Scottsdale’s annual financial audit has been completed, and no reported internal control deficiencies or noncompliance matters were identified, officials say.
City Auditor Sharron Walker presented the audit findings to Scottsdale City Council in November.
Overall, the City Council voted unanimously to accept the FY 2018-19 financial audit reports submitted by the city’s external auditors, Heinfeld, Meech & Co.
The Scottsdale City Charter requires elected leaders to designate certified public accountants to perform an independent audit of the municipality’s annual financial statements.
After performing the annual financial audit, Heinfeld, Meech & Co. reports on the city’s Comprehensive Annual Financial Report, known as a CAFR, and on the annual financial reports of its component units. Scottsdale’s component unites include:
For the city to meet its federal funding requirements, the CPA firm also reports on the city’s expenditures of federal awards, called a single audit report.
Further, to meet certain state funding requirements, the CPA firm reports on the city’s compliance with its highway user revenue fund uses.
In addition, the firm will also report on a Housing and Urban Development-required financial schedule for the city’s federally supported housing programs and on the city’s state-required annual expenditure limitation report. These reports are anticipated in January or February, according to a city staff report.
The Scottsdale Audit Committee received the fiscal year reports at its Nov. 12 meeting, where it voted 3-0 to recommend the reports.
Ms. Walker gave an overview of the audit reports, noting their status.
“Overall, the financial, the internal control, the compliance audit results for this year were excellent,” Ms. Walker said in her report to council.
In Heinfeld, Meech & Co.’s report on the city CAFR, the firm stated the auditors obtained reasonable assurance that the financial statements present fairly, in all material respects, the financial position, changes in financial position, and where applicable, cash flows of the specified activities and funds and the budgetary comparison for the General Fund.
The firm did not identify any matters of concern, a city staff report states, with zero financial-related internal control matters or instances of noncompliance with federal grant requirements found.
Also, the report concluded the city’s schedule of expenditures of federal awards, which totaled almost $12.6 million for FY 2018-19, was fairly stated in relation to the city’s basic financial statements.
In a separate report, the CPA firm stated its opinion that the city complied with the statement’s requirement to use Highway User Revenue Fund monies for authorized transportation purposes.
As with the city’s CAFR, the firm issued unmodified opinions on the separate annual financial reports of the component units, that did not disclose any matters of concern.
Mayor Jim Lane commented on the way Scottsdale handles its audits, both internal and external.
“We are somewhat unique in the way we handle this process and trying to eliminate as much as possible any kind of conflict of interest in evaluating ourselves,” Mr. Lane said, explaining Ms. Walker’s role as a Charter officer who operates independently.
“Her auditing capacity is independent of those agencies and departments that she may audit, which is really very unique in city government. It’s just one additional way your governance here facilitates greater accountability and greater transparency even through that office as we can muster. It all works very well, and we all work well together.”