ITEM:

CONSENT CALENDAR

 

5.

REVIEW AND ACCEPT INDEPENDENT AUDITORSí REPORT FOR FISCAL YEAR 2003-04

 

Meeting Date:

March 21, 2005

Budgeted:

N/A

 

From:

David A. Berger,

Program/

N/A

 

General Manager

Line Item No.:

 

Prepared By:

 

Rick Dickhaut

Cost Estimate:

N/A

General Counsel Approval:N/A

Committee Recommendation: The Administrative Committee reviewed this item on March 11, 2005 and recommended approval.The Committee also recommended that the Districtís capitalization threshold be modified as indicated in the recommendation section.

CEQA Compliance:N/A

 

SUMMARY:Drafts of the Financial Statements and Independent Auditorsí Report, Board Disclosure Letter and Management Letter for the fiscal year ending June 30, 2004 have been received from the Districtís external auditors, Hayashi & Wayland.These documents have been distributed under separate cover to the Board and are available for public review at the District office. The report can also be accessed on the Districtís website at http://www.mpwmd.dst.ca.us/asd/committees/admincomm/2005/20050311/20050311_agenda.htm.The report and financial statements have changed somewhat from previous fiscal years due to the implementation of Governmental Accounting Standards Board Statement No. 34 (GASB 34).This statement was developed to make financial reports easier to understand and more useful for oversight bodies, investors and citizens.GASB 34 requires significant changes and additional information including a Management Discussion and Analysis and Government-Wide Financial Statements.All changes required by GASB 34 have been implemented and the auditors have issued a clean opinion on the financial statements.District staff concurs with the auditorís three recommendations in the Management Letter.

 

These draft reports are normally presented to the Administrative Committee and Board of Directors in December or January, however this year the report is later than usual due to the implementation of GASB 34, and the fact that the separate auditors report for the CAWD/PBCSD Reclamation Project, which must be incorporated into the Districtís reports, were not received from the Project until January 17, 2005.It is anticipated that we will be back on the normal schedule for fiscal year 2004-05.

 

The Administrative Committee reviewed the draft report and letters on March 11, 2005 with the District's auditors, Hayashi and Wayland.As a result of that review the committee recommended that the reports be accepted by the full Board.Based on the auditorís third recommendation in the Management Letter, the Committee also recommended that the Districtís capitalization policy be changed to increase the threshold for capitalization from $500 to $1,000 for equipment and from $500 to $5,000 for land, facilities and improvements.Subsequent to the Committee meeting, the Management Letter has been modified to reflect this change.The revised letter is attached as Exhibit 5-A.If approved by the Board, these new limits will become effective for fiscal year 2005-2006.

 

Following acceptance by the Board, the Financial Statements and Independent Auditorsí Report will be finalized and provided to Monterey County and various financial institutions that the District conducts business with.The statements will also be made available to the public.

 

RECOMMENDATION:District staff recommends that the Board review and accept the Financial Statements and Independent Auditorsí Report for the year ending June 30, 2004.The Administrative Committee reviewed draft report February 11, 2005 and voted 3 to 0 to recommend approval. ††The Committee further recommended that the Districtís threshold for capitalization of items be increased from $500 to $1,000 for equipment and from $500 to $5,000 for land, facilities and improvements.

 

EXHIBITS

5-A††††† Revised Management Letter from Hayashi & Wayland

 

 

 

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