DATE: January 26, 2021
TO: Board of Supervisors
SUBMITTED BY: Oscar Garcia, CPA
Auditor-Controller/Treasurer-Tax Collector
SUBJECT: Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2020
RECOMMENDED ACTION(S):
TITLE
Receive and file the County of Fresno Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2020.
REPORT
This item is countywide.
ALTERNATIVE ACTION(S):
There is no viable alternative as the CAFR is submitted in compliance with Government Code Sections 25250 and 25253.
FISCAL IMPACT:
There is no fiscal impact associated with this action.
DISCUSSION:
The County of Fresno’s CAFR for the fiscal year ended June 30, 2020 is provided for your Board’s review in compliance with Government Code Sections 25250 and 25253.
The CAFR contains the County’s basic financial statements, which are comprised of:
(1) Government-wide financial statements, which are designed to provide readers with a broad overview of the County’s finances, in a manner similar to a private-sector business;
(2) Fund financial statements, which present the County’s financial activities in a traditional fund format; and
(3) Notes to the basic financial statements.
The basic financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States.
The CAFR reports (all amounts presented in thousands) a total net position of $454,959 as of June 30, 2020, an increase of $138,903 from the total net position of $316,056 as of June 30, 2019 in the Government-wide financial statements. Generally, “net position” is the amount of assets and deferred outflows of resources that exceed the liabilities and deferred inflows of resources of the County.
The Governmental Funds financial statements report as of June 30, 2020, the fund balance of $821,771, an increase of $19,895 from a fund balance of $801,876 as of June 30, 2019. Included in fund balance as of June 30, 2020 is the General Fund’s fund balance of $197,786, a decrease of $6,332 from the General Fund’s fund balance of $204,118 as of June 30, 2019. As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the County is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. Further detail of the reported fund balance classifications is provided in Note 14 - Fund Balance on the Notes to the County’s basic financial statements.
The County’s basic financial statements have been audited by the independent certified public accounting firm of Brown Armstrong. The goal of the independent audit is to provide reasonable assurance the financial statements of the County for the fiscal year ended June 30, 2020 are free of material misstatement. The independent certified public accounting firm has issued an unmodified (“clean”) opinion on the County’s basic financial statements as of and for the fiscal year ended June 30, 2020 (See report, “Opinion,” at p. 2). The independent auditor’s report is located at the beginning of the financial section of the report and is dated December 30, 2020.
The CAFR also includes certain required supplementary information, which includes the Budgetary Comparison Schedules for the General Fund, Disaster Claiming, Behavioral Health-MH, Social Services, Local Health and Welfare, and 2011 Realignment Fund. Additionally, this section includes the Fresno County Employees’ Retirement Association (FCERA) Schedule of the County’s Proportionate Share of the Net Pension Liability, which provides information regarding the County’s portion of the net pension liability, along with the Schedule of County Contributions, which provides information on the actuarially determined contribution amounts for the last 10 fiscal years.
Such required supplementary information, although not a part of the basic financial statements, is required by Governmental Accounting Standards Board (GASB), 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. The independent auditors state in their report that have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to its inquiries, the basic financial statements, and other knowledge the independent auditors obtained during their audit of the basic financial statements. The independent auditors report that they do not express an opinion or provide any assurance on the required supplementary information because the limited procedures do not provide them with sufficient evidence to express an opinion or provide any assurance (See Report, “Other Matters,” at p. 2).
The independent auditors report states that, in accordance with Government Auditing Standards, they have also issued their report dated December 30, 2020, on their consideration of the County’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 (See report, “Other Reporting Required by Government Auditing Standards, at p. 3).
The Audit Committee has completed its review and accepted the CAFR at its January 15, 2021 meeting.
As required by federal securities disclosure rules, the County has entered into contractual reporting covenants (known as “continuing disclosure obligations”) in connection with its County’s bond issues that are presently outstanding in the public bond market. In accordance with those contractual covenants for County bonds payable from the County’s General Fund, the County is required, among other things, to prepare and publicly post annual reports, containing certain County basic financial information, in the secondary bond market by the last day of February following the relevant County fiscal year. Those posted annual reports must include the County’s audited CAFR for the relevant preceding County fiscal year.
Following your Board’s completion of its review of the CAFR, the County will include the CAFR as part of the County’s annual report to the secondary bond market by the end of February 2021.
OTHER REVIEWING AGENCIES:
The CAFR and corresponding audit report were received by the Audit Committee at its January 15, 2021 meeting. The CAFR was distributed to all Board members as of that date.
REFERENCE MATERIAL:
BAI #22 - January 21, 2020
BAI #29 - January 29, 2019
BAI #27 - January 23, 2018
BAI #17 - February 7, 2017
BAI #26 - March 1, 2016
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with the Clerk - FY 2019-20 CAFR
CAO ANALYST:
Yussel Zalapa