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~:'::.,,'t~><:;"',j\';A.UD' . .T,seo. PE':.4.1\.ffi PRO. VI.SI'O.. NS'( G..o"n"'tl.n""u':c".d). :~,:;'..,:, ,: .:1Í::".. Of: '.. ',:. ~._';""'.~~".~'.'"'Jo<""-~'~'...."" ,..~~JJ~ ..,..:.. .,... ",..,"'ir.'.""",.......:.,:",.",...."....,.",:~ We will review the City's compliance with the Appropriations Limit restrictions imposed by Propositions 4 and Ill. We will also prepare the State Controller's Report for the City and the Redevelopment Agency and prepare the Annual Street Report, if you should choose to have us do this work. A lIdit Approach --Illterim As you know, we can perfonn our interim work any time during the months of January through June; we set the precise date with you ahead of time to minimize our impact on your work load. In the past we have perfonned our interim work in Redwood City as early as February, to accommodate staff changes by the City and on our audit team as well, with a second interim later in the year. We could follow this pattern or schedule a single interim if you prefer. Unlike older-style finns, we perform most of our important work at interim, well before the end of the fiscal year. We use our interim work to identify and solve problems and to plan the year-end closing and audit in detail. We begin our interim work by sending you a list of the items we will need at least two weeks before we are scheduled to visit your offices, so you have time to prepare. We start our work in your offices by evaluating your internal control structure and interviewing you and your staff. We use our own typed checklists as part of our evaluations and we outline the duties of each pertinent person and the important control points, We also vary our approach and we change areas of emphasis each year based on our planning meetings with you. We test our evaluations each year through our sampling and tests of transactions. All our transaction samples are drawn and tested during the interim portion of our work. Each sample is drawn from all months of the year, except payroll which is selected from a single month. We generally sample payroll, disbursements, receipts, investments, and budget transactions. We begin to apply our analytical procedures at interim, when we analyze year-to-date results and balances and compare them with budget and prior year actuals. We forccast many year-end amounts at interim, so that we can limit the amount of work required at year-end and concentrate instead on areas of concern. For example, we perforn1 all our cash and investment testing at intcrim, including sending confirmation letters to depositories and determining financial statcmcnt categorizations. Perfonning these last two steps at interim allows plenty of time to follow up on confirmations or resolve questions about the proper categorization of an investment without delaying the audit. As another example, we test long-tenn debt at interim and forecast year-end balances for each debt issue. At interim, we will continue to work with you to modify your Excel financial statement programs to fit any minor changes in your disclosure and format needs. We will continue to help you redraft and revise last year's financial statements where necessary for new transactions, disclosures and accounting pronouncements. Drafting the financial statements at interim is particularly important because it forces all of us to address these issues before we enter the year end crunch. You and others have time to review the effects of proposed accounting treatments and disclosures without the pressures of impending issuance deadlines. We plan the year-end closing in detail with you by preparing our Annual Closing Checklist. Our Checklist details all the information we will need from you to complete our year-end audit, along with the person responsible for preparing it and the date they will have it ready. We do not ask for more information than other firn1s-we simply organize it and put it all on one list, so you know what we need in advance. And we do not ask for more later. 15 r ."'r'w,' ...- T