1. Association of County Auditors Property Tax Sub-Committee October 2016
Property Tax Process and Update

2. Agenda Property Tax Process Where are we at? Where are we going?
Where to find Property Tax Report?
Questions

3. Property Tax Process Tax Increment and AB8 Calculation (slide 1/2)
Document assessed value (AV) by tax rate area (TRA)
Confirm TRA factors remain unchanged during the audit period
Confirm TRA increment calculations
Verify TRA increments were distributed by TRA factors
Confirm each jurisdiction’s total annual tax increment (ATI) was added to prior year gross revenues

4. Property Tax Process Tax Increment and AB8 Calculation (slide 2/2)
Verify AB8 factor calculation including any shifts (ERAF, RDA, SB85, Disaster Relief, etc)
Confirm AB8 factors were used to allocate actual revenues with journal entries

5. Property Tax Process Jurisdictional Changes
Review LAFCO Resolutions, Memorandums of Understanding, and BOE Notices
Confirm annexation computations
Confirm any transfers of assessed value and adjustments to base revenues
Verify any calculations resulting in a change to TRA factors

6. Property Tax Process Property Tax Administrative Fees (PTAF) SB2557
Review PTAF Summaries
Review documentation of PTAF costs
Confirm PTAF allocation factors were properly developed
Verify collections of PTAF with journal vouchers

7. Property Tax Process Educational Revenue Augmentation Fund (ERAF), ERAF Shift, Excess ERAF, Negative ERAF, Vehicle Licensing Fee (VLF), and Sales and Use Tax (SUT) (slide 1/2)
Confirm ERAF shift growth calculations
Verify Negative ERAF calculations
Verify Excess ERAF calculations

8. Property Tax Process Educational Revenue Augmentation Fund (ERAF), ERAF Shift, Excess ERAF, Negative ERAF, Vehicle Licensing Fee (VLF), and Sales and Use Tax (SUT) (slide 2/2)
Confirm SUT amounts
Confirm VLF growth calculations
Verify ERAF shift revenues, VLF transfers, and SUT transfers with journal vouchers

9. Property Tax Process Tax Equity Allocations (TEA)
Verify each TEA city receives at least 7% of city-wide revenues (prior to ERAF adjustments)
Confirm any adjustments made to city revenues that affects the TEA amount
Verify TEA adjustments in the county’s property tax apportionment system

10. Property Tax Process Supplemental Apportionments (slide 1/2)
Verify supplemental factors were properly developed
Document Average Daily Attendance (ADA) statements from the Department of Education
Confirm county’s process of supplemental admin fee collections
Review supplemental admin fee documentation of costs

11. Property Tax Process Supplemental Apportionments (slide 2/2)
Verify collection of supplemental admin fees collected does not exceed 5%
Confirm allocation of supplemental revenues and admin fee collections with journal vouchers

12. Property Tax Process Unitary and Pipeline
Verify calculation of total unitary and pipeline revenues and growth
Confirm prior year factors were used to allocate revenues of up to 102% of prior year
Confirm revenues in excess of 102% of prior year were allocated using prior AB8 factors
Verify apportionment of unitary revenues with journal vouchers

13. Property Tax Process Regulated Railway
Verify calculation of total regulated railway revenues and growth
Confirm prior year factors are used to allocate revenues of up to 102% of prior year
Confirm revenues in excess of 102% of prior year are allocated using prior AB8 factors
Verify apportionment of railroad revenues with journal vouchers

14. Property Tax Process Qualified Electric (QE) (slide 1/2)
Document QE change notices
Confirm QE base year calculations
Verify the county, cities, and school entities receive the same percent of revenues as in the prior year
Verify 90% of the remainder is allocated to the city (or county if unincorporated)
Verify 10% of the remainder is allocated to water districts (city or county if there are none)
Confirm calculations of QE factors for each applicable TRA

15. Property Tax Process Qualified Electric (QE) (slide 2/2)
Confirm factors were used to apportion QE revenues with journal vouchers

16. Property Tax Process Redevelopment Areas (RDAs) New RDAs During the Audit Period
Review enabling documents, maps, and boundaries
Verify increment and pass-through calculations
Document Statements of Indebtedness
Confirm increment distribution
Verify payment of revenues to RDAs and pass-through amounts to jurisdictions on journal vouchers

17. Property Tax Process Redevelopment Property Tax Trust Fund (RPTTF) (slide 1/2)
Review admin cost calculations
Verify pass-through calculations
Document Recognized Obligation Payment Schedule (ROPS) statements, approved by the Department of Finance (DOF)
Confirm allocation of successor agency admin costs
Verify residual calculations and allocations

18. Property Tax Process Redevelopment Property Tax Trust Fund (RPTTF) (slide 2/2)
Confirm RPTTF allocations to journal vouchers
Document any obligations from the ROPS that are now paid off or retired

19. Where are we at? Where are we going next?
Final Reports Issued
Audits In Process 14
Next in the queue:
As of 3/31/16, for calendar year 2016
Placer – October 2016
Sacramento
Imperial
Los Angeles
San Diego
Marin
Ventura – January 2017
Sierra
we were able to issue 16 in 2014, and 7 in 2015,
At this point we are 2-years behind schedule (down from 3 last year)
We have transitioned some of our RDA auditors to the property tax program. We anticipate continuing to catch up each year. Expect to be 1.5 years behind schedule by the end of 2016
Currently we have a Manager, 6 auditors, and 1 RA in the PTX program. We appreciate your feedback and try to make the audit process a positive experience for all parties involved.
In 2016 we issued 13 FINAL reports and had 14 audits in process as of March 31, 2016.
We’re currently in the process of auditing (have not exited or completed fieldwork) on the following counties : Mendocino, Mono, and Alameda. So we have 11 counties in various stages of draft or draft to final process
Next in the queue (in no particular order): Placer, Imperial, San Diego, Sacramento, Los Angels, Marin, and Sierra We will work with the counties to determine a mutually agreeable start date and a few of these counties have already expressed there preferred timeline.

20. Division of Audits Contact Information
Chief - Division of Audits
Jeffrey V. Brownfield, CPA, at (916) or
Chief – Compliance Audits Bureau
Elizabeth Gonzalez, at (916) or
Audit Manager – Property Tax Program
Scott Freesmeier, at (916) or

21. SCO Website Information
Audit-Related Sites
Links to Audit and Oversight Reports, and More Information
Controller's Redevelopment Asset Reviews
Controller's Audits of State and Local Agencies
Controller's Revenue Audits
Controller's Oversight of Independent Auditors' Audits of Local Agencies
Search for Additional Audits
Information on Ordering Printed Copies of Controller's Audits

22. Property Tax Reports on SCO’s Website (slide 1/3)

23. Property Tax Reports on SCO’s Website (slide 2/3)

24. Property Tax Reports on SCO’s Website (slide 3/3)
Click the desired year
Results will show

25. Questions