SR-03-17-2015-8BCity of
Santa Monica
�-
City Council Meeting: March 17, 2015
Agenda Item: 8® E3
To: Mayor and City Council
From: Martin Pastucha, Acting Assistant City Manager
Subject: Presentation of Internal Audit Internal Controls Review Report and Review
of the City's Audit Review Framework, Including Consideration of Audit
Committee
Recommended Action.
Staff recommends that the City Council:
1. Review and comment on the attached Internal Controls Review report prepared
by the City's internal auditor, Moss Adams LLP.
2. Approve the City's current audit review framework, including presentation of audit
reports to the full City Council in an open hearing.
Executive Summary
The City maintains a comprehensive audit function that provides testing and proof of the
City's sound financial practices and stewardship of public funds. The audit function
includes an independent external auditor, as required by the City's Charter, and an
internal auditor, as recommended by best practices. The external audit process
culminates in the Comprehensive Annual Financial Report to Council (see Item 8A),
while the internal audit process looks at financial and operational controls, risk
management, and performance efficiency and effectiveness throughout the City. These
items represent the City's ongoing program to assure sound financial stewardship,
accountability, and compliance with accounting principles and law. Key elements of this
program are independent, objective reviews and a transparent process wherein internal
and external auditors present reports to Council in a public forum.
Staff has worked with the City's internal auditor, Moss Adams LLP, to produce an
Internal Controls Review report, included as Attachment 1. This report presents a high -
level assessment of the City's financial processes and fiscal operational controls. Staff
agrees with the results of the report and is currently working on a number of process
improvements. A number of the items the report raises as control issues are primarily
inefficiencies; these are processes staff developed as checks and balances in the
absence of better alternatives, which staff plans to address with more effective
1
measures along with other recommendations
At its January 27, 2015 meeting, Councilmembers directed staff to return with
information on the creation of an audit committee within the Council. Staff has reviewed
the attributes of an audit committee structure, as set forth by such organizations as the
Government Finance Officers' Association (GFOA) and the Association of Local
Government Auditors (ALGA), provided information on the City's current audit function
and practices, and researched other cities' use of audit committees or alternative
structures. Based on this review, staff believes that the City's current process provides
the same, or greater, level of transparency, understanding, and thoroughness as the
Audit Committee process, and it does so more efficiently. Staff recommends that
Council approve the continuation of the current practice, in which a!l Council members
participate as audit committee members, reviewing and discussing financial audits and
internal audit reviews in an open hearing that is transparent to the public, and in which
both Council members and the public have the opportunity to ask questions.
Background
As a steward of public funds, the City of Santa Monica must conduct periodic internal
audits to ensure that internal accounting controls are in place and the organization is
operating according to the highest standards of professional financial management as
outlined by the GFOA. Santa Monica's Internal Audit function was created in FY 2007-
08 to ensure that staff in all departments followed best business practices. From FY
2007 -12, the City's Finance Department employed an Internal Audit Manager,
supported by a Senior Internal Auditor, who conducted a series of audits and monitored
the implementation of audit recommendations. Among the internal audits completed
were ambulance billing and specific functions in Big Blue Bus, Cemetery, Parking
Operations, and Resource Recovery and Recycling. These audits were conducted
under the direction of the Finance Director, and findings, as well as status updates,
were presented to the City Manager on a quarterly basis. In November 2012, in
accordance with best practices, staff transferred the internal audit function from the
Finance Department to the City Manager's Office. Additionally, taking advantage of the
independence, experience level, and expansive evaluation scope that a contractor
could offer in this field, on August 26 2014, Council authorized the City Manager to
negotiate and execute a professional services agreement with Moss Adams, LLP for
internal audit services for a 3 -year period with one option to renew for an additional two
years.
6
Discussion
Internal Controls Review
With the introduction of a new internal auditor, staff requested the completion of an
assessment of the City's key financial processes. The last citywide risk assessment
was completed in 1998. An enterprise wide internal controls review provides a
comprehensive overview of the City's fiscal operational controls and has the added
benefit of presenting an unbiased starting point for the development of an internal audit
work plan, which can delve deeper into specific high risk operations. This internal
controls review has provided a number of opportunities for improvement, and it will
serve as a launching point for a number of more thorough reviews cf the City's financial
practices. The results of the internal controls review are attached and will be presented
to Council by Moss Adams, with an opportunity for Councilmembers and the public to
ask questions.
Moss Adams conducted interviews with staff and reviewed procedures during October
and November 2014. The review included seven key functions and over 100 controls,
including Payroll and Timekeeping, Purchasing and Accounts Payable, Monthly Account
Reconciliation and Closing, Grants Management, Revenue and Cash Collections,
Accounts Receivable, and information technology general controls.
Overall, the report finds that the City has key internal controls in place for many
functions. However, there are opportunities for improvement. Staff agrees with the
determinations made by Moss Adams. Areas requiring improvement are mostly
characterized by recent staff turnover due to retirements, limitations of current
automated systems, and the City's history of decentralized operations. This report
contains no surprises; staff is aware of the gaps noted in this report and, in many cases,
has developed additional checks and balances to ensure that a process is completed
with proper controls in place. Also, staff has been working over the past two years to
provide training, update policies and procedures, transition to new automated systems,
3
and centralize or work with departments to establish standard processes for
decentralized operations.
There are 42 controls identified as areas that would benefit from improvement. The
report categorizes control areas needing improvement based on the impact of an
occurrence and the likelihood of a negative event, where a breakdown in checks or
controls could lead to a material loss. Eight controls are shown to have a high
likelihood of occurrence, one would have a high impact, and four are characterized as
having a high likelihood and impact. Staff has provided responses to each
recommendation, shown in the "Management Response" column on the report. The
responses include detail on changes that staff will implement to improve controls in
addition to the recommendations made by Moss Adams.
Over the next two years, staff will follow a work plan and continue to consult with Moss
Adams on best practices to improve these controls. The work plan will prioritize the
development of controls in areas that have a high likelihood of occurring and /or high
impact should they occur. Staff will return to Council biannually to report on progress
made on these recommendations.
Audit Committee
At its January 27, 2015 meeting, as part of a Councilmember Discussion Item, Council
directed staff to provide an information item on the subject of audit committees.
Specifically, Council directed staff to report on best practices in the area of audit
reporting, whether other cities were using an audit committee structure, and what the
City's current process is to provide transparent financial and internal controls review and
reporting.
The City's Audit Function
The City maintains a comprehensive audit function that provides testing and proof of the
City's sound financial practices and stewardship of public funds. The audit function
includes an independent external auditor, as required by the City's Charter, and an
internal auditor, as recommended by best practices. While the C!'iy does not have an
Audit Committee, a structure that is considered a best practice by the Government
Finance Officers' Association (GFOA) and the Association of Local Government
Auditors (ALGA), both of these auditors have been approved by the Council and a
report is presented to the Council and the public on their findings.
Per the GFOA, the three main groups responsible for the quality of financial reporting
are the governing body, financial management, and the independent auditors. The
governing body's responsibility with respect to financial reporting practices is to ensure
that management properly develops and adheres to a sound system of internal controls,
procedures are in place to objectively assess management's practices, and the
independent auditors, through their own review, objectively assess the government's
financial reporting practices.
To better understand the various roles and responsibilities that exist as part of a
municipal audit program, a description of each participant's role is ncted below:
Independent External Auditor's Role
The Council authorized the City to enter into a professional services agreement with
Macias, Gini and O'Connell, LLP (MGO), for independent external auditor services, on
May 10 2011. MGO performs an annual examination of the City's financia! statements,
which includes all financial transactions, assets and deferred outflows of resources, and
liabilities and deferred inflow of resources. This examination is performed in
accordance with auditing standards issued by the American Institute of Certified Public
Accountants (AICPA), the Comptroller General of the United States, the United States
Office of Management and Budget, the State Controllers' Office, and other agencies
with which the City shares grant agreements. The role of the external auditor is to
obtain a reasonable assurance about whether the financial statements are free from
material misstatement. The external auditor selects samples and conducts numerous
tests across a wide variety of City functions to test the accuracy of the City's financial
5
data. While this process includes a risk assessment in which the auditor considers
internal controls, it is not for the purposes of expressing an opinion as to the
effectiveness of the internal controls.
Results of this annual audit are documented in auditor's reports that either express
opinions on the City's compliance with requirements and on the fair presentation of the
financial statements. In addition to the auditor's reports, the external auditor may issue
a letter to management on observations concerning the City's internal control structure,
as well as areas of potential economy and efficiency. The external auditor also reports
to the Council on the qualitative aspects of accounting practices, corrected and
uncorrected audit adjustments, disagreements with management, and difficulties
encountered in performing the audit, if any.
Also addressed in the annual audit is the potential existence of fraud, as audit standards
require the auditor to plan the audit to detect material misstatements caused by fraud or
errors. At the start of the audit, the external auditor conducts interviews with key
individuals at different levels and throughout the City under the Statement of Auditing
Standards No. 99 process as required by the AICPA. Interviews seek to identify and
assess risk of fraud in the financial statement audit. The auditor inquires about potential
weaknesses in the organization that would impact financial functions and any
knowledge of fraud. Throughout the audit, if such instances are noted, the external
auditor is required to make an immediate, written report of all irregularities and illegal
acts, or indicators of irregularities and illegal acts, to the Council, City Manager and
Finance Director.
Internal Auditor's Role
The internal audit function exists to verify compliance with applicable rules and
regulations and identify opportunities to improve performance and accountability. The
scope of internal audits is focused on specific areas determined to be potentially high
risk. The goal of the internal audit review is to determine if there is a breakdown or
there are insufficient internal controls in a specific area or function that may result in a
Ip
material loss, assess risks, and identify opportunities to improve operational efficiency
and effectiveness. Unlike the external audit, the internal audit review of internal controls
requires detailed testing that can form an opinion on the internal controls.
Management's Role
Management's objective in the audit function is to support transparency and deliver
complex financial information in a way that can be understood by both financial and
non - financial staff alike. It is ultimately the responsibility of management to ensure that
adequate controls are in place and financial statements are presented accurately and in
accordance with generally accepted accounting principles. The City of Santa Monica
has received a clean audit report for at least the last 31 years and has been awarded
the Certificate of Achievement for Excellence in Financial Reporting by the Government
Finance Officers' Association of the United States and Canada for the 30th consecutive
time. Staff anticipates that the FY 2013 -14 CAFR also conforms to the Certificate of
Achievement program requirements.
The implementation of effective internal controls continues to be the best deterrent
against error, fraud, and theft, and management's commitment to integrity and
transparency cultivates adherence to policies and procedures entity -wide. It is
management's responsibility to design, implement, and maintain internal controls and
consider the areas of risk. Implementation of effective policies and procedures can
prevent, detect, and correct errors and fraud before they affect financial statements.
Staff continues to develop written policies to document and confirm existing internal
controls, as well as detect opportunities for improvement and develop new policies.
City Council's Role
The role of the City Council is to provide sound governance, ensure. that management
upholds prudent financial practices and internal controls, and provide the resources for
audits in order to ascertain that these practices are being met. Star has implemented a
process over the past three years whereby the external auditor presents the results of
their audit of the City's financial statements to the Council in an open hearing and
makes themselves available for questions. This process will be replicated with the
presentation of the internal audit review findings to the Council by the City's internal
auditor.
Best Practices
The GFOA and the ALGA both recommend that cities implement an audit committee
within their governing body to oversee the audit program and ensure the quality and
independence of the audit program. Staff has reviewed the recommendations,
summarized in the table below, and finds that the current process followed by the City
addresses each one of the needs that an audit committee would respond to.
Audit Committee provides:
City's Current Process
A practical means for a governing body to
The Council receives and reviews reports from the
review and oversee the government's
City's external auditor and the internal auditor in an
financial reporting processes, internal
open meeting. These reports provide independent
controls and independent auditors.
examinations of the City's financial reporting
processes and internal controls.
A forum in which auditors and other
The external auditor and the internal auditor
interested parties can candidly discuss
present their reports to Council in an open hearing
concerns.
and are available for questions. In addition, there
are a number of opportunities for the external
auditor to discuss concerns with the Council,
including the SAS No. 99 interview at the beginning
of the audit process, as well as throughout the audit
if the need arises.
Responsibility for the appointment,
Both the external auditor and internal auditor
compensation, retention, and oversight of
contracts are approved by Council after a
the work of any independent accountant
competitive process is completed. Council approves
or internal auditor.
the compensation, contract length, and general
scope of the work being performed.
A structure for private meetings with the
While there is a structure for private meetings
independent auditors. The results of these
between the Mayor (and potentially any Council
meetings are reported to the governing
member who is interested) and the external auditor,
body.
Council has consistently advocated for more open
and transparent forums. Additionally, a standing
Council sub - committee having audit or finance
oversight responsibilities would be considered a
"legislative body" under the Brown Act and be
subject to all Brown Act requirements, including
public meetings and noticing, and would therefore
not be able to conduct private meetings, as
reflected in the best practice.
Audit Committee Structure
Current City Practice
All members of the audit committee
Under the current practice, al? City Council members
should be members of the governing body,
have access to both the external auditor and the
and minimum membership should be
internal auditor, and to their reports. This allows for
three councilmembers.
a more transparent process, and one in which the
various backgrounds and perspectives of all Council
members may benefit the review process.
Ideally, all members should possess or
Governmental financial reporting and auditing is a
obtain a basic understanding of
very complicated subject matter. For the past two
governmental financial reporting and
annual audit report presentations to Council, staff
auditing.
has provided a detailed summary of the CAFR in its
staff report, clearly discussing the key indicators for
the City's fiscal health.
The committee should also have access to
Council has the ability to ask both the external
the services of at least one expert that
auditor and the internal auditor specific questions
possesses knowledge in governmental
regarding the City's financial operations at the
accounting principles, preparation of
Council meeting. Both auditors have an excellent
financial statements and internal
understanding of financial principles, as well as the
accounting controls, who would be
way in which the City applies them. The internal
engaged for this purpose
auditor has completed the broadest assessment of
the City's internal controls in 16 years and, with their
breadth of experience in dealing with cities (both as
an internal auditor and an independent external
auditor) they would be able to provide a more
thorough understanding of the City's operations
than an accountant who is brought in to review
reports.
Over the past three years, staff has made specific
efforts to increase the independence and objectivity
of the City's internal audit function by transferring
the function out of the Finance Department to the
City Manager's Office, and through the selection of
an external contractor that brings a broad and deep
level of experience in governmental internal
financial controls.
The committee should present an annual
The current practice of the entire Council reviewing
written report on its accomplishments and
and discussing audit reports i°, more efficient and
observations to the full Council and public
transparent, and provides a similar record of review.
The committee should establish
The external auditor has the ability to provide
procedures for the receipt, retention and
Council with a listing of concerns, and the internal
treatment of complaints regarding
auditor's risk assessment report also provides these
accounting, internal accounting controls,
concerns. In addition, staff is currently working on
or auditing matters, and monitor controls
establishing a citywide ethics training program that
performed by senior management.
will also include a method for staff to anonymously
report potential fraud in the City's operations. Staff
will prepare a work plan to implement new control
measures in accordance with the Internal Controls
Review report
Other Cities
At the June 26, 2012 Council meeting, the City's external auditor, MGO, recommended
to Council that it consider an audit committee, as this is considered a best practice, but
also provided that these committees vary greatly among cities. Staff reviewed the
results of a survey conducted on the use of audit committees to determine the current
structures and practices that other cities use. Staff also gathered information directly
from neighboring cities. The results indicate that there is not a consistent practice of
using audit committees. Furthermore, the audit committees that are in place vary
significantly as to function, composition of participants, formality of process, regularity of
meetings, and scope of work. The number of committee meetings per year varies from
one to twelve (monthly). Some of the more formal committees require the annual
rotation of members, the inclusion of an elected auditor, or restricting members of the
public to those with financial backgrounds, while more informal committees include city
management. Some committees only meet to review the completed CAFR, while other
committees meet to discuss internal audit report recommendations and upcoming
projects. Cities were also polled to determine their method of presenting the CAFR and
results of the audit to Council and whether the external auditor participated in Council
meetings. Once again, responses covered a wide range. In some cases, the Audit
Committee reviewed a draft of the CAFR, but the document was never presented to the
full Council.
Since the 2012 recommendation, Council has continued to have an open hearing where
all Council members participate essentially as audit committee members. Staff
recommends that Council approve the continuation of the current practice, in which all
Council members approve the selection and scope of work of the external and internal
auditors, and participate in the review and discussion of financial audits and internal
audit reviews in an open hearing that is transparent to the public, and in which both
Council members and the public have the opportunity to ask questions.
10
While the City does not have an Audit Committee as defined by GFOA and ALGA, staff
believes that the current process being followed provides the same, or greater level, of
transparency, understanding, and thoroughness.. As a result, staff recommends that
Council approve continuation of the current practice..
11
Financial Impacts & Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action.
Prepared by: Martin Pastucha, Acting Assistant City Manager
Approved:
LAL _ i
Martin Pastucha
Acting Assistant City Manager
n
j C�.
Gigi Decavalles- Hughes
Director of Finance
Attachments:
1. City's Internal Controls Review
12
r,
Elaine M. Polachek
Interim City Manager
March 17. 2015
Prepared by:
Moss Adams LLP
999 Third Avenue
Suite 2800
Seattle, WA 98104
(206) 302 -6500
MOSSADAMSLLP
Certified Pubtic Accountants I Business Consultants
WWW.MOSSADAM5.COM
TABLE OF CONTENTS
I. EXECUTIVE SUMMARY
I
11. SCOPE AND METHODOLOGY
7
111. INTERNAL CONTROLS REVIEW
11
A. PAYROLL
11
B. PURCHASING AND ACCOUNTS PAYABLE
20
C. MONTHLY ACCOUNT RECONCILIATION AND CLOSING
28
D. GRANTS MANAGEMENT
28
E. REVENUE AND CASH COLLECTIONS
30
F. ACCOUNTS RECEIVABLE
38
G. CITY -WIDE AND DEPARTMENTAL POLICIES & PROCEDURES
39
H. TRAINING
40
WWW.MDSSADAMS.COM
The City Manager of the City of Santa Monica (the City) requested third -party assistance to review the
City's internal controls framework. The review took place between October and November 2014 and
focused on assessing select key controls in areas deemed important to protecting the City s assets and
resources, and processing and reporting timely financial information.
The review of internal accounting controls was completed under the consultancy standards of the
American Institute of Certified Public Accountants (AICPA). As such, this work was not an audit of
internal controls that resulted in a formal opinion or other farm of assurance. Moss Adams reviewed the
City's internal controls for design but did not test those controls for operating effectiveness, which is
assumed to be a forthcoming activity.
Specific areas where controls were reviewed included:
® Payroll and timekeeping
® Purchasing and accounts payable
D Monthly account reconciliation and closing
® Cash receipts and cash handling
® Revenues and billings
® Accounts receivables and write -offs
® Grant management and compliance
® IT general controls
The City has key internal controls in place for many functions. However, there is always opportunity for
improvement, both in terms of effectiveness and efficiency. Opportunities for improvement of varying
degrees were discovered in most of the functions reviewed, especially in the case of decentralized
operations. Historically, a number of the City s financial operations have been decentralized to some
extent in order to take advantage of department expertise, and to increase accountability and
efficiencies. However, like many organizations throughout the country, the City has seen an increase in
staff retirements, and therefore turnover, over the past few years. This turnover has highlighted the
need to strengthen the dissemination of updated policies and procedures for decentralized functions.
The internal controls gaps for the City can be primarily attributed to five factors:
® Lack of training of employees
® Insufficient policies and procedures
Inadequate systems
® Manual controls that could be improved with automation
® Deficient processes
i ai > mv,✓ t( '.!ty . Mmice; 1 .:,
WWW.MOSSAUAMS.CUM
MOSS —AD SLLP
The implementation plan provided below defines an approach to addressing the internal control gaps
listed in Section III. The gaps have been grouped into the following recommendation categories:
O Addressed through future internal audit work plans
® Discrete tasks that are more easily implemented
Take time to develop and implement
O Require developing policies and procedures
O Require training
® Require changes to current technology
® Relate to initiatives already underway
Some gaps are listed in more than one category.
i rj—nal CC k 2e i'Cro Rc , fm Cry of aw, � l 2
e
-
p
O
N
a
�
a
>
C
m
N
m
N
O
ro
N
>
N
L
N
m
C
N
m
U
C
U
N
m
N
a
_
a
C
uo
"EO
Ds
¢ Lo
¢
mm
m�
N
V
>
E m
N
�V
N
O
C
ii E
N O
O
o.
LL
W
¢
O
c
c
o
@
�
�
m
-
c
a
00
0-
00
00
J
N
>
U
m
m
U
Q
0
LL U
U
LL
a
U
O
0)
U
LL
o
U
U'
(D
d
0
m
m
0
0
m
m
m
m
m
m
m
m
m
m
•
L
�
L
-Op
L
L
L
�
�
�
�
®
O
S
x
S
2
:E
N
N
N
N
U1
f0
0
6
6
Of
T
N
O
N
O
N
O
N
O
N
30
•
Ol
0)
p
O
2
2
2
2
2
S
2
2
M
2
J
N
M_
N
P N
I
g
L
m I
I
I
I
a
I
L
I
L
I
L
I
a
I
L
m
I
L
®
:c
.�
m
U
U
U
U
U
U
U
U
�p
a
a
a
�p
a
cp
a
�
m
c
c
c
c
c
c
N
w m
N
d
d
0
m
d
m
C
N
O N
p
N c
N
V
N
N
N
U
N
c
N
>
C
E
�O
C
of
o
m
c
C
C
C
`O
p_
a
C
C
y
O
O
O
O
O
O
N
C
c
C
C
m
N
G
C
V
E
E
E
E
o
f
E
N
U
U
0
U
U
O
n
U
U
C
O
O
O
O
O
O
O
O
v
-o
v
-a
$
0
E
�c
c
C
c
N
c
'00
O�
0
m
c
m
N
`o
N
N
c
N
'o
c
p
y
v
m
'E c
E
E
E
E
`
E
�
>
o
0
>
E
o
o
o
m
m
m
-
N
c>i
v
v
E
E
n
m
°'
E
'E
E
as
v°
N
j
N
N
C
O
O
N
N
N
U C
C m
N
N
%
N
N
N
N
O-
d
O
O
O
O
0 0
L N
�N�pp
O
N
N
O
a
m
N
c
a
a
a
a
�'
U
'D
a
c
a
0
c C Ei
o
E
E
E
E
€
0 0
E
v m
E
E
E
o
E�
Y
J
N
O
'
O
'
O
'
O
N U
0
N O
v
p
N
p
.0 -
O y
2
0
2,E
,
t
t
Q N
E
a
a
a
d
o m
¢ m
a
2
E
w
o
N
N
c
N
m
m
c
E
O
m
U
m
U
c
c
m
a
m
c
>
-o
v
c
m
m
U
c
m
E
a�
r
CJ
o 0
0
'°
m
@
Y
Y
>
a
N
T
E><
E
o
a
o
O a°
a
a
U
m
U
C7
a
j=
o
IJi
F
m
N
m
d
m
o
m
m
d
d
N
N
N
N
N
N
(1
N
N
N
N
3
3
3
0
0
0
3
0
0
0
0
0
0
0
0
®
J
J
J
rL
J
cL
rG
cL
2
2
UI
N
N
N
N
N
N
N
l0
f6
@
(0
f0
@
(6
N
•® O
30
30
Ol
N
O
N
O
N
N
N
N
N
2)
m
01
O
O
O
O
O
J
J
2
S
2
2
J
a
s
a
a
CL
m
N
d
U
m
co
Cl
m
m
CI
Q'
m
c
m
N
M
V
0
O)
°
2
2
°
o
2
2
0
0
¢
T
WT
a
o
a
a
a
a
a
a
leol
@
O
f0
f6
N
m
O
O
o
m
m
E
O
c
@
o
a
@
a
m
N
N
J
O
N C
U
a
a
Q
N
@@
N
CO
O
N
C
m
w
m
E
U
00
w
a
'@O
0
L
U
N
T
U
N
C
.0
m
0
o
O
:..
O
O
a
O
C
a
C
N
N
Q
._
a N
a
p
N
Y
E
O
@
p
£
p
j
W
�,ti.
L
@ N
N
L
O
N
f6
O
J
N
a
N
@
;z.
O o.
O
a
o
o
a
o
Q
v
¢'$-
x
w u
w
c
O
a
C
-
m
o
a3
a
°
O
N
G
N
C
W
N
L
N a
C
LO
C
y
-
r a
>
J
aQ
U
L
U
U
aN
¢
I-
m
a
m0
D `Q
a
N
ii
O
U
m
a
U
•®
0
3
m
o
3
3
3
�
J
2
cC
J
J
J
2
J
0
cG
0
@
@
�
f6
3
3
rn
m
N
0
3
3
rn
3
0
3
® J
J
2
S
J
J
2
J
J
(6
6
G
G
N
N
L
a
N
N
�-
I
U
a
m
a
m
a
>
>.
U
T
T.
U
U
C
c
>
T
0
@
a'
v a
a
a
0 0-
aJ
a
r
M
W
co
I
I
I
rn
0
0
0
m
m
a
a
a
I—
i
m
U
N
0
L�;,
m
a
a
¢
a
WWW.MOSSAUAMS.COM
�' q � .! I.
The scope of our review included a high -level evaluation of key internal controls throughout the City of
Santa Monica to determine the general adequacy of enterprise internal controls and identify areas
warranting more in -depth review in the future.
The scope of internal controls review included the following aspects:
® Identifying control objectives in specific areas and identifying controls that would satisfy each
control objective
Reviewing policies and procedures
® Examining relevant documentation in support of select Ivey controls
® Performing control walk-throughs to observe the design of key controls and understand workflow
processes
® Obtaining an understanding of the characteristics of each relevant control activity (who performs it,
how often it is designed to operate, whether it is designed to mitigate fraud, whether it is a manual
or programmed [automated] control, and whether it is a preventive, detective, or corrective
control)
® Assessing whether the controls in place would prevent or detect errors
® Providing recommendations on key controls that need to be implemented or changed
The work performed included interviews with personnel involved in managing functions, processing
key accounting transactions, and handling physical assets. Such positions included:
rt ,:rai Co Y Rem v Pepw fa City < a i' a, ca 17
City Manager
0 Interim City Manager
Finance /Accounting Department
® Director of Finance
Assistant City Treasurer /Acting Business &
Revenue Operations Manager
® Former Business & Revenue Operations
Manager
® Revenue Collections Supervisor
® Senior Revenue Collections Assistant
e Revenue Collections Assistants
® Accounts Payable Supervisor
Purchasing Services Manager
® Budget Manager
® Accounting Manager
® Financial Reporting Supervisor
® Financial Systems & Payroll Administrator
d Payroll Analyst
® Utilities Billing Supervisor
® Business License Administrator
® Billing & Collections Administrator
® Administrative Analyst
® Fiscal Staff Assistant 3 (Payroll)
Big Blue Bus
® Chief Financial Officer
® Transit Finance and Grants Manager
Senior Admin Analyst (Grants and Capital
Costs)
Fiscal Staff 3 (Payroll)
Accountant 1 (Counting Room)
® Senior Admin Analyst (Budget)
WWW.M055ADAMS.COM
Police
Deputy Chief of Police
® Senior Admin Analysts
® Police Personnel Services Technician
Fire
0 Principal Administrative Analyst
Public Works - Civil Engineering
® Principal Civil Engineer
Civil Engineering Technician
Public Works - Resource Recovery &
Recycling
® Resource Recovery & Recycling Manager
® Principal Public Works Analyst
Community and Cultural Services (CCS)
® Senior Administrative Analyst
Executive Administrative Assistant
Principal Supervisor, Community Aquatics
® Aquatics Site Supervisor
® Community Recreation Manager - Acting
Planning and Community Development -
Parking
® Acting Parking Administrator
® Administrative Analyst
m Fiscal Staff Assistant 3
Information Technology
® Chief Information Officer
® Software Systems Division Manager
® Systems and Network Manager
® Fiscal Systems and Payroll Administrator
® Lead Systems Analyst, Information Systems
WWW.MOSSADAMS.COM
In addition to in- person interviews, an Internal Control Survey was disseminated to division managers
of CCS (Human Services, Community Recreation, and Cultural Affairs) and Public Works (Architecture
Services, Facilities Maintenance, Public Landscape, Street and Fleet Services, Airport, and Water
Resources) to obtain a broader understanding of the internal control environment throughout these
departments.
In support of the internal controls review, the matrix provided in Section III provides a summary
documentation of:
• Control objectives
• Control issues
® Corresponding recommendations
® Likelihood of occurrence
® Impact of occurrence
Likelihood of occurrence is defined as the probability of a negative event occurring. Impact of
occurrence is defined as the level of significance if a negative event occurs. Risk levels of low, moderate,
or high were used to rate the likelihood of occurrence and impact of occurrence for each finding.
Beyond those controls that have been reported within this report as a control issue, additional controls
were reviewed without exception. The total population of controls reviewed was over 100 controls. It
should be noted that many of the same controls were reviewed multiple times in relevant, separate
department reviews.
Of the over 100 controls reviewed, the 41 controls with exception conditions, or areas that would
benefit from improvement, are reported in this document. The following Internal Controls Matrix with
exception conditions in Section III is organized in order of risk Those categories listed first are
considered to be, on the whole, of greater risk to the City, than those categories listed last. Within each
category, exception conditions are further organized in descending order, with control issues receiving
"high" likelihood of occurrence and "high" impact of occurrence rankings listed first, and control issues
receiving "low" likelihood of occurrence and "low" impact of occurrence rankings listed last. In
developing an implementation plan for addressing recommendations within this report, the City should
consider the categorical order, as well as the exception condition order within each category, as a means
of prioritizing remediation activity. Eight controls are shown to have a high likelihood of occurrence, one
would have a high impact occurrence, and four are characterized as having both a high likelihood and
high impact occurrence.
Findings can be addressed through the updating and sharing of policies and procedures throughout the
organization, increased training, decreased reliance on manual processes, changes in technology, and
implementation of additional controls. As stated in the management responses in Section III, in many
cases, staff has developed and is implementing manual checks and balances to ensure that processes are
completed accurately and appropriately. The Finance Department has already begun work on both of
these goals in its effort to update policies and procedures and increase training throughout the City, and
Memal Gom,ds RP,vw Pe fnf Gilyo ..rlu'O nmal1,
WWW.MOSSADAMS.COM
its implementation of a new enterprise resource planning (ERP) automated financial system. The
results of this review, and Moss Adams' continued consultative approach, will guide staff in
incorporating best practices into their processes. This work is a priority for the Finance Department and
will be completed in phases over the next 12 to 24 months.
er 3i Jun ,i (rr- ie,J @i I,� o t !. �ICe i 19
I
k
:
@
»
�
±
m
/
±
e
2
O
U
k
2
±
2
@
2
� \ \ \� \ \�
:lrrMR -0
!! \!4]r:K!#
()012 0 E:5- 0 (
:§ y:
|6
lZ.s , ;z�
#(- 2[2.2
-- :
\)\ d) /\) 9)J\
;#J ;:,f! §$!
{)k ® \ * }!)�¥\
\ \ \�Lci
)rrf |f#E! }fR
w`) § §!!$
> 1& « ;);i\
{ \)2;
)j
!f § §2 ;f!
} \ \ \! {\ }}
\ \�
{ \/\ {)
)&! {)!!!!2
5
C�
cP5
I
\
\
/
�
�
z \
- -
_
\k \)
/
{ ƒ)(
, ƒ !;M
EE00w
!$ Q
\;
!0
�° 1,
�§
/)!r!
{[f t)«
10;
0 r;
/!ww 0.
{ ;a ,0
}�} } \\
!!& ;:r
E) (00
cow .w
, .#!
;!e$ &:. <P _! , °!®§:! 2 :( f [! ;
,B
E r !r \0- E0 - a
} / $# ll =r:
� l[ J ° °® \kr«)0 ! ® 0 ! +/°:l! �E0 0,,53 � }0E = /0 -. � :Bi \ >[a / )°`` . § /,! *`
E : N §0.L;; \] k2MD t fa
E 0. it `/!§ 5f§/Z{!/o ;t) ={\!;` frl
f ` ` §E ! < ,Uw0 ,r 0 fw a; ! { { /\ {o } k[\ R ) \..\ u2- a\ 0a /m o , k
\{{
2c 2
fO \ E N 2\
two,,
C
o
vo.E JodQ2 ym3
H y 3Jai @" mE E`v D
N N@ m i@ N N O d a N a T N @@
E n °ovr!? 2. �`E"v3E
v�o0Oa aQ 2000v�c
S N W
m v E t D E N P C ? N y Y D C j 0 0 0 m W ` p W E
v�nmIE ovm of`L�w
@ w N m m
n _ Z O N o , > —
@ m C P C W j7O 5 — N> E.-
T N 0 s T m .
m@ O a N LL N O
@ m y E v
m� E. m a E a T V .R w
T aE 'U C
m Cv J m „a
a @ ` O @ > v c N Qe
'
moo. vcarnv
n
2o-c=
� m
0
@
0
U C y N
c
a_
N
O N m O
O-> 0@
L O_ m@
N m `� @ r,
D` c> N m
j
D U
v' Da
is
m° o 3 o D o
a o
v�wEa
$DOT°'Oy
cm °c
D�
cm
0mv>nJ
h cm@
oa NO,
ac @oc
.5
>,m
«m
FEai o
moyt c
0 0
u
o
a c
NJ`F
N O
v a
N
oy E
N
E
2-0
Lp
05 E vvdo
a�ixw
v t m E>
o m a D m
m
o E o
E 22
v v'�
v•-`�
m'c a@D
C 0 2E
as
W U D
E@
U O N S N N N
- N N
>D._NO mN Q
mE rn€ v E
@ U— m L\ ry c0 @ v in @ N
N C~ O EE
Q N v U a ;E2 D v Lo m E d v m
12 �ELE
'C
R
OO @ C C N O O W N.0 Y m c m ai m C .� N m@ c
vo.E pjO wva'Yi ¢C Wt @ m L $ S 4 5 E
�aoa >DI -r.D EF m3Dmn
Jcs
L N 3 E c a
C O N@ C N R N
> g p N T O
O 2O E
V L J
i VOS 60
V
r
N m C N @ L
> E E ° D s o 3 v
v 'C E E j O m m N 0 N c r
m O C @@ L @ @@ O v F @@
m ry E J y mLL m d
-e-
>0 > N v> y p
U C O
v m E m J c 0 a a m
8Em
42 0
41 d m v E
v
E N€ Oi N C O J@ m N N ry@ m
mm °aE w ami `orE « °v E
o
N m o c m a E E m E a
o E ac
y t C 2C LL tl1 L' a @ @@ N N
o -O 5>� E as v m E> o a a> o>
m m 02@@5°r.o aD @ vDw
\
\
7
�
:
) .
�.
0
\0 \ \ \ \
}
\
!
)}k
\\0
\ /k(\ /� \)
7 ;(:
__
) {\) \// {[f
= er0 ®5 § #2.
.
](;;{§$!rE!{[
..!!�! -E !_!,
!
|;$!! \: :0
2020 M)E 00
)k E ) / \)\
- -
|�,r \!22 '13 \)T
, , «)\0
\ \ \ }
\ \ \ \ \ \\ \\ }� /0 \ \ \ \\
§
/)l-0)!()�k(
\� \�)!E )
—
_ .
) |
!l!;
{ {!)! }�!
]
.t f
\� i
E ) w
) ) �§ w
® 02
\ /\ 00 \/w{
) `
o /!
; § - $!$:)
«!
#_±;Q!w G ;
W wo
12
I
Ion
it
0.
• 0
J
0
J
N
@
@
@
N
•
@
O
O
@
W y
_
3 m
`.G O O
W.2 � �
G @ C 2 s°
S v
c 2
N r
- C N O a O
m c� o E c m N
«
mE �'o-6 °jO
cyaT@ o �-a°E
N
N w'U �t w @ E
v
d
a m
N
>,E c 0E.0 0E
0-a
U0
lava ED
c
C@
Em
N @ y @ r T
@ E
C N > O @ N _
@ 3 x 8 3 0—
� v
m> d
r
m
o
rm °3E
uic9�' mE
ac vEao
2 @rn='m
@
or
N
L O.
N @ C
C C y «O N
Q W >
m`
2-
C
cv l
m N °y
oc
L >' L N
v'"c� a5
2 &rn
EE O N an
o's v
m c 2 E4v
O «i
vaycm
EcE
N N
navy
O> E ° m E 3 �
s°>0Em @a
a '> E'v E
s °« n N m N S;
v5v
E m v a o > 0 E ° @
E_ Tv °,@@
C 0 '- C
0
O
p m y N a
y « U U
a N E u,w o
W a W a
n? Y v N
°`a— @Ea¢av
8aE�Eg dE
U. n O F N N N@
C{ 'A U
y v °
E v v 3
m c
v C N- y
@
m E w m 3° w
c `m 3 Ei m y a_ m L m z'E
v a
`
y o wommv
ra
m
om iv'�
a N
ad$ @E�
c EE
E.S
ao
mC>,ry v- —
a<E E mvm
��v
xNf~
5 @ Z,v T
p
Oi�ENT
WCULLWNtYC ='L'O�
yNE,>LLOn
nJjyN
Ed E, Dw `w EEE
«m Ed V g S
0«. Nv
° E
>° QZ ON a°
°L m
Ev@a =
Q O >
O@ a@
a •an .- N C
7
L�v
0
O N a
o o m�
.ON
m
Oy«
@ 'y vm
m@
c 'm
amc '
mE
EoE
@ N °C U
p L@
0 12
C m C
2
- O G
O
Rr E.M.E0
vav 0 U
2
-
o
o a y
5
> Q
o c a°5 v
E
L
`��@
aU °
>
O O a@
Oi
E C N v o-
E °
M.9 0 L n
O
d �
a T
a
d 7 O@
'0v
mEm«
v a
m 3mc
N C d
® 3c°�rvic
in @ C N C N
Naw�mm8
a E 'c o
f
C °.Y ° N °n �
m a Y � c E
c6
r
\
\
\
\
$
'
0
_
)))® !_ \{
.{ \ {!|
\
{w
} \ \ \0
\ \\
\/E )
E 7a
\�
202
1E E
]r[f#
3E
t6 E /l if
\
_
®§
\)
\ \
k
\! j
) {
y f
fl,e;l!E
! « : ;\
!
})
§ ;I .
2 §
-
,f E
E#. = -0E
f
§: \E !
§r ,-6
.0 .
co
\ \ \wEU
I
re5
vJ
3
0
J
3
0
J
N
W a
N J U @
0 mo
O O N Y 3
6 p N ry y
t a pN O
G yC o G N
O O @
N N O a
�? =a3
�atOG
C W
T 0 N N G
m G jp n1
0 r C ? G
-
L E v 3 E
c n
EO w
,0 Y
non v«
c o > o @o
E 2 R
m
o.-an v
C � m
pP'§ O m n
V
ID
m m C m
J N m N
E � m E w
C U V J U
U` n o
o on
N
O a
IL C = rT O 'm 16
2« c S O O°N
E a
OE O U N N O nT@ .
ec o N U a w-
@ d rn�
° o v
0 0J0m xm@N j p U 3 3 E N
7rd e 0 U n 5,
ON N U E 3 .J
200m N= E m �68m @ N 2
TU
@ O NO N wOON
E a= L E n« O
d
N
V a
O w
n- y
T3 U
w
0
5
r�qqJ
�J J
,VqJ
VJ
III
I
@
m
v
a
• o
•
_m
2
0
a D o> v m
c `o m c a v- 'c d
N N N N m C C E 0
EN¢
@
@ O a m a N
of
N a N N
N m U Car L m C
N
2.0
zl�
a W D
Ec,io n�a0E EE
-i
a2 A8
mco c «2
0
2E JG
a O v
z o «
w
@ Ecvi @ v E coC .N m E m
8
5.0 m w> n d r O L'E
o. c.oY wL °D
a a.- c rn8
r NN mTi a@i
v
0 o
V> M
0 @
p'm�
c d - 05
p@jL N e"M2 O O m 3 O tl U@ N V yUj E O
E
= ic` .°o a 0 i
n dam
a
a Li, N v o o
s@ c > -n
o
a� ai o .c
@ O E a r m o > 2 «/
p
N
C >
N jO a
i 0 0 m OC a
@
W
a C C N N N
N
x
n @ m a@
@ C
W a C a m
m ¢ v0 n ; m
CT@
E @
N m
@
`E
m o o 0@
8
n
N @ E c '@ E Vo N a
mN�U r ao o cJ T o ro
o
a
v vrncm L @x$
@ �° '8 c v J Y J i@T'
v o
La
ro � � v
vc5Ba2 8 oaw aU aU« m >a
a
¢
w�vE'��
U @ ..
p Vpa «-0
N @
O N
@ O C
@
4@ 'DNO&-T? O LN
@ T @
i C N OLL VO m m m N
Y C U n N U r U
o
8 o a
w w «_
a Y E a
m N -E 3
� o 'o o o
a a m« N a v {@ m
@ v0 2 m N @
R
0
a m-
°°mv mvor
o o a
o
y E
Ed
mm o oa a
u� . m ro mac .@ s m c u m V
3
o 'N `N v�
v E NOc 4 m12 C- a U C
' vN
C a L O
's '> w O� ow
O C U Y
.NC o
Vv
aO
i U T 4c N J
m O '6 N N E o ¢C N U > 2E oa o o.>J m
JC m i ,
E
n c v w v m E -
m `
d �m ani s -
D ''N 8 m c o a m Ow o
y
„QCc��S
Nn
a v @ v
JEN L° 'oa 0.c°v O10 oo a>:
t
v.o roTtiv�cEmd3�a`�E�n`a
L q N L6 m C m v �p x C m
U
caa
O O N J O t O a m@ L p O yy d N O
2
N a �. N m N C D n U v n¢ V r p w> J U n
D d N
N
U @ D G
m C @ v
O m
>.
• N � @ U Q
�p @
ci
l v
l
n
���
��
r
�
�
\} \)
!! §f
))k)
) \/
! \0
{) co
m0
\ \ \\
2
) \\0
) L)
\ \)\ #� \ \! !)))!
-- /f \ : : :,zz :,E,; §/!;
) {!k \ = \) )q h
\[§)\){$ )\ {)\
�)! \��G
, /E)rf±r
§ , ] {� {) \]E {#) ^ \\ {]]
:#Elea
3 O L
Y L T ry m
m m O c J
i m O O- C N L N m O"P
O m N ~ L E E1 w N 0
o« v m t Qa o j c a m m
Nd� E Em m`m `EEm
E. d xQ c« E c
Ec .me o° `� 3 E o
m Q O
0 N Y a m « .O jm
.4 0 2 m O� N « a to O « E
WE m E
N 2 a _ d J
> a c ma
0 0
N T
T U m«
p C d g C C
Y O n y o c S m o
a
E M E E 0>
LV -.JUL N.>- JLCUOIN NO N
v
a
m
.a E `0
r. N€ O 0.0
�'a c o n E'@
d E RJR m d E
a o 2i m2 o co
QEQ!2D 6@
N _ m 0 N N
t6p�m_ o
mE hm ° -m
m m o 0 3 c E
,moo ui « 0 € m= m
C W U C_ "0 4mi N V r N 2«
@ v
0 d J m C
'o d 0 nE �NN
J D
d N N a ry 0 0 O m E 6@ YO
N .F�O�mC OI Q
o o S E J m o
N
=c''�o ai6 m =L�m SvACE
V C J 3
r E Q 0
v o.w°Q 0
F0mN0ti�u `m E-o Qa-oo FS
a
m E
Ta
@ N m
r 1
man
�' aE
c C
@ N N N N d V G N OI
N.c
0 Y
d
2
u C ~ a
C
p'O
a�
m
@
N
m- �O c m N z N U
m -J V pO
T
m
O- N U m 0 0 0 YS OI
m
E
a c a c
dui
cV5m
T t«pa
0
o�'c
2 E VI N
2 c
@ O V
C m U W C U v'y�
N O O� d a N m@ p O p
ya
mr a.0
72 E
«ar30
EEC
@
EE�a °nm
E 3 p o
E 2•
cEi;
@ E c v= y m N
cE, :6,,-Em
8
m 0
V �'
2 E
m m =_ O O V
O«
nE°iEmD@
3 O L
Y L T ry m
m m O c J
i m O O- C N L N m O"P
O m N ~ L E E1 w N 0
o« v m t Qa o j c a m m
Nd� E Em m`m `EEm
E. d xQ c« E c
Ec .me o° `� 3 E o
m Q O
0 N Y a m « .O jm
.4 0 2 m O� N « a to O « E
WE m E
N 2 a _ d J
> a c ma
0 0
N T
T U m«
p C d g C C
Y O n y o c S m o
a
E M E E 0>
LV -.JUL N.>- JLCUOIN NO N
v
a
m
.a E `0
r. N€ O 0.0
�'a c o n E'@
d E RJR m d E
a o 2i m2 o co
QEQ!2D 6@
N _ m 0 N N
t6p�m_ o
mE hm ° -m
m m o 0 3 c E
,moo ui « 0 € m= m
C W U C_ "0 4mi N V r N 2«
@ v
0 d J m C
'o d 0 nE �NN
J D
d N N a ry 0 0 O m E 6@ YO
N .F�O�mC OI Q
o o S E J m o
N
=c''�o ai6 m =L�m SvACE
V C J 3
r E Q 0
v o.w°Q 0
F0mN0ti�u `m E-o Qa-oo FS
a
m E
Ta
@ N m
r 1
d
U O
E
E
a�
m
c
E avrn
J
T
m
-2 2
m
E
a c a c
dui
w
E v
J E o c c
ya
mr a.0
E
o f
En
c-O N0dv
V �'
_m N
m m =_ O O V
N>
m
E
E
O `I
N 'N O_
J
w0
R,
a N C
ry
W
m O
m 0 O L C
v E
m
m'U « m 3
U O
cE
> V
o
>._ Ip D U
oaU�OEa
3 O L
Y L T ry m
m m O c J
i m O O- C N L N m O"P
O m N ~ L E E1 w N 0
o« v m t Qa o j c a m m
Nd� E Em m`m `EEm
E. d xQ c« E c
Ec .me o° `� 3 E o
m Q O
0 N Y a m « .O jm
.4 0 2 m O� N « a to O « E
WE m E
N 2 a _ d J
> a c ma
0 0
N T
T U m«
p C d g C C
Y O n y o c S m o
a
E M E E 0>
LV -.JUL N.>- JLCUOIN NO N
v
a
m
.a E `0
r. N€ O 0.0
�'a c o n E'@
d E RJR m d E
a o 2i m2 o co
QEQ!2D 6@
N _ m 0 N N
t6p�m_ o
mE hm ° -m
m m o 0 3 c E
,moo ui « 0 € m= m
C W U C_ "0 4mi N V r N 2«
@ v
0 d J m C
'o d 0 nE �NN
J D
d N N a ry 0 0 O m E 6@ YO
N .F�O�mC OI Q
o o S E J m o
N
=c''�o ai6 m =L�m SvACE
V C J 3
r E Q 0
v o.w°Q 0
F0mN0ti�u `m E-o Qa-oo FS
a
m E
Ta
@ N m
r 1
C d N
N 30 C
Ro �v sN
'Q E
W adS aci 'a
nU L 7 N d= O N n 0 0
n N T O N ^ J W N D `' U O n
C a d e N ~, U �. « T G mmo N
m G N N N R N N i p W N N D N N
.N O mp�c 0 - p2�NmN��NN�- vi n c _D
C U W D i v V N 8,0
N Q r n N N r A L Y Td .j
>m
- O N O 20
cNNC DE E °%'c c u.19 auc�
Q �'>''O$ <,Zog�U'Eva0 v Q��
A
MEW
T
FA
m
L @
� D
L
_ar
W
i
D
p
o @
0
N
m --,z, m CO
C T
Ff @ m t
O .0 W F V r
T L
N - - - W -@O « C
C W
W@
U
N p@ T •Q C
G C W
Y N @ O
N
C W d m
61 m E
N
D a O w
J J@ C
m
E
c m 0 m m U
O
D
UQ@ dEN
2 a a@ U O .
aL-m v
O
C d
n N L
W O W C W C W
° N L N ' O
m L - °W = d -
Wc
C d°
E v
E°U
w vEa
W C O ~ C Y W
E v a n c c 2 s
Om E E d
` °
`=�
rn E • m o � m °n
mom
t v 12
>omc t m@
B«u DE
muU ry n
12
a
22�nt-SN: D@@
o
D
c c
c
o @
o
m --,z, m CO
d U C
U
N p@ T •Q C
G C W
Y N @ O
@ « C
C W d m
Cp N
Ut3 'u,
L7
2
UQ@ dEN
C 9pC
v
n N L
W O W C W C W
0 @
° C 12
E°U
w vEa
12 O
` °
mom
t v 12
>omc t m@
12
N_ �EO
N@ 7
c a
r °wn a�v
c L°>
u'am o.a
dm «n
av m
W
D - D
Y .W^ C C W
O N
FE @ n m
5 o c c
E U L C
m > @ d
ay jn
W O
N C C E
2— O a
Ua0
� U
F i�DL i
N
N @ C
C @
O
aaDE
!a W c W
C V Ep W
N O
m E m r- � U° w
a C Y@ U L W v W
T @.D may «y_mN W La
0 O W W W> 0 U U
O U> U
N N N
E W co W'- C m a@ e Dc m @
o
.O N W m.T. W NT @O�
p N L U W�U >
.t N
°o.
n° O ~
@ ° � c U«
W C C N N O C 0 T p
«ajdm a.E�`o
N
C C D O
@ C C
mm @ 03
O N N N
D w0 ry N @
2 c 2 a v
U0
« 2 LL« E o m
N N W C C U a
« C C N
o v E c
w E E 3@ U c
N id V O 0 m W W
p v
E E v c a E c 3
:N W C- W t @ m
> @Sr nE
02 E0. S D U@
3
r d
y @�D
N Q V W
@ E
@ @ p O
7E aD
5
/
\
2
B
\/P \{
\ \ \ \ \}
!;7332
\$\ \ \\
!.>+ !:>r =-
{\), \ / -<
\ \t) /] /E. \ \ \\� \)
\\ / \ \ \ \ \ \ \ \ / } \ \/
{ \)§
.80
) \ } \.E co { \ \ \ \\\ --
,)
{
\ /()y/
_ »!!!!!r f-
\/� t00, '
§) §0-
°- S! \; G / -- -\
\ \ {;
{!{!
_
#f�!«§yf 3 \ ;(
-_
=G
; _ °�_�. -�
_
:
\.,oJ!!
& ; -_ +\k ®Z 5 2
_`
=f {( \ {;/4[ f;)) ; =) \ «:)
- -
|E
!##
{)(�))!f{} ® ;!] |_
/tf) \f \af"
{! {)E 0
r,
)kk
.1
w
w
D
w
O
O
o
• �
L
m
L
m
�
o E D
w D
J m m
a
L S E
O v D N C@ a V C
E Ot j C L_ C O
N D
T N« E
d
t « m o m
r v m c a 0 E m
Si C N
N }S a O N
0 y N O T Y > Ol
O ,Y @ E G Y N C
0
0
O J L N lv N N n6] k 0
m. � a
3mcvE'E mwmvv
m E
a
L @LOD C' N X
3 O
w c L E
W N LL a
N Q- c
rn E d
rn c v m'ii.
ami
co�:a uN
c�aEEcm.c
^2 v
—f''o=
0@ a m U Q i U N m v
ro y @ m
ro D @ D
Dc a o
d
N c.E c C v a>
r
?i i0 D tL, C@ O O N
�DG
N(ID NN
° c —mw
E8NNOI0 D «�
w@rnp =wc wftG
c @'y $@ O m N
m� C•� E W C W r
= p Q N- N•y D
C
@ C �0 N N J G N- N
C N @
•A C @ N N
o
E._ L .G m- J
mi Lwn
}Q NLY O.N
L N L
oN
ro p F. E C rL-• @ d V j
D_ma = no3(gip
tE,p0 2.6 d�mD
E O J 0 0{ W
O. @ C 61 � N N N G D O
Y�II N.O O'y NN T
t6 2� N
NC j.0 O C'O N @LO
- N O
O
a 0
p
"OE L U p. upi r
g
S C_ D O U m O N G
N
m LV >
Q LO L0 0@ c O ,>G O
N
>30
D
N
N
�C
C O
ryU j m NS
C
N
w 0
L
s J@°@
O
E> N m N N N rm
ia N N E GE
N O 3
m e p N h 0
«o
5 o o a d E o
N
O- i0
d O n N i • /'
aj N L i
«E
�E L« V@
2 O c J d
NOj �D�•@
2 3:
Q
ol
Q C
J
c
w
8 >
OU
O C@
- N N
r N N @ E
E a
0:2 0
@ O N
C
_U
O '
5 m E p Q
@ '
@ d N O
Y@N =,
p
0
'N O N C N C L rc w O
'm
oE
E
E 0 c QE 0~
m wa 'rni
ce b
m3�CY o
omL
O
w a. O
C N N@N
E -
Q 'F $ m
PEO
QQ '
✓
ro 0
o wO @
0Lm w«D
�i Q E U Q U N VQ @ N
@
m C
C T
•
N@
Tl D C
y) y N
w @@
w U.0 OI
y
N N N B M
D
O d m>
O C'N C w
U@ C D _
O-c �wc
E@ m u@
NLLO.O0
@ w w p>
wL
N
yM
@
L
♦
a
o
�
m
2
N
N
• ®
m
o
2
�
c �
T3va�
1 73 E
@ v..-
E
v @ n u 3
m � E 0 L
0
N L L Nm v @
> n
=
L $ o a E ¢
3mmYmy
v
m o
NNLL
m c L O T
O r n J
Eaci
Em °�mE°W
mE
mEmvi.¢a
2i es @ @ « U
3 O
° n m r r° O E
N U
E 3
o
5
♦
�o m -'i mLci
C_
L_ C E W
d C
m
n°mvuy -- -v nJ
3Ec °ice
'o
m@ o N c« a 'E ° 3 W d« W
t5 8
v d«
C O
T
V
C Y ? j N d@ U d
E ao9 . ¢n
C 0 C
C a
$ SN 3mn°�0 ate ~EC
¢r w.vc
12 a L
ai
U N O
Q ,vN O C U C C N N N 7
c N E ¢ o o m T o
"C
Z W O 0, c c N@
>j @m'"a
c= E `N E
iL Eoc�
y?W oac
n- o °CmYaE of
N
Wao [2 ¢
J>= W N i E N O n« N 6
F@ W E p
O a
LO
T C
a° C Y N LL N a
a
N
0@ W Y> N
O
O C T m O NC r 12 € N F C C
(J C1
�j
j Cp_
t N G i d° W W
O
Y« C
@@ N
C VJi t YCl
C p 0-2 @
mOV@
=
s
E N
N ¢a ab
> W, o E oa
«a
`@
.. JO
o m a
m «� m E$
rJ N n
aQ W
O v U @ y N§ E v v
«
O�
a p
F @
J °
CO 3-
~
LT =
E J
0:3
aC v
a N W P Z .-m' @ o
0
_C
o m
°
N p L
a« �
W. aT a O c «mE o
O a@
W
a c y
E
2.
W
N ¢0 1
✓
r
E
E a v a a� c 2U8
T O O
°U
v `E
.1E c d
aE
o E"° E
W > 0 � W a E o
j
N U j r Q
- !W !� a m O .o
pp p
0 n 9� 9
O N O
O ¢
L �
N
8.R a
C
•
N C N
TZ'd
a @ C
@
Y -E
Q,1 @ N > O
C ¢ U
-> WE E
V
N
�
K
�
Q
_ )
0
�.
\
0
• )
\
\)
/j (
�}
\ \�
\0
Ow
:
E
^
/}})))
{ \(
$;! |$
)!!§
!«
-
-
# :&
)\\
} \ § /):f)|
° :®fit\
\! ) -0
/)
#£ -0EfE
\ §0. \53: { }(7 /\
0SOo ) {) \0
�`-
0 ƒzr
a#! \.
§ {\
o G - l:f §f\
r :5.,,,_ .,.
!
))) {! > |,;
"-
! § -'E 0 m -wE0 !{
_ -
- -_-
--
*(!t4l7[) §[(f#! ®»
- - -
-_ .!a0t
s :! \ {)
-
-- -
;
- ;�
/_$,�#«l�f
!§*; ; \ :: !! |:°
_ - « § {)
)
=f# § §!!
_-
;;l77§
§t®
_! y
f$fr;f
;77\!)] | {JZ
)\ Q f |{4 §frf
/ o
t EGW ;)i) §i)
<6! !
\
, /
/))(
r ^�
VJ
V1
V1 /
3
@
@
T
m
a
m
a
• 0
0
m
m
v
v
® a
0
a
0
v o
p
R
y• N
@
O L
W N
U
U@
R C J D J N
C
y
67)A
N
v Tim L Yi,
m U 0 O
mp�NDNV
OI p' G!i)R
E m o 1 o v
L o
w E N«
m E m m
n@
��u� -°r $aJO
�vmoQ cm
@
N N
O w
O C C
C C@ U
uw00—
p E O
U
R m
T— Z@ C
(OJ @ N« v
m-
R
2
Lo
O O O
p
O O N N'C_
N.F
O vpi O O. TJ @ «
6 Q
�N�pp
U u
2
D N
N L p@
4s
O @
y N D r
C
a
.@O
R @@
o> E o-o m o
C J O T W
O N U TED R
N N O@ R U
N O O>
N L W R
_ '05 w
m> :5 ma p,N C U d R N
N D
C
u p N>
R C U c D ¢, L T m_ R mc
3 m O L_ m O
N y E U O.0 m m 3
E
ULry
O.2
U ND
8
m El O m R R
o 0
U
g N a C d O (7 p R Y a+
m o a c m U m T v d m D
21 U G N W m W N@ D U U u1
L m 0 0 0 L Y R
m C O m N p O y
R m L O m O y R
O a
wl U m p J D L m E 0
nDm w 3 5 E J LL m 5
C m
+S
C
N O
A
N O N
N U O
m T R
'J$ d
• EmiOpmDm
y
U g R V g
m >`U
D
i
1 =vv�UE
w
ovm o.E�
m
v
0
v
• 0
v v
0
w T
'a
o° U E v a o
c > t `@�
..a
E O E
M M N O L 2 1 j
N y N NN
N O W R N N
@ pNT _ LL a
O a
N U N D O o
iD
N N
_@ V _
�C E m �
V E
1iO
m @« N
O 0 N G
.'C
E
N N O W-.- U O T
Y .
in
>oa @aq
L W N W C
«
m 2
C N NC E@ N@ m@ O.> N E
> '. 'm
• @ Y
3 E w w o m . a � N m d
U
3 d ° 3 O
�j
p@m G @ E C
j 10
B N E E v a= o
Q nN
>ti -C
~ N `t¢ U
V . O p
a
oGv
.G >
II//j �� yoy,�
L Y 6
L O
T @
o
z C
myN
Lom¢.
Cv°'
pGym
j « E pN
yL N$ C ^ D C�; �
Eoo �N wm Em -
�
N a
EE c�
Z�
ao m
�
@
�
°
@2
E
U
U@ @ @
y r D N 3 yv
(E
vs N
0
(C U2
-°
O
C
N
E
7 W
O j0
L o
OY
C L
~=
T
O
W O
N C n
o« c0 02
® N C@ T n N@ U
W E @
d C
n N
N �
N
N«
m
d N492v o U @E @°
Lm
ip
v
'o 0 N @L
Cr
P2.-.S3
3: of
o f
N
E a
wz
a v.
U a C N "
L E@ W U
O N
E@ G a
C E m o
N N@
C -E Yn v ;�
,�`o ._ c
T m E a
n
v N C T
E
`m.m-
J U C@ O
E.,-. @a o
N O U a C
.a. @mm ^'
N u
mho
U� $ >2
- vo3No�
L -v�
O� @
> v
1-v�aQ N
US @a O E
c c c `pnpp�5???d daTiiL V"
@« C
c m m 3 -o d
W o ✓i o@ C ] rn C v Lo C N a r t @.c L w �` C N
t5
7WTNO @ @ @vNEO @� (Np NNXL_
a 0@ a U v p> pQ N M O` �+- N c@ >i W N O E -
U D O L
EN °ui Efi o E c 006) ToZ00 to v � N
U
O W a .0 N V Z V N G G a C 0 O W C 0-
INQ iI N ry O mG s CN w@ 0 N vC I Ca@ > O j'@ V - N O C C « C d N i Lm C E O 0 i N Fo-a@ O p ry Cm $s � 0. 4? ow
C O m m a O Q � a Y t N O �o C wN vi a U - . y.0 m o O._c- p T
o V0 O u E
K � N
0@ V C O G ✓ N� @ N m C N N p U O1 N na S C a U N
•� L N N W @ N a 3 m,.�_ C N tJ a O n w V
ii« E $c
w m «
m
O a Lw. N T N B C
@ N 3 T
® N C@ T n N@ U
O N
N«
m
d N492v o U @E @°
UYn E,�ao
pl �.aL yaaC8
ul
_ v'Enm$am wL°�
0
P2.-.S3
lo
d
Dp
2 J 3
d
d
® O
ry
d
p
r
d
L= U
d @
E' E «o �3 0
ko L
O 2 U)
O
J
°rp m
vc cDm c,•L_•o> @amv a'0
D❑ 0 =dLL-. -vo nE,o Jp v>
2 �¢03 uvi
O{
C - U E
d 6 c
_d Y
U d O� d O J« d NE
COmJp
L
"L'll1 jy iatL03 �` p.N
w
E
mt.c 5Ea °"E nc c mw m
NN~
a@i
c E L � 9 T
@ o
C ar
@ 'C
O
O
d a
E N
d0 N T N N Oi@ C... @ `O C G? N R
E N O N'O d. N d dZEE N 0.002
0. 'a
dE
OI
O
dE._> N Nd.Vj E.G d
OI N N O C U T@ d Y c _ m m J
C
C O C U> O C D 9 D C
om
fNO W N M, A) � N@ d@ m a 3 t%� m 8
N C w
O d «
C T@ J D V d y N d O IL U
_ _ E o o @ c
i
.0 C r L O N c O. @ N O N Ui
N O�p C d 0) d "N a d O> N
6NT €dU'CN Cep 8DF rCJl]L LOcp12
o «OC@NNCo dd�a dU 01U@ U
ycEmo.c.. E'c cc ❑ cmJ @Qo@
C 0@ N E n N ME y@ C r U U O' LLD O p O
E v o m
E5 w m m LE c 'D d m v v o . @ 46 ` r c
Q�NE€ c v
N h LL c
v v E o 0
0° c 'a o« o` t o d r c_ O t t U °I
0 0 d 2 E d' S c E y
w U c v 33 v v.3 N c c
E
E J ❑ N J v o
v$ Ec v «pc —vo. oy, v oav Q d
L d O 3 N@ J d c d .- L C d@ L d D1
F oJDNard c$ E > O
QSU Fc
42 w
0oa@ v r« oaJ
a° 'o a > 3c p°0 M8 c c @''00 3 L 2 v
o c@ L m e c o v °
> W o N E 0 E r« o N
> D E n p
U'dNidl NE 6UO N:t YONr V@i tL,L CYO
i>nd VOO
C aOS 'N
Ea- EdLL d «0a
fpl U N Q 0 Y >�. > O U _ O •. N C O N@ .O d V .i-' dj yd «
p, dC (J N d LL
.OE co m" d m � r O o 0 0 U L U C L E O N 'Y vp E- T C d c L k OU N J a d N 2 d . .,
m D NaN Ev o ° W 'd mrn =on 0
a O� 0a E LL@
2fiC L
@ E 2 U W E E N 2 T 0 y m d O
2 MO. E 8 a > o E °T E « u 02 v on ° v i o 0.00.8c° co i 0. Rm pdU w �
cm
0
.N
r
O J t
ko L
O 2 U)
O
U L' O
0
U O
C - U E
d 6 c
N > `T
a
FL7
- v
wo U-
N
th
�
k
®
f)�) \(&{
\) /{){
42 M
/)
\)k } \) .
§(
\\\ :
\ )
— -
9
or
)f
{ ■te } !!« ;«!±
/ !f ! &q
_
\!} /$ {)7)f cm
-CM y0
E E,2Em0 \;){ {]( "-.- ,
�)�
k �(}7\
{) {(±)®kW /\|
k/)
_ _,.!!)It§!±t
k
- {{ ) ƒ \f ¥!9!ak)
_
/O.E21 \l22t / «!\ ;;§! \f
)))
/j) / «[ !- :l;!!,w{ m {
. EEM';t §$)!#][! »! /§!)
�-
l�:�/
5 E
0-8 -0
o
. (/A
\j (ll,,;
.,
U.0
/) /E
§/) { }ii /{
.
\ \/\
\
\} \ \ \ \ \ \/
\
\
\
/
E
\\\
:
0.
-2
}
M"
(Ek)}.
!,)j!
`
§
0.
9 !;
y }k / §)
LE c
:
(c §) ) )
) )\tk
�\\
-
\\
\
\
}/
\ \ { \ \} \
\
-- =r:B0
!„ #!%t!!!
\ / \ \ \ }) \\ }!(;#!f2
)!!
1-
/&)j}\\
X
\=
\
_ / -
.q2)
) |}f
, \k / } # (w(!
|)|\ {
!!!;!#z:
!!!
>! / })7f)k\ /]!)!z!!
:!;0 OaE
y!
7 G !!! %!t£ {.
FL f{[k
{!;
- _ -0
f$)-
_EZ \) /��)\�
ƒf {f {tom ] #(t!»
2)+ =;§
;« ;!
± G § §:!$*±�)
\) } \ §\
ƒ
{)
/)$
\ \ \ \ \
\
@
N
�
J
N
N
x
J
N
O C
N
N O
a
2 0
nmin
n
°u
°a
o>>
�N
mcNr
Na.N.
« C D!
'S m O C
m
.c N= N
« LL Yo N O
N
E
34:'od
3 E
«ter
N« N J
NN'Z�4Z4a
N L rya w
~CQ
N E d
NNN
yNj
mNU
mC
m m¢
D)c
C
m@ 0,0
61�a
m a O
N =
N C N
Y
2
m
EE
E 2 ¢ZG
m m
m E '
a-. c
p
@
N L a W
U a
N
" E woc
FcN ' q>�a
>
0 m
vi
2 @m
O v N
0
O
¢ C T
7 N
>.
E m
N r¢ N 2 r C "NO E
N >
a U
O N U
N
�aFVOE:oYr$ o:o
_
m3 °0
N
mv�m
IL�T «SONG O.N CI OO
`o c
"ULm
NO-50
c a E v EY E
C a 9
N m Gr� NFN c
N N
m
r y
NNNA
E -:R w. cTw.c O N
E NOm
O�
()
@«no - o ac
-ONp . N rg c N
iw
m , m E G
fi
c c m
r a
Om 8 mr° c'NO d L m
E2
N m Q> U«
L= N O
2 E a
N N@
u a a
O m
C N O@
F-UmEa ¢v5 `5 nE toU
K�Nx
C C
OmE@
a
p
N l
W L
o
c -ona m
�Y-
o m a >
cVL oEE c
ii�rd�da
N
>Em E2v
5 «'mom -m$
cour3 c Ec@i io
�u�i�v ���
m�5 E m
E °c o.s
aN@m00
yc
Q D E .� V N y
V O M.5?
Ctq
v -R' 73E N
�o NUa
O2m'Q dt O-`�
_ m
O
_NN yNj
_ Ip
C LL d p
O
U O iS N@ ami C E O
T J m� U N D O
N U co
-OU N pNo y
L C a m v i m O O
m C J O N d 0
t O U cm C V
¢EN U
-NO W.QOU
�-a5 w°i%3n
.0
C
N
a -_ O N a
€ a N T
N a N N N
3° 0 N c
®
o N E o.
E d N= m o y
°� m n
U >> E c
w c E m d
r E E N
N J a V U t
U N m
¢.- O O U N W a p
F n E mUUUm 21 u
a u v m Q
O n n n.NO a QA m o
N
ry'
§
�
,z]rt!
]t 0 \
\j \ \\ G \ }/
))(
\ \ }/
\\\\
)\)/
`(\ a®/
§f
\!frlf\
! ;
\ 7)7:
,122)la2lE
� `�ZZ)k� ; -)
- �6k. °r`!
/ \ /\\\ {\\ { \)({
\
\
/
�
! \� \ \\
/ \\
} \ \w
E
\/(
ff$ ::
) §§«{
} \ \o
{ §{ \{{
\ \2\
-±f )
{))){{§) {]§)fk±z){) / /E) \ \))f
Oa - 1 : :; ;mmE r Roo -0M, _,!+
(»l7:, : ;:lfx G :- ! #!- #!::lam
` - °_,»;` >! 400fr.
°,=.WEw 0,E'E2 0 ®f0-
/(�i)§ /)\ »$ \rff;#! ®! ;!l,;;;
: .,f ®,m;02:o ! = { :`t4;
) \) {{( {)Jt{)iI$#{ ;f {§ #�] \! \2
\ /\ \ \� /� j } \�/ }\E;
flf:f { \)(