This is a request for City Council to receive and file the Comprehensive Annual Financial Report, Single Audit Report and Auditor Communications for the fiscal year ended June 30, 2016.

Comprehensive Annual Financial Report (CAFR)

We are pleased to submit to you the CAFR for fiscal year ended June 30, 2016.  This report is prepared annually by the Finance Department and includes basic financial statements, combining fund financial statements, footnotes and other supplementary information prepared in accordance with generally accepted accounting standards for local governments.  The financial statements were audited by an independent firm of Certified Public Accountants, Heinfeld, Meech & Co., P.C., whose report is included within.  The audit satisfies Article VI, Section 7, of the City Charter, which requires an annual audit of all accounts of the City by an independent certified public accountant. 

Responsibility for the accuracy of the information and the completeness and fairness of the presentations, including all disclosures, rests with the management of the City.  We believe the information is accurate in all material respects and is presented in a manner which fairly sets forth the financial position and results of operations of the City.  Furthermore, we believe that all disclosures necessary to enable the reader to gain an understanding of the City’s financial activity have been included.

Single Audit Report

The City is required to have an independent audit of Federal financial assistance received from Federal agencies, or passed through to the City by the State of Arizona or other governmental entities during the fiscal year (the “Single Audit”).  The standards governing Single Audit engagements require the independent auditor to report on the government’s internal controls and compliance with legal requirements having a direct and material impact on major programs, with special emphasis on internal controls and compliance requirements involving the administration of major federal awards.  The Single Audit Report from Heinfeld, Meech & Co., P.C. is a separately issued report, copies of which have been provided to Council.

Management Letter

As part of the audit process, the auditors also may prepare a management letter to present their comments and recommendations for improvements to internal controls and operating efficiencies of the City.  The auditors did not issue a management letter.

Auditor Communication to Governance Letter

Additionally, the auditors are required by professional standards to communicate certain information to “those charged with governance”.  The attached Communication to Governance (previously known as Statement on Auditing Standards (SAS) 114 letter) is that communication.  This letter: 1) communicates the responsibilities of the auditors and the City, 2) discusses the audit process, and 3) discusses any issues that may have arisen during the audit or as a result of the audit.

There are no previous actions for this item.

This item has no financial implications.

For fiscal year ended June, 30 2016, the City’s CAFR received an unmodified opinion from the independent auditors.  An unmodified opinion is a "clean" audit report, indicating the auditor's opinion that the financial statements are fairly presented in accordance with accounting principles generally accepted in the United States. This is the desired opinion of each organization. The CAFR is filed with the Arizona Office of the Auditor General and also the Government Finance Officers’ Association (GFOA). The City’s CAFR has earned the GFOA‘s Certificate of Achievement for Excellence in Financial Reporting every year since 1985.  We will be submitting this 2016 CAFR for consideration of this award again.  The CAFR is also filed with the Municipal Securities Rulemaking Board (MSRB) as a required annual continuing disclosure for outstanding bond issues in accordance with SEC Rule 15c2-12.

The Single Audit Report which reports on the City’s internal controls and compliance with legal requirements relating to major federal grant programs will be filed with the Federal Audit Clearing House.  The City received a “clean” Single Audit Report for fiscal year ended June 30, 2016 indicating that the auditors did not find any material weakness in internal controls or material noncompliance with major federal program requirements.