Featured: Agustín “Gus” García, Jr., Executive Director, Edinburg Economic Development Corporation, on Friday, September 25, 2015, participates in a panel discussion during the Inno’2015 Transportation Innovation Conference sponsored by South Texas College at its Technology Campus Atrium in McAllen.
Photograph By DIEGO REYNA
The financial statements and practices of the Edinburg Economic Development Corporation meet the highest standards that help ensure citizens and the public that the EEDC is properly managing its programs and services, according to an independent audit released on Tuesday, March 22, 2016. The EEDC, which is led by Executive Director Agustín “Gus” García, Jr., is the jobs-creation arm of the Mayor and Edinburg City Council. The audit, which is required by state law, was conducted by Noel Garza, CPA, who has been under contract with the EEDC for the previous five years to perform the financial review. His detailed work, which is available by requesting a copy from the EEDC, covers the fiscal year 2014-2014 activities of the EEDC.
Executive Director Gus García reports favorable independent audit for Edinburg Economic Development Corporation
By DAVID A. DÍAZ
The financial statements and practices of the Edinburg Economic Development Corporation meet the highest standards that help ensure citizens and the public that the EEDC is properly managing its programs and services, according to an independent audit released on Tuesday, March 22, 2016.
The EEDC, which is led by Executive Director Agustín “Gus” García, Jr., is the jobs-creation arm of the Mayor and Edinburg City Council.
The EEDC Board of Directors is comprised of Mark Iglesias as President, Harvey Rodríguez as Vice President, Ellie M. Torres as Secretary/Treasurer, and Mayor Richard García and Richard Ruppert as Members.
Agustín García, Jr. and Mayor Richard García are not related.
The audit, which is required by state law, was conducted by Noel Garza, CPA, who has been under contract with the EEDC for the previous five years to perform the financial review. His detailed work, which is available by requesting a copy from the EEDC, covers the fiscal year 2014-2014 activities of the EEDC.
FY 2014-2015 represents October 1, 2014 through September 30, 2015 – the most recent period for which an audit can be performed.
Garza issued an unmodified opinion, which is the best possible rating, for the EEDC’s system of financial accounting and accountability.
In general, an unmodified opinion is the opinion where auditor expresses an opinion that financial statements are presented, in all material respects, in accordance with applicable financial reporting framework (http://pakaccountants.com).
“The EEDC is very open with their documentation,” said Garza, who has more than 30 years experience in his profession, including 14 years in public accounting. “The best opinion we can give is an ‘unmodified’ opinion. That means that we found nothing that required us to modify the report, which typically would be if we found an area that we didn’t agree with or feel uncomfortable. But we did issue an unmodified to the EEDC because we do feel comfortable with these financial statements. As a result of our testing, we feel this is a fair representation.”
EEDC Executive Director Agustín “Gus” García, Jr. praised his staff for their excellence in maintaining a financial report system that meets and surpasses the requirements of independent analyses, and he thanked the EEDC and city leadership for their unwavering support of open government.
“Everyone at the EEDC is dedicated to transparency, honesty, effectiveness, and achievements on behalf of the citizens of Edinburg,” said the executive director. “These ideals represent the highest ethical standards of our team here at the EEDC, which are shared by the EEDC Board of Directors, the Mayor, and Edinburg City Council.”
In addition to Agustín “Gus” García, the EEDC staff features Nelda Ramírez, Assistant Executive Director, Letty Reyes, Director of Business Development & Public Affairs, Dalila Razo, Office Manager, Laura Lee Vela, Administrative Assistant, and Diego Reyna, Research Analyst.
As of September 30, 2015, the EEDC had an available fund balance of $3 million, according to the audit.
“Overall, the EEDC is in a good financial position,” the auditor told reporters following his presentation to the EEDC Board of Directors during the EEDC’s March 22, 2016 public meeting, which was held at noon in the Council Chamber at Edinburg City Hall. “That’s a positive number ($3 million) and that gives the EEDC Board of Directors leeway and discretion on projects they want to undertake because they do have that fund balance that is available to them.”
Asked how this latest audit compares with previous audits he has conducted of the EEDC, Garza said the organization, which is a branch of city government, has performed well.
“We have never had an issue where we felt that we couldn’t rely on these (EEDC) financial statements,” he said. “They have a good system and they utilize the city for a lot of their accounting and their financials, bill paying and payroll. They do receive a lot of transaction and information from the city so that adds to our level of confidence of the documentation.”
He explained key aspects of how he performs audits.
“At the inception, when we present our engagement letter, we do ask that they provide all the documents needed so that we can conduct our audit and be able to issue a fair opinion. So they give us access to any documentation we need. There is really nothing that is off-limits as long as we think it’s necessary for the auditing process,” Garza assured the public.
The primary purpose of an audit is for an independent expert to render an opinion on the financial statements. Those financial statements are the responsibility of the client.
“It’s our responsibility to issue an opinion on those based on our audit work,” he said. “So we go through this process where we go through and test the numbers and look at those numbers and analyze and conduct detailed testing in order to satisfy ourselves that those numbers are a fair representation of the financial statements.”
That data he reviews for his audit of the EEDC is comprehensive, and can take two months to complete.
“Overall, it’s related to the financials. It’s everything from requesting checks, payroll processing, their bidding and documentation related to their minutes,” Garza continued. “It encompasses anything and everything that could affect financial statements.”
Asked what are other key aspects of the audit of importance to the public, he said the financial statements maintained by the EEDC are a fair representation of their financial activities.
“They do show that while the EEDC does have its revenues and expenditures and existing debt, they do show increased revenues, which will allow them to take on more projects and assist other entities in bringing new businesses to the city, which I think is part of the primary mission,” Garza said. “So by showing that their revenues are increasing from that component shows they have the ability to continue that process to help bring in more business to the city.”
He noted that during FY 2014-2015, the revenues for the EEDC did increase, a symbol of a strong and growing economy in Edinburg.
“Sales tax is their biggest source of revenue. That did increase by about $400,000 for the year. That’s a 10 percent increase,” Garza said “So, I think in any entity, when you have a 10 percent jump in one category, that’s a pretty positive figure. So that’s the biggest contributor to their revenues.”
He said evidence of the city’s growth, including in its retail economy, is everywhere to see.
“I have noticed that activity at the Shoppes at Rio Grande Valley and a lot of other areas. I drive through there daily and I see the activity there,” he observed.
“As I have done these audits, I have seen how these sales tax revenues have just grown and grown. That’s probably one of the big contributors to that. So I don’t foresee any reason why that wouldn’t continue, and maybe even grow at a faster pace because of the new businesses being brought into the city,” Garza added. “The EEDC has a big part of that through their involvement with economic incentives and bringing business to the city.”
The EEDC generates money from collecting a local one-fourth cent economic development sales tax, which is used to help finance projects which help retain or create jobs, among its many duties.
Garza noted that although the EEDC is a client, the audit he presents must be accurate and honest, not only for the sake of the public and the EEDC, but for his professional integrity as well.
“I say it like it is, and I would not be doing them justice by not following our moral and ethical responsibilities,” the independent auditor said. “It wouldn’t be fair to them to not give them a true picture of where they stand financially.”