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2011 Single Audit Report07-1-1741=171; 1 1 4A -9L"- City of Rosemead Single Audit Report on Federal Awards Year Ended June 30, 2011 TABLE OF CONTENTS 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 Page Independent Auditor's 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 3 Schedule of Expenditures of Federal Awards D Notes to the Schedule of Expenditures of Federal Awards 7 Schedule of Findings and Questioned Costs 0 Summary Schedule of Prior Audit Findings 10 '�. �- Compliance and Other Matters 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 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, City Council, others within the entity, and 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. Xj e 4A, iz ao January 18, 2012 -2- 1. 1 .- 'l -,-. L- .. - AL a . � " • 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 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, each major fund, and the aggregate remaining fund information of 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 January 18, 2012, which contained unqualified opinions on those financial statements. Our audit was conducted 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 Circular A -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 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 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 as a whole. This report is intended solely for the information and use of management, City Council, others within the entity, 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. ®R March 22, 2012 (except for the Schedule of Expenditures of Federal Awards, as to which the date is January 18, 2012) -5- City of Rosemead Schedule of Expenditures of Federal Awards Year Ended June 30, 2011 Federal Grantor/ Pass - through Grantor/ Program Title U.S. Department of Housing and Urban Development Direct Assistance: Community Development Block Grant ARRA - Community Development Block Grant HOME Subtotal - U.S. Department of Housing and Urban Development U.S. Department of Justice Passed through the City of Los Angeles: Edward Byrne Memorial Justice Assistance Grant Subtotal - U.S. Department of Justice U.S. Department of Transportation Passed through the State of California Department of Transportation: ARRA - Highway Planning and Construction Subtotal - U.S. Department of Transportation U.S. Department of Enerqv Direct Assistance: ARRA - Energy Efficiency and Conservation Block Grant Subtotal - U.S. Department of Energy Federal CFDA Pass - through Number Number 14.218 N/A 14.253 -ARRA N/A 14.239 N/A Amount Federal Provided to Expenditures Subrecipients Total Expenditures of Federal Awards $ 2,325,894 $ 169,713 See accompanying notes to schedule of expenditures of federal awards. $ 576,448 $ 169,713 18,942 - 227,086 - 822,476 169,713 16.738 C- 117929 26,141 - 26,141 - 20.205 -ARRA 07 -5358R 1,345,934 - 1,345,934 - 81.128 -ARRA N/A 131,343 - 131,343 - WE City of Rosemead Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2011 (1) Summary of Significant Accounting Policies Applicable to the Schedule of Expenditures of Federal Awards (a) Scope of Presentation The information in the accompanying schedule is presented in accordance with the requirements of OMB Circular A -133, Audits of State and Local Governments and Non Profit Organizations. The accompanying schedule presents only the expenditures incurred by the City that are reimbursable by agencies providing federal assistance. For the purposes of this schedule, federal financial assistance includes both federal financial assistance received directly from a federal agency, as well as federal funds received indirectly from a non - federal agency or other organization. Only the portions of program expenditures reimbursable with such federal funds are 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 recognized when the City becomes obligated for payment as a result of the receipt of the related goods and services. Expenditures reported include any property or equipment acquisitions incurred under the federal program. (c) Subrecipients During the fiscal year ended June 30, 2011, the City disbursed $169,713 of federal grants to various subrecipients. 7- City of Rosemead Schedule of Findings and Questioned Costs Year Ended June 30, 2011 I. SUMMARY OF AUDITOR'S RESULTS Financial Statements Type of auditor's report issued: unqualified Internal control over financial reporting: Material weakness identified? yes X no Significant deficiencies identified that are not considered to be material weaknesses? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major programs: Material weaknesses identified? yes X no Significant deficiencies identified that are not considered to be material weaknesses? 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 Circular A -133? yes X no City of Rosemead Schedule of Findings and Questioned Costs Year Ended June 30, 2011 I. SUMMARY OF AUDITOR'S RESULTS (continued) Identification of major programs: CFDA Number 20.205 -ARRA 81.128 -ARRA Name of Federal Program ARRA - Highway Planning and Construction ARRA - Energy Efficiency and Conservation Block Grant Dollar threshold used to distinguish between type A and type B programs: Auditee qualified as low -risk auditee? X yes ll. FINDINGS — FINANCIAL STATEMENT AUDIT No matters to be reported. III. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters to be reported. $ 300,000 no City of Rosemead Summary Schedule of Prior Audit Findings Year Ended June 30, 2011 CURRENT STATUS OF PRIOR YEAR FINDINGS: DEPARTMENT OF TRANSPORTATION ARRA - Highway Planning and Construction - CFDA No. 20.205 -ARRA 2010 -5 Grant No. 07 -5358R Condition: For the year ended June 30, 2010, the City had not submitted any required Monthly Employment Reports to the granting agency. Current Status: The finding has been corrected; the City is now filing the required Monthly Employment Reports in a timely manner. -10-