HomeMy WebLinkAboutAzusa RMC 2017
Azusa Rivers and
Mountains
Conservancy
Authority
Financial Statements and Independent
Auditors’ Reports
For the year ended June 30, 2017
Azusa Rivers and Mountains Conservancy Authority
Table of Contents
For the year ended June 30, 2017
i
Page
Independent Auditors’ Report ................................................................................................................................. 1
Basic Financial Statements:
Statements of Net Position ................................................................................................................................... 6
Statements of Activities ........................................................................................................................................ 7
Balance Sheet – General Fund ............................................................................................................................. 10
Reconciliation of the Balance Sheet of the General Fund to the
Statement of Net Position ..................................................................................................................................... 11
Statement of Revenues, Expenditures and Changes in Fund Balance – General Fund .............................. 12
Reconciliation of the Statement of Revenues, Expenditures, and Changes
In Fund Balance of the General Fund to the Statement of Activities ............................................................. 13
Notes to Financial Statements ............................................................................................................................. 16
Required Supplementary Information:
Notes to the Required Supplementary Information ......................................................................................... 25
Budgetary Comparison Schedule, General Fund ............................................................................................. 25
ii
This page intentionally left blank
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
of the Azusa Rivers and Mountains Conservancy Authority
Azusa, California
We have audited the accompanying financial statements of the governmental activities and each major fund of
the Azusa Rivers and Mountains Conservancy Authority (Authority) as of and for the year ended June 30, 2017,
and the related notes to the financial statements, as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities and each major fund of the Authority, as of June 30, 2017, and the
respective changes in financial position for the year then ended in accordance with accounting principles
generally accepted in the United States of America.
To the Board of Directors
of the Azusa Rivers and Mountains Conservancy Authority
Azusa, California
Page 2
Other Matters
Required Supplementary Information
We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for consistency
with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to express an opinion or
provide any assurance.
Management has omitted the management, discussion, and analysis that accounting principles generally accepted
in the United States of America require to be presented to supplement the basic financial statements. Such
missing information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context.
Badawi & Associates, CPAs
Berkeley, California
February 19, 2020
2
BASIC FINANCIAL STATEMENTS
3
This page intentionally left blank.
4
GOVERNMENT-WIDE FINANCIAL STATEMENTS
5
Azusa Rivers and Mountains Conservancy Authority
Statement of Net Position
June 30, 2017
Governmental
Activities
ASSETS
Cash and investments 40,639$
Prepaid items 3,762
Total assets 44,401
LIABILITIES
Accounts payable 1,244
Unearned revenue 39,914
Total liabilities 41,158
NET POSITION
Unrestricted 3,243
Total net position 3,243$
See accompanying Notes to Basic Financial Statements.
6
Azusa Rivers and Mountains Conservancy Authority
Statement of Activities
June 30, 2017
Net (Expense)
Revenue and
Changes in
Net Position
Operating
Charges for Grants and Governmental
Functions/Programs Expenses Services Contributions Total Activities
Governmental activities:
Rivers and mountains conservation 14,392$ -$ 17,635$ 17,635$ 3,243$
Total primary government 14,392$ -$ 17,635$ 17,635$ 3,243
General revenues:
Investment income -
Total general revenues -
Change in net position 3,243
Net position - beginning of year -
Net position - end of year 3,243$
See accompanying Notes to Basic Financial Statements.
Revenues
Program
7
This page intentionally left blank.
8
FUND FINANCIAL STATEMENTS
9
Azusa Rivers and Mountains Conservancy Authority
Balance Sheet
General Fund
June 30, 2017
ASSETS
Cash and investments 40,639$
Prepaid items 3,762
Total assets 44,401$
LIABILITIES AND
FUND BALANCES
Liabilities:
Accounts payable 1,244$
Unearned revenue 39,914
Total liabilities 41,158
Fund Balances:
Unassigned 3,243
Total fund balances 3,243
Total liabilities and fund balances 44,401$
See accompanying Notes to Basic Financial Statements.
10
Azusa Rivers and Mountains Conservancy Authority
Reconciliation of the Balance Sheet of the General Fund
to the Statement of Net Position
Total Fund Balances for the General Fund 3,243$
There were no reconciling differences for fiscal year 2017.
Net Position of Governmental Activities 3,243$
See accompanying Notes to Basic Financial Statements.
June 30, 2017
Amounts reported for governmental activities in the Statement of Net
Position were different because:
11
Azusa Rivers and Mountains Conservancy Authority
Statement of Revenues, Expenditures and Changes in Fund Balance
General Fund
For the year ended June 30, 2017
REVENUES:
Member contributions 17,635$
Total revenues 17,635
EXPENDITURES:
Current - Rivers and Mountain Conservation:
Insurance 2,687
Attorney fees 11,704
Other expenditures 1
Total expenditures 14,392
Net change in fund balances 3,243
FUND BALANCES:
Beginning of year -
End of year 3,243$
See accompanying Notes to Basic Financial Statements.
12
Azusa Rivers and Mountains Conservancy Authority
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balance of the General Fund to the Statement of Activities
For the year ended June 30, 2017
Net Changes in Fund Balances - General Fund 3,243$
There were no reconciling differences for fiscal year 2017.
Change in Net Position of Governmental Activities 3,243$
See accompanying Notes to Basic Financial Statements.
Amounts reported for governmental activities in the Statement of
Activities are different because:
13
This page intentionally left blank.
14
NOTES TO BASIC FINANCIAL STATEMENTS
15
Azusa Rivers and Mountains Conservancy Authority
Notes to Basic Financial Statements
For the year ended June 30, 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Azusa Rivers and Mountains Conservancy Authority (Authority) is a joint powers authority
between the City of Azusa (City) and the San Gabriel and Lower Los Angeles Rivers and Mountains
Conservancy (Conservancy). The Authority was created to conserve 180 acres of open space land in the
hillsides of north Azusa from a developer. The following is a summary of the significant accounting
policies of the Azusa Rivers and Mountains Conservancy Authority (the Authority) in conformity with
accounting principles generally accepted in the United States of America.
A. Relationship to the City of Azusa
The City of Azusa provides administrative and accounting services for the Authority and acts in a
fiduciary capacity for the Authority. The Authority’s activities are accounted for in its own set of
financial statements.
B. Basis of Accounting and Measurement Focus
The basic financial statements of the Authority are composed of the following:
Government-wide financial statements
Fund financial statements
Notes to basic financial statements
Government - wide Financial Statements
Government-wide financial statements display information about the reporting government as a whole,
except for its fiduciary activities. The Authority has no fiduciary activities. Government-wide financial
statements are presented using the economic resources measurement focus and accrual basis of
accounting. Under the economic resources measurement focus, all (both current and long-term)
economic resources and obligations of the reporting government are reported in the government-wide
financial statements. Basis of accounting refers to when revenues and expenditures are recognized in
the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues,
expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are
recognized when the exchange takes place. Revenues, expenses, gains, losses, assets and liabilities
resulting from nonexchange transactions are recognized in accordance with requirements of GASB
Statement No. 33.
16
Azusa Rivers and Mountains Conservancy Authority
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
B. Basis of Accounting and Measurement Focus, Continued
Government - wide Financial Statements, Continued
Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial
statements, rather than reported as an expenditure. Proceeds of long-term liabilities are recorded as a
liability in the government-wide financial statements, rather than as another financial source. Amounts
paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the
related liability, rather than as an expenditure.
Fund Financial Statements
Fund financial statements for the Authority’s governmental fund are presented after the government-
wide financial statements. These statements display information about the Authority’s major fund.
In the fund financial statements, governmental funds are presented using the modified-accrual basis of
accounting. Revenues are recognized when they become measureable and available as net current
assets. Measurable means that the amounts can be estimated or otherwise determined. Available
means that the amounts were collected during the reporting period or soon enough thereafter to be
available to finance the expenditures accrued for the reporting period. The Authority uses an
availability period of 60 days.
Revenue recognition is subject to the measurable and availability criteria for the governmental funds in
the fund financial statements. Member contributions and investment income associated with the current
period are considered to be susceptible to accrual. Exchange transactions are recognized as revenues in
the period in which they are earned (i.e., the related goods or services are provided). Locally imposed
derived tax revenues are recognized as revenues in the period in which the underlying exchange
transaction upon which they are based takes place. Imposed nonexchange transactions are recognized
as revenues in the period for which they were imposed. If the period of use is not specified, they are
recognized as revenues when an enforceable legal claim to the revenues arises or when they are
received, whichever occurs first. Government-mandated and voluntary nonexchange transactions are
recognized as revenues when all applicable eligibility requirements have been met.
Unavailable revenues arise when potential revenues do not meet both the “measurable” and “available”
criteria for recognition in the current period. Unavailable revenues also arise when the government
receives resources before it has a legal claim to them, as when grant monies are received prior to
incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are
met or when the government has a legal claim to the resources, the unavailable revenue is removed
from the combined balance sheet and revenue is recognized.
In the fund financial statements, governmental funds are presented using the current financial resources
measurement focus. This means that only current assets and current liabilities are generally included
on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of
“available spendable resources.” Governmental fund operating statements present increases (revenues
and other financing sources) and decreases (expenditures and other financing uses) in net current assets.
Accordingly, they are said to present a summary of sources and uses of “available spendable resources”
during a period.
17
Azusa Rivers and Mountains Conservancy Authority
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
B. Basis of Accounting and Measurement Focus, Continued
Fund Financial Statements, Continued
Recognition of governmental fund type revenue represented by noncurrent receivables is deferred until
they become current receivables. Noncurrent portions of long-term receivables are offset by
nonspendable fund balance.
Due to the nature of their spending measurement focus, expenditure recognition for governmental fund
types exclude amounts represented by noncurrent liabilities. Since they do not affect current assets,
such long-term amounts are not recognized as government fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that resources
were expended, rather than as fund assets. The proceeds of long-term liabilities are recorded as other
financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are
reported as fund expenditures.
When both restricted and unrestricted resources are combined in a fund, expenses are considered to be
paid first from restricted resources, and then from unrestricted resources.
C. Activities in Major Fund
The following fund is presented as a major fund in the accompanying basic financial statements:
General Fund – all revenues have been accounted for in this fund. Expenditures of this fund include
general operating expenses.
D. Net Position
Government-Wide Financial Statements
In the Government-Wide Financial Statements, net position are classified in the following categories:
Net Investment in Capital Assets – This amount consists of capital assets net of accumulated depreciation
and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the
assets. The Agency did not have any amount reported in this category as of June 30, 2017 as the
Authority did not have any capital assets as of June 30, 2017.
Restricted – This amount is restricted by external creditors, grantors, contributors, or laws or regulations
of governments. The Agency did not have any amount reported in this category as of June 30, 2017.
Unrestricted – This amount is all net position that do not meet the definition of “net investment in capital
assets” or “restricted net position” as defined above.
When an expense is incurred for purposes for which both restricted and unrestricted net position are
available, the Agency’s policy is to apply restricted net position first.
18
Azusa Rivers and Mountains Conservancy Authority
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
E. Fund Balances
Fund Financial Statements
In February 2009, the Governmental Accounting Standards Board (GASB) issued Statement 54, Fund
Balance Reporting and Governmental Fund Type Definitions (GASB 54). The new classification of fund
balances is as follows:
Nonspendable Fund Balances
These include amounts that cannot be spent because they are either (a) not in spendable form or (b)
legally or contractually required to be maintained intact, e.g., the principal of an endowment fund.
Examples of “not in spendable form” include inventory, prepaid amounts, long-term notes and loans,
property held for resale and other items not expected to be converted to cash. However, if the proceeds
from the eventual sale or liquidation of the items would be considered restricted, committed or assigned
(as defined further on) then these amounts would be included in the restricted, committed or assigned
instead of the nonspendable classification. A debt service reserve fund held by a trustee is an example
of fund balance in nonspendable form that is classified as restricted instead of nonspendable since the
reserve is eventually liquidated to make the final debt service principal payment.
Restricted Fund Balances
Restricted fund balances have externally enforceable limitations on use. The limitations on use can be
imposed by creditors, grantors, or contributors as well as by constitutional provisions, enabling
legislation, laws and government regulations.
Committed Fund Balances
Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action
(Resolution) of the Board are classified as committed fund balances.
Assigned Fund Balances
Fund balance amounts for which the Board has expressed intent for use but not taken formal action to
commit are reported as assigned under GASB 54.
Unassigned Fund Balance
These are either residual positive net resources of the General Fund in excess of what can properly be
classified in one of the other four categories, or negative balances.
19
Azusa Rivers and Mountains Conservancy Authority
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
G. New Pronouncements
In 2017, the Authority adopted new accounting standards in order to conform to the following
Governmental Accounting Standards Board Statements:
GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans– The objective of this Statement is to improve the usefulness of information
about postemployment benefits other than pensions (other postemployment benefits or
OPEB) included in the general purpose external financial reports of state and local
governmental OPEB plans for making decisions and assessing accountability. This
Statement results from a comprehensive review of the effectiveness of existing standards of
accounting and financial reporting for all postemployment benefits (pensions and OPEB)
with regard to providing decision-useful information, supporting assessments of
accountability and interperiod equity, and creating additional transparency. The
requirements of this statement were not applicable to the Authority.
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other
Than Pensions – The objective of this Statement is to improve accounting and financial
reporting by state and local governments for postemployment benefits other than pensions
other postemployment benefits or OPEB. It also improves information provided by state
and local governmental employers about financial support for OPEB that is provided by
other entities. The requirements of this statement were not applicable to the Authority.
GASB Statement No. 77, Tax Abatement Disclosure- This statement addresses the financial
statements prepared by state and local governments in conformity with generally accepted
accounting principles to provide citizens and taxpayers, legislative and oversight bodies,
municipal bond analysts, and others with information they need to evaluate the financial
health of governments, make decisions, and assess accountability. This information is
intended, among other things, to assist these users of financial statements in assessing (1)
whether a government’s current-year revenues were sufficient to pay for current-year
services (known as interperiod equity), (2) whether a government complied with finance-
related legal and contractual obligations, (3) where a government’s financial resources come
from and how it uses them, and (4) a government’s financial position and economic
condition and how they have changed over time. The requirements of this statement were
not applicable to the Authority.
GASB Statement No. 78, Pension Provided through Certain Multiple-Employer Defined Benefit
Pension Plans– The objective of this statement is to address a practice issue regarding the
scope and applicability of Statement No. 68, Accounting and Financial Reporting for Pensions.
This issue is associated with pensions provided through certain multiple-employer defined
benefit pension plans and to state or local governmental employers whose employees are
provided with such pensions. The requirements of this statement were not applicable to the
Authority.
20
Azusa Rivers and Mountains Conservancy Authority
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
G. New Pronouncements, Continued
GASB Statement No. 80, Blending Requirements for Certain Component Units – An Amendment
of GASB Statement No. 14 - The objective of this statement is to improve financial reporting
by clarifying the financial statement presentation requirements for certain component units.
This Statement amends the blending requirements established in paragraph 53 of Statement
No. 14, The Financial Reporting Entity, as amended. This statement amends the blending
requirements for the financial statement presentation of component units of all state and
local governments. The additional criterion requires blending of a component unit
incorporated as a not-for-profit corporation in which the primary government is the sole
corporate member. The additional criterion does not apply to component units included in
the financial reporting entity pursuant to the provisions of Statement No. 39, Determining
Whether Certain Organizations Are Component Units. The requirements of this statement were
not applicable to the Authority.
GASB Statement No. 82, Pension Issues – An Amendment of GASB Statement No. 67, No. 68, and
No. 73 - This statement addresses certain issues that had been raised with respect to
Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial
Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related
Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain
Provisions of GASB 67 and 68. Specifically, this statement addresses issues regarding (1) the
presentation of payroll-related measures in the required supplementary information, (2) the
selection of assumptions and the treatment of deviations from the guidance in an Actuarial
Standard of Practice for financial reporting purposes, and (3) the classification of payments
made by employers to satisfy employee (plan member) contribution requirements. The
requirements of this statement were not applicable to the Authority.
2. CASH AND INVESTMENTS
The City of Azusa (City) maintains a cash and investment pool used by all funds of the City, including
the Authority. The Authority does not own specifically identifiable securities of the City’s pool. The
Authority’s portion of this pool is reported on the financial statements as “cash and investments”.
Investment policies and associated risk factors applicable to the Authority’s funds are those of the City
of Azusa and are included in the City’s Comprehensive Annual Financial Report.
Cash and investments are reported as follows:
Statement of Net Position:
Cash and Investments $40,639
21
Azusa Rivers and Mountains Conservancy Authority
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2017
3. LAND HELD BY THE AUTHORITY
The Authority currently holds 180 acres of hillside property received via the City of Azusa from a Developer.
No acquisition value could be determined as of the acquisition date of the land, and as such is not currently
presented on the Authority’s Statement of Net Position on the Government-Wide Statements.
22
REQUIRED SUPPLEMENTARY INFORMATION
23
This page intentionally left blank.
24
Azusa Rivers and Mountains Conservancy Authority
Notes to Required Supplementary Information, Budget Comparison Schedule
For the year ended June 30, 2017
1. BUDGETS AND BUDGETARY ACCOUNTING
The Agency adopted an annual budget prepared on the modified accrual basis for the General Fund,
which is consistent with accounting principles generally accepted in the United States of America.
Budgetary Comparison Schedule, General Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Member contributions 13,000$ 13,000$ 17,635$ 4,635$
Grants and special project revenue 10,086 10,086 - (10,086)
Total revenues 23,086 23,086 17,635 (5,451)
EXPENDITURES:
Current:
Rivers and Mountains Conservancy 23,086 23,086 14,392 8,694
Total expenditures 23,086 23,086 14,392 8,694
Net change in fund balance -$ -$ 3,243 3,243$
FUND BALANCE:
Beginning of year -
End of year 3,243$
Budgeted Amounts
25
This page intentionally left blank
26