City of Dunsmuir 02/07

CITY OF DUNSMUIR Audit Report GAS TAX FUND July 1, 2004, through June 30, 2005 J C OHN HIANG California State Controller February 2007 J C OHN HIANG California State Controller February 23, 2007 Mr. Keith Anderson Finance Director City of Dunsmuir 5915 Dunsmuir Avenue Dunsmuir, CA 96025 Dear Mr. Anderson: The State Controller’s Office audited the City of Dunsmuir’s Gas Tax Fund for the period of July 1, 2004, through June 30, 2005. We also audited the Traffic Congestion Relief Fund (TCRF), recorded in the Gas Tax Fund, for the period of July 1, 2000, through June 30, 2004. The city accounted for and expended its Gas Tax Fund in compliance with Article XIX of the California Constitution and the Streets and Highways Code. If you have any questions, please contact Paul R. Criss, Chief, Financial-Related Audits Bureau, at (916) 322-4941. Sincerely, Original signed by JEFFREY V. BROWNFIELD Chief, Division of Audits JVB/ssa:vb MAILING ADDRESS P.O. Box 942850, Sacramento, CA 94250-5874 SACRAMENTO 300 Capitol Mall, Suite 518, Sacramento, CA 95814 (916) 324-8907 LOS ANGELES 600 Corporate Pointe, Suite 1000, Culver City, CA 90230 (310) 342-5656 City of Dunsmuir Gas Tax Fund Contents Audit Report Summary .................................................................................................................................... 1 Background ................................................................................................................................ 1 Objective, Scope, and Methodology ........................................................................................ 1 Conclusion .................................................................................................................................. 2 Follow-Up on Prior Audit Findings ........................................................................................ 2 Views of Responsible Official ................................................................................................... 2 Restricted Use ............................................................................................................................ 2 Schedule 1—Reconciliation of Fund Balance ............................................................................ 3 City of Dunsmuir Gas Tax Fund Audit Report Summary The State Controller’s Office (SCO) audited the City of Dunsmuir’s Gas Tax Fund for the period of July 1, 2004, through June 30, 2005. We also audited the Traffic Congestion Relief Fund (TCRF) recorded in the Gas Tax Fund for the period of July 1, 2000, through June 30, 2004. The last day of fieldwork was July 7, 2006. Our audit disclosed that no adjustment to the Gas Tax Fund is required. Background The State apportions funds monthly from the highway users tax account in the transportation tax fund to cities and counties for the construction, maintenance, and operation of local streets and roads. The highway users taxes are derived from state taxes on the sale of motor vehicle fuels. In accordance with Streets and Highways Code Section 2101 and Article XIX of the California Constitution, a city must deposit all apportionments of highway users taxes in its Gas Tax Fund (also known as the Special Gas Tax Street Improvement Fund). A city must expend gas tax funds only for street-related purposes. We conducted our audit of the city’s Gas Tax Fund under the authority of Government Code Section 12410. Chapter 91, Statutes of 2000 (Assembly Bill 2928), as amended by Chapter 656, Statutes of 2000 (Senate Bill 1662), established a Traffic Congestion Relief Fund in the State Treasury for allocating funds quarterly to cities and counties for street or road maintenance, reconstruction, and storm damage repair. Cities must deposit funds received into the city account designated for the receipt of state funds allocated for transportation purposes. The city recorded the TCRF in the Gas Tax Fund. We conducted our audit of the city’s TCRF under the authority of Streets and Highways Code Sections 2182 and 2182.1. Objective, Our audit objective was to determine whether the city accounted for and Scope, and expended the Gas Tax Fund in compliance with Article XIX of the California Constitution and the Streets and Highways Code. To meet the Methodology audit objective, we determined whether the city: • Properly deposited highway users tax apportionments and other appropriate revenues in the Gas Tax Fund; • Expended funds exclusively for authorized street-related purposes; and • Made available unexpended funds for future expenditures. We conducted our audit according to Government Auditing Standards, issued by the Comptroller General of the United States. We did not audit the city’s financial statements. We limited our audit scope to planning and performing the audit procedures necessary to obtain reasonable assurance that the city accounted for and expended the Gas Tax Fund in -1- City of Dunsmuir Gas Tax Fund accordance with the requirements of the Streets and Highways Code. Accordingly, we examined transactions, on a test basis, to determine whether the city expended funds for street purposes. We considered the city’s internal controls only to the extent necessary to plan the audit. Conclusion Our audit disclosed that the city accounted for and expended its Gas Tax Fund in compliance with Article XIX of the California Constitution and the Streets and Highways Code for the period of July 1, 2004, through June 30, 2005. Our audit also disclosed that the city accounted for and expended its Traffic Congestion Relief Fund recorded in the Gas Tax Fund in compliance with Article XIX of the California Constitution and the Streets and Highways Code for the period of July 1, 2000, through June 30, 2004. Follow-Up on Prior Our prior audit report, issued on December 15, 1995, disclosed no Audit Findings findings. Views of We discussed the audit results with city representatives during an exit conference on July 7, 2006, Keith Anderson, Finance Director, agreed Responsible with the audit results. Mr. Anderson further agreed that a draft audit Official report was not necessary and that the audit report could be issued as final. Restricted Use This report is intended for the information and use of city management and the SCO; it is not intended to be and should not be used by anyone other than these specified parties. This restriction is not intended to limit distribution of this report, which is a matter of public record. Original signed by JEFFREY V. BROWNFIELD Chief, Division of Audits -2- City of Dunsmuir Gas Tax Fund Schedule 1— Reconciliation of Fund Balance July 1, 2004, through June 30, 2005 Gas Tax Fund 1 Beginning fund balance per city $ 13,298 Revenues 71,754 Total funds available 85,052 Expenditures (75,998) Ending fund balance per city 9,054 SCO adjustment — Ending fund balance per audit $ 9,054 NOTE: Chapter 9, Statutes of 2000 (Assembly Bill 2928), as amended by Chapter 656, Statutes of 2000 (Senate Bill 1662) established the State Traffic Congestion Relief Fund (TCRF), which allocates funds to cities and counties for street or road maintenance and reconstruction from FY 2000-02, through 2002-03. TCRF allocations were suspended during FY2003-04, and 2004-05. __________________________ 1 The city receives apportionments from the state highway users tax account, pursuant to Streets and Highways Code Sections 2105, 2106, 2107, and 2107.5. The basis of the apportionments for Sections 2105, 2106, and 2107 varies, but the money may be used for any street purpose. Streets and Highways Code Section 2107.5 apportionments are restricted to administration and engineering expenditures, except for cities with populations of fewer than 10,000 inhabitants. Those cities may use the funds for rights-of-way and for the construction of street systems. -3- State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, CA 94250-5874 http://www.sco.ca.gov S07-GTA-001