reported in the governmental funds or as a
discrete component unit â—¢ After dissolution, activity of the successor
agency
will be reported in a fiduciary fundï—§ For entities that followed the CRA
guidance - Activity will have to be distinguished between the former
Redevelopment Agency and the Successor Agencyï—§ New Fund Required:
â——Redevelopment Obligation Retirement Fundâ—— 16
17. Accounting and Reportingï—§ Transfers of assets and liabilities of the
former RDA to the successor agency â—¢ Reported as extraordinary gains/losses
in
governmental funds and governmental activities â—— Since government-wide
financial statements have capital assets and long-term debt, among other
differences, there will need to be a reconciliation of these differences when
compared to governmental funds â—¢ Reported as extraordinary gains/losses in
the
trust fund or as additions (â——net assets received upon dissolution of
redevelopment agencyâ——) 17
18. Accounting and Reportingï—§ All transfers of assets and liabilities need
to
be at carrying value (e.g. net book value) â—— Same methodology proposed in
GASB
Exposure Draft â—— Governmental Combinations and Disposals of Governmental
Operations â—— Extremely important to establish the carrying value at the
transfer date (i.e., cut-off) 18
19. Accounting and Reportingï—§ Extraordinary Items may include â—¢ Unpaid
advances from the City/County â—¢ Transfers of properties held for resale and
capital assets at carrying value â—¢ Transfers of outstanding bonds at
carrying
value â—¢ Transfers of all other assets and liabilities (including compensated
absences, accrued employee benefits, etc. that go to the successor agency) 19
20. Accounting and Reportingï—§ Housing Funds â—¢ Unencumbered balances of Low
and
Moderate Income Housing Fund goes to the successor agency â—— Pending
legislation â—¢ Assets transferred to the housing successor agency â—— If the
City/County elected to be the housing successor, then the transferred assets
should be reported within its governmental funds â—¦ or possibly an enterprise
fund in the case where a housing authority of the City/County elected to be
the the housing successor 20
21. Accounting and Reporting â—— February 1, 2012Preliminary and Tentative -
For
Illustration Purposes OnlyExample of Select Governmental Funds Reported in the
Primary Government (i.e., city-wide) CITY OF EXAMPLE Governmental Funds -
SELECT FUNDS ONLY Balance Sheet Note: Normally, the reporting date Note:
Housing Successor February 1, 2012 would be 6-30-12, however, we are showing
2-1-12 for illustration of the impact of the dissolution (closing the Low and
Tax Allocation former redevelopment funds). Moderate Refunding New City
Project Area Income Bonds Housing One Housing Debt Service Fund TotalAssets:
8. Interest receivable $ - $ - $ - $ 10,000 $ 10,000 Notes and loans receivable -
- - 1,058,000 1,058,000 Land held for redevelopment - - - 500,000 500,000
Total assets $ - $ - $ - $ 1,568,000 $ 1,568,000Liabilities and Fund Balances:
Liabilities: Deferred revenue $ - $ - $ - $ 600,000 $ 600,000 Fund balances:
Restricted for: Low and moderate income housing - - - 968,000 968,000 Total
liabilities and fund balances $ - $ - $ - $ 1,568,000 $ 1,568,000 21
22. Accounting and Reporting â—— February 1, 2012 Preliminary and Tentative -
For Illustration Purposes Only Example of Select Governmental Funds Reported
in the Primary Government (i.e., city-wide) Note: Excludes new CITY OF EXAMPLE
activity in the "New Governmental Funds - SELECT FUNDS ONLY City Housing Fund"
Statement of Revenues, Expenditures and Changes in Fund Balances subsequent to
2/1/12. For the Year Ended June 30, 2012 Low and Tax Allocation Moderate
Refunding New City Project Area Income Bonds Housing One Housing Debt Service
Fund Total Revenues: Property taxes $ 712,000 $ 928,000 $ 3,000,000 $ - $
4,640,000 Use of money and property 15,000 20,000 5,000 - 40,000 Other -
80,000 - - 80,000 Total revenues 727,000 1,028,000 3,005,000 - 4,760,000
Expenditures: Current: Community development 1,849,000 900,000 130,000 -
2,879,000 Debt service: Principal - - 570,000 - 570,000 Interest and fiscal
charges - - 597,000 - 597,000 Total expenditures 1,849,000 900,000 1,297,000 -
4,046,000 Excess (deficiency) of revenues over (under) expenditures
(1,122,000) 128,000 1,708,000 - 714,000 Other financing sources (uses)
Transfers in 200,000 - - 968,000 1,168,000 Transfers out (1,100,000)
(1,668,000) (200,000) - (2,968,000) Total other financing sources (uses)
(900,000) (1,668,000) (200,000) 968,000 (1,800,000) Extraordinary loss
(562,000) (1,258,000) (1,552,000) - (3,372,000) Change in fund balances
(2,584,000) (2,798,000) (44,000) 968,000 (4,458,000) Fund balances, beginning
of year 2,584,000 2,798,000 44,000 - 5,426,000 Fund balances, end of year $ -
$ - $ - $ 968,000 $ 968,000 22
23. Accounting and Reporting â—— February 1, 2012Preliminary and Tentative -
For
Illustration Purposes OnlyExample of Footnote Disclosure Reconciling
Extraordinary Loss in Governmental Funds CITY OF EXAMPLE Reconciliation of the
Extraordinary Loss Reported in Governmental Funds to the Extraordinary Loss
Recognized in the Fiduciary Fund Financial StatementsTotal extraordinary loss
reported in governmental funds - increase to net assets $ 3,372,000 Capital
assets recorded in the government-wide financial statements - Increase to net
assets 500,000 Long-term liabilities reported in the government-wide financial
statements - Decrease to net assets: Long-term debt (5,700,000) Interest
payable (190,000) Total changes to net assets of the successor agency as a
result of initial transfer $ (2,018,000) 23
24. Accounting and Reporting â—— February 1, 2012Preliminary and Tentative -
For
Illustration Purposes OnlyExample of a Private Purpose Trust Fund CITY OF
EXAMPLE Statement of Fiduciary Net Assets Successor Agency to the Example
Redevelopment Agency Private Purpose Trust Fund February 1, 2012Assets: Cash
and investments: Note: Normally, the reporting date Held in City Treasury
would be 6-30-12, however, we are $ 2,750,000 showing 2-1-12 for illustration
of Held with trustees initial balances transferred from the 650,000 Interest
receivable former redevelopment agency. 8,000 Land held for redevelopment
86,000 Nondepreciable capital assets 500,000 Total assets
3,994,000Liabilities: Accounts payable and accrued liabilities 122,000
Interest payable 190,000 Long-term debt: Due within one year 700,000 Due in
more than one year 5,000,000 Total liabilities 6,012,000Net Assets: Held in
trust for other purposes $ (2,018,000) 24
25. Accounting and Reporting â—— February 1, 2012Preliminary and Tentative -
For
9. Illustration Purposes OnlyExample of a Private Purpose Trust Fund CITY OF
EXAMPLE Statement of Changes in Fiduciary Net Assets Successor Agency to the
Example Redevelopment Agency Private Purpose Trust Fund For the Period
February 1, 2012 through June 30, 2012 Establishing the "Extraordinary Loss"
â—¦
at February 1, 2012Additions: Note: Excludes new activity in the private
purpose trust fund Property taxes $ - subsequent to 2/1/12, in order to
Investment earnings isolate the initial transfer of - Other assets and
liabilities. - Total additions -Deductions: Program expenses of former
redevelopment agency - Administrative expenses - Interest and fiscal ageny
expenses of former redevelopment agency - Total deductions -Extraordinary loss
(2,018,000)Change in net assets (2,018,000)Net assets - beginning -Net assets
- ending $ (2,018,000) 25
26. Accounting and Reporting â—— January 31, 2012 Preliminary and Tentative -
For Illustration Purposes Only Example of a Stand Alone Audit of the
Redevelopment Agency, before Dissolution CITY OF EXAMPLE REDEVELOPMENT AGENCY
Statement of Net Assets January 31, 2012 Governmental Activities Assets: Cash
and investments: Held in City Treasury $ 2,750,000 Held with trustees 650,000
Interest receivable 18,000 Notes and loans receivable 1,058,000 Land held for
redevelopment 586,000 Nondepreciable capital assets 500,000 Total assets
5,562,000 Liabilities: Accounts payable and accrued liabilities 122,000
Interest payable 190,000 Long-term debt: Due within one year 700,000 Due in
more than one year 5,000,000 Total liabilities 6,012,000 Net Assets: Invested
in capital assets 500,000 Restricted for: Low and moderate income housing
2,826,000 Debt service 1,742,000 Unrestricted (deficit) (5,518,000) Total net
deficit $ (450,000) 26
27. Accounting and Reporting â—— January 31, 2012Preliminary and Tentative -
For
Illustration Purposes OnlyExample of a Stand Alone Audit of the Redevelopment
Agency, before Dissolution CITY OF EXAMPLE REDEVELOPMENT AGENCY Statement of
Activities For the Period July 1, 2011 through January 31, 2012 Governmental
ActivitiesProgram Expenses: Community development $ 2,319,000 Pass-through
agreements 150,000 Developer tax sharing reimbursements 410,000
Intergovernmental 1,800,000 Interest and fiscal charges 617,000 Total program
expenses 5,296,000General Revenues: Property taxes 4,640,000 Investment
earnings 40,000 Other 130,000 Total general revenues 4,810,000 Change in net
assets (486,000)Net assets, beginning of year 36,000Net deficit, end of year $
(450,000) 27
28. Accounting and Reporting â—— January 31, 2012 Preliminary and Tentative -
For Illustration Purposes Only Example of a Stand Alone Audit of the
Redevelopment Agency, before Dissolution CITY OF EXAMPLE REDEVELOPMENT AGENCY
Governmental Funds Balance Sheet January 31, 2012 Low and Tax Allocation
Moderate Refunding Project Area Income Bonds One Housing Debt Service Total
Assets: Cash and investments: Held in City Treasury $ 650,000 $ 1,200,000 $
900,000 $ 2,750,000 Held with trustees - - 650,000 650,000 Interest receivable
6,000 10,000 2,000 18,000 Advances to other funds - 60,000 - 60,000 Notes and
loans receivable - 1,058,000 - 1,058,000 Land held for redevelopment 86,000
500,000 - 586,000 Total assets $ 742,000 $ 2,828,000 $ 1,552,000 $ 5,122,000
Liabilities and Fund Balances: Liabilities: Accounts payable and accruals $
120,000 $ 2,000 $ - $ 122,000 Deferred revenue - 600,000 - 600,000 Advances
from other funds 60,000 - - 60,000 Total liabilities 180,000 602,000 - 782,000
Fund balances: Restricted for: Low and moderate income housing - 2,226,000 -
2,226,000 Debt service - - 1,552,000 1,552,000 Assigned for redevelopment
979,000 - - 979,000 Unassigned (417,000) - - (417,000) Total fund balances
562,000 2,226,000 1,552,000 4,340,000 Total liabilities and fund balances $
742,000 $ 2,828,000 $ 1,552,000 $ 5,122,000 28
29. Accounting and Reporting â—— January 31, 2012Preliminary and Tentative -
For
Illustration Purposes OnlyExample of a Stand Alone Audit of the Redevelopment
Agency, before Dissolution CITY OF EXAMPLE REDEVELOPMENT AGENCY Reconciliation
10. of the Balance Sheet of Governmental Funds to the Statement of Net Assets -
Governmental Activities January 31, 2012Total fund balances reported on the
governmental funds balance sheet $ 4,340,000 Amounts reported for governmental
activities in the statement of net assets are different from those reported in
the governmental funds above because of the following: Capital assets used in
governmental activities are not financial resources and, therefore, are not
reported in the funds 500,000 Receivables not available: Certain receivables
are not available to pay for current period expenditures and therefore are
deferred in the governmental funds. 600,000 Long-term liabilities: The
liabilities below are not due and payable in the current period and therefore
are not reported in the governmental funds: Long-term debt (5,700,000)
Interest payable (190,000) Net deficit of governmental activities $ (450,000)
29
30. Accounting and Reporting â—— January 31, 2012 Preliminary and Tentative -
For Illustration Purposes Only Example of a Stand Alone Audit of the
Redevelopment Agency, before Dissolution CITY OF EXAMPLE REDEVELOPMENT AGENCY
Governmental Funds Statement of Revenues, Expenditures and Changes in Fund
Balances For the Period July 1, 2011 through January 31, 2012 Low and Tax
Allocation Moderate Refunding Project Area Income Bonds One Housing Debt
Service Total Revenues: Property taxes $ 712,000 $ 928,000 $ 3,000,000 $
4,640,000 Use of money and property 15,000 20,000 5,000 40,000 Other - 80,000
- 80,000 Total revenues 727,000 1,028,000 3,005,000 4,760,000 Expenditures:
Current: Community development 1,419,000 900,000 - 2,319,000 Pass-through
agreements 150,000 - - 150,000 Developer tax sharing reimbursements 280,000 -
130,000 410,000 Intergovernmental 1,100,000 700,000 - 1,800,000 Debt service:
Principal - - 570,000 570,000 Interest and fiscal charges - - 597,000 597,000
Total expenditures 2,949,000 1,600,000 1,297,000 5,846,000 Excess (deficiency)
of revenues over (under) expenditures (2,222,000) (572,000) 1,708,000
(1,086,000) Other financing sources (uses) Transfers in 200,000 - - 200,000
Transfers out - - (200,000) (200,000) Total other financing sources (uses)
200,000 - (200,000) - Change in fund balances (2,022,000) (572,000) 1,508,000
(1,086,000) Fund balance, beginning of year 2,584,000 2,798,000 44,000
5,426,000 Fund balance, end of year $ 562,000 $ 2,226,000 $ 1,552,000 $
4,340,000 30
31. Accounting and Reporting â—— January 31, 2012Preliminary and Tentative -
For
Illustration Purposes OnlyExample of a Stand Alone Audit of the Redevelopment
Agency, before Dissolution CITY OF EXAMPLE REDEVELOPMENT AGENCY Reconciliation
of the Statement of Revenues, Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities - Governmental Activities
For the Period July 1, 2011 through January 31, 2012Net change in fund
balances - total governmental funds $ (1,086,000)Amounts reported for
governmental activities in the statement of activities are different because
of the following: Long term debt transactions: Repayment of bond principal is
an expenditure in the governmental funds, but in the statement of net assets
the repayment reduces long-term liabilities. 570,000 Accrual of noncurrent
items: The amounts below included in the statement of activities do not
provide or (require) the use of current financial resources and therefore are
not reported as revenues or expenditures in governmental funds: Change in
deferred revenue 50,000 Change in interest payable (20,000) Change in net
assets of governmental activities $ (486,000) 31
32. Accounting and Reporting ï—§ Disclosure of dissolution and transfer of
assets and liabilities â—¢ A sample disclosure is included as part of the CCMA
White Paper â—¢ Good starting point, but must be tailored to fit the events
and
circumstances unique to your organization â—¢ Suggests to reconcile the
difference between the extraordinary gain/loss reported in the governmental
funds versus the fiduciary fundâ——s extraordinary gain/loss or additions 32
11. 33. Polling Question #5Extraordinary items are:b) Within the control of
management that are eitherunusual in nature or infrequent in occurrencec)
Unusual in nature not in the control ofmanagementd) Only infrequent in
nature.e) Both unusual in nature and infrequent inoccurrence. 33
34. Polling Question #5 DebriefExtraordinary items are:d) Both unusual in
nature and infrequent in occurrence. 34
35. Polling Question #6The Low and Moderate Income Housing Fund (20%Fund)
balances are to be disposed as follows:b) Encumbered balances are transferred
to theSuccessor Agencyc) Unencumbered balances are transferred tothe Successor
Agencyd) Total balances transferred to the SuccessorAgencye) Transferred to
the Cityâ——s General Fund 35
36. Polling Question #6 DebriefThe Low and Moderate Income Housing Fund
(20%Fund) balances are to be disposed as follows:b) Unencumbered balances are
transferred to the Successor Agency 36
37. Audit RequirementsState and Local Audits/Oversightâ—¢Actions of the
Oversight Board = DOFâ—¢Agreed-upon procedures engagements, directedby the
County Auditor-Controllers â—¢ Due by 7/1/12 and submitted to SCO by 7/15/12
â—¢
Purpose (1) establish assets/liabilities, (2) pass- through obligations, (3)
determine the amount and terms of indebtedness, and (4) â——Certifyâ—— the
initial
ROPSâ—¢Actions of the County ACO = SCOâ—¢SCO also reviews redevelopment asset
transfersmade after 1/1/11 to determine if appropriate 37
38. Audit Requirementsï—§ Transition Audits are highly recommended but not
required by the SCO (no legislative basis â—— either for former RDA or SA) â—¢
No
direct funding for audits under ABX1 26 â—¢ Bond covenants may require a
separate auditï—§ Two separate engagements are contemplated as two separate
entities involved 38
39. Audit Requirementsï—§ The RDA Audit Guide â—— Auditing Procedures for
Accomplishing Compliance Audits of California Redevelopment Agencies (August
2011) is no longer in effect (i.e., no compliance audit required)!!!ï—§ SCO
states there is no legislative basis to require State Controllerâ——s Reports
or
Statements of Indebtednessï—§ Not yet known whether HCD reports will be
required
39
40. Polling Question #7The State Department of Finance is responsible to:b)
Review the actions of the Oversight Boardc) Review the actions of the County
Auditor-Controllerâ——s Officed) Certify the Recognized Obligation
PaymentSchedulee) Review the redevelopment asset transfers madeafter 1/1/11 40
41. Polling Question #7 DebriefThe State Department of Finance is responsible
to:c) Review the actions of the Oversight Board 41
42. Polling Question #8A â——Stubâ—— period audit of the former
redevelopmentagency
is:b) Required by the State Controllerâ——s Officec) Required by the State
Department of Financed) Directly funded under ABX1 26e) Not required, but
recommended 42
43. Polling Question #8 DebriefA â——Stubâ—— period audit of the former
redevelopmentagency is:d) Not required, but recommended 43
44. Whatâ——s Next?ï—§ Pending legislationï—§ DOF has proposed trailer bill,
with
significant changes to the existing laws and regulations in the Health and
Safety Codeï—§ Administrative Costs will start to drop (5% to 3%, still
subject
to $250,000 â—¦ administrative budget to be approved by the Oversight
Board)ï—§
Oversight Boards will consolidate on July 1, 2016 44
45. ReferencesCCMA White Paper (CalCPA members only)
-http://www.calcpa.org/Content/24325.aspxDOF
-http://www.dof.ca.gov/assembly_bills_26-27/view.phpSCO
