2001/02 Audited Financial Statements - Section 99234 Transportation FundAUDITED FINANCIAL STATEMENTS
City of La Quinta
Section 99234 Transportation Fund
Year ended June 30, 2002
with Report of Independent Auditors
ERNST & YOUNG LLP
AUDITED FINANCIAL STATEMENTS
City of La Quinta
Section 99234 Transportation Fund
Year ended June 30, 2002
with Report of Independent Auditors
City of La Quinta
Section 99234 Transportation Fund
Audited Financial Statements
Year ended June 30, 2002
Contents
Report of Independent Auditors.......................................................................................... 1
Audited Financial Statements
BalanceSheet...................................................................................................................... 3
Statement of Revenues, Expenditures and Changes in Fund Balance ................................ 4
Statement of Revenues, Expenditures and Changes in Fund Balance —
Budgetand Actual........................................................................................................... 5
Notes to Financial Statements............................................................................................ 6
Report on Compliance and on Internal Control Over Financial Reporting
Report of Independent Auditors on Compliance and on Internal Control Over
Financial Reporting of the Section 99234 Transportation Fund Based on
an Audit of the Section 99234 Transportation Fund's Financial Statements
Performed in Accordance with Government Auditing Standards .................................... 8
ER, NS & YOUNG r Ernst & Young LLP tr Phone: (949) 794-2300
Suite 1000 Fax: (949) 437-0590
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Irvine, California 92612-1007
Report of Independent Auditors
Honorable City Council
City of La Quinta
We have audited the accompanying financial statements of the Section 99234
Transportation Fund of the City of La Quinta, California, as of and for the year ended
June 30, 2002, as listed in the table of contents. These financial statements are the
responsibility of the Section 99234 Transportation Fund of the City of La Quinta,
California's management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the
United States and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
As described more fully in Note 1, the financial statements present only the Section
99234 Transportation Fund and are not intended to present fairly the financial position,
results of operations and budgetary comparison of the City of La Quinta, California, in
conformity with accounting principles generally accepted in the United States.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of the Section 99234 Transportation Fund of the City of
La Quinta, California, as of June 30, 2002, and the results of its operations and budgetary
comparison for the year then ended in conformity with accounting principles generally
accepted in the United States.
As discussed in Note 1 to the fund financial statements, during fiscal 2002 the Section
99234 Transportation Fund changed its financial accounting and reporting to comply
with the provisions of Governmental Accounting Standards Board Statement No. 34,
Basic Financial Statements—and Management's Discussion and Analysis for State and
Local Governments.
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In accordance with Government Auditing Standards, we have also issued our report dated
September 13, 2002 on our consideration of the Section 99234 Transportation Fund of
the City of La Quinta, California's internal control over financial reporting and our tests
of its compliance with certain provisions of laws, regulations, contracts and grants. That
report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the results of
our audit.
v UP
September 13, 2002
0)
City of La Quinta
Section 99234 Transportation Fund
Balance Sheet
June 30, 2002
Assets
Cash
Total assets
Liabilities and fund balance
Liabilities:
Due to City general fund
Total liabilities
Fund balance:
Unreserved fund balance
Total fund balance
Total liabilities and fund balance
See accompanying notes.
Q
City of La Quinta
Section 99234 Transportation Fund
Statement of Revenues, Expenditures
and Changes in Fund Balance
Year ended June 30, 2002
Revenues:
Intergovernmental allocation:
Article 3
Expenditures:
Construction
Total expenditures
Deficiency of revenues under expenditures
Other financing sources:
Operating transfer in
Excess of revenues and other financing
sources over expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying notes.
$ 37,822
75,644
75,644
(37,822)
37,822
4
City of La Quinta
Section 99234 Transportation Fund
Statement of Revenues, Expenditures
and Changes in Fund Balance — Budget and Actual
Year ended June 30, 2002
Revenues:
Article 3
Total revenues
Expenditures:
Construction
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources:
Operating transfers in
Excess of revenues and other financing
sources over expenditures
Fund balance at beginning of year
Fund balance at end of year
See accompanying notes.
5
Variance
Favorable
Budget Actual (Unfavorable)
$ 93,175 $ 37,822 $ (55,353)
93,175 37,822 (55,353)
186,350 75,644 110,706
186,350 75,644 110,706
(93,175) (37,822) 55,353
93,175 37,822 (55,353)
City of La Quinta
Section 99234 Transportation Fund
Notes to Financial Statements
June 30, 2002
1. Summary of Significant Accounting Policies
The accounting policies of the Section 99234 Transportation Fund of the City of La
Quinta, California (City), are in conformity with accounting principles generally accepted
in the United States applicable to governmental units. The Governmental Accounting
Standards Board (GASB) is the accepted standard-setting body for establishing
accounting and financial reporting principles. The following is a summary of the more
significant accounting policies:
General
The Section 99234 Transportation Fund is a capital projects fund of the City. The
financial statements of the Section 99234 Transportation Fund are included in the general
purpose financial statements of the City.
Fund Accounting
The operations of the Section 99234 Transportation Fund are accounted for in a separate
set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues
and expenditures. The Section 99234 Transportation Fund accounts for the City's share
of the Transportation Development Act Article 3 allocations. The Section 99234
Transportation Fund is legally restricted for specific purposes.
Basis of Accounting
The Section 99234 Transportation Fund is accounted for using the modified accrual basis
of accounting. Under this basis of accounting, revenues are recorded when susceptible to
accrual (i.e., measurable and available). Measurable means the amount of the transaction
can be determined, and available means collectible within the current period or soon
enough thereafter to be used to pay liabilities of the current period. Revenues susceptible
to accrual are Section 99234. Expenditures are recorded when the related fund liability is
incurred.
G
City of La Quinta
Section 99234 Transportation Fund
Notes to Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Basis of Accounting (continued)
These financial statements include the implementation of GASB Statement No. 34, Basic
Financial Statements—and Management's Discussion and Analysis for State and Local
Governments. This new standard provides for significant changes in terminology and
other changes, which did not have a material impact on these fund financial statements.
Budgetary Control and Encumbrances
The City adopts an annual budget on a basis consistent with accounting principles
generally accepted in the United States and utilizes an encumbrance system as a
management control technique to assist in controlling expenditures and enforcing revenue
provisions. Under this system, the current year expenditures are charged against the
budgeted appropriation. Encumbrances outstanding at year-end are reported as
reservations of fund balance for subsequent year expenditures as they do not constitute
expenditures or liabilities.
2. Compliance Requirements
Funds received pursuant to Section 99234 of the Public Utilities Code may only be used
for facilities provided for exclusive use by pedestrians and bicycles or bicycle safety
education programs.
VA
Report on Compliance
and on Internal Control
Over Financial Reporting
`1 ERNST & iOUNG
of Ernst & Young LLP ra Phone: (949) 794-2300
Suite 1000 Fax: (949) 437-0590
18111 Von Karman Avenue www.ey.com
Irvine, California 92612-1007
Report of Independent Auditors on Compliance and on
Internal Control Over Financial Reporting of the Section 99234
Transportation Fund Based on an Audit of the Section 99234
Transportation Fund's Financial Statements Performed in
Accordance with Government Auditing Standards
Honorable City Council
City of La Quinta
We have audited the financial statements of the Section 99234 Transportation Fund
(Transportation Fund) of the City of La Quinta, California, as of and for the year ended
June 30, 2002, and have issued our report thereon dated September 13, 2002. We
conducted our audit in accordance with auditing standards generally accepted in the
United States and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the Transportation Fund's
financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts and grants, including
the Transportation Development Act, as summarized in the "Guidelines on Auditing for
Conformance" published by the Southern California Association of Governments,
noncompliance with which could have a direct and material effect on the determination
of financial statement amounts. However, providing an opinion on compliance with these
provisions was not an objective of our audit of the Transportation Fund and, accordingly,
we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit of the Transportation Fund, we considered the
Transportation Fund of the City of La Quinta, California's internal control over financial
reporting in order to determine our auditing procedures for the purpose of expressing our
opinion on the Transportation Fund's financial statements and not to provide assurance
on the internal control over financial reporting. Our consideration of internal control over
financial reporting would not necessarily disclose all matters in the internal control over
financial reporting that might be material weaknesses. A material weakness is a condition
in which the design or operation of one or more of the internal control components does
not reduce to a relatively low level the risk that misstatements in amounts that would be
material in relation to the Transportation Fund's financial statements being audited may
occur and not be detected within a timely period by employees in the normal course of
performing their assigned functions. We noted no matters involving the internal control
over financial reporting and its operation that we consider to be material weaknesses.
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This report is intended solely for the information and use of management, the City
Council, the Riverside County Transportation Commission and the California State
Controller's office and is not intended to be and should not be used by anyone other than
these specified parties.
September 13, 2002
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AD-# RNST &YOUNG
December 18, 2002
Mr. John Falkoner
Finance Director
City of La Quinta
78-495 Calle Tampico
La Quinta, CA 92253
Dear Mr. Falkoner:
ru Ernst & Young LLP rr Phone: (949) 794-2300
Suite 1000 Fax: (949) 437-0590
18111 Von Karman Avenue www.ey.com
Irvine, California 92612-1007
Enclosed are 5 copies of the Transportation Development Act financial statements for the
fiscal year ended June 30, 2002. The appropriate number of copies has been sent to the
following agencies on the City's behalf:
Riverside County Transportation Commission
State Controller's Office
If you should have any questions, please feel free to call me at (949) 437-0494.
JC/mn
Enclosures
JC
Enclosures
Sincerely,
Julia Cox
Assurance Advisory Business Services
Senior Manager
A Member Practice of Ernst & Young Global