Audit on Beaumont Council's Agenda Tuesday Night

The City of Beaumont's most recent financial audit is on the city council agenda Tuesday night, and City Manager Alan Kapanicas has recommended council members accept the audit report.

The 88-page June 30, 2012 independent auditor's report was put together by Moss, Levy & Hartzheim, LLP, Certified Public Accountants. They have offices in Beverly Hills, Culver City and Santa Maria.

"The City's general fund is where the city accounts for most of its operations, such as adminstration, public safety services and community services," Kapanicas said in a discussion for agenda item 6.a., titled "Acceptance of June 30, 2012 Financial Audit Report."

"The general fund had a surplus for the year ended June 30, 2012 of just under $283,000," Kapanicas said. "Though the fund balance stands at over $17,600,000, this amount is not currently available due to a receivable from the former Redevelopment Agency of over $21,500,000."

The Moss, Levy & Hartzheim report includes the following:

"We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Beaumont, California as of and for the fiscal year ended June 30, 2012, which collectively comprise the City's basic financial statements as listed in the table of contents.

"These financial statements are the responsibility of the City's management.

"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 and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. . . . 

"We believe that our audit provides a reasonable basis for our opinions.

"As discussed in Note 1 to the basic financial statements, the City has not recorded capital assets within its governmental activities, and accordingly, has not recorded depreciation expense on those assets. Accounting principals generally accepted in the United States of America require that those capital assets be capitalized and depreciated, which would increase the assets, net assets, and expenses of the governmental activities. These amounts are not reasonably determinable.

"In our opinion, because of the effects of the matter discussed in the preceding paragraph, the financial statements of the governmental activities do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position of the governmental activities of the City of Beaumont as of June 30, 2012, and the respective changes in financial position for the fiscal year then ended."

Note 1 is nine-and-a-half pages of the 88-page report. It includes the following:

"The City does not maintain a complete record of the accumulated depreciation and depreciation expense of capital assets for its governmental activities. Due to lack of records, no opinion has been given on the capital assets, accumulated depreciation, or depreciation expense related to the governmental activities in the government-wide statements."

The audit report and Kapanicas' recommendation are at this link:

www.ci.beaumont.ca.us/DocumentCenter/View/17579

The council agenda for Tuesday is at this link:

http://www.ci.beaumont.ca.us/DocumentCenter/View/17572

The Beaumont council is scheduled to meet in regular session at 6 p.m. Oct. 15 at 550 E. 6th St.