Los Angeles — 2018-02-23 Treasurer and Tax Collector – Redemption Property Tax Collections Financial and Compliance Audits for Fiscal Year 2016-17

Source: https://ttc.lacounty.gov/wp-content/uploads/2018/10/2018-02-23TreasurerandTaxCollector-RedemptionPropertyTaxCollectionsFinancialandComplianceAuditsforFiscalYear2016-17.pdf

COUNTY OF LOS ANGELES DEPARTMENT OF AUDITOR-CONTROLLER KENNETH HAHN HALL OF ADMINISTRATION 500 WEST TEMPLE STREET, ROOM 525 LOS ANGELES, CALIFORNIA 90012-3873 PHONE: (213) 974-8301 FAX: (213) 626-5427 JOHN NAIMO AUDITOR-CONTROLLER

February 23, 2018

TO: Supervisor Sheila Kuehl, Chair Supervisor Hilda L. Solis Supervisor Mark Ridley-Thomas Supervisor Janice Hahn Supervisor Kathryn Barger L"'~~ FROM: John Naimo Auditor-Cont er i SUBJECT: TREASURER AND TAX COLLECTOR- REDEMPTION PROPERTY TAX COLLECTIONS FINANCIAL AND COMPLIANCE AUDITS FOR FISCAL YEAR 2016-17

Background

The Los Angeles County Treasurer and Tax Collector (TTC) bills and collects taxes on real property, such as land and structures. If the taxes are not paid by the Fiscal Year (FY) end (June 3Q1h), the property goes into tax-defaulted status, and TTC assesses additional fees and penalties pursuant to the California Revenue and Taxation (R&T) Code. Property owners may redeem their property by paying the full amount due, or by entering into a payment agreement with TTC. If non-residential commercial or vacant property remains in tax-defaulted status for three years or more (five years or more for residential and agricultural property), TTC may auction the property to recover the taxes, penalties, and costs.

Audit Scope and Objectives

R& T Code requires an audit of TTC's accounting for collections of defaulted property taxes (redemption collections). We contracted with an independent Certified Public Accounting firm, BCA Watson Rice LLP (BCA), to audit TTC's redemption collections for the FY ended June 30, 2017. BCA conducted the audit under the Auditor-Controller's Master Agreement.

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Board of Supervisors February 23, 2018 Page 2

Review Summary

BCA's attached report indicates that TTC's Schedule of Redemption Property Tax Collections presents fairly, in all material respects, the redemption property tax collections, for the FY ended June 30, 2017, and TTC complied, in all material respects, with R& T Code requirements.

As part of the audit, BCA reviewed TTC's internal control over financial reporting and did not identify any deficiencies they consider to be material weaknesses. BCA tested TTC's compliance with certain provisions of laws, regulations, and other matters. BCA noted no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

If you have any questions please call me, or your staff may contact Robert Smythe at (213) 253-0100.

JN:AB:PH:RS:YK

Attachment

c: Sachi A. Hamai, Chief Executive Officer Joseph Kelly, Treasurer and Tax Collector Audit Committee Countywide Communications

Attachment

COUNTY OF LOS ANGELES

Schedule of Treasurer and Tax Collector Redemption Property Tax Collections With Independent Auditor's Report

For the Fiscal Year Ended June 30, 2017

G!f...!!..'!lf! LLP

{I H .1 t I l : I I' ! I ' ' I I I i \I

L ) t ; I ) " I f:

Attachment Page 2of16

COl . ·ry OF LOS ANGELES

. 'cbC>dulr f n a\ur r ::mrl a. • II lor Rrdempti n Pr pert)· ti n
For tbe Fi\Cal "ear Ended June 30. 2017

Table or Contenh

In l i;>J~ t h l en • rnht · pa t ..

Schedule of Trea-,urer and Tax Collector Redemption Pro1 J1y Tax Collections. 3

• tc .... I ch ulc l 1 e rn er an I • x l~n tt 11 PrclJ ~.-ty Tax Collections ........ .............. ............................ .

ludet>t>ndeut Auditor· s Rept.lrt 011 Compliance with Requirements Applicable ll th~ 1 ~a l1 et and . x 'lie r r R le1111 Ill 11 p 11: lie ·1tc II'• :u1 l 1.. 1 In e1wu nu \l 'l!t m1 h, 11 eo: 6

ltult>Jx>n lent \11 hr , · tltH l l \ 'Ct Fman 1. l eJ 1111112 , tul 1.. u \ m1 l1:rn ~ • <l h 1 • f. ll r B. ~ n , n . mill lt che tle of Tream~ and Tax Collecto1 Redemption Property Tax Collectiou-, Pei fonu~ in Accoula.nce with <Jow•n111u•111 A11di1i11g Stmulord\ . . . . . . . ... . .. . . . .......... 8

Schedule of Fmdin~z., and Questioned Costs . . . .................. 10

Stahl'- of Prior Year Audit F indin~s . • . . . . . . ... . 11

Attachment Page 3of16

}1/'-0lbw!tw>mdl><i ~ 1 • l [ 310 1"4}"""40
h.11T:ant:"' CA ') F;t<~ 310 m Jl1
-.•• b(.a. .lb.or°Wi(,e (J)m

INDEPENDENT Al "DITOR"S REP Rf

B ard o Super\ iso1. Cowiry of Los Autzele'S Los Antzeles. California

Rt!pOrl 0 11 the . 'i:ludulit uf ritamr •r and Tax oll tur Rt!tle111ptio11 Propaly Tax ( ollttdio11

\'e ba\·e and11ed the al:c upml} iii· d tt:•.l11l"' o 1 <•'!>tu-c1 and ax oltto 1 Pw rty Tax 111..:.cll 11 I.' h..: Ink J f 1he l lllll} 1f I ' ele ( 11ut ·1. a fiscal c:.u euded J1U1e JO. 2017. ru1tt rhe relare<l nole<s Ill die Schedule. which col111wly C Ulpll'>C lb ·• ba, 1 • 'd1ei.lule. !> h red m 1he !able o l:OTilenl

.lla11a em ft11f' Rt:. pomibilit '[or the . lled11/

•• lll.'UI em~ n l 1-. r IX u 1 le f 11 lh i.: p1ep, 1. II 11 . 11: 11 p r e~cllf 11 11 f 1hc : ·heJ11le

iu ·c 1 lance with 1he cc 1m11au p11u ·1pk fl.t.'I c:1. II) ep 1~l 111 the '1111ed ·r 1es f ...\Jllt.'JJ . this indudes the desi!IIL implemeulation. and mamtc.:1 ;mce of internal control relevant to the p1ep. r t1 u . d f 11 pie ei11. 11 n ot'tl e I ednk 1b. 11 fi ~ ti 111111.: te11 I uu "'· tement. \ hclhei due to f1aud or enor.

. 11di1or ' Rtt po11 ibility

Otu· r~ponsib1hty is fo exp1ess au opuuou on lhe Schelhde based on om a11d1t \'e co11tfm:ted our audit in accordam:t.' with aud1tiniz stm1<fards izenerally accepted in rhe l 1uited Slates of America and the stancfa1<ls apphcahle ro fi11m1c1al andir., cout:unt'<i in Gown111w111 ..l11di1i11g Slmulord. issued by rhe Comptwlle1 (jeuernl of the l luited Sfafe'>. Those ... raml·mf., te<JlllU that we plan and pe1ti:1nn rhc audit lo 11htam 1easo11;1ble a-.smauct.' all\ml wht.'lhe1 the Sd1t.'dule h tice of matenal missfate111e111

An audil i11\·ol'es pe1 fomnnJl pioced1u t.'S lo ohtam arnht C\ ulcncc ahont the amotml' and disdos1ues m the Schedule The p1 occd1u e., ..elted depeml on rhe aud1101 "' Jlldnenr. iucludinjl rhe a<.;scssmcul of the w.h of 111ate1ial 1111-.;,talcmeut 11f the Schedule. whe1he1 due Ill tiaud or enoi . In makinjl tho ... c risk asseS'>lllClll'>. the a11d1h.l1 co11-.1de1 s mlemal conrwl 1de'a111 to the TH"s p1epaiation and fai1 presentation of the Schedule m l)rdc1 lo desi1 arnht pHicedmcs tlt1t me appwp11ah! m the en cumstam:es. 11111 1101 fo1 lhc p111pose llf exp1c-.sm au opu1wn 011 the eff~cl1\·eness of the e1111ty · s 111te111al cl111twL .--\cc111dini.:ly. we exp1ess Ill' such opmwn An amht ab11 md11de ... t.•\·aluafm)l the appwp11a1c11c.,s ,,f the a1.:"1.:01111l111!l p1)hc1c' thed a11d the lt.''1sOt1able11ess of lhl!' <.;111.lllfiCalll acCOllllllll!l l!'slllllalt.'s made b) T'f( lllall:t!lelllelll. <1
\o,.·cll a-; e'al11atm12 the 1weiall p1e .. e111at1011 of the Scheduk

Attachment Page 4of16

We lhew that \ltu and1r e\·ideuce \W ln ·e (lbrained is sntfo:ieur aud appropnare to pro\ide a bai tlll tllU ambr opitutlll.

Opinion

111 m I i111f'llL 1h1.: d1e hale.: 1d~ 11 ed I\ , b ~ pi e eul f, 11ly. 111 11 m. k•nal 1c: I " - the C' e lemJltt ll Pt pc1 ~ L1:\ c11lt:cl1 th d ' 11 e ( nut~ . • lf uue ~ . 2f 1-. 111 • 1."C HLrnce "11h acctlllllflll!_Z p1mc1ple~ tzeueaally accepted m the United Star~ tlf . \u ~ica .

Otlt~r .1!11trc?r

A"> discu-.sed mote folly iu fore ~ to the Schedule. the accouipauiu[l Schedule is iuteu led to 11 ·-.cul tm1 .' ht! J 1 · R d •mp 1 11 PH 11'!1 • 11 a.1u 1e ·I Info I 1.: u 1 • 11 I ti e 11 11 pte cl 1 f 11 I~ 11 e Im. 1 ·rnl I .,,,u 11 "f the · 1u1I) < daan[le~ in if"> financial position for the fiscal year ended. in co11fr1nmty with accomirintr principles (leneially accepted i.11 dre United States of America.

th r Report in R qnirrd b. · '01'4!mnumt A11diti11g . to11dard

' 1n111w111 • l11d11111g rmulards . \W h. ,.e • I I ll~ II II? 11. d~ t~t
l\U !;'\ II 1lk1, tl n f the T 'e fin, u 1. I 1 ttin and

I~ ~IJY\ ~JGt LLP

Ton. ni:e. CA January 10. 2018

Attachment Page 5of16

. ·heduJe ff r a urer uncl I a. · lk lor Redemption Pr per·t. · 1 ax li n 01· the Fi :11 Ye:tr nrled June J( 201

y ?017 Aadll I· · 1017
1·aaadUftl Adju\tm ut\ AadUftl

ApphcJ Tax , 1 Peimlu · , n ral Taxe\ s 219. 768.6-i2 s s 219.".'68.642 P (11, Jri~ 19.932.100 19.932.100 R ·d~mpfion Penaltio ·B.950.860 -B.950.860 283.651.602 283 .651.602 Admini\trative Ftt\ Collected Cost 7-U.159 741.159 IUI . -P3.907 -fi3.907 . et! •mJ lh I I, I 236.953 236.953 1.-152.019 1.-152.019 Total Applied Collection\ s 285.103.621 s s 285.103.621

Attachment Page 6of16

COl:NTY OF LOS ANGELES

:Sote' to Schedule of Trea,urer and Jn Collector Redemption Proper~· Tax C'oltection' for the Fi\Cal "ear Ended Jane JO. 2017

:SOT£ l - Or1aniz:1tion

eneral

TI1e c'-)lulty of Los :\ugdes (('1.)tU1ly) IS a leizal sull<fi-ision )f the Stale of Cahfonua char11ec.I with izeuernl !Zc.wemmeutal powl!ls. T11e Cotwty·s pt)\Wts are exe1cised tluoui.W an decred &'md of Snpen-i'>l''" which. as the ~hwemin!l ho<ly of the Comuy. j-. re-.pou-.ihle for the letzislati\·e and execntiw control of the Comuy

TrH'iurer and Tu Coll ctor

he 01ml) 1 1ea u1e1 and , x ( · lie ·10 1 I fl 1 1e!tpoo 1ble 1 billuuz. t;ix olle 110 11. bauktuiz. m\e 11 " J1 I . ·c 111Ut. b1hl) f 1 nbu • rn1d TI1e · · llt?"Ct <,e<.:wec.l , u I uu e-cme,J l • I 1I)

1. xc . a-. \c>ll ;h llhe1 1a. e ltc u c an<l ·~ .... · m1:.>I p ll') t. :e .a 1axe- u11 1eal pw1 1I) . such as \·acant land aud stmcnu l'll l:tud. i e . Cl'llUUeicial and res1de111ial propei11es \'111;.•11 t>:1111.:d pt pc1t) 1. x • ""e ..,111eu1" llt! ·one deliuque111. • 10 peualty1 "' a I It: J 10 the amotmt ,,f taxes due \'hen the sec«<'mes deliuqneut. the TTC will chare a I 0 co-.r 14.lr p1eparintz the delim11k!ut tax reco1d'> The TTC' '>end'> fotic of DelinqueI1cy iu the fit-.1 wk Jm t:. nd 1 l lllic rh J fl I ..:tly wner f thi.: 1. x I t. uh t nt f the 11 I 11y tr the 1 p ti ) \ ue1 I 1c: 11 I I,. tilt> tleliu llt'UI 1u.· • I n..11! 11!' . , uJ ; I. rn full I) J1u1c: 30. llte taxes. penallles_ and co'>t will ckfanJr 011 July I to the Seemed efaulred Tax Rl11l I SDTR) ... y le111. u<l \ di e uh eel 1 1 a 1: 1edempl1l U fee ·'( . I t~ au 1 · 111u1y f~ J and . h: empll u penally' caknlated at rhe rnte of I :'0 o per month 011 the total cklinqnent taxe'> due TI1e TTC -.end-. Stateineuh of Prw1 Yem T axe" to the pwpe11y owuel'> in .-\1111ust. If a plllJ~.-1) ll\ller make., pa11ial pa)1nenh to redeem hi'> or her property. he 01 she will recei\·e a Statemeur (1f Prior Yem T axe., the week followm!l pa) ment. retlectmiz the p.'t) 111enr., recei\·ed by the TTC and the 1co:111 111111 l ur I nd111 2 l alam.:t.: I lht.: pwpt.:11) mu"' Ii.: lcC"UI lht> 11\1pe1r. m full. th..: ( · 1 .. ue a Re: le111p111. 11 t'c1tdK·. h: t lhe Ir 1-.e1 y '' 11e1

1 Califonu.-i Re\ em~ .mJ T.1x;111011 Code S.:.::1io11 161- .111J :!61 S Cahfonua Rc:,·c:1111c: au.I Tax.111011 l o.k Sc:.:twu :!<•:!I ' l ahfonua Rc:nuuc: a11J T.1x.111011 l o<k Sc:.:tion -JI u: ' C1hlo1111a Re:\ c:nnc: au.I Tax.it ion C ·o,k Sc:.:l1t>11 -J6"'-6 <i ''••tc:' th.it 1c:,lc:1114>fln11 tc:' .:ollc:.:tc:d ,ti;11l I~ ,h,111h111c:,I ,1, S "'- ro rhc: Stare: of C.11tfo111L1 .111<1 SI 11 lo the: ~01u11
' < .1hto1111a Re\ c:1111c: .111.I I .1x.111l)ll < otk Se.:11011 -J.111.• ~ ( ;1hfo1111a Re:\ c:nnc: ;111,I T.1xa11011 ( o<k Sc:.:rwu i I ti"'- :!

Attachment Page 7of16 C( l . . Y L

te to . hedult· of Tre11\ urer :iod - ~ '.\ Coll ctor rlt'mption Property a 'oHectiom
·or lhl' Fi nl Y ar ".nch·ct J une JO. 201

:'." T E 2 - Sunnmiry of . 'ioniJi uni . ountin Poli ie'

Th c hdulc: f TT , Re lmp J n Pr pc 1 . • ax lit: · 11 11'. I. h~"(lnl ~ J ha bc~ n 11c.>p:ll l' d 111 c L f 1111 11 · "11h 11t-1 . Uy .-\ c~~ I It'd • .. tmlm ~ Pt w1.:11 I P 1u 1he 111tt-d . 1 :1 1 f . \m11 '<l a~ • Pl h I t 2l 'em1111?11t m111.. 1~ 11wc.>11 u 11 111 ~11 .-\ c u 1111m12 ·1m1 laid-.. B '• rd { ·.\ ')8 1 1he h : • i1.?.111£eJ Ian I. 1 I- ~ 11 111g l ly l 1 t- I, It luu ~ '- ,. nuuut . I ace 11111111:.... • nJ tin. n 1. I 1ept 1 iJ 11in ·1plc.>., fi 1 11m· 11u 11e 11t

Ba i o/Acc:ou111i11g

cti i til" :\duded fr m the .· h dule

1 J 'I\ 1 1 nly 111d u II:?'. lh h I 'II\ lilt'., f !ht'
. 1e n 1 m clud~J in 1hi If'! rt

:'OTE 4 - Sah'> ~ aenl Enal\

lu l pru m e lh d1~duk the 1 1 lm \·, lu. ld H ilt u I 11 aa1 • c it 11'. fu J leut1. n: '( mull 11 'Ir th' 11 .. 1m: thr 111ih J: 1111. ry I . _ I . h l.ak 1h1.: , n hi 11.: 1 r1 f th · h<lult.> \, issu<l .

Attachment Page 8of16

7 !}'S(j ~ 81.1' s.. 1!'.0 T~ 1!0TW4640
1~ c~ 9o~oJ f ~~ )1() 192 ~J:ll
•- bcot•a!Mlrnue mm

lDEPENDENT APDITOR'S P RT ON COMPLIAC"E
wn H ~ ot M . . . . p I . 11 R
.. C l OR . JP . . PRO· R . LL
AD ON INTER''AI, CONTROL O'ER COMPUACE

ard of Snpeni'°rs C1.nu11y of Los ..\n[[eles Los n[leles. Califomia

R port on Complianc~

\ e h \ 'e a11d11t.!J 1h1o: 11.: Uh ?J :u I c m1 h. 11 e f 1hc fompu 11 Pt I ti ' llt: 11 u r lb 01011y "" ' ' \ 1h !he I ,~ .. lf c mph. , ~ rcqmret 1cnt. de 11b1o'<l m th (ah o 11m RM· mw rmd [m:a1w11 "txl . 11 /rem\ Joi - _()/, _o: I .JJOJ . .JJ03wJ . .J/05 J . .JIOS. .J/08 5, .J.r:. muf .Jrt> for the fi'lcal year emlc I Jtuie ~O . .'.!017

./a11age111111 \ R epomibility

TTC .. s manaeiuent is re"'JlSlble ii.,r· conqlliance with the reqmrements of laws and re~tlat1011s . Pl hcal>le l lhe ede111111 11 P1 ~ty a.· ·ollc 11 ru.

A111Ji1or ' Rit pon ibilil)'

OlU 1espousih1hty is h1 cxp1es' •Ul opinwu on the TTC's c,1mph1mce with Re,kmptwn Pwpe1ty Tax Coll~taous based 111 otu audit of the type'> ,,f coauphauce ret1mreme11ts retned to alxwe \' e conducted om audit of compliance in acconfance with au<litmiz stamfards ~eneially accepk•d iu lhe United Stales of A.me11ca aml the stau l:u&~ applicable to tinaucial amhls conlaiued m Govem111e11r A11diti11g Srmulan/. is-.ued by the ('omptH)llea General of the lJmted Stale,. llHhe standards 1et1nue that we plan aud peafonu the audit lo ohtam rea ... ouahle as-sm;mce ahmat whether no11compha11ce with lhe t)lle' of compliance 1eq1111eme111s refoned to alxwe that could have a diaect and mate1ial effect llll TTC Redemption P10pe1ty Tax Collecflous occnned An amht includes exa111111m~. 011 a lest basis. e'ldence about the ·1 T("" s compliance with lhose 1eqniremenh and peaforminiz such other procedmes. a' we co11s1cle1ed neces'>ary 111 lhe cu cmnst;mces.

\'e behe\·e that lllU anlht pionde., a 1ea .. onahle hash foa (1111 lllHmon (lll lhe Redemption Pw pe1 ty Tax (\llleclillll"> H1 l\e"CI. 1llU amht doe-. 1101 pwnde a le~al derenumalwn 11f Tf C.' c11mpha11ce

Attachment Page 9of16

( 'Pi11itJ11 011 Re!dt!mpthm Propt!rly Tax 'ollt:ctimH

lu om opuuou. the TH· compli~l. 111 all 11Mte1ial 1e... 1"1ech. with the rl!()llitemeuh 1efened 11.1 • ho\ 1.: th: 1 '. ul I h \ c: , ti a cl • 1 I nu 11:1 ml t.>I lc._':I n tht.> TT Rc.>dt.>mplH 11 P1 p 1 ty , x C.1llect1.ms tl11 the fiscal yea1 emled Jmae 30. ~O 17

Report on Internal Control onr Compliance

fana!Zemeut of the C is hSJklllsible {{)r establi .. hin!Z and maintaimn!Z etlectiw intemal co11t1 ol l ' c.>1 c 1111ph. 11 e ''1th tht' ')Vt!' l.'>f c nnµh. H e •l'llhm eu1 1dne 1 1 1 . 'e Lu pl. JUJlll:? nml J"lerti.""'mlin!Z our andir of Cl)mpliance. we considered the rrc·-. internal control lwer compliance w11h the tpes of •11111emenh that wnl<l haw a duect and mate11al et · ·t on the R~fompri,m ProJler1Y Tax Collection'> a ... a basis for <ksi~tllll!? a1utitin!Z pwced1ue-. th.1t are app10p1iate in the cuc1u11st:uu:es tiJr the p1UJX>:-.e of expte'>sin!Z :u1 oputil111 l'll compliance aud to lest au<l 1e1 11 ou infernal contwl t.we1 Clllllpliauce m acconl1uce with the Colfomia R,,,·e11m• <111d Ttrrm;o11 Code. but 11 t 1~ 1 the.> puq ) c: f exp1e m_ • 1 l p1111 11 t.)Jl lhc.> e 1: ·11\ e 11 t u1lemal l)lllJ l l \·e1 compliance. :\ccordjn!Zly. we dl' not expaess au llpiuit.'U '""'n rhe effc.: tin~uess of the Comity's iutemal conh,l lwe1 ctm1phauce .

• \ ""- 1n 11 ,. 111 mremttl o urol m · •1 m11plu111c ' x t h. when 1he 11.:-.1 1 r pt.>1 alt n f. cc ntr I lWet compliance d not allow mau.1!Zemeut l'I empll)Y~~. w lite uonual Cl11u se of Jlel ttJru1iu their assi[lned fimctious. fl' prewnt. t.11 detect and comct. noncompliance with a type of c m ltan ·e 1 e 111u r:menl n Im d y l>. 1 111a1en<1/ 11 a/me 111 i111 •nwl co11tn>I ( Jl 'L r co111plia'1n' i'> a ddiciency. or combin.1tiou ,,f deficieucie ... in internal c,1utrol o\·ei· Cl'lllpliauce. such that rhere i ... a reas,,11.1ble Jk''>sibihty 1ha1 mate1ial nl111co111phauce with a t)l of c'm1pli:u1ce re<1ui.te111ent \Viii lll't be Jlh~\ ·ented. 1..i1 detectetl and conected. on a timely ha .. i... ..\ ig11firn111 dtfkie11<T i11 i111,•n1al co111rol on•r compli1111n• is a deficiency. 01 a combi11.1tion of deficiencies. m mternal control ove1 compliance with a t)lk: ,,f conq,liauce 1e'(1ni1ement of the Red mption P1 1 '11) T.x < lled1 th tb. 1 1s lt!.-. s\ei e 1h.m. m.1e11.I \t:<k11e m 111 hrn . l c 1111 I '' compliauce. yet im1 rtaut euonh tt.1 mei it aneuflllll by rhose chat !Zed with ~wwm:u1ce

01u cous1de1atil1n t.lf internal couhol o\·e1 C(1mphauce was for the lmuted pm se descnbed m rhe fi1-,f p:u aapb nf thi-. -.ection and wa., lh't de"iaed hl ideurify all deficiencies in iuremal contwl llWI Cl'lllpham:e that nli!lhl be st ~uficant ddicieucies 01 mafe1 ial weaknes'>es. \' e did uot idenritY any deticiem:ies in internal couf11.1l "''·e1 C1.lmphance 1ha1 we ct.11..,ide1 fl' be mateaial weaknesses. as <kfiued abo\·e.

Tiii" 1eJk'11 is iureuded fo1 rhe i.t1fonuatinn and the of the management of rhe Corn1ry. the TTC. the Comuy Bt.i;u d of Supen.1s ...11s. and the ..\11di101-Con11olle1. aml h lll•I mrended lo be and should not he n-.ed by auyl)lle othe1 rhau rhese specified pattie'>.

~ ~u, LLP 0%an T1.111auce. Califc.1111ia Jami.uy 10. 20IS

I "

Attachment

}1.i'SQ I~ fl•<d ~ 15() T~ J10f9]~
TOf!at>()! (A 90503 f'_,..,. 110 f9} HJl
.,... ,.~oom

B~ ard of Sn1~n. iso1s ( "otmty of Los Au(leles Los .\n(leles. California

11i1ed · 1a1 lutemal 011/ro/ o ,· r Fimmcia/ Reportin

ln plamuug and perfonuinp. om audit ,lf the Sd1edufo. \W consir the Trc·., iutemal control o'~ financial reportm!l ( mtemal control) to detennme the audit prncedur~ that are appropnate m the cucnublauce'> for rhe plUJXhe of exprsmp. 01u opmiou 011 the Sd1ule. bur nor for the ptUJXlse of expressmtz an opuuou l'U the el 'ccti'eness of the TTC · s internal courrnl O'er fmaucial 1epo11mp. . ..\ccordm~ly. we Jo not exp1ess a11 opmion on the effecti'enes;, of the TT( .. s internal control

:\ deficit•11cT i11 irtfemal 'omrol ex1'>h when the desl!lfl or operation of a control does nor allow 11i.111ap.et11cnt 01 employees iu the 1wm1al com -.e of pert(.l1111in~ their as'iiizned fmictions. f<l ple'ent. m detect and conect 1msstalemenh l)IJ a tunely basi'>. A 11w1erial u-eak11e.n rs a deficiency. m a combination of deficiencies. iu internal control. o;nch that there is a reasonable pos-.ih1hty that a mare1ial mi-.-.ratemeut of the Schedule will not be pre'ented. or detected and c1111eclI l)ll a hmely basis A .\ig11ifinmr de/icienn io; a deficiency. or a combination of delic1cncic-.. 111 inrcmal Cllntwl that 1s lc's sen>Jc than a material weakness_ yet important enonizh lo me11r attenllon by tlwse cha1ed with ~ovemam:e

Utu co11-,lllc1ahon of inkmal cuutwl o\·er finauc1al 1epo1tm1-t was fo1 the luuited pmpose dcs'-·11hcd Ill thl.' Iii.,, pa1 aaph nf tl11s section awl wa-. 1wl dcs11cd lo 1<ll.'11llfy '111 dcfic1euc1c-. 111 111te111al control 0Ye1 linam:1al 1cp01tm~ that nu1zht he ni.1rernll wcaknc.,.,e-. 01 s1,111iticant ddlc1cnc II.'., <i1\·e11 these lm11talio11-.. d111 i11~ 'llll :111d1t 'lie chd lhlf 1dc11t i fy any deficiencies m mtemal Cl)Jllwl (1'1.'I finaucial 1epo11mfiZ that \Ve c1111 .. 1dc1 In he marc11al weaknesses However. malc11al \Vcalme-,se .. ni;1' cx.-.1 thal have not hecu 1dcullficd.

Attachment

Complia11,·c: mu/ Otha Jlafla A_, I a11 l'l ' "'•llllllUZ 1e. '>(lllllhlc a ... rn .111 ·c: • l lll \hc1h ..·1 1he n . d1e;:d11l • "' f11.:e li l m 111, te11. I 1m t<ll1:rncnt. \e i~1f 1m'-" I te h < f 11 ·'1111 haw.:e \llh ·e11. m pl l ,,..,, ,11 1f '"''"· 1l!ulati n , ml 11lte1 m: lle1., 11 im: 1m1 lima ·e \ llh wluda c.. uld h. VI! • du ~ I a11J m. I rial e ·, "111 1he le1en11111. 11 11 <'f1he ·che<ink. Ull'lllll H \h\·c1 pu ' 1'1m~ .u1 1p1111,m 11 ""mph. 1~e \ 1th th ~ ~ 1 ) \ t 1 11 \ \ •h 11 I , 11 o .1..-c11 e ll f l)lll an ht. and al."· '' dm!I~ . '' t' h 11 H ex1 1 e ., ... 11,:h an l I 1111 n The 1 e 111.., t " IH t~h h d ... ed 11 u1 1a11ce l f u uc 1111 ha nee i 111 ... , llll Het 1h. tale H: llli1t> l t be 1e1 'IJh:d m1 le1 m •111111«"' .tud11111'< .\ rmulard\

Purp e f thh Report

lh 1 p 1r1 "' 1111ende f 1 lltl' u1f , , u . ll <- 11 a 1 d 11 e '-'f 1) c m:m. gt;!1Ue;:11t l'I the · 10111~ . tl.ie 1h~ . uu1~ ," d 1f 'i 111 e1\I 1.... , uJ the . 11 h 1-< 1111 ,Jle1. nu I 1 Lill mteu ie{t t 1 be a.uJ h uld int t:k" u .. c I b~ , 11y 11e the1 tli; n chi.:-.~ -.pe ·die IP• 111e

~ ~~u,LLP 1 11 l "~. ' hf llll.t J, rm; ry 10. 2018

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Attachment Page 12of16

COl '":'TY OF LOS ANGELES

Tru\urer and Tax CoH«tor R dt'mption Proper~- Tax C'oll«tion
Schedule of t"inding\ and Qut'o;tioned <·oo;I
For tbt' fi'>Cal 'ear Ended Junt' JO, 2017

10

Attachment

COl~TY C>F LOS ANGEL.ES

Tna,urer and Tu Collector Redemption Proper~· Tn Collection
Statu\ of Prior Year Audit finding\

The1e we1e ll) p111..'I year audit fiudm~'>

11

Attachment Page 14of16

T~ 310/'W-4640 r~ .H079243J1

Jammry IO. 2018

~ ' ha ·e a11d1 ed rhe . chedu l ~ of 1l1c r • me1 d td ede1111 11 n Pr I rt: a. "\ h? · m ty f L f aud ti 1 lh fi.., al ye:u eu led Jtme ~ Pit fe. 1 u I r tdar 1 qture 1hat wt? llJ audit: u Rt"'lp n ibilit' ' in Rel· tio • t b h duJ r 11 · R empf n Pr p rty C ll Ii n' Audit

nu , ud e. pie - • n p1w 11
_ mm neut with ur \ 1-.utl11 1

pre ented aul.. m. lJ m;:if n. I n: pc . m n mu1; with .·· unlmp pnuc1ple e11er.1J; epled 111 lhe 1uted lith.-. f . mea1 • 1 au 11 thil' . · ·hed11Je d 11 I rehe'c 11 0 1 HU.Ul3 emenl f y UJ lpechve re pou 1 bilJll~ .

u- re u..,1l 1hty. a~ pie c11 ed by pr es i ual landru- . 1 to plan au pe1f nn ur audJI
b1am re-a u ble. r tbe1 d.1, a hale. a ..... w. 1 JI ' b 1h 1 tlie · ·bedule 1 fi e o

mnterial nu 1. h?menl An audit l f rbe cbc lule u1-111 c. c ibid ra i u f iutcmaJ c ut1 I n ·c1 finan id CJ lllll!l 11 ta 1 · ti 1 le 1i;z.1 in, t 11 Jr edu1e tli; 1 are a pr p11ah! in 11~ cu uubldtet'"'>. bur u t ti 1 fht< puqr1 '-f e, pr~ UJ au OJ mi n 1'11 th e ecr1veu .., f rlte ·~ mtcrnal c 1111 I cf fmam:1 I rei nm• . cc1.: 1 m y . p. 11 f 111 aud11. w 11 1 l1 t!<l t h ~ mk rnal ct 1111 l f !he rT · l!h· f 1 the pllfJ of etcnnmi11_ tu ud11 p cecl111 t' u n 1 r 11 \1de 11 y a .. ur, 11 • c ncen11112 nch 1111 111.:1 I 11h I

We a.re respolL')ible fo1 cou11muucaliu!l si[znifo:aut matters related to the audit that are. in our I ' tC... 1 11 I 1ud'2rn Ill. 1 •II:'" 111 I y Ill 1 ~ I u 1b1h11 ~ 111 \er eem !he firnmc inl 1 r.:p1. rt in process. However. we are not re<11u1ed to design procedrnes for the purp e of identifyiniz other matters to co1111m11ncate to yon.

TI1e1e were no findinizs reizardmiz s1~zniticant control deficiencies over financial rep rtiniz and material noncomphance. aud other mattets noted drniniz our audit.

Plannm Seo~ and Timing of the Audit

\'e comhu.:tetl om audit cons1steut with the plrumed scoire ru1d timing we p1e\·illllsly COllUlllUUCated lo )'lHI

1

Attachment Page 15of16

Compliance with .-\II Ethic\ Requirement\ Rt1?ardin2 lndependt"nce

Tlae en!la!lemeut team aud 01u finu ha\·e Cl)lllphed wuh all 1devanr ethical ret1niremenrs 1 e • rd rn ~ 11 I I rnh:11cc.:

(,}u:ilit· tin p I of lh ntin·· i nifi nt . ounlina Pra ti e\

lanaemeur ha' rhe 1e-.pousibihty to io;decr amt U'ie app1opriate accomarin!Z policie-. .-
-,1muwuy of the Sl!llllficaur policies adopted by the TTC 1s iududed m Note 2 to the Scbetlule. Tiaere ha\·e been no chau!ln in "i!mificant accomlfin!Z polu:ies 01· their apphcatwns chu·in!l 2017. ~o matteh ha'e come to 01u attenrion that would 1et1nue us. twder professional ... taaulanf... to iufonn you about ( I I rhe merh -. u-;ed to accomar f)r si!ZJaificaut lUUhla.11 trnw.acti,,us. and: ( 2) the effect of si!znificant accom1h11!l policies in conlro\·er.;,ial 01 eme1 !llll!Z areas fo1 winch there h a lack of autho1 itari\·e !luich nee or con-.e1hlh.

Significant Difficultie' Encountered During the Audit

\'e e1u:om11ered 110 s1~tificauf difficulties iu dealiil!Z with ui.1u.1!Zemeur 1eL1tii1!Z to the pe1fonu.1nce (,f rhe audit.

1 ·ncorrected and Corrected \li\tatt"menf\

f (•I pm sn of flus conummicatiou. professional stauda1ds retinue us to accmuulate all km,,\ll and likdy mis.,taremenr... identified duain!Z the audit. othe1 rhan those that we lleliew aie 111'lal. aud couummicate lhem to ti~ appwpriale level of 111.·magemeul. TI1e1e a1e uo 1uac,)1Jecte<t nus.,ratements relatin!f lo the Schedule

Di,agrttmenf\ with \lanagement

fti1 p1u1 -.es of rhi ... lerte1. pwfo-.s1011al slaruL11<l., ddiue a disa~eement with mauagemeut a-. a 111.1tre1. whether 01 nor 1e.,oh"ed lo om 1tisfactiou. concemin a financial accomarin!Z. h !J '1llll!l. '-'• an<hlm~ mallet. which could be s1guiticaut lti the TTC s Schec:lule 01 the audiror·., repo1t ~o .,uch di'>a!Zfeemeuts aro-,e dm in!l rhe C)llJ'>e of rbe audit.

Repre\entation\ Reque\ted from \lanagement

\'e h11'e 1e<111e-.red ce11ai11 1ep1e-,entation-. ti)lll 111.111a!lemenr. which are iudndetl in the maua!Zemenr 1e1lle.,e11tati,)n lettea dated Jam1.11y 10. :?O 18.

:\lana2ement ( 'on,ultation\ with Other Accountanh

In ,nme "'a.,e .... m1111a!Ze111ent may decide to coaa...ult wirh othe1 accl 'llllfanh about auditm~ and aCClllllltnuz marte1-.. \lana!-!ement mf1Jm1ed th lhar. and ft.) l)m· kiu._1\·lede. the1e we1e Ill) co1i...nlratao1a... with l1lhe1 ;11.:c,itmtanh 1eanlm~ aud1tlll!l and acco11111111~ malle1 ....

2

Attachment Page 16of16 0 1her • ignifi ~101 indin2 .r h u ' '- · 1. 11 ll \I h ti r ·. \' ner. II\ dt:i.11 . ,
, fW \ ' f 1 afh:t 11 f . · ., m 11 p111 ·11 1 ... . n I • 11 11111 .. t.m L: ll.... vpe1a1m ~ , 11 I 1 ~ nla 1. nil y . . u I 11>t'I . ll ual 1 I. 1 • 11 I 11 . I !lie' 1bar m y aff • 1he 1i · • · ne :l " thl..' 11 all 1. da en .. e r. -.nlre I 111 • ·'II hlH 11 r nu 1t.'111ru. 11 ,

uttud d lely fr 1 the 11 f tht> m. n en 1:m f the \ lUlT. · b IT .
1 • : 11 l 1fa: Au hi..: 1 ~ • 1111 ll?t. ; n l 1 11 1 11 I n led I I e u I
y auy ue rht:'1 thnu th ·e c1fie I 1 . 111e

~ on 1 LLP m ·e. C" A

3