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Port of Redwood City Presentation to The Board of Commissioners

Port of Redwood City Presentation to The Board of Commissioners. December 12, 2012 Presented by: Ahmed Badawi, CPA Partner. Badawi & Associates Audit of the Port of Redwood City. 1. Agenda. About the Firm Engagement Team

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Port of Redwood City Presentation to The Board of Commissioners

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Presentation Transcript

  1. Port of Redwood CityPresentation to The Board of Commissioners December 12, 2012 Presented by: Ahmed Badawi, CPA Partner

  2. Badawi & Associates Audit of the Port of Redwood City 1

  3. Agenda • About the Firm • Engagement Team • Deliverables and Scope of the Audit • Areas of Primary Emphasis • Auditors Report and Financial Statements • Required Communications • New Accounting Standards • Conclusion & Discussion/Questions 2

  4. About the Firm • Badawi & Associates • Formed in February 2012 • Located in Oakland, CA • Specialized in auditing governmental agencies, including cities, counties, special districts and transportation agencies • Over 15 years of auditing governmental agencies 3

  5. Engagement Team 4

  6. Engagement Team Engagement Partner Ahmed Badawi, CPA Quality Control Partner Jack Georger, CPA Manager Jennifer, Ye CPA Information Technology Robert Wucher CISA, CISM, CRISC Senior Cathy Zhai Staff John Neal 5

  7. Deliverables and Scope of the Audit • Report of Independent Auditors on Port of Redwood City Basic Financial Statements • Report 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 Standards • Communications 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) 6

  8. Areas of Primary Audit Emphasis • Revenues & 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 assets • Test of significant deletions to capital assets 7

  9. 8

  10. Auditors Report • Unqualified opinion • Audit performed in accordance with Generally Accepted Auditing Standards and Government Auditing Standards • Financial statements are fairly presented in all material respects • Significant accounting policies have been consistently applied • Estimates are reasonable • Disclosures are properly reflected in the financial statements 9

  11. 10

  12. Port of Redwood City 11

  13. Port of Redwood City 12

  14. Port of Redwood City 13

  15. Port of Redwood City 14

  16. Port of Redwood City 15

  17. Port of Redwood City • Expense Coverage 16

  18. Other Financial Information • Port’s Annual Pension Cost 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. 17

  19. Other Financial Information Port’s Annual Pension Contribution Rates 18

  20. Other Financial Information • Port’s Annual OPEB Cost 21

  21. Other Financial Information Port’s Annual OPEB Contribution Rate 22

  22. Other Financial Information 23

  23. 24

  24. Required Communications • 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 • Our Responsibility Under U.S GAAS 25

  25. Required Communications • 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 • Management Responsibility 26

  26. Required Communications • 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 • Independence • Timing of the Audit 27

  27. Required Communications • 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 • Significant Accounting Policies and Unusual Transactions • Management Judgment and Accounting Estimates 28

  28. Required Communications • 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 • Sensitive Disclosures • Difficulties Encountered in Performing the Audit 29

  29. Required Communications 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 • Significant Audit Adjustments and Unadjusted Differences Considered by Management to be Immaterial • Potential Effect on the Financial Statements of Any Significant Risks and Exposures 30

  30. Required Communications • We are pleased to report that there were no disagreements with management • No significant or material weaknesses identified during our audits • Disagreement with Management • Deficiencies in Internal Control 31

  31. Required Communications • 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 • Representations Requested of Management • Management Consultation with Other Accountants 32

  32. Required Communications • 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 • Other Material Written Communications • Material Uncertainties Related to Events and Conditions • Fraud and Illegal Acts 33

  33. New Accounting Standards 34

  34. Questions Ahmed M. Badawi abadawi@b-acpa.com 35

  35. Thank You For Allowing Us to Provide Audit Services to the Port of Redwood City 36

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