HomeMy WebLinkAbout9B--Reports from Independent Auditors for the year ended June 30, 2022
CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Approve the Audit Committee’s recommendation to accept the Statement on Auditing Standards
AU-C 260 Letter and the draft copy of the Single Audit Reports for the year ended June 30,
2022.
Fiscal Impact
There is no fiscal impact associated with this item.
Alternative Action
The City Council could reject the Statement on Auditing Standards AU-C 260 Letter and the
draft copy of the Single Audit Reports for the year ended June 30, 2022, and provide additional
direction to the Audit Committee and/or staff.
Background/Analysis
Attached is a copy of the AU-C 260 Letter to the City Council and a draft copy of the Single
Audit Reports for the year ended June 30, 2022. The Audit Committee met on January 4, 2023,
to review and discuss the reports. The Audit Committee recommended that the AU-C 260 Letter
and the draft of the Single Audit Reports be brought to the City Council for acceptance.
The AU-C 260 Letter is commonly known as the ‘The Auditor’s Communication with those
Charged with Governance’ and provides the auditors the forum to share their perspective on
accounting policies, estimates, and disclosures used in the preparation of the financial statements
and whether there were any difficulties, disagreements, or other findings in performing the audit.
The auditors found no problems or issues to convey.
MEETING DATE: January 17, 2023
ITEM NO. 9B
FROM:
***APPROVED BY***
taudette@cityofredding.org, mmezzano@cityofredding.org
mmezzano@cityofredding.org
SUBJECT: 9B--Consider Reports from Independent Auditors for the year ended June 30,
2022.
Audit Committee,, Tenessa
Audette, Mayor Pro Tempore,
Mark Mezzano, Vice Mayor
Report to Redding City Council January 11, 2023
Re: 9B--Reports from Independent Auditors for the year ended June 30, 2022 Page 2
The Single Audit Reports pertain to the compliance and internal control in the expenditure of
federal awards and the collection and expenditure of passenger facility charges. No findings or
questioned costs were noted in the reports.
Environmental Review
This is not a project defined under California Environmental Quality Act, and no further action is
required.
Council Priority/City Manager Goals
This is a routine operational item occurring on an annual basis
Attachments
2022 Redding ACFR AU-C 260 Letter
Draft 2022 Single Audit, Passenger Facility Charges Program, and Independent Auditors'
Reports
2121 North California, Suite 290
Walnut Creek, California 94596
December 16, 2022
To the Honorable Mayor and Members of the City Council
of the City of Redding
Redding, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City of Redding, California (the “City”) for the year ended
June 30, 2022. Professional standards require that we provide you with information about our responsibilities under
auditing standards generally accepted in the United States of America, and Government Auditing Standards, as well as
certain information related to the planned scope and timing of our audit. We have communicated such information in
our letter to you dated May 1, 2022. Professional standards also require that we communicate the following information
related to our audit.
Qualitative Aspects of Accounting Practices
Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting
policies used by the City are described in Note 1 to the basic financial statements. Other than those standards described
below that were implement in the fiscal year ended June 30, 2022, no new accounting policies were adopted nor was the
application of existing policies changed:
GASB Statement No. 87
In June 2017, GASB issued Statement No. 87, Leases (GASB Statement No. 87), to better meet the information
needs of financial statement users by improving accounting and financial reporting for leases by governments. This
statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease
assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of
resources or outflows of resources based on the payment provisions of the contract. It also establishes a single model
for lease accounting based on the foundational principle that leases are financings of the right to use an underlying
asset. Implementation of this Statement had a significant effect on the City’s financial statements for the year ended
June 30, 2022.
GASB Statement No. 92
In January 2020, GASB issued Statement No. 92, Omnibus 2020. The primary objectives of this Statement are to
enhance comparability in accounting and financial reporting and to improve consistency of authoritative literature
by addressing practice issues that have been identified during implementation and application of certain GASB
Statements. Application of this statement did not have a material effect on the City’s financial statements for the
fiscal year ending June 30, 2022.
GASB Statement No. 93
In March 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates. Some governments have
entered into agreements in which variable payments made or received depend on an interbank offered rate (IBOR)—
most notably, the London Interbank Offered Rate (LIBOR). As a result of global reference rate reform, LIBOR is
expected to cease to exist in its current form at the end of 2021, prompting governments to amend or replace financial
instruments for the purpose of replacing LIBOR with other reference rates, by either changing the reference rate or
adding or changing fallback provisions related to the reference rate. The objective of this Statement is to address
those and other accounting and financial reporting implications that result from the replacement of an IBOR.
Application of this statement did not have a material effect on the City’s financial statements for the fiscal year
ending June 30, 2022.
To the Honorable Mayor and Members of the City Council
of the City of Redding
Redding, California
Page 2
GASB Statement No. 97
In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial
Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans – An Amendment of GASB
Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32. The primary objectives of this
Statement are to (1) increase consistency and comparability related to the reporting of fiduciary component units in
circumstances in which a potential component unit does not have a governing board and the primary government
performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting
of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and
employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary
component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and
comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred
compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through
those plans. Application of this statement did not have a material effect on the City’s financial statements for the
fiscal year ending June 30, 2022.
We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or
consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management’s knowledge and experience about past and current events and assumptions about future events. Certain
accounting estimates are particularly sensitive because of their significance to the financial statements and because of
the possibility that future events affecting them may differ significantly from those expected. The most sensitive
estimates affecting the City’s financial statements were:
Investments are reported using GASB Statement No. 72, Fair Value Measurement and Application, this
statement defines fair value, establishes a framework for measuring fair value and establishes disclosures about
fair value measurement. Investments, unless otherwise specified, are recorded at fair value in the Statements of
Net Position and are categorized based upon the level of judgment associated with the inputs used to measure
their fair value. Levels of inputs are as follows:
Level 1 – Inputs are unadjusted, quoted prices for identical assets and liabilities in active markets
at the measurement date.
Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the assets
or liabilities through corroboration with market data at the measurement date.
Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants
would use in pricing the assets or liabilities at the measurement date.
Management’s estimate of the investment fair market value is based on information provided by the State
of California for the City’s investment in Local Agency Investment Fund, and based on market price
provided by US Bank, the trustee for investments in Medium Term Corporate Notes, Federal Agency
Bonds, and Mutual Funds.
Management’s estimate of the depreciation on capital assets is based on the industry standard and past
experience on actual useful life of the asset groups.
To the Honorable Mayor and Members of the City Council
of the City of Redding
Redding, California
Page 3
Management’s estimate of the net OPEB and the net pension liabilities is based on the actuarial valuations
for each Plan of total pension/OPEB liability and is based on audited financial statements on fiduciary net
position for the CalPERS plans and the PARS Plan. CalPERS issues publicly available reports that include
a full description of the pension plans regarding benefit provisions, assumptions and membership
information that can be found on the CalPERS website.
As part of our audit, we evaluated the key factors and assumptions used to develop the accounting estimates described
above and in determining that it is reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users.
The most sensitive disclosures affecting the financial statements were:
Note 1 – Summary of Significant Accounting Policies
Note 15 – Joint Ventures
Note 18 – Retirement Plans
Note 19 – Other Postemployment Healthcare Benefits
Note 22 – Commitments and Contingencies
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other
than those that are clearly trivial, and communicate them to the appropriate level of management. There were no
misstatements identified during our audit that management had to correct and none of the misstatements detected as a
result of audit procedures were material, either individually or in the aggregate, to each opinion unit’s financial
statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter,
whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report.
We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are communicated to us in the management
representation letter dated December 16, 2022.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar
to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to
the governmental unit’s financial statements or a determination of the type of auditor’s opinion that may be expressed
on those statements, our professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts.
To the Honorable Mayor and Members of the City Council
of the City of Redding
Redding, California
Page 4
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with
management each year prior to retention as the governmental unit’s auditors. However, these discussions occurred in the
normal course of our professional relationship and our responses were not a condition to our retention.
Other Information in Documents Containing Audited Financial Statements
We applied certain limited procedures to the Management Discussion and Analysis (“MD&A”), Budgetary Principles,
Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - General Fund, Schedules of
Changes in Net Pension Liability and Related Ratios, Schedules of Plan Contributions, Schedules of Changes in Net
OPEB Liability and Related Ratios, and Schedule of Contributions, which are Required Supplementary Information
(“RSI”) that supplement the basic financial statements. Our procedures consisted of inquiries of management regarding
the methods of preparing the information and comparing the information for consistency with management’s responses
to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the Combining and Individual Non-major Fund Financial Statements, Budgetary
Comparison Schedules as listed in the table of contents, and Schedule of Passenger Facility Charges Collected and
Expended and Interest Collected, which accompany the financial statements but are not RSI. With respect to this
supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of
preparing the information to determine that the information complies with accounting principles generally accepted in
the United States of America, the method of preparing it has not changed from the prior period, and the information is
appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the
supplementary information to the underlying accounting records used to prepare the financial statements or to the
financial statements themselves.
We were not engaged to report on the Introductory and the Statistical Sections, which accompany the financial statements
but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic
financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
Restriction on Use
This information is intended solely for the use of the City Council and management of the City and is not intended to be,
and should not be, used by anyone other than these specified parties.
Very truly yours,
Walnut Creek, California
City of Redding
Redding, California
Single Audit, Passenger Facility
Charges Program, and
Independent Auditors’ Reports
For the Year Ended June 30, 2022
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City of Redding
Table of Contents
Page
Single Audit:
Independent Auditors’ 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 .................................................................. 1
Independent Auditors’ Report on Compliance for Each Major Federal Program
and on Internal Control Over Compliance Required by the Uniform Guidance ........................................ 3
Schedule of Expenditures of Federal Awards ............................................................................................................ 7
Notes to the Schedule of Expenditures of Federal Awards ...................................................................................... 10
Schedule of Findings and Questioned Costs ........................................................................................................... 11
Passenger Facility Charges:
Independent Auditors’ Report on Compliance with Requirements Applicable to the
Passenger Facility Charge Program and on Internal Control Over Compliance ..................................... 13
Schedule of Passenger Facility Charges Collected and Expended and Interest Collected ....................................... 16
Notes to the Schedule of Passenger Facility Charges Collected and Expended and Interest Collected .................. 18
Schedule of Findings and Questioned Costs ............................................................................................................ 19
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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
Independent Auditors’ Report
To the Honorable Mayor and Members of City Council
of the City of Redding
Redding, 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 basic financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Redding, California (the
“City”) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which
collectively comprise the City’s basic financial statements, and have issued our report thereon dated
December 16, 2022.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered The City’s internal control over
financial reporting (internal control) as a basis for designing 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 City’s internal control. Accordingly, we do not express an opinion
on the effectiveness of The City’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 entity’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.
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To the Honorable Mayor and Members of City Council
of the City of Redding
Redding, California
Page 2
2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's basic 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 financial statements. 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.
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 City’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 City’s internal control and compliance. Accordingly, this communication is not suitable for any
other purpose.
Walnut Creek, California
December 16, 2022
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REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL
CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
Independent Auditors’ Report
To the Honorable Mayor and Members of City Council
of the City of Redding
Redding, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited City of Redding, California’s (the “City”) compliance with the types of compliance requirements
identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each
of the City’s major federal programs for the year ended June 30, 2022. The City’s major federal programs are
identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to
above that could have a direct and material effect on each of its major federal programs for the year ended
June 30, 2022.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States
of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations
Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in
the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with
relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not
provide a legal determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of laws,
statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.
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To the Honorable Mayor and Members of City Council
of the City of Redding
Redding, California
Page 2
4
Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance
requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s
compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards,
Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it
exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control. Noncompliance with the compliance requirements referred to above is considered material if there is a
substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable
user of the report on compliance about the City’s compliance with the requirements of each major federal program as
a whole.
In performing an audit in accordance with auditing standards generally accepted in the United States of America,
Government Auditing Standards, and the Uniform Guidance we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and
perform audit procedures responsive to those risks. Such procedures include examining, on a test basis,
evidence regarding the City’s compliance with the compliance requirements referred to above and
performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design
audit procedures that are appropriate in the circumstances and to test and report on internal control over
compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on
the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over
compliance that we identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A
material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal
control over compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal
control over compliance with a type of compliance requirement of a federal program that is less severe than a
material weakness in internal control over compliance, yet important enough to merit attention by those charged with
governance.
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To the Honorable Mayor and Members of City Council
of the City of Redding
Redding, California
Page 3
5
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s
Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in
internal control over compliance that might be material weaknesses or significant deficiencies in internal control over
compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or
significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal
control over compliance and the results of that testing based on the requirements of the Uniform Guidance.
Accordingly, this report is not suitable for any other purpose.
Schedule of Expenditures of Federal Awards
We have audited the financial statements of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City, as of and for the year ended June 30, 2022, and the related
notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our
report thereon dated December 16, 2022, which contained unmodified opinions on those financial statements. Our
audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the
basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the basic financial statements. The information has been subjected to
the auditing procedures applied in the audit of the financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to prepare
the basic financial statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule
of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as
a whole.
Walnut Creek, California
December 16, 2022
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City of Redding
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2022
See accompanying Notes to the Schedule of Expenditures of Federal Awards
7
Assistance Grant Amount
Listing Identification Federal Provided to
Number Number Expenditures Subrecipients
U.S. Department of Housing and Urban Development
CDBG - Entitlement Grants Cluster:
Direct Programs:
Community Development Block Grant 14.218
B-19-MC 060-033 92,385$ 92,385$
Community Development Block Grant 14.218
B-20-MC 060-033 296,313 30,776
Community Development Block Grant 14.218
B-21-MC 060-033 220,044 41,022
COVID-19 - Community Development Block Grant 14.218
B-20-MCW 060033 608,457 -
Total CDBG - Entitlement Grants Cluster 1,217,199 164,183
Community Development Block Grant - States 14.228 21-DRMHP-21008 323,087 -
COVID-19 - Emergency Solutions Grant Program 14.239
20-ESGCV1 340,290 -
HOME Investment Partnership 14.239
M15-MC060238 11,422 -
HOME Investment Partnership 14.239
M17-MC060238 17,826 -
HOME Investment Partnership 14.239
M18-MC060238 46,700 -
HOME Investment Partnership 14.239
M19-MC060238 284,206 -
HOME Investment Partnership 14.239
M20-MC060238 347,881 -
HOME Investment Partnership 14.239
M21-MC060238 120,106 -
COVID-19 - HOME Investment Partnership 14.239
M21-MP060238 1,856 -
Total HOME Investment Partnership 829,997 -
Housing Vouchers Cluster:
Section 8 Housing Choice Vouchers 14.871
CA 106 9,767,291 -
COVID-19 - Section 8 Housing Choice Vouchers 14.871
CA 106 137,709 -
Emergency Housing Vouchers (EHV) 14.871
CA 106 243,199 -
Total - Program 14.871 10,148,199 -
Mainstream Vouchers 14.879 CA 106 298,575 -
Total Housing Vouchers Cluster 10,446,774 -
Family Self-Sufficiency (FSS) Program:
FSS Coordinator 14.896 FSS21CA3628 15,072 -
FSS Coordinator 14.896 FSS22CA4181 39,240 -
Total Family Self-Sufficiency (FSS) Program 54,312 -
Total U.S. Housing and Urban Development 13,211,659 164,183
U.S. Department of Justice
Direct Programs:
COVID-19 - Coronavirus Emergency Supplemental Funding Program 16.034 2020-VD-BX-0874 25,128 -
Bulletproof Vest Partnership Program 2019 16.607 19097427 13,231 -
Bulletproof Vest Partnership Program 2020 16.607 19097427 8,400 -
Total - Program 16.607 21,631 -
Edward Byrne Memorial Justice Assistance Grant 16.738 2019-DJ-BX-0686 577 -
Edward Byrne Memorial Justice Assistance Grant 16.738 2020-DJ-BX-0227 8,269 -
Edward Byrne Memorial Justice Assistance Grant 16.738 15PBJA-21-GG-01252-JAGX 24,968 -
Total - Program 16.738 33,814 -
Asset Seizure Program 16.922 N/A 58,267 -
Total U.S. Department of Justice 138,840 -
Federal Grantor/Pass - Through
Grantor/Program Title
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City of Redding
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended June 30, 2022
See accompanying Notes to the Schedule of Expenditures of Federal Awards
8
Assistance Grant Amount
Listing Identification Federal Provided to
Number Number Expenditures Subrecipients
U.S. Department of Transportation
Airport Improvement Program:
Direct Programs:
COVID-19 - CARES Act Muni 20.106 3-06-0194-053-2020 465,279 -
COVID-19 - CARES Act Benton 20.106 03-06-0308-22 4,175 -
Runway 16 Blast Pad Design/Taxi 20.106 03-06-0194-52 13,611 -
Terminal Loop Design 20.106 03-06-0194-52 6,256 -
Coronavirus Response and Relief Supplemental Appropriations 20.106 3-06-0194-055-2021 422,713 -
Coronavirus Response and Relief Supplemental Appropriations - Benton 20.106 3-06-0308-024-2021 10,900 -
Airport Rescue Grant - American Rescue Plan Act (ARP)20.106 3-06-0194-058-2021 68,641 -
Airport Layout Plan Drawing Set Update 20.106 3-06-0308-023-2021 216,613 -
Runway Pavement Preservation / MAGVAR (Slurry Seal) Phase 1 20.106 3-06-0308-025-2021 70,382 -
Airport Drainage Study 20.106 3-06-0308-026-2021 43,157 -
Reconstruct Terminal / Airport Loop Access Road (Woodrum Circle) - Phase 2 20.106 3-06-0194-054-2021 1,089,312 -
Preliminary Design Concept Study for RW 16-34, RW 12-30, Taxiway Connectors, MAGVAR Imp. 20.106
3-06-0194-057-2021 475,124 -
Total - Airport Improvement Program 2,886,163 -
Highway Planning and Construction Cluster:
Passed through the California Department of Transportation:
FHBP study 5068-34 Sacramento / Olney 20.205 HBRR 5068-34 31,297 -
FHBP study 5068-35 Eastside / Canyon 20.205 HBRR 5068-35 49,278 -
FHBP study 5068-36 Eastside Olney 20.205 HBRR 5068-36 8,220 -
FHBP study 5068-37 Canyon / ACID 20.205 HBRR 5068-37 14,225 -
FHBP study 5068-38 Westside / Canyon 20.205 HBRR 5068-38 17,746 -
FHBP study 5068-39 Girvan / Olney 20.205 HBRR 5068-39 75,137 -
FHBP study 5068-45 Old Alturas / Churn Creek 20.205 HBRR 5068-45 54,832 -
Intersection Old Oregon/Oasis 20.205 HSIP 5068-30 9,487 -
Shoulder widening on Old Oregon Trail for recovery area and bike lanes 20.205 HSIP6-02-002 5068-52 51,656 -
Hartnell Avenue Ped Improvements 20.205 HSIP7-02-002 5068-54 72,702 -
Churn Creek/Maraglia Safety Improvements 20.205 HSIPL-5068(57)1,368,286 -
Enhanced Pedestrian Crossings 20.205 HSIPL-5068(62)78,066 -
Diestelhorst Bridge to Downtown via Benton 20.205 ATPL-5068(055)38,996 -
Pedestrian Improvements on Bidwell and North Bonnyview Road 20.205 SRTSL-5068 (048)96,820
Downtown to Turtle Bay Non-Motorized Improvements 20.205 RPSTPL 5068 (061)62,822 -
Shasta Street Railroad Crossing Project 20.205 STPLR-7500(254)49,144
Girvan Road Railroad Crossing Project 20.205 STPLR-7500(225)3,950,789 -
Victor/Cypress Active Transportation Program 20.205 HSIPL-5068(64)54,784 -
Total Highway Planning and Construction Cluster 6,084,287 -
Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research Program:
Passed through the Shasta Regional Transportation Agency:
OWP WE 702.04 Sustainable Development Incentive Program 20.505 SRTA (OWP 2017-2018)393,490 -
Federal Transit Cluster:
Direct Program:
COVID-19 - Federal Transit—Formula Grants (CARES Act)20.507 CA-2020-061 1,325,333 -
Federal Transit—Formula Grants 20.507 CA-2020-192 157,391 -
Federal Transit—Formula Grants 20.507 CA-2021-109 1,646,132 -
Total - Program 20.507 3,128,856 -
Bus and Bus Facilities Formula Program 20.526 CA-2020-061 393,477 -
Total Federal Transit Cluster 3,522,333 -
Federal Grantor/Pass - Through
Grantor/Program Title
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City of Redding
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended June 30, 2022
See accompanying Notes to the Schedule of Expenditures of Federal Awards
9
Assistance Grant Amount
Listing Identification Federal Provided to
Number Number Expenditures Subrecipients
U.S. Department of Transportation (Continued)
Highway Safety Cluster:
Passed through California Office of Traffic Safety:
Selective Traffic Enforcement Program (STEP) 20.600
PT21122 11,001 -
Selective Traffic Enforcement Program (STEP) 20.600
PT22061 10,984 -
Total Highway Safety Cluster 21,985 -
Minimum Penalties for Repeat Offenders for Driving While Intoxicated Program:
Passed through California Office of Traffic Safety:
Selective Traffic Enforcement Program (STEP) 20.608
PT21122 22,841 -
Selective Traffic Enforcement Program (STEP) 20.608
PT22061 14,990 -
Total - Program 20.608 37,831 -
Total U.S. Department of Transportation 12,946,089 -
U.S. Department of Treasury
State and Local Fiscal Recovery Fund:
Passed through the State of California:
State and Local Fiscal Recovery Fund 21.027
SLT-3272 1,760,987 -
Passed through the State of California:
California Water and Wastewater Arrearage Payment Program 21.027
CWWAPP 229,477 -
California Arrearage Payment Program 21.027
CAPP2021-01 1,143,413 -
Total - State and Local Fiscal Recovery Fund 3,133,877 -
Total U.S. Department of Treasury 3,133,877 -
U.S. Department of Homeland Security
Passed through the California Department of Boating and Waterways:
Small Water Craft Safety Program 97.012 C8962309-1 30,619 -
Direct Programs:
Disaster Grants - Public Assistance 97.036
FEMA-4382-DR-Carr Fire 331,048 -
Hazard Mitigation Grant Program 97.039
HMGP 4382-149-27F 114,029 -
Hazard Mitigation Grant Program 97.039
HMGP 4382-143-27F 60,805 -
Total - Program 97.039 174,834 -
Homeland Security Grant Program:
Passed through the County of Shasta:
Homeland Security Grant Program (HSGP) 97.067
19HSGP 63,235 -
Homeland Security Grant Program (HSGP) 97.067
20HSGP 31,500 -
Total Homeland Security Grant Program 94,735 -
Total U.S. Department of Homeland Security 631,236 -
Total Expenditures of Federal Awards 30,061,701$ 164,183$
Grantor/Program Title
Federal Grantor/Pass - Through
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City of Redding
Notes to the Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2022
10
Note 1 – Reporting Entity
The financial reporting entity, as defined by the Governmental Accounting Standard Board (“GASB”), consists of
the primary government, which is the City of Redding, California (the “City”), organizations for which the primary
government is financially accountable, and other organizations for which the nature and significance of their
relationship with the primary government are such that exclusion would cause the reporting entity’s financial
statements to be misleading or incomplete.
Note 2 – Basis of Accounting
Funds received under the various grant programs have been recorded within the general fund, enterprise funds and
special revenue funds of the City. The City utilizes the modified accrual method of accounting for the general fund
and special revenue funds. The accompanying Schedule of Expenditures of Federal Awards (“Schedule”) is
presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Therefore, some amounts presented in the schedule may differ from amounts presented in, or used in, the preparation
of the City’s basic financial statements. Negative amounts shown on the Schedule represent adjustments or credits
made in the normal course of business to amounts reported as expenditures in prior years.
Note 3 – Schedule of Expenditures of Federal Awards
The accompanying Schedule presents the activity of all federal financial assistance programs of the City. Federal
financial assistance received directly from federal agencies as well as federal financial assistance passed through the
State of California, County of Shasta, and Shasta Regional Transportation Agency is included in the Schedule. The
Schedule was prepared from only the accounts of various grant programs and, therefore, does not present the
financial position, change in fund balance, or results of operations of the City.
Note 4 – Indirect Cost Rate
The City has not elected to use the 10-percent de minimis indirect rate as allowed under the Uniform Guidance.
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City of Redding
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2022
11
Section I – Summary of Auditors’ Results
Financial Statements
Type of report the auditors issued on whether the financial
statements audited were prepared in accordance with GAAP: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? No
Significant deficiency(ies) identified? None Reported
Noncompliance material to financial statements noted? No
Federal Awards
Internal control over major programs:
Material weakness(es) identified? No
Significant deficiency(ies) identified? None Reported
Type of auditor’s report issued on compliance for major programs Unmodified
Any audit findings disclosed that are required to be reported in
accordance with 2 CFR 200.516(a)? No
Identification of major programs:
Assistance
Listing Number(s) Name of Federal Program or Cluster Expenditures
20.205 Highway Planning and Construction Cluster 6,084,287$
21.027 State and Local Fiscal Recovery Fund 3,133,877
Total Expenditures of All Major Federal Programs 9,218,164$
Total Expenditures of Federal Awards 30,061,701$
Percentage of Total Expenditures of Federal Awards 30.66%
Dollar threshold used to distinguish between type A and type B program $901,851
Auditee qualified as low-risk auditee in accordance with 2 CFR 200.520? Yes
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City of Redding
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2022
12
Section II – Financial Statement Findings
A. Current Year Findings – Financial Statement Audit
No findings were noted on the City’s financial statement audit for the year ended June 30, 2022.
B. Prior Year Findings – Financial Statement Audit
No findings were noted on the City’s financial statement audit for the year ended June 30, 2021.
Section III – Federal Award Findings
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit
No findings or questioned costs were noted on the City’s major federal programs for the year ended
June 30, 2022.
B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit
No findings or questioned costs were noted on the City’s major federal programs for the year ended
June 30, 2021. DRAF
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REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO THE PASSENGER FACILITY CHARGE PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE
Independent Auditors’ Report
To the Honorable Mayor and Members of City Council
of the City of Redding
Redding, California
Report on Compliance for the Passenger Facility Charge Program
Opinion on the Passenger Facility Charge Program
We have audited City of Redding, California’s (the “City”) compliance with the types of compliance requirements
identified as subject to audit in the Passenger Facility Charge Audit Guide for Public Agencies, issued by the Federal
Aviation Administration (Guide), that could have a direct and material effect on the City’s passenger facility charge
program for the year ended June 30, 2022.
In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to
above that could have a direct and material effect on its passenger facility charge program for the year ended
June 30, 2022.
Basis for Opinion on the Passenger Facility Charge Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States
of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and the Guide. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with
relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion on compliance for the passenger facility charge program. Our audit
does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of laws,
statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s passenger facility
charge program.
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To the Honorable Mayor and Members of City Council
of the City of Redding
Redding, California
Page 2
14
Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance
requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s
compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards,
Government Auditing Standards will always detect material noncompliance when it exists. The risk of not detecting
material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with
the compliance requirements referred to above is considered material if there is a substantial likelihood that,
individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on
compliance about the City’s compliance with the requirements of the passenger facility charge program as a whole.
In performing an audit in accordance with auditing standards generally accepted in the United States of America and
Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and
perform audit procedures responsive to those risks. Such procedures include examining, on a test basis,
evidence regarding the City’s compliance with the compliance requirements referred to above and
performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design
audit procedures that are appropriate in the circumstances and to test and report on internal control over
compliance in accordance with the Guide, but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over
compliance that we identified during the audit.
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, noncompliance with a type of compliance requirement of the passenger facility charge program on
a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance, such that there is a reasonable possibility that material
noncompliance with a type of compliance requirement of the passenger facility charge program will not be
prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance
is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance
requirement of the passenger facility charge program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.
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To the Honorable Mayor and Members of City Council
of the City of Redding
Redding, California
Page 3
15
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s
Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in
internal control over compliance that might be material weaknesses or significant deficiencies in internal control over
compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or
significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal
control over compliance and the results of that testing based on the requirements of the Guide. Accordingly, this
report is not suitable for any other purpose.
Schedule of Passenger Facility Charges Collected and Expended and Interest Collected
We have audited the financial statements of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City as of and for the year ended June 30, 2022, and have issued
our report thereon dated December 16, 2022 which contained an unmodified opinion on those financial statements.
Our audit was conducted for the purpose of forming our opinions on the City’s financial statements. The
accompanying Schedule of Passenger Facility Charges Collected and Expended and Interest Collected, as required by
the Guide, is presented for purposes of additional analysis and is not a required part of the financial statements. Such
information is the responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the financial statements. The information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain other procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to prepare
the financial statements or to the financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Passenger
Facility Charges Collected and Expended and Interest Collected is fairly stated in all material respects in relation to
the basic financial statements as a whole.
Walnut Creek, California
December 16, 2022
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City of Redding
Schedule of Passenger Facility Charges Collected and Expended and Interest Collected
For the Year Ended June 30, 2022
See accompanying Notes to the Schedule of Facility Charges Collected and Expended and Interest Collected
16
Cumulative Total September 30, December 31,
June 30, 2021 2021 2021
Unexpended (over expended) passenger facility -$ (168,268)$ (88,603)$
charges and interest, beginning of period
Revenues:Amount Approved
Passenger facility charges collected 4,140,977 79,665 89,287
Interest collected 19,779 - -
Total passenger facility charge revenue 4,559,200$ 4,160,756 79,665 89,287
Expenses:
Project Number/Project Name Amount Approved
Completed and Closed Applications 3,440,457$ 3,440,457 - -
Open Projects
Application 17-05-C-00-RDD
001-Aircraft Rescue and Fire Fighting Vehicle Acquisition 68,676 68,676 - -
002-Airport Master Plan Update 44,832 44,800 - -
003-ADA Passenger Loading Ramp 4,984 4,984 - -
004-Airport Pavement Management System Study 4,735 4,735 - -
005-T-Hangar Taxilane Reconstruction 458,672 394,850 - -
006-West Tie Down Apron Reconstruction 323,278 313,730 - -
007-Airccraft Rescue and Fire Fighting Station Modifications 1,735 1,735 - -
009-Environmental Assessment Parallel Runway 32,690 187 - -
013-PFC Application/Administration Costs 150,000 54,870 - -
Total passenger facility charge revenue expenditures 4,329,024 - -
Unexpended (over expended) passenger facility
charges and interest, end of period (168,268)$ (88,603)$ 684$
For the Quarter Ended
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City of Redding
Schedule of Passenger Facility Charges Collected and Expended and Interest Collected (Continued)
For the Year Ended June 30, 2022
See accompanying Notes to the Schedule of Facility Charges Collected and Expended and Interest Collected
17
For the Year Ended
March 31, June 30, June 30, Cumulative Total
2022 2022 2022 June 30, 2022
Unexpended (over expended) passenger facility 684$ 126,445$ (168,268)$ -$
charges and interest, beginning of period
Revenues:
Passenger facility charges collected 125,761 108,605 403,318 4,544,295
Interest collected - - - 19,779
Total passenger facility charge revenue 125,761 108,605 403,318 4,564,074
Expenses:
Project Number/Project Name
Completed and Closed Applications - - - 3,440,457
Open Projects
Application 17-05-C-00-RDD
001-Aircraft Rescue and Fire Fighting Vehicle Acquisition - - - 68,676
002-Airport Master Plan Update - - - 44,800
003-ADA Passenger Loading Ramp - - - 4,984
004-Airport Pavement Management System Study - - - 4,735
005-T-Hangar Taxilane Reconstruction - - - 394,850
006-West Tie Down Apron Reconstruction - - - 313,730
007-Airccraft Rescue and Fire Fighting Station Modifications - - - 1,735
009-Environmental Assessment Parallel Runway - - - 187
013-PFC Application/Administration Costs - - - 54,870
Total passenger facility charge revenue expenditures - - - 4,329,024
Unexpended (over expended) passenger facility
charges and interest, end of period 126,445$ 235,050$ 235,050$ 235,050$
For the Quarter Ended
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City of Redding
Notes to the Schedule of Facility Charges Collected and Expended and Interest Collected
For the Year Ended June 30, 2022
18
Note 1 – Reporting Entity
The accompanying Schedule of Facility Charges Collected and Expended and Interest Collected includes all the
Passenger Facility Charges (“PFC”) and the interest earnings thereon collected by the City from July 1, 2021 through
June 30, 2022. The City currently collects $4.50 per enplaned passenger. The current approval for charges as
approved by the Federal Aviation Administration (“FAA”) is expected to end on February 1, 2025.
Note 2 – Basis of Accounting
The Schedule of Facility Charges Collected and Expended and Interest Collected was prepared on the accrual basis
of accounting. PFCs are recorded as revenue when earned and expenditures for debt service and approved capital
projects are recorded as expenditures are made. Expenditures are made in accordance with an approved FAA
application.
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City of Redding
Passenger Facility Charge Program
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2022
19
Section I – Summary of Auditors’ Results
A. Current Year Findings and Questioned Costs – Passenger Facility Charge Program
No findings or questioned costs were noted on the City’s compliance with requirements of the passenger facility
charge program for the year ended June 30, 2022.
B. Prior Year Findings and Questioned Costs – Passenger Facility Charge Program
No findings or questioned costs were noted on the City’s compliance with requirements of the passenger facility
charge program for the year ended June 30, 2021.
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