HomeMy WebLinkAboutSingle Audit - Federally Assisted Grant Programs FYE 06/30/2011CITY OF PALM DESERT
FINANCE DEPARTMENT
Staff Report
REQUEST: RECEIVE AND FILE THE SINGLE AUDIT OF FEDERALLY ASSISTED
GRANT PROGRAMS FOR THE FISCAL YEAR ENDED JUNE 30, 2011
DATE: April 12, 2012
SUBMITTED BY: Paul S. Gibson, Finance Director
CONTENTS: Single Audit Report for the Fiscal Year Ended June 30, 2011
Recommendation
By Minute Motion, that the City Council receive and file the single audit report of
Federally Assisted Grant Programs for fiscal year ended June 30, 2011.
Committee Recommendation
The Audit, Investment and Finance Committee received the single audit report at their March 27
meeting, and it was recommended that the report for the fiscal year ended June 30, 2011 be
received and filed by the City Council.
Background
The Single Audit Act and Office of Management and Budget (OMB) Circular A-133, Audits of
States, Local Governments, and Non -Profit Organizations, requires non-federal entities that
expend equal to or in excess of $500,000 in a fiscal year in federal awards to have an audit
performed in accordance with the Single Audit Act.
The City was required to undergo an audit of federal funds it received because the City expended
more than $500,000 in the year ended June 30, 2011. On Page 6 of the Single Audit of Federally
Assisted Grant Programs, a detail of federal expenditures is given. The City's Community
Development Block Grant represents the majority of expenditures totaling $554,880. In total, the
City expended $1,422,403 for the year ended June 30, 2011.
White Nelson Diehl Evans, LLP, was hired to perform and complete an audit on the Schedule of
Federal Financial Assistance for the fiscal year ended June 30, 2011. As stated in their opinion
found on Page 3 of the report, "the City complied, in all material respects, with the compliance
requirements ... of its major federal programs for the year ended June 30, 2011."
Staff requests that the Council receive and file the single audit report for fiscal year ended June
30, 2011.
G:\Finance\Niamh Ortega\Staff Reports\Audit staff reports\Audit Staff Reports 2010\SR - Council single audit 2011.docx
Staff Report
Approval of Single Audit Report for Fiscal Year ended June 30, 2011
April 12, 2012
Page 2 of 2
Fiscal Impact
There is no fiscal impact associated with this action.
Submitted by:
Approved by:
F�dul S. Gibson, Finance Director J n M. Wohlmuth, City Manager
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CITY COUNCIL ACTION
APPROVED VENIED
RECEIVED `� Fl e7 OTIIFR.
MEETING DATE
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G:\Finance\Niamh Ortega\Staff Reports\Audit staff reports\Audit Staff Reports 2010\SR - Council single audit 2011.docx
CITY OF PALM DESERT, CALIFORNIA
SINGLE AUDIT OF FEDERALLY
ASSISTED GRANT PROGRAMS
JUNE 30, 2011
CITY OF PALM DESERT, CALIFORNIA
TABLE OF CONTENTS
June 30, 2011
Page
Number
Independent Auditors' Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on
an Audit of Financial Statements Performed in Accordance
with Government Auditing Standards 1 - 2
Independent Auditors' Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major
Program and on Internal Control Over Compliance in Accordance
with OMB Circular A-133 and on the Schedule of Expenditures
of Federal Awards 3-4
Schedule of Expenditures of Federal Awards and Schedule of
Findings and Questioned Costs:
Schedule of Expenditures of Federal Awards 5-6
Notes to Schedule of Expenditures of Federal Awards 7-8
Schedule of Findings and Questioned Costs 9 - 10
Summary Schedule of Prior Audit Findings 11
J
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable City Council
City of Palm Desert
Palm Desert, California
We have audited the financial statements of the governmental activities, the business -type activities,
the discretely presented component unit, each major fund and the aggregate remaining fund
information of the City of Palm Desert, California (the City) as of and for the year ended
June 30, 2011, which collectively comprise the City's basic financial statements, and have issued our
report thereon dated December 16, 2011. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States.
Internal Control Over Financial Reporting
Management of the City is responsible for establishing and maintaining effective internal control over
financial reporting. In planning and performing our audit, we considered the City's internal control
over financial reporting as a basis for designing our auditing procedures for the purpose of expressing
our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we do not express an
opinion on the effectiveness of the City's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the City's financial statements will not be prevented, or detected and corrected on a
timely basis.
2975 ;Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978,1300 • Fax: 714.978.7893
Offla!r located in Oral{fie and San Die{o Counlie.r
Internal Control Over Financial Reporting (Continued)
i
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control
over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We
did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Palm Desert, California's basic
financial statements are free of material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit and,
accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of management, the City Council, others
within the City, federal awarding agencies, and pass -through entities and is not intended to be, and
should not be, used by anyone other than these specified parties.
December 16, 2011
Irvine, California
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d
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL
EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL
OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-] 33
AND ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
The Honorable City Council
City of Palm Desert
Palm Desert, California
Compliance
We have audited the City of Palm Desert's, California (the City) compliance with the types of compliance
requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance
Supplement that could have a direct and material effect on each of the City's major federal programs for the year
ended June 30, 2011. The City's major federal programs are identified in the summary of auditors' results
section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of
laws, regulations, contracts and grants applicable to each of its major federal programs are the responsibility of
the City's management. Our responsibility is to express an opinion on the City's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local
Governments and Non -Profit Organizations. Those standards and OMB Circular A-133 require that we plan
and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major program
occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those
requirements and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal
determination of the City's compliance with those requirements.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to above
that could have a direct and material effect on each of its major federal programs for the year ended
June 30, 2011.
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2877 Michelle Drive, Suite 300, Irvine, C.A 92606 - Tel: 714.978.1300 - Fax: 714.978.7893
O�Jt'�c.i loculed in Onnlge rind San Diem Counlie.r
Internal Control Over Compliance
Q
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In
planning and performing our audit, we considered the City's internal control over compliance with the
requirements that could have a direct and material effect on a major federal program as a basis for designing our
auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal
control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an
opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on
the effectiveness of the City's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct noncompliance with a type of compliance requirement of a federal
program on a timely basis. A material weakness in internal control over compliance is a deficiency, or
combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that
material noncompliance with a type of compliance requirement of a federal program will not be prevented, or
detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over compliance
that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.
Schedule of Expenditures of Federal Awards
We have audited the financial statements of the governmental activities, the business -type activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund information of the City
of Palm Desert as of and for the year ended June 30, 2011, which collectively comprise the City's basic financial
statements, and have issued our report thereon dated December 16, 2011, which contained unqualified opinions
on those statements. Our audit was performed for the purpose of forming opinions on the financial statements
that collectively comprise the City's basic financial statements. The schedule of expenditures of federal awards
is presented for purposes of additional analysis as required by U.S. Office of Management and Budget
CircularA-133, Audits of States, Local Governments, and Non -Profit Organizations, and is not a required part
of the basic financial statements. Such information is the responsibility of management and was derived from
and relates directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information directly to
the underlying accounting and other records used to prepare the financial statements of the City or to the
financial statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the information is fairly stated in all material respects
in relation to the basic financial statements taken as a whole.
This report is intended solely for the information and use of management, the City Council, others within the
City, federal awarding agencies, and pass -through entities and is not intended to be, and should not be, used by
anyone other than these specified parties.
Gt.L.L� 7Z&tr,J .CQ%-[e� of tea
February 14, 2012, except to the date for the Schedule of Expenditures of Federal Awards to which the date is
December 16, 2011
Irvine, California
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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
CITY OF PALM DESERT, CALIFORNIA
0
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2011
Catalog of
Federal
Expenditures
Federal Grantor /
Domestic
Program
of
Disbursements
Pass - Through Grantor /
Assistance
Identification
Federal
to
Program Title
Number
Number
Awards
Subrecipients
U.S. Department of Housing and Urban Development
Direct Programs:
CDBG - Entitlement Grants Cluster
Community Development Block Grants -
Entitlement Grants
14.218
B-09-MC-06-0594
$ 264,937
$ 264,687
B-10-MC-06-0594
222,717
177,381
ARRA - Community Development Block
Grants - Entitlement Grants
14.253
B-09-MY-06-0594
67,226
64,707
Total CDBG - Entitlement Grants Cluster
554,880
506,775
Passed through County of Riverside:
Neighborhood Stabilization Program
14.228
09-NSP1-6300
324,831
-
Total U.S. Department of Housing and Urban Development
879,711
506,775
U.S. Department of Justice
Direct Programs:
JAG Program Cluster:
Edward Byrne Memorial Justice Assistance
Grant Program (JAG)
16.738
2009-DJ-BX-1348
7
2010-DJ-BX-0688
6,225
ARRA - Edward Byrne Memorial Justice
Assistance Grant Program (JAG)
16.804
2009-SB-0954
57,285
Total U.S. Department of Justice
63,517
-
See Independent Auditors' Report on Compliance with Requirements That Could Have a Direct
and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance
with OMB Circular A-133 and on the Schedule of Expenditures of Federal Awards (pages 3 and 4)
and Notes to Schedule of Expenditures of Federal Awards (pages 7 and 8).
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CITY OF PALM DESERT, CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2011
Catalog of
Federal
Expenditures
Federal Grantor !
Domestic
Program
of Disbursements
Pass - Through Grantor /
Assistance
Identification
Federal to
Program Title
Number
Number
Awards Subrecipients
U S Department of Transportation
Passed through the State of California
Department of Transportation:
Highway Planning and Construction
20.205
CML 5414 (008)
$ 1,592 $ -
Passed through the State of California
Office of Traffic Safety:
State and Community Highway Safety
20.600
AL1094
26,473
Passed through the University of California, Berkeley
Traffic Safety Center:
State and Community Highway Safety 20.600 CTI 1302 1,740
SC 10302 5,471
SC 11302 18,218
Total Passed through the University of California,
Berkeley Traffic Safety Center 25,429
Passed through the City of Riverside:
State and Community Highway Safety Programs 20.600 AL0842 3,481
Total State and Community Highway Safety 55,383
Total U.S. Department of Transportation 56,975
U.S. Department of Energy
Direct Program:
ARRA - Energy Efficiency and Conservation
Block Grant Program (EECBG) 81.128 DE-SCO02046 422,200 -
TOTAL DISBURSEMENTS
TO SUBRECIPIENTS $ 506,775
TOTAL EXPENDITURES
OF FEDERAL AWARDS $ 1,422,403
See Independent Auditors' Report on Compliance with Requirements That Could Have a Direct
and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance
with OMB Circular A-133 and on the Schedule of Expenditures of Federal Awards (pages 3 and 4)
and Notes to Schedule of Expenditures of Federal Awards (pages 7 and 8).
CITY OF PALM DESERT, CALIFORNIA
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
June 30, 2011
1. GENERAL:
The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal
financial assistance programs of the City of Palm Desert (the City). The City's reporting entity is
defined in Note 1 of the notes to the City's financial statements. All financial assistance received
directly from federal agencies as well as federal financial assistance passed through other
government agencies to the City is included in the accompanying schedule.
2. BASIS OF ACCOUNTING:
The accompanying Schedule of Expenditures of Federal Awards is presented using the modified
accrual basis of accounting for governmental funds and the accrual basis for proprietary funds,
which is described in the Note 1 of the notes to the City's financial statements.
3. RELATIONSHIP TO COMPREHENSIVE ANNUAL FINANCIAL REPORT:
Amounts reported in the accompanying Schedule of Expenditures of Federal Awards agree to
amounts reported within the City's Comprehensive Annual Financial Report (CAFR).
4. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS:
Amounts reported in the accompanying Schedule of Expenditures of Federal Awards agree with
amounts reported in federal financial reports.
See Independent Auditors' Report on Compliance with Requirements That Could Have a Direct and
Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with
OMB Circular A-133 and on the Schedule of Expenditures of Federal Awards (pages 3 and 4) and
Schedule of Expenditures of Federal Awards (pages 5 and 6).
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CITY OF PALM DESERT, CALIFORNIA
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
(CONTINUED)
June 30, 2011
5. SUBRECIPIENTS:
During the fiscal year ended June 30, 2011, the City disbursed federal funds to the following
subrecipients under the Community Development Block Grant and ARRA - Community
Development Block Grant Programs (CFDA # 14.218):
Amount
Disbursed
CDBG
Borrego Community Health Foundation
$ 13,746
Casa for Riverside County, Inc.
1,463
Desert Aids Project
21,000
Fish of the Lower Coachella Valley
15,000
Martha's Village and Kitchen
22,253
Stroke Recovery Center
75,000
Fair Housing Council of Riverside County
28,920
(Desert ARC) Foundation of the Retarded
57,618
Family YMCA of the Desert
79,066
(Healthy Family) John F. Kennedy
Memorial Foundation
50,136
Ranch Recovery Center
77,866
Rancho Recovery
-
Total Subrecipient Payments
$ 442,068
6. DEFERRED LOANS RECEIVABLE:
Amount
Disbursed
CDBG - R
64,707
$ 64,707
The CDBG balance of deferred loans receivable at June 30, 2011 was $13,310.
7. CONTINGENCIES:
Under the terms of federal and state grants, additional audits may be requested by the grantor
agencies and certain costs may be questioned as not being appropriate expenditures under the terms
of the grant. Such audits could lead to a request for reimbursement to the grantor agencies.
See Independent Auditors' Report on Compliance with Requirements That Could Have a Direct and
Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with
OMB Circular A-133 and on the Schedule of Expenditures of Federal Awards (pages 3 and 4) and
Schedule of Expenditures of Federal Awards (pages 5 and 6).
CITY OF PALM DESERT, CALIFORNIA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the year ended June 30, 2011
1. SUMMARY OF AUDITORS' RESULTS:
a. The auditors' report expresses an unqualified opinion on the financial statements of the City of
Palm Desert.
b. No significant deficiencies relating to the audit of the financial statements are reported.
c. No instances of noncompliance material to financial statements of the City of Palm Desert,
which would be required to be reported in accordance with Government Auditing Standards,
were disclosed during the audit.
d. No significant deficiencies relating to the audit of the major federal award programs are
reported.
e. The auditors' report on compliance for the major federal award programs for the City of Palm
Desert expresses an unqualified opinion on all major federal programs.
f. No audit findings that are required to be reported in accordance with Section 510(a) of
OMB Circular A-133 are reported in this Schedule.
g. The threshold used for distinguishing between type A and type B programs was $300,000.
h. The programs tested as a major programs were:
Neighborhood Stabilization Program CFDA # 14.228
ARRA - Energy Efficiency and Conservation
Block Grant Program (EECBG) CFDA # 81.128
i. The City of Palm Desert did qualify as a low -risk auditee.
See Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards and Independent Auditors' Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over
Compliance in Accordance with OMB Circular A-133 and on the Schedule of Expenditures of Federal
Awards (pages 1 through 4).
CITY OF PALM DESERT, CALIFORNIA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(CONTINUED)
For the year ended June 30, 2011
2. FINDINGS - FINANCIAL STATEMENT AUDIT:
There were no significant deficiencies or noncompliance material to the financial statements which
were disclosed by the audit of the financial statements of the City of Palm Desert for the year
ended June 30, 2011.
3. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT:
None
See Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards and Independent Auditors' Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over
Compliance in Accordance with OMB Circular A- 133 and on the Schedule of Expenditures of Federal
Awards (pages 1 through 4).
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CITY OF PALM DESERT, CALIFORNIA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the year ended June 30, 2011
There were no findings reported for fiscal year 2009-10.
See Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards and Independent Auditors' Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over
Compliance in Accordance with OMB Circular A- 13 3 and on the Schedule of Expenditures of Federal
Awards (pages 1 through 4).
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