SR-201-002 (10)
FIN:CMD:\finance\admin\stfrpts\srcafr02.doc
Council Meeting: February 25, 2003 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Transmittal of Comprehensive Annual Financial Report for Fiscal Year
Ended June 30, 2002
Introduction
This report transmits to the City Council the City's Comprehensive Annual Financial Report
(CAFR) for FY 2001-02 as required by Section 1516 of the City Charter.
Background
The City Charter requires that the City's financial records and systems be examined by a
qualified accountant and that an audit report be submitted to the Council. The attached
Comprehensive Annual Financial Report for FY 2001-02 contains the results of the audit
work performed by the City's certified public accountant KPMG Peat Marwick and is
submitted herewith in conformance with Charter requirements.
In June 1999, the Governmental Accounting Standards Board (GASB), which sets the
financial reporting requirements for all state and local governments, established a new
framework for financial reports. This new framework represents the biggest single change
in the history of governmental accounting. These changes, which are collectively known
as GASB Statement 34—Basic Financial Statements, and Management’s Discussion and
Analysis for State and Local Governments, are required to be implemented for the City’s
CAFR for the fiscal year ending June 30, 2002. The CAFR transmitted by this staff report
meets those requirements.
GASB 34 changes require financial reporting that is similar to private sector financial
reporting by presenting Citywide financial statements with a “net assets” bottom line
approach. However, governmental agencies are also still required to present financial
statements by fund. The presentation of two different types of financial statements
together in one CAFR requires the presentations to be reconciled. Appropriate
reconciliations are presented in the transmitted CAFR.
To further help the Council and community understand these new financial reporting
requirements, attached to this staff report are two brief reference documents: An Elected
Official’s Guide to the New Governmental Financial Reporting Model, and The Quick Guide
to Local Government Financial Statements.
Report Highlights
The City's auditors have issued an unqualified opinion. This means that the auditors
believe that the City's combined financial statements have been prepared in conformity
with generally accepted accounting principles and, therefore, fairly present the financial
position of the various fund types and account groups of the City.
Budget/Financial Impact
There is no budget or financial impact to receive and file the City’s Comprehensive Annual
Financial Report for FY 2001-02. An analysis of the City’s financial position will be
presented as part of the Mid-Year report to City Council.
Recommendation
It is recommended that the City Council receive and file the City's Comprehensive Annual
Financial Report for FY 2001-02.
Prepared by: Mike Dennis, Director of Finance
Attachment: Comprehensive Annual Financial Report
For the Year Ended June 30, 2002
An Elected Official’s Guide to the New Governmental Financial Reporting
Model
The Quick Guide to Local Government Financial Statements
NOTE: ATTACHMENTS ARE NOT AVAILABLE ELECTRONICALLY.
THEY ARE AVAILABLE FOR REVIEW IN THE CITY CLERK’S OFFICE.