HomeMy WebLinkAboutCity of Palm Desert Single Audit Final FYE2021
CITY OF PALM DESERT, CALFORNIA
JUNE 30, 2021
SINGLE AUDIT REPORT
CITY OF PALM DESERT, CALIFORNIA
SINGLE AUDIT REPORT
JUNE 30, 2021
CITY OF PALM DESERT
SINGLE AUDIT REPORT
JUNE 30, 2021
TABLE OF CONTENTS
Page
Number
Independent Auditor’s 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
Independent Auditors’ Report on Compliance for Each Major Program and on Internal
Control Over Compliance; and Report on Schedule of Expenditures of Federal
Awards Required by the Uniform Guidance ........................................................................................ 3
Schedule of Expenditures of Federal Awards for the
Fiscal Year Ended June 30, 2021 ........................................................................................................ 6
Notes to the Schedule of Expenditures of Federal Awards .................................................................... 7
Schedule of Findings and Questioned Costs for the
Fiscal Year Ended June 30, 2021 ........................................................................................................ 8
Schedule of Prior Year Findings and Questioned Costs for the
Fiscal Year Ended June 30, 2020 ........................................................................................................ 9
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
To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
We have audited, in accordance with the 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, 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, 2021, and the related notes to the financial statements, which collectively comprise the
City’s basic financial statements, and have issued our report thereon dated December 20, 2021.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in
the circumstances 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. Accordingly, we do not
express an opinion on the effectiveness of the City’s internal control.
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 entity’s
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
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
financial statements. 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.
203 N. Brea Blvd., Suite 203 Brea CA 92821 Lance, Soll & Lun hard, LLP Phone: 714.672.0022
To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control
or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Brea, California
December 20, 2021
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INDEPENDENT AUDITORS’REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE AND REPORT ON SCHEDULE OF
EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE
To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Palm Desert (the City), California’s compliance with the types of compliance
requirements described in the OMB 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, 2021. The City’s major federal
programs are identified in the summary of auditor’s results section of the accompanying schedule of findings
and questioned costs.
In our opinion, the City, complied, in all material respects, with the types of 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, 2021.
Basis for Opinion
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America (GAAS); the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and the audit
requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities
under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for
the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance
with relevant ethical requirements relating to our audit. We believe the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion. Our audit does not provide a legal
determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of
laws, statutes, regulations, rules, and provisions of contracts or grant agreement s applicable to the City’s
government programs.
203 N. Brea Blvd., Suite 203 Brea CA 92821 Lance, Soll & Lun hard, LLP Phone: 714.672.0022
To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above, whether due to fraud or error, and express an opinion on the
City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not
absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS,
Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance
when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control. Noncompliance with the compliance requirements referred to above is
considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence
the judgment made by a reasonable user of the report on compliance about the City’s compliance with the
requirements of the government program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and
Uniform Guidance, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit.
x Identify and assess the risks of material noncompliance, whether due to fraud or error, and design
and perform audit procedures responsive to those risks. Such procedures include examining, on
a test basis, evidence regarding the City’s compliance with the compliance requirements referred
to above and performing such other procedures as we considered necessary in the circumstances.
x Obtain an understanding of the City’s internal control over compliance relevant to the audit in order
to design audit procedures that are appropriate in the circumstances and to test and report on
internal control over compliance in accordance with Uniform Guidance, but not for the purpose of
expressing an opinion on the effectiveness of the City’s internal control over compliance.
Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal
control over compliance that we identified during the audit.
Report on 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 a 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. A significant deficiency in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance that is less
severe than a material weakness in internal control over compliance, yet important enough to merit attention
by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the
Auditor’s Responsibilities for the Audit of Compliance section a bove and was not designed to identify all
deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify
any deficiencies in internal control over compliance that we consider to be a material weakness, as defined
above. However, material weaknesses or significant deficiencies in internal control over compliance may
exist that have not been identified.
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To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control
over compliance. Accordingly, no such opinion is expressed.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
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, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which
collectively comprise the City’s basic financial statements. We issued our report thereon dated December
20, 2021, which contained unmodified opinions on those financial statements. Our audit was conducted for
the purpose of forming opinions on the financial statements that collectively comprise the basic financial
statements. The accompanying schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by the Uniform Guidance 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 basic
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 basic financial statements as a whole.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of that testing based on the requirements of the
Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Brea, California
July 11, 2022 (except for our report on the Schedule of Expenditures of Federal Awards, for which the date
is December 20, 2021)
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CITY OF PALM DESERT, CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Assistance
Listing Pass-Through Entity Passed-Through Total Federal
Number Identifying Number to Subrecipients Expenditures
CDBG - Entitlement Grants Cluster
Department of Housing and Urban Development:
Direct Assistance:
Community Development Block Grants/Entitlement Grants 14.218 N/A -$ 284,230$
COVID-19 - Community Development Block Grants/Entitlement Grants 14.218 N/A -453,803
Subtotal - Assistance Listing 14.218 -738,033
Total Department of Housing and Urban Development Programs -738,033
Total CDBG - Entitlement Grants Cluster -738,033
Other Programs
Department of the Treasury:
Direct Assistance:
COVID-19 - Coronavirus Relief Fund 21.019 N/A -663,425
COVID-19 - Coronavirus State and Local Fiscal Recovery Funds*21.027 N/A -4,991,526
Total Department of the Treasury Programs -5,654,951
Department of Homeland Security:
Pass Through Assistance:
County of Riverside:
Emergency Management Performance Grant 97.042 72514789 -14,363
Total Department of Transportation Programs -14,363
Total Other Programs -5,669,314
Total Expenditures of Federal Awards -$ 6,407,347$
Assistance
Listing Pass-Through Entity Passed-Through Total Federal
Number Identifying Number to Subrecipients Expenditures
Department of Housing and Urban Development Direct Programs:
Community Development Block Grants/Entitlement Grants 14.218 N/A -$ 453,803$
Total Department of Housing and Urban Development Programs -453,803
Department of the Treasury Direct Programs:
Coronavirus Relief Fund 21.019 N/A -663,425
Coronavirus State and Local Fiscal Recovery Funds*21.027 N/A -4,991,526
Total Department of the Treasury Programs -5,654,951
Total Coronavirus Emergency Acts Funding -$ 6,108,754$
* Major Program
1 There were no federal awards expended in the form of noncash assistance and insurance in effect during the year.
Grantor/Program or Cluster Title
Federal Grantor/Pass-Through
CORONAVIRUS EMERGENCY ACTS FUNDING RECONCILIATION
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
The notes to the schedule of expenditures of federal awards are an integral part of this schedule.
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CITY OF PALM DESERT, CALIFORNIA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies Applicable to the Schedule of Expenditures
of Federal Awards
a. Scope of Presentation
The accompanying schedule presents only the expenditures incurred by the
City of Palm Desert, California, that are reimbursable under federal programs of federal
financial assistance. For the purposes of this schedule, federal awards include both federal
financial assistance received directly from a federal agency, as well as federal funds
received indirectly by the City from a non-federal agency or other organization. Only the
portion of program expenditures reimbursable with such federal funds is reported in the
accompanying schedule. Program expenditures in excess of the maximum federal
reimbursement authorized or the portion of the program expenditures that were funded with
state, local or other non-federal funds are excluded from the accompanying schedule.
b. Basis of Accounting
The expenditures included in the accompanying schedule were reported on the modified
accrual basis of accounting. Under the modified accrual basis of accounting, expenditures
are incurred when the City becomes obligated for payment as a result of the receipt of the
related goods and services. Expenditures reported included any property or equipment
acquisitions incurred under the federal program. The City has elected not to use the
10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
c. Indirect Cost Rate
The City did not elect to use the 10% de minimis cost rate.
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CITY OF PALM DESERT, CALIFORNIA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
SECTION I - SUMMARY OF AUDITORS' RESULTS
Financial Statements
Type of auditors' report issued: Unmodified Opinion
Internal control over financial reporting:
x Significant deficiencies identified? yes X no
x Material weaknesses identified? yes X none reported
Noncompliance material to financial
statements noted? yes X no
Federal Awards
Internal control over major programs:
x Significant deficiencies identified? yes X no
x Material weaknesses identified? yes X none reported
Type of auditors' report issued on compliance for major programs: Unmodified Opinion
Any audit findings disclosed that are required to be
reported in accordance with Title 2 U.S. Code of
Federal Regulations (CFR) Part 200, Uniform
Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (Uniform
Guidance)? yes X no
Identification of major programs:
CFDA Number Name of Federal Program
21.027 Coronavirus State and Local Fiscal Recovery Funds
Dollar threshold used to distinguish
between type A and type B program $750,000
Auditee qualified as low-risk auditee? yes X no
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CITY OF PALM DESERT, CALIFORNIA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
SECTION II - FINANCIAL STATEMENT FINDINGS
No matters were reported.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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CITY OF PALM DESERT, CALIFORNIA
SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
SECTION II - FINANCIAL STATEMENT FINDINGS
No matters were reported.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
C I T Y O F P A L M D E S E R T
73-510 FRED WARING DRIVE
PALM DESERT, CALIFORNIA 92260-2578
TEL: 760 346-0611
INFO@PALM-DESERT.ORG
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