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  Consent-General Government   # 12.       
Financial Services  
Meeting Date: 10/12/2021  
Brief Title:    Alternative Audit Cycle for Cottonwood Cemetery District
From: Chad Rinde, Chief Financial Officer, Department of Financial Services
Staff Contact: Chad Rinde, Chief Financial Officer, Department of Financial Services, x8050

Subject
Approve a five-year compilation cycle for the Cottonwood Cemetery District as recommended by the County Chief Financial Officer. (No general fund impact) (Unanimous approval required) (Rinde)
Recommended Action
Approve a five-year compilation cycle for the Cottonwood Cemetery District as recommended by the County Chief Financial Officer.
Strategic Plan Goal(s)
County Mandated Service
Reason for Recommended Action/Background
California Government Code (Code) Section 26909 requires all independent special districts and joint powers agencies [pursuant to Code Section 6505(b) and (f)] in the County to be subject to an annual audit, biennial audit, or other allowable alternative schedule, if approved by the Board. The Code provides that should the district not procure an audit, the Auditor-Controller (now Chief Financial Officer) can conduct, or contract with a certified public accountant to conduct, the audit.

The Cottonwood Cemetery District, at its September 10, 2021, Board of Trustees meeting requested that the Chief Financial Officer and County Board of Supervisors allow a five year compilation in-lieu of completion of an audit. Cottonwood Cemetery District previously conducted audits on a biennial schedule (every two years) as allowed by Government Code 26909. In the last round of audits, the district substituted an agreed-upon-procedures (AUP) engagement for the period covering fiscal years 2014-2015, 2015-16, 2016-17, and 2017-18. Cottonwood Cemetery District Board action was approved unanimously at their September 10, 2021 Meeting.

Code 26909(d)(1) allows by unanimous request by the governing board of the special district and unanimous approval by the County Board of Supervisors to replace the annual audit with a financial compilation following professional standards if all of the following are met:
 
  • (A) All of the special district's revenues and expenditures are transacted in the County's Financial System
  • (B) The special district's annual revenues do not exceed one hundred fifty thousand dollars ($150,000)
  • (C) The special district pays the costs of performing a financial compilation
A compilation is allowed in-lieu of a financial audit for a maximum of a 5 year period and was requested due to the high cost of an audit being cost prohibitive on the district's budget. This option would be used for the fiscal years of June 30, 2019, 2020, 2021, 2022, and 2023. The above action has been reviewed by the County Chief Financial Officer who has determined that the adjustment from an audit to a compilation is justified due to the small financial size of the district and a lower risk level as transactions are processed through the County Department of Financial Services. This would also allow the district an opportunity to accumulate funds needed to pay for the compilation.
Collaborations (including Board advisory groups and external partner agencies)
The County Department of Financial Services collaborated with the Board from Cottonwood Cemetery District on the recommended action.
Competitive Bid Process
Not applicable.

Fiscal Impact
Potential fiscal impact (see notes in explanation section below)
Fiscal Impact (Expenditure)
Total cost of recommended action:    $   0
Amount budgeted for expenditure:    $   0
Additional expenditure authority needed:    $   0
One-time commitment     Yes
Source of Funds for this Expenditure
$0
Explanation (Expenditure and/or Revenue)
Further explanation as needed:
Audit costs are paid by the respective special district under Government Code 26909. Any audit or compilation costs related to this item will be paid by the Cottonwood Cemetery District.
Attachments
Att. A. Government Code 26909

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Form Review
Inbox Reviewed By Date
Chad Rinde (Originator) Chad Rinde 10/04/2021 08:42 AM
Financial Services Chad Rinde 10/04/2021 08:48 AM
County Counsel Hope Welton 10/04/2021 09:35 AM
Joanne Vanhoosear Joanne Vanhoosear 10/04/2021 10:08 AM
Elisa Sabatini Elisa Sabatini 10/04/2021 10:40 AM
Form Started By: Chad Rinde Started On: 09/13/2021 08:47 PM
Final Approval Date: 10/04/2021

    

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