RECEIVE report on audit process and ACCEPT the Transportation Safety and Investment Plan (Measure X) audit report for fiscal year ending June 30, 2018.

The cost of the annual audit is $1,750.00.

The Transportation Agency has fiduciary responsibility for the administration of the Transportation Safety and Investment Plan (Measure X) funds. Ordinance 2016-01 was passed by 67.7% of the Monterey County voters in November 2016 and started being collected effective April 1, 2017.

Measure X is anticipated to generate an estimated $20+ million annually, for a total of $600+ million over thirty years. The funding source is a retail transactions and use tax of 3/8 cents. The revenue from the sales tax measure can only be used to fund transportation safety and mobility projects in Monterey County.

Measure X funds are divided into two programs:
1. Local road maintenance, pothole repairs and safety: 60% of Measure X funds are allocated to the County of Monterey and twelve incorporated cities for local street and road safety and maintenance improvements.
2. Regional safety, mobility and walkability: 40% of Measure X funds are allocated to regional safety and congestion relief, transit and bicycle/pedestrian projects and expended on projects as prioritized in the Strategic Expenditure Plan.

Moss, Levy & Hartzheim, Certified Public Accountants, completed the audit for fiscal year ending June 30, 2018. The purpose of the audit is to confirm that the Transportation Agency for Monterey County, the County of Monterey, and the twelve incorporated cities complied with Ordinance 2016-01-Transportation Safety and Investment Plan; that the financial statements are free of material misstatement; assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

The Transportation Agency for Monterey County financials have been audited and the auditors found no instances of noncompliance that are required to be reported under Government Auditing Standards, nor did they note any matters involving the internal control over financial reporting and its operation that they consider to be material weaknesses.

FY 17/18 is the first year of the independent audits’ requirements and there has been a learning curve for all entities. As a result, as of April 9, 2019, some jurisdictions that received Measure X funds have only met partial compliance of the independent audits’ requirements. Attached is a draft report from Moss, Levy & Hartzheim on the current status of the independent audits of all the cities and the County of Monterey. At this time, staff is not recommending withholding of distributions to the non-compliant entities. Instead, staff will work with the jurisdictions to evaluate this year’s process and recommend changes to help avoid issues in the future.

Attached with this report are the summary tables from the audit ending June 30, 2018.
The audit is also available on the Agency website: http://www.tamcmonterey.org/information/audits/index.html

The total funds and interest collected during the audit reporting period was $28,129,899. Payouts and expenditures made during the audit period were $17,262,295 The Transportation Safety and Investment Plan has a fund balance of $12,475,665 as of June 30, 2018.

The trust fund’s administrative costs are paid for by the Transportation Agency for Monterey County and then reimbursed to the Agency as specified in the Measure X documents.