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7.1.A. - Page 29 <br /> (OD r BADAWI&ASSOCIATES <br /> CERTIFIED PUBLIC ACCOUN IAN I S <br /> INDEPENDENT AUDITORS' REPORT <br /> To the Honorable Mayor and Members of City Council <br /> of the City of Redwood City <br /> Redwood City, California <br /> Report on the Financial Statements <br /> We have audited the accompanying financial statements of the governmental activities, the business- <br /> type activities, each major fund, and the aggregate remaining fund information of the City of Redwood <br /> City, California (City), as of and for the year ended June 30, 2014, and the related notes to the financial <br /> statements, which collectively comprise the City's basic financial statements as listed in the table of <br /> contents. <br /> Management's Responsibility for the Financial Statements <br /> Management is responsible for the preparation and fair presentation of these financial statements in <br /> accordance with accounting principles generally accepted in the United States of America; this includes <br /> the design, implementation, and maintenance of internal control relevant to the preparation and fair <br /> presentation of financial statements that are free from material misstatement, whether due to fraud or <br /> error. <br /> Auditor's Responsibility <br /> Our responsibility is to express opinions on these financial statements based on our audit. We did not <br /> audit the City's investment in the Silicon Valley Clean Water Authority, which represents 41 percent, <br /> 42 percent and 18 percent, respectively, of the City's assets, net position, and expenses of the Sewer <br /> Utility Fund and 11 percent, 15 percent, and 7 percent, respectively, of the assets, net position, and <br /> expenses of the business -type activities. The City's investment in the Silicon Valley Clean Water <br /> Authority was audited by other auditors whose report has been furnished to us, and our opinion, <br /> insofar as it relates to the amount included for the City's investment in the Silicon Valley Clean Water <br /> Authority, is based solely on the report of the other auditors. We conducted our audit in accordance <br /> with auditing standards generally accepted in the United States of America and the standards <br /> applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller <br /> General of the United States. Those standards require that we plan and perform the audit to obtain <br /> reasonable assurance about whether the financial statements are free from material misstatement. <br /> An audit involves performing procedures to obtain audit evidence about the amounts and disclosures <br /> in the financial statements. The procedures selected depend on the auditor's judgment, including the <br /> assessment of the risks of material misstatement of the financial statements, whether due to fraud or <br /> error. In making those risk assessments, the auditor considers internal control relevant to the entity's <br /> preparation and fair presentation of the financial statements in order to design audit procedures that <br /> are appropriate in the circumstances, but not for the purpose of expressing an opinion on the <br /> effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also <br /> includes evaluating the appropriateness of accounting policies used and the reasonableness of <br /> significant accounting estimates made by management, as well as evaluating the overall presentation of <br /> the financial statements. <br /> Address: 180 Grand Avenue, Suite 1500 Oakland, CA 94612 • Phone: 510.768.8251 • Fax: 510.768.8249 <br /> 1 <br />