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COUNTY OF ALPINE TRANSPORTATION DEVELOPMENT ACT FUNDS NON-TRANSIT PURPOSES Annual Financial Statements For the Year Ended June 30, 2019 ---PAGE BREAK--- Table of Contents Page Independent Auditor’s Report 1-2 Financial Statements: Balance Sheet 3 Statement of Revenues, Expenditures and Changes in Fund Balance 4 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual 5 Notes to the Basic Financial Statements 6-9 Other Reports: Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 10-11 Independent Auditor’s Report on Compliance Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with the Statutes, Rules and Regulations of the California Transportation Development Act, and the Allocation Instructions and Resolutions of the Local Transportation Commission 12 ---PAGE BREAK--- 1 INDEPENDENT AUDITOR’S REPORT To the Board of Supervisors of the County of Alpine Markleeville, California We have audited the accompanying financial statements of the Transportation Development Act Funds Non- Transit Purposes (TDA Fund) of the County of Alpine, California as of and for the year ended June 30, 2019, 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 an opinion 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. 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 TDA Fund’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 TDA Fund’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 opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Transportation Development Act Funds Non-Transit Purposes of the County of Alpine, California as of June 30, 2019, and the changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. ---PAGE BREAK--- 2 Emphasis of Matter As discussed in Note 1-A, the financial statements TDA Fund are intended to present the financial position and the changes in financial position of only that portion of the governmental activities of the County of Alpine, California that is attributable to the transactions of the TDA Fund. They do not purport to, and do not present fairly the financial position of the County of Alpine, California as of June 30, 2019, the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Management has omitted the management’s 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. Our opinion on the basic financial statements is not affected by this missing information. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 31, 2020, on our consideration of the Transportation Development Act Funds Non-Transit Purposes of the County of Alpine, California’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the TDA Fund’s internal control over financial reporting and compliance. Clovis, California March 31, 2020 ---PAGE BREAK--- The accompanying notes are an integral part of these financial statements. 3 COUNTY OF ALPINE TRANSPORTATION DEVELOPMENT ACT FUNDS NON-TRANSIT PURPOSES Balance Sheet June 30, 2019 ASSETS Cash and investments - $ LIABILITIES Unearned revenues - $ Total Current Liabilities - FUND BALANCE Restricted for non-transit allocations - Total Liabilities and Fund Balance - $ ---PAGE BREAK--- The accompanying notes are an integral part of these financial statements. 4 COUNTY OF ALPINE TRANSPORTATION DEVELOPMENT ACT FUNDS NON-TRANSIT PURPOSES Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended June 30, 2019 REVENUES Local Transportation Funds - streets and roads 75,000 $ EXPENDITURES Streets and roads 75,000 Change in Fund Balance - Fund Balance, Beginning of the Year - FUND BALANCE, END OF THE YEAR - $ ---PAGE BREAK--- The accompanying notes are an integral part of these financial statements. 5 COUNTY OF ALPINE TRANSPORTATION DEVELOPMENT ACT FUNDS NON-TRANSIT PURPOSES Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2019 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Local Transportation Funds - Streets and roads 75,000 $ 75,000 $ 75,000 $ - $ EXPENDITURES Streets and roads 75,000 75,000 75,000 - Change in Fund Balance - - - - Fund Balance, Beginning of the Year - - - - FUND BALANCE, END OF THE YEAR - $ - $ - $ - $ ---PAGE BREAK--- COUNTY OF ALPINE TRANSPORTATION DEVELOPMENT ACT FUNDS NON-TRANSIT PURPOSES Notes to the Basic Financial Statements June 30, 2019 6 Note 1: Summary of Significant Accounting Policies The financial statements of the County of Alpine Transportation Development Act Funds Non-Transit Purposes (TDA Fund) are prepared in accordance with Generally Accepted Accounting Principles (GAAP) as applied to governmental agencies. The TDA Fund applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. A. Reporting Entity The TDA Fund receives allocations under Article 8, Section 99400(a) of the Transportation Development Act from the Alpine County Local Transportation Fund for the purpose of street and road infrastructure improvements. The funds provided under Article 8 represent amounts available after the determination by the Alpine County Local Transportation Commission, the transportation planning agency administering TDA funds, of amounts for local streets and roads of the County. The TDA Fund is used to account for these funds received for non-transit purposes, of which the revenues and expenditures are also included in the County of Alpine’s Road Fund reported as a major fund in the County’s annual financial report. The financial statements of the TDA Fund are intended to present the financial position and the changes in financial position of only the portion of the governmental activities of the County that is attributable to Transportation Development Act Funds allocated for non-transit purposes and is not intended to present fairly the financial position and changes in financial position of the County in conformity with accounting principles generally accepted in the United States of America. B. Basis of Presentation The accounts of the TDA Fund are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The County’s Transportation Development Act Funds allocated for non-transit purposes is a governmental fund specially categorized as a special revenue fund. Special revenue funds are used to account for the financial activity of specific revenue sources that are legally restricted to expenditures for specific purposes. ---PAGE BREAK--- COUNTY OF ALPINE TRANSPORTATION DEVELOPMENT ACT FUNDS NON-TRANSIT PURPOSES Notes to the Basic Financial Statements June 30, 2019 7 C. Basis of Accounting The TDA Fund is reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized in the period in which they become both measurable and available. “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. A sixty-day availability period is used for revenue recognition. Revenues that are susceptible to accrual include local transportation fund allocations and interest income. Expenditures are recorded when the related fund liability is incurred. D. Cash in County Treasury Cash is held by the TDA Fund with the County in an investment pool in order to facilitate the management of cash. On a quarterly basis, the County Treasurer allocates interest to the various funds based upon the average cash balances. Information regarding categorization of investments, risk and fair value reporting can be found in the County’s financial statements. The Alpine County Treasury Oversight committee oversees the Treasurer’s investment policies and practices. The TDA Fund adheres to the County’s deposit and investment policy that addresses specific types of risk. Required risk disclosures for the TDA Fund’s investment in the County’s Investment Pool at June 30, 2019 were as follows: Credit risk Not rated Custodial risk Not applicable Concentration of credit risk Not applicable Interest rate risk (average maturity) 259.3 days Investments held in the County’s investment pool are available on demand and are stated at cost plus accrued interest, which approximates fair value. E. Budgets Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America, as prescribed by the GASB. Annual appropriated budgets are adopted for the TDA Fund. Budgets are prepared by department and fund. Department heads may, upon approval of the Treasurer-Tax Collector, Director of Finance and the County Administrative Officer, make transfers from one object or purpose to another within the same department. All other budget amendments must be approved by the County Board of Supervisors. The legal level of control is the departmental level. All annual appropriations lapse at fiscal year-end. The budgetary data presented in the accompanying financial statements includes all approved revisions. ---PAGE BREAK--- COUNTY OF ALPINE TRANSPORTATION DEVELOPMENT ACT FUNDS NON-TRANSIT PURPOSES Notes to the Basic Financial Statements June 30, 2019 8 F. Fund Balance In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned or unassigned based primarily on the extent to which the TDA Fund is bound to honor constraints on how specific amounts can be spent. • Nonspendable fund balance – Amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to remain intact. • Restricted fund balance – Amounts with constraints placed on their use that are externally imposed by creditors, grantors, contributors, or laws and regulations of other governments. Constraints may also be imposed by law through constitutional provisions or enabling legislation. • Committed fund balance – Amounts that can only be used for specific purposes determined by formal action of the TDA Fund’s highest level of decision-making authority (the County Board of Supervisors) and that remain binding unless removed in the same manner. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. • Assigned fund balance – Amounts that are constrained by the TDA Fund’s intent to use resources for specific purposes. The intent can be established at either the highest level of decision-making or by a body or an official designated for that purpose. • Unassigned fund balance – The residual classification for the TDA Fund used only if the expenditures incurred for specific purposes exceed the amounts restricted, committed or assigned to those purposes deficit fund balance). The County Board of Supervisors establishes, modifies or rescinds fund balance commitments and assignments by passage of an ordinance or resolution and through adoption of the budget and subsequent budget amendments that occur throughout the year. When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted resources first, followed by committed, assigned and unassigned resources as they are needed. G. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from these estimates. ---PAGE BREAK--- COUNTY OF ALPINE TRANSPORTATION DEVELOPMENT ACT FUNDS NON-TRANSIT PURPOSES Notes to the Basic Financial Statements June 30, 2019 9 Note 2: Insurance and Risk of Loss The TDA Fund is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The TDA Fund is insured against these types of losses through various commercial insurance policies and participates in the County’s self-insured risk pool. Note 3: Compliance Requirements of Local Transportation Funds The TDA is defined commencing at Chapter 4 of the California Public Utilities Code Section 99200. Funds received pursuant to Section 99400(a) of the TDA (Article 8(a)) may only be used for local streets and roads and projects which are for use by pedestrians and bicycles. TDA funds are apportioned, allocated and disbursed in accordance with allocation instructions from the Local Transportation Commission of the County of Alpine for specific transportation purposes. ---PAGE BREAK--- OTHER REPORTS ---PAGE BREAK--- 10 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS AND THE RULES AND REGULATIONS OF THE TRANSPORTATION DEVELOPMENT ACT To the Board of Supervisors of the County of Alpine Markleeville, California We have audited, in accordance with the 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, the financial statements of the Transportation Development Act Funds Non-Transit Purposes (TDA Fund) of the County of Alpine, California as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the TDA Fund’s basic financial statements, and have issued our report thereon dated March 31, 2020. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the TDA Fund’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the TDA Fund’s internal control. Accordingly, we do not express an opinion on the effectiveness of the TDA Fund’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the TDA Fund’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. ---PAGE BREAK--- 11 Compliance and Other Matters As part of obtaining reasonable assurance about whether the County of Alpine, California’s TDA Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and the Rules and Regulations of the Transportation Development Act. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Transportation Development Act Funds Non-Transit Purposes of the County of Alpine, California’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the TDA Fund’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Clovis, California March 31, 2020 ---PAGE BREAK--- 12 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH THE STATUTES, RULES, AND REGULATIONS OF THE CALIFORNIA TRANSPORTATION DEVELOPMENT ACT AND THE ALLOCATION INSTRUCTIONS AND RESOLUTIONS OF THE LOCAL TRANSPORTATION COMMISSION To the Board of Supervisors of the Alpine County Local Transportation Commission Markleeville, California We have audited the basic financial statements of the Transportation Development Act Funds Non-Transit Purposes (TDA Fund) of the County of Alpine, California as of and for the year ended June 30, 2019, and have issued our report thereon dated March 31, 2020. 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. As part of obtaining reasonable assurance about whether the TDA Fund’s basic financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. Additionally, we performed tests to determine that allocations made and expenditures paid by the Local Transportation Commission were made in accordance with the allocation instructions and resolutions of the TDA Fund and in conformance with the California Transportation Development Act. Specifically, we performed each of the specific tasks identified in the California Code of Regulations Sections 6666 and 6667 that are applicable to the TDA Fund. In connection with our audit, nothing came to our attention that caused us to believe the TDA Fund failed to comply with the Statues, Rules, and Regulations of the California Transportation Development Act and the allocation instructions and resolutions of the Local Transportation Commission. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. This report is intended solely for the information and use of the Transportation Development Act Funds Non- Transit Purposes of the County of Alpine, California’s management, the California Department of Transportation, and the State Controller’s Office, and is not intended to be and should not be used by anyone other than these specified parties. Clovis, California March 31, 2020