This item is on the Council's agenda to receive the Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2020 (Fiscal Year 2019-2020). The CAFR includes the City's audited basic financial statements and the independent auditor's report. It also includes a narrative on the City’s financial activities known as the Management Discussion and Analysis and a statistical section pertaining to financial trends, revenue capacity, debt capacity, demographic and economic information and operating information.
State law requires that the accounts and fiscal affairs of all municipal entities be examined annually by an independent certified public accountant. The City has retained an independent auditor, Chavan and Associates, LLP, to audit the City’s financial statements. The audit was performed in accordance with auditing standards generally accepted in the United States, including financial auditing standards issued by the Comptroller General of the United States, in order to determine if the City’s financial statements were misstated or misrepresented, either due to fraud or error. Chavan and Associates, LLP, has issued an unmodified opinion that the financial statements for the year ended June 30, 2020, are fairly presented in conformity with generally accepted accounting principles (GAAP).
As part of the audit process, Chavan and Associates, LLP, also test the City’s internal controls over financial reporting and compliance and reports on the outcome of these tests (“findings”) as part of the Communication Letter. There are different categories of findings, including a material weakness, meaning that a deficiency, or a combination of deficiencies, in internal controls exists and that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, detected or corrected on a timely basis. No material weaknesses or other findings were identified as part of the audit. Sheldon Chavan of Chavan and Associates LLP will give a presentation on the Fiscal Year 2019-2020 audit as part of the Council's January 5, 2021 meeting.
The Fiscal Year 2019-2020 CAFR was prepared using guidelines issued by the Government Finance Officers Association of the United States and Canada (GFOA) as part of its Certificate of Achievement for Excellence in Financial Reporting Program. The intent of this program is to encourage state and local governments to prepare reports that exceed the minimum requirements of generally accepted accounting principles in order to produce a readable and efficiently organized document intended to allow greater public transparency and full disclosure of the City’s financial health. The City received a Certificate of Achievement for its Fiscal Year 2017-2018 and 2018-2019 CAFRs and the Fiscal Year 2019-2020 CAFR will also be submitted to the GFOA for consideration of a new Certificate of Achievement.