HomeMy WebLinkAboutSingle Audit - Federally Assistd Grnt Pgrms FYE 06-30-2012 �
CITY 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, 2012
DATE: March 28, 2013
SUBMITTED BY: Paul S. Gibson, Finance Director
CONTENTS: Single Audit Report for the Fiscal Year Ended June 30, 2012
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, 2012.
Committee Recommendation
The Audit, Investment and Finance Committee received the single audit report at their March 26
meeting, and it was recommended that the report for the fiscal year ended June 30, 2012 be
received and filed by the City Council.
Backqround
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, 2012. On Pages 5 and 6 of the Single Audit of
Federally Assisted Grant Programs, a detail of federal expenditures is given. In total, the City
expended $1,169,606 for the year ended June 30, 2012.
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, 2012. 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, 2012."
Staff requests that the Council receive and file the single audit report for fiscal year ended June
30, 2012.
G:\Finance\Niamh Ortega\Staff ReportsWudit staff reportsWudit Staff Reports 2012\SR-Council single audit 2012.docx
Staff Report
Approval of Single Audit Report for Fiscal Year ended June 30, 2012
March 28, 2013
Page 2 of 2
Fiscal impact
There is no fiscal impact associated with this action.
Submitted by: A proved by:
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Paul S. Gibson, Finance Director n M. Wohlmuth, City Manager
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CiTY COUNCIL ACTiON
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G:\Finance\Niamh Ortega\Staff ReportslAudit staff reportsWudit Staff Reports 2012\SR-Council single audit 2012.docx
CITY OF PALM DESERT, CALIFORNIA
SINGLE AUDIT OF FEDERALLY
ASSISTED GRANT PROGRAMS
JUNE 30,2012
CITY OF PALM DESERT, CALIFORNIA
TABLE OF CONTENTS
June 30, 2012
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 Auditin��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
Schedu(e of Findings and Questioned Costs 9 - l0
Summary Schedule of Prior Audit Findings 1 l
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 GOVERNMENTAUDITING 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, 2012, which collectively comprise the City's basic financial statements, and have issued our
report thereon dated December 19, 2012. 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 Auditin� 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.
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Internal Control Over Financial Reportin (Continued)
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'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 Auditin� 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.
G�)� �7�J,s� .�'-.L� ���� �1�
December 19, 2012
Irvine, California
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# '
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
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 Mana�ement and Bud�et (OMB) Circular A-133 Compliance
Supplement that could have a direct and material effect on each of the City's major federa] programs for the year
ended June 30, 2012. 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 is 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 Auditin� 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
oecurred. 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, 2012.
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Internal Control Over Compliance
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 in order to determine the
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, 2012, which collectively comprise the City's basic financial
statements, and have issued our report thereon dated December 19,2012, which contained an unqualified
opinion on those statements. Our audit was performed for the purpose of forming opinions on the financial
statements that collectively comprise the City's financial statements. The accompanying 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 financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements 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 schedule of
expenditures of federal awards is fairly stated in all material respects in relation to the financial statements taken
as a whole.
The purpose of this report is solely to describe the scope of our testing of compliance with the types of
compliance requirements applicable to each of the City of Palm Desert's major programs and our testing of
internal control over compliance and the results of our testing, and to provide an opinion on the City's
compliance but not to provide an opinion on the effectiveness of the City's internal control over compliance.
This report is an integral part of an audit performed in accordance with Government Auditin� Standards in
considering the Ciry's compliance with requirements applicable to each major program and its internal control
over compliance.Accordingly,this report is not suitable for any other purpose.
��� `�'�t�� ,��-�i �� ��'
February 5, 2013, except to the date for the Schedule of Expenditures of Federal Awards to which the date is
December 19, 2012
Irvine,California
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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
CITY OF PALM DESERT, CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2012
Catalog of
Federal Expenditures
Federal Grantor/ Domestic Program of Disbursements
Pass-Through Grantor/ Assistance Identification Federal to
Program TiUe Number Number Awards Subrecipients
U S De�arhnent of Housing and Urban Development
Direct Programs:
Community Development Block Grants/
EntidementGrants 14.218 B-09-MC-06-0594 $ 43,162 $ 43,012
B-10-MC-06-0594 100,707 100,707
B-Il-MG06-0594 126,890 93,997
Total U.S.Department of Housing and Urban Development 270,759 237,716
U.S.Department of Justice
Direct Programs:
Edward Byrne Memorial Justice Assistance
Grant Program(JAG) 16.738 2010-DJ-BX-0688 � 5,575 -
U.S.DepaRment of TranspoRation
Passed through the State of California
Department of Transportation:
Highway Planning and Construction 20205 CML 5414(008) 3,158 -
CML 5414(009) 255,149 -
CML SA14(O10) 47Q333 -
Total Highway Planning and Construction 728,640 -
Passed through the University of California,Berkeley
Traffic Safety Center:
State and Community Highway Safety- 20.600 SCl 1302 6,502 -
Sobriety Checkpoint Program LLEA SC12302 38,945 -
Total Passed through the University of California,
Berkeley Traffic Safety Center 45,447 -
Passed through the City of Riverside:
State and Community Highway Safety-Avoid 30 20.600 AL0842 12,385 -
Total State and Community Highway Safety 57,832 -
Total U.S.Department ofTransportation 786,472 -
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, 2012
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 Ener�v
Direc[Program:
ARRA-Energy Efficiency and Conservation
Block Grant Program(EECBG) 81.128 DE-SC002046 $ 106,800 $ -
TOTAL D[SBURSEMENTS
TO SUBRECIPIENTS $ 237,716
TOTAL EXPENDITURES
OF FEDERAL AWARDS $ 1,169,606
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
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
June 30, 2012
l. 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, 2012
5. SUBRECIPIENTS:
During the fiscal year ended June 30, 2012, the City disbursed federal funds to the following
subrecipients under the Community Development Block Grant Program (CFDA#14.218):
Amount
Disbursed
CDBG
Borrego Community Health Foundation $ 12,223
Casa for Riverside County, Inc. 7,587
Desert Aids Project 21,780
Desert ARC 43,012
Desert Cancer Foundation 7,223
Martha's Village and Kitchen 24,476
Fair Housing Council of Riverside County 26,378
Ranch Recovery Center 95,037
Total Subrecipient Payments $ 237,716
6. DEFERRED LOANS RECEIVABLE:
The CDBG balance of deferred loans receivable at June 30, 2012 was $12,255.
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 Reyuirements 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
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the year ended June 30, 2012
1. SUMMARY OF AUDITORS' RESULTS:
Financial Statements
Type of auditor's report issued:
• Unqualified
Internal control over financial reporting:
• Material weakness identified? _ yes x no
• Significant deficiency identified? _ yes x none reported
Noncompliance material to financial statements noted: _ yes x no
Federal Awards:
Internal control over major programs:
• Material weakness(es) identified? _ yes x no
• Significant deficiency(es) identified? _ yes x none reported
Type of auditor's report issued on compliance for major programs:
• Unqualified
Any audit findings disclosed that are required to be
reported in accordance with Section 510(a) of OMB
Circular A-133? _ yes x no
Identification of major programs:
CFDA Number(s) Name of Federal Pro�ram or Cluster
20.205 U.S. Department of Transportation; Passed through the
State of California Department of Transportation;
Highway Planning and Construction
Dollar threshold used to distinguish
between type A and type B programs: $ 300,000
Auditee qualified as low-risk auditee? x yes _ no
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
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(CONTINUED)
For the year ended June 30, 2012
2. FINDINGS - FINANCIAL STATEMENT AUDIT:
There were no significant deficiencies, material weaknesses 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, 2012.
3. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUD1T:
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 Auditin� 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, 2012
There were no findings reported for fiscal year 2010-11.
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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