To: Board of Supervisors
From: General Government Committee
Meeting Date: May 16, 2017
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Department Contact: |
Supervisor Gjerde |
Phone: |
463-4441 |
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Department Contact: |
Supervisor Brown |
Phone: |
463-4441 |
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Item Type: Consent Agenda |
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Time Allocated for Item: N/A |
Agenda Title:
title
Acceptance of Report out of Committee Clearing Referral Regarding California Government Code Section 26909 for the Replacement of Annual Audits of Special Districts with a Financial Review (Sponsor: Supervisors Gjerde and Brown - General Government Committee)
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Recommended Action/Motion:
recommendation
Accept the report out of Committee and clear referral regarding California Government Code Section 26909 for the Replacement of annual audits of special districts with a financial review.
End
Previous Board/Board Committee Actions:
On April 18, 2017 this topic was referred by the Board of Supervisors to the General Government Committee. On May 8, 2017 the referral was presented as an agenda item for the General Government Committee’s consideration.
Summary of Request:
The Mendocino Local Agency Formation Commission (LAFCo) has been conducting Municipal Service Reviews (MSR) and Sphere of Influence (SOI) assessments of all Special Districts within Mendocino County as required by State law. Most recently, the LAFCo conducted and completed reviews of the Cemetery Districts. The review found that most of these Districts do not comply with State law that requires Annual Audits but do complete financial reviews that are then filed with the State Controller. Most of these Cemetery Districts do not have the revenue to cover the cost of an annual audit and struggle financially to manage their cemeteries. The Cemetery Districts are not the only Specials Districts that struggle financially in the County and have hardships meeting all their obligations yearly. It was discovered during the MSRs/SOIs of the Cemetery Districts that exceptions can be made to the annual audit mandate under State law if certain findings can be made and actions are taken by the governing boards.
Pursuant to California Government Code Section 26909 Special Districts may, by unanimous request of the governing board of the special district, with unanimous approval of the Board of Supervisors, replace the annual audit required by this section with a financial review, in accordance with the appropriate professional standards, as determined by the County Auditor, if the following conditions are met: (A) All of the special district's revenues and expenditures are transacted through the county's financial system and (B) The special district's annual revenues do not exceed one hundred fifty thousand dollars ($150,000). Special Districts can then meet the State requirement by (1) A biennial audit covering a two-year period; (2) An audit covering a five-year period if the special district’s annual revenues do not exceed an amount specified by the board of supervisors or (3) An audit conducted at specific intervals, as recommended by the county auditor, that shall be completed at least once every five years.
On March 23, 2017, the Board of Supervisors received a request from the Mendocino Little River Cemetery District to replace their annual audit with a financial review, as approved unanimously at the District’s February 15, 2017, Board of Trustees meeting.
On May 8, 2017 the Auditor-Controller made a presentation to the General Government Committee regarding this referral. During the discussion following the presentation it was determined that Auditor-Controller will review any special district requests for financial review and will present them to the Board of Supervisors for approval. The Committee reached consensus that no further action is required at the committee level for this referral.
Alternative Action/Motion:
Do not accept the report out of committee.
Supplemental Information Available Online at: N/A
Fiscal Impact:
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Source of Funding: N/A |
Budgeted in Current F/Y: N/A |
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Current F/Y Cost: N/A |
Annual Recurring Cost: N/A |
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Supervisorial District: All |
Vote Requirement: Majority |
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Agreement/Resolution/Ordinance Approved by County Counsel: N/A
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CEO Liaison: Janelle Rau, Deputy CEO |
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CEO Review: Yes |
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Comments: