1. 1 California State Association of County Auditors Property Tax Managers’ Subcommittee May 2015 Division of Audits Update

2. 2 PRESENTED BY: SCOTT FREESMEIER, AUDIT MANAGER LOCAL GOVERNMENT COMPLIANCE BUREAU DIVISION OF AUDITS (916) 730-2793 SFREESMEIER@SCO.CA.GOV REGINALD NIDOY, AUDIT MANAGER LOCAL GOVERNMENT COMPLIANCE BUREAU DIVISION OF AUDITS (916) 324-6686 RNIDOY@SCO.CA.GOV

3. 3 Overview Property Tax Audits Property Tax Update RDA Asset Transfer Reviews Successor Agency Reviews Questions Agenda

4. Property Tax Audits Audit Authority and Selection Process Government Code Section 12468 requires the SCO to audit the allocation of property taxes Counties are selected based on last fiscal year audited and the audit frequency laid out in Government Code  County population under 200,000 = 5 years  County population over 200,000 = 3 years  County population over 5,000,000 = annually 4

5. Property Tax Audits Audit Process Contact the county via telephone to establish start date Preliminary Records Request emailed Engagement Letter is mailed to the Auditor-Controller Entrance Conference held Fieldwork typically lasts 4-7 weeks Exit Conference held and preliminary findings discussed 5

6. Property Tax Audits Report Process If there are findings the audit will be issued in draft –County has 15 days to respond –Response incorporated in final report If there are no findings, and all affected parties agree, the report will go straight to final 6

7. Property Tax Audits Audit Scope Tax Increment and AB 8 Calculations Jurisdictional Changes Supplemental Property Tax Unitary and Pipeline Railroad Qualified Electric (QE) 7

8. Property Tax Audits Audit Scope (Continued) Property Tax Administrative Costs (PTAC) Education Revenue Augmentation Fund (ERAF) Tax Equity Allocations (TEA) Redevelopment Agencies Redevelopment Property Tax Trust Fund (RPTTF) 8

9. 9 Final Reports Issued 4 Reports In Process 6 Next in the queue: As of 5/7/2015, for calendar year 2015 Property Tax Audits Update FresnoImperial Contra CostaMonterey PlacerSan Diego SiskiyouSanta Barbara

10. 10 Review Universe 402 Agencies Final Reports Issued 360 Reports In-Process 42 Total Dollar Findings $5.9 Billion Anticipated Completion Date June 30, 2015 As of 4/30/2015 RDA Asset Transfer Reviews Update

11. 11 Fixed Assets (buildings, property, parks, etc.) Current Assets (cash, bond proceeds, etc.) Housing Assets (including Low/Mod assets) transferred directly to the Housing Agency Assets not transferred to the Successor Agency (still on the former RDA’s books) RDA Asset Transfer Reviews Common Unallowable Transfers

12. 12 Audit Authority H&S Code section 34177.3 Pilot Reviews –Davis, Morgan Hill, Ontario, Montclair, Brea, Oakland, Irvine, Suisun City, El Cerrito, and Beaumont Scope of Reviews Successor Agency Asset Transfer Reviews

13. 13 WWW.SCO.CA.GOV (Under (Under Controller’s Programs and News) 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 SCO Website

14. 14 Questions