2002 City Compliance ReportsI
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CITY OF ROSEMEAD
COMPLIANCE REPORTS
AND OTHER FINANCIAL INFORMATION
JUNE 30, 2002
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TABLE OF CONTENTS
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
1
Notes to schedule of expenditures of federal awards
2
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INDEPENDENT AUDITOR'S REPORT ON:
Compliance with requirements applicable to each major program and internal
control over compliance in accordance with OMB Circular A-133
3 and 4
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Compliance and on internal control over financial reporting based on an audit of
financial statements performed in accordance with Government Auditing Standards
5
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
6
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
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INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON
PROCEDURES
8 and 9
Appropriations Limit Calculation
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CITY OF ROSEMEAD
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year Ended June 30, 2002
Catalog of
Federal
Domestic
Pass-through
Assistance
Entity Identifying
Program
Grantor/Pass-through Grantor Program Title
Number
Number
Expenditures
U.S. Department of Housing and Urban Development
Direct Programs:
Community Development Block Grant Entitlement Program
14.218 *
N/A
$ 3,190,121
Home Investment Partnership Program
14.239
N/A
40,000
Total U.S. Department of Housing and
Urban Development
3,230,121
U.S. Department of Justice
Direct Programs:
Narcotics Forfeiture & Seizure
16.XXX
N/A
54,817
Local Law Enforcement Block Grant
16.592 *
N/A
102,151
Total U.S. Department of Justice
156,968
Total Expenditures of Federal Awards
$ 3,387,089
* Denotes a major program
I CITY OF ROSEMEAD
' NOTES TO SCHEULE OF EXPENDITURES OF FEDERAL AWARDS
June 30, 2002
I Note 1. Basis of Presentation
' The accompanying schedule of expenditures of federal awards includes the federal grant activity of the
City of Rosemead (the City), California, and is presented on the modified accrual basis of accounting.
The information in this schedule is presented in accordance with the requirements of OMB
Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. Therefore, some
' amounts presented in this schedule may differ from amounts presented in, or used in the preparation of,
the general-purpose financial statements.
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Note 2. Subrecipients
Of the federal expenditures presented in the schedule, the City provided federal awards to subrecipients as
follows:
CFDA Amount
Number Program Title Provided Expended
14.218 Community Development Block Grant Entitlement Program
$ 236,916
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McGLADREY& PULLEN, LLP M&O
® Certified Public Accountants international
' INDEPENDENT AUDITOR'S REPORT ON
' COMPLIANCE WITH REQUIREMENTS APPLICABLE TO
EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER
COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
To the Honorable Mayor and
' Members of the City Council
City of Rosemead
Rosemead, California
' Compliance
We have audited the compliance of the City of Rosemead (the City), California, with the types of
compliance requirements described in U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that are applicable to each of its major federal programs for the year ended
' June 30, 2002. 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. 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 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 occurred that could have a direct and
material effect on a major federal program. 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 on the City's compliance with those requirements.
' In our opinion, the City complied, in all material respects, with the requirements referred to above that are
applicable to each of its major federal programs for the year ended June 30, 2002.
' Internal Control over Compliance
The management of the City is responsible for establishing and maintaining effective internal control over
' compliance with 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
requirements that could have a direct and material effect on a major federal program in order to determine
' 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.
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McGladrey & Pullen, LLP is an independent member firm of
RSM International, an affiliation of independent accounting and consulting firms.
' Our consideration of internal control over compliance would not necessarily disclose all matters of
internal control that might be material weaknesses. A material weakness is a condition in which the
design or operation of one or more of the internal control components does not reduce to a relatively low
' level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants
that would be material in relation to a major federal program being audited may occur and not be detected
within a timely period by employees in the normal course of performing their assigned functions. We
noted no matters involving internal control over financial reporting and its operation that we consider to
be material weaknesses.
Schedule of Expenditures of Federal Awards
We have audited the general-purpose financial statements of the City as of and for the year ended
' June 30, 2002 and have issued our report thereon dated October 3, 2002. Our audit was performed for the
purpose of forming an opinion on the general-purpose financial statements taken as a whole. The
accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis
as required by OMB Circular A-133 and is not a required part of the general-purpose financial statements.
' Such information has been subjected to the auditing procedures applied in the audit of the general-
purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the
general-purpose financial statements taken as a whole.
' This report is intended solely for the information and use of the City Council, management and applicable
governmental control agencies and is not intended to be and should not be used by anyone other than
' those specified parties.
' Pasadena, California
October 3, 2002
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McGLADREY& PULLEN, LLP ME
® Certified Public Accountants international
' INDEPENDENT AUDITOR'S REPORT ON
COMPLIANCE AND ON INTERNAL CONTROL OVER
FINANCIAL REPORTING 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 Rosemead
Rosemead, California
We have audited the financial statements of the City of Rosemead (the City), California, as of and for the
' year ended June 30, 2002, and have issued our report thereon dated October 3, 2002. 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.
Compliance
' As part of obtaining reasonable assurance about whether the City's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
' contracts and grants, 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 that are required to be reported under
' Government Auditing Standards.
Internal Control over Financial Reporting
' In planning and performing our audit, we considered the City's internal control over financial reporting in
order to determine our auditing procedures for the purpose of expressing our opinion on the financial
' statements and not to provide assurance on internal control over financial reporting. Our consideration of
internal control over financial reporting would not necessarily disclose all matters in internal control over
financial reporting that might be material weaknesses. A material weakness is a condition in which the
' design or operation of one or more of the internal control components does not reduce to a relatively low
level the risk that misstatements in amounts that would be material in relation to the financial statements
being audited may occur and not be detected within a timely period by employees in the normal course of
' performing their assigned functions. We noted no matters involving internal control over financial
reporting and its operation that we consider to be material weaknesses.
This report is intended for the information and use of City Council, management and applicable
' governmental control agencies and is not intended to be and should not be used by anyone other than
those specified parties.
Pasadena, California
' October 3, 2002
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McGladrey & Pullen, LLP is an independent member firm of
' RSM International, an affiliation of independent accounting and consulting firms.
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CITY OF ROSEMEAD
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended June 30, 2002
1. Summary of Independent Auditor's Results
Financial Statements
Type of auditor's report issued: Unqualified
Internal control over financial reporting:
Material weakness(es) identified?
Reportable condition(s) identified that are not considered
to be material weaknesses?
Noncompliance material to financial statements noted?
Federal Awards
Internal control over major programs
Yes X No
Yes X None Reported
Yes X No
Material weakness(es) identified? Yes
Reportable condition(s) identified that are not considered
to be material weakness(es)? Yes
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
X None Reported
X No
Identification of major program:
CFDA Number Name of Federal Program
' 14.218 Community Development Block Grant Entitlement Program
16.592 Local Law Enforcement Block Grants
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Amount Expended
$ 3,190,121
102,151
Dollar threshold used to distinguish between type A and type B programs $ 300,000
Auditee qualified as low-risk auditee? X Yes No
H. Findings relating to the financial statement audit as required to be reported in accordance with
generally accepted Government Auditing Standards
None reported
III. Findings and questioned costs for federal awards
None reported
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I CITY OF ROSEMEAD
' SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
Year Ended June 30. 2002
I There were no audit findings reported during the year ended June 30, 2001.
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McGLADREY& PULLEN, LLP FUSE
® Certified Public Accountants international
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INDEPENDENT ACCOUNTANT'S REPORT ON
' APPLYING AGREED-UPON PROCEDURES
' To the Honorable Mayor and
Members of the City Council
City of Rosemead
Rosemead, California
We have applied the procedures enumerated below to the accompanying Appropriations Limit
' Calculation of the City of Rosemead, California (the City), for the year ended June 30, 2002. These
procedures, which were agreed to by the City and the League of California Cities as presented in the
publication entitled "Agreed-Upon Procedures Applied to the Appropriations Limitation" prescribed by
' Article XIIIB of the California Constitution, were performed solely to assist the City in meeting the
requirements of Section 1.5 of Article XIIIB of the California Constitution. The City's management is
responsible for the Appropriations Limit Calculation.
' This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of these
procedures is solely the responsibility of those parties specified in this report. Consequently, we make no
1 representation regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
' The procedures performed and our findings were as follows:
1. We obtained the completed internal calculations and compared the limit and annual adjustment
' factors included in those calculations to the limit and annual adjustment factors that were adopted by
a resolution of the City of Rosemead Council. We also compared the population and inflation options
included in the aforementioned calculations to those that were selected by a recorded vote of the City
' Council.
Finding: No exceptions were noted as a result of our procedures.
' 2. For the accompanying Appropriations Limit Calculation, we added line A, last year's limit, to line E,
total adjustments, and compared the resulting amount to line F, this year's limit.
Finding: No exceptions were noted as a result of our procedures.
3. We compared the current year information presented in the accompanying Appropriations Limit
' Calculation to the supporting calculations described in item 1 above.
Finding: No exceptions were noted as a result of our procedures.
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McGladrey & Pullen. LLP is an independent member firm of
' RSM International, an affiliation of independent accounting and consulting firms.
' 4. We compared the prior year Appropriations Limit presented in the accompanying Appropriations
Limit Calculation to the prior year Appropriations Limit adopted by the City Council during the
prior year.
' Finding: No exceptions were noted as a result of our procedures.
We were not engaged to, and did not, conduct an examination, the objective of which would be the
expression of an opinion on the accompanying Appropriations Limit Calculation of the City of
Rosemead, California. Accordingly, we do not express such an opinion. Had we performed additional
procedures, other matters might have come to our attention that would have been reported to you. No
' procedures have been performed with respect to the determination of the appropriations limit for the base
year, as defined by ArticleAMB of the California Constitution.
' This report is intended solely for the information and use of the City Council and management of the City
of Rosemead, California, and is not intended to be and should not be used by anyone other than these
specified parties. However, this report is a matter of public record and its distribution is not limited.
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4c-~~ . / , " 5%'e~ / Z-
Pasadena, California
October 3, 2002
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CITY OF ROSEMEAD
APPROPRIATIONS LIMIT CALCULATION
Year Ended June 30, 2002
A. Last Year's Limit
B. Adjustment Factors
1. Population change
2. Inflation change
Total Adjustment
C. Annual Adjustment
D. Other Adjustments:
Lost responsibility
Transfer to private
Transfer to fees
Assumed responsibility
Subtotal
E. Total Adjustments
F. This Year's Limit
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Amount
$ 25,367,272
1.0166
1.0782
0.0961
$ 2,437,795
Source
State Finance
State Finance
(B x A)
2,437,795
$ 27,805,067