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Home My WebLink AboutFY2015-16 Single Audit ReportCITY OF SAN RAFAEL SINGLE AUDIT REPORT FOR THE YEAR ENDED JUNE 30, 2016 This Page Left Intentionally Blank CITY OF SAN RAFAEL SINGLE AUDIT REPORT For The Year Ended June 30, 2016 TABLE OF CONTENTS Schedule of Findings and Questioned Costs .............................................................................. l Section I-Summary of Auditor's Results ........................................................................... 1 Section II -Financial Statement Findings ........................................................................... 2 Section ill-Federal Award Findings and Questioned Costs ............................................. 2 Schedule of Expenditures of Federal Awards ............................................................................ 4 Notes to Schedule of Expenditures of Federal Awards ............................................................. 7 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 ...................... 9 Independent Auditor's Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance .......... 11 This Page Left Intentionally Blank CITY OF SAN RAFAEL SCHEDULE OF FINDINGS AND QUESTIONED COSTS For The Year Ended June 30, 2016 SECTION I-SUMMARY OF AUDITOR'S RESULTS Financial Statements Type of auditor's report issued on whether the financial statements were prepared in accordance with GAAP: Internal control over financial reporting: • Material weakness( es) identified? • Significant deficiency(ies) identified? Noncompliance material to financial statements noted? Federal Awards Type of auditor's report issued on compliance for major programs: Internal control over major programs: • Material weakness( es) identified? • Significant deficiency(ies) identified? Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Identification of major programs: Unmodified Yes x x Yes ------ Yes x --- Unmodified Yes x x Yes --- Yes x --- CFDA#(s) Name of Federal Program or Cluster 14.218 Community Development Block Grants/Entitlement Grants 20.205 Highway Planning and Construction Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? Yes ---x --- 1 No None Reported No No None Reported No No SECTION II-FINANCIAL STATEMENT FINDINGS Our audit disclosed significant deficiencies, but did not disclose material weaknesses or instances of noncompliance material to the basic financial statements. We have also issued a separate Memorandum on Internal Control dated October 12, 2016, which is an integral part of our audits and should be read in conjunction with this report. SECTION ill-FEDERAL AW ARD FINDINGS AND QUESTIONED COSTS Our audit disclosed the following fmdings or questioned costs required to be reported in accordance with Uniform Guidance. Finding reference number: SA2016-001 Accurate Preparation of the Schedule of Expenditures of Federal Awards CFDA number -20.205, 20.600 CFDA Title -Highway Planning and Construction, State and Community Highway Safety Name of Federal Agency-Department of Transportation Name of pass-through Entity-California Department of Transportation • Criteria -In accordance with the requirements of OMB Uniform Administrative Requirements Subpart D Section 200.302(b)(l), the City should report all Federal expenditures in the Schedule of Expenditures of Federal Awards (SEFA) each fiscal year with the correct Catalog of Federal Domestic Assistance (CFDA) title and number. • Condition -The original SEF A prepared by the City included one grant project incorrectly identified as funded by the State and Community Highway Safety Grant (CFDA 20.600) instead of the Highway Planning and Construction Grant (CFDA 20.205). • Effect -The City is not in compliance with the requirements as listed in the OMB Uniform Administrative Requirements for Federal grant program expenditures. • Cause-The City's staff in charge of the grant program did not provide the correct CFDA number in the preparation of the SEF A. • Recommendation -The City should develop policies and procedures for City departments to ensure that the correct CFDA titles and numbers are included on the SEF A. For example, upon receiving new grant awards, the City should contact the grantor to obtain the CFDA title and number related to the award, if they are not clearly stated on the grant agreement. In addition, if the SEF A is prepared by an outside consultant, the City should distribute the SEF A to grant program managers to verify the accuracy of the information. • View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City. 2 This Page Left Intentionally Blank CITY OF SAN RAFAEL SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS For the Fiscal Year Ended June 30, 2016 Federal Grantor/ Pass-Through Grantor/Program or Cluster Title U.S. Department of Housing and Urban Development Pass-Through County of Marin, California Community Development Block Grants/ Entitlement Grants Childcare ADA I DOJ Compliance Curb Ramps ADA I DOJ Compliance Curb Ramps Total U.S. Department of Housing and Urban Development U.S. Department of Health and Human Services Pass-Through the California Health and Human Services Agency Medical Assistance Program Department of Health Care Services -Ground Emergency Medical Transportation Pass-Through County of Marin, California Special Programs for the Aging Title III, Federal CFDA Number 14.218 14.218 14.218 93.778 Part B -Grants for Supportive Services and Senior Centers 93.044 Substance Abuse and Mental Health Services Projects of Regional and National Significance Strategic Prevention Framework State Incentive Grant -Alcohol Compliance Team 93.243 Total U.S. Department of Health and Human Services U.S. Department of Transportation, Pass-Through Programs Pass-Through State of California Department of Transportation Highway Planning and Construction Puerto Suello Transit Center Connector Downtown Rail Readiness Project Del Presidio Blvd. -Pt. San Pedro Resurfacing SR Downtown Integrated Transit Center Study SR Downtown Parking and Wayfinding Study Subtotal for Highway Planning and Construction State and Community Highway Safety 2nd Street at Grand Ave Intersection Modification Pass-Through California Office of Traffic Safety State and Community Highway Safety Selective Traffic Enforcement Program FY2016 Subtotal for State and Community Highway Safety Pass-Through California Office of Traffic Safety Minimum Penalties for Repeat Offenders for Driving While Intoxicated Avoid Grant FY15-16 Total U.S. Department of Transportation 4 20.205 20.205 20.205 20.205 20.205 20.600 20.600 20.608 Pass-Through Identifying Number HUD-04527-01-13 HUD-04536-01-14 HUD-04536-01-15 SFY 2013/14 10-204 2117 04-5043R-017-N CML-5043(036) STPL-5043 (035) RSTPL-6406(014) RSTPL-6406(014) HlSPL 5043 (037) PT1673 AL1628 Federal Expenditures $ 16,552 239,204 243,243 498,999 139,373 8,390 51,925 199,688 172,547 1,591,986 679,525 214,145 201,035 2,859,238 18,990 114,183 133,173 122,761 3,115,172 (Continued) CITY OF SAN RAFAEL SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS For the Fiscal Year Ended June 30, 2016 Federal Grantor/ Pass-Through Grantor/Program or Cluster Title U.S. Department of Justice, Direct Programs Bulletproof Vest Partnership Program PD Vest Grant 2014 Total U.S. Department of Justice U.S. Department of Homeland Security, Pass-Through Programs Pass-Through County of Marin, California Homeland Security Grant Program Marin County CERT FY 2015 Total U.S. Department of Homeland Security Total Federal Expenditures Federal CFDA Number 16.607 97.067 Pass-Throu2h Identifying Number 1121-0035 SHSGP-2015 See Accompanying Notes to Schedule of Expenditures of Federal Awards 5 Federal Expenditures 9,732 9,732 17,597 17 597 $ 3,841,188 This Page Left Intentionally Blank CITY OF SAN RAFAEL NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended June 30, 2016 NOTE 1-REPORTING ENTITY The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for the City of San Rafael, California and its component units as disclosed in the notes to the Basic Financial Statements, except for federal awards of the San Rafael Sanitation District (District). Federal awards expended by this entity, if any, are excluded from the Schedule and are subject to a separate Single Audit performed by other auditors. NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the measurement focus applied. All governmental funds and agency funds are accounted for using the modified accrual basis of accounting. All proprietary funds are accounted for using the accrual basis of accounting. Expenditures of Federal Awards reported on the Schedule are recognized when incurred. NOTE 3 -INDIRECT COST ELECTION The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. 7 This Page Left Intentionally Blank MAZE &ASSOCIATES 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 To the Honorable Members of the City Council City of San Rafael, 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 basic financial statements of the City of San Rafael as of and for the year ended June 30, 2016, and the related notes to the financial statements, and have issued our report thereon dated October 12, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered City's internal control over financial reporting (internal control) to determine the 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 City's internal control. Accordingly, we do not express an opinion on the effectiveness of 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 City'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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. 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. We identified certain deficiencies in internal control, we consider to be significant deficiencies as listed on the Schedule of Significant Deficiencies included as part of our separately issued Memorandum on Internal Control dated October 12, 2016 which is an integral part of our audits and should be read in conjunction with this report. A ccountancy Corpor at ion 3478 Bu skirk Avenue, Suite 215 Plea sant Hill, CA 94523 9 T 925.930.0902 F 925.930.0135 E maze@mazeassociates.com w mazeassociates.com 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 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. City's Response to Findings City's response to the findings identified in our audit are described in our separately issued Memorandum on Internal Control dated October 12, 2016 which is an integral part of our audits and should be read in conjunction with this report. City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. 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 result 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. Pleasant Hill, California October 12, 2016 10 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE To the Honorable Members of the City Council City of San Rafael, California Report on Compliance for Each Major Federal Program We have audited the City of San Rafael’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, 2016. 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. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. 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 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). Those standards and the Uniform Guidance 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 federal 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 on compliance for each major federal program. However, our audit does not provide a legal determination of the City’s compliance. Opinion on Each Major Federal Program 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, 2016. 11 Other Matters The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as item SA 2016-001. Our opinion on each major federal program is not modified with respect to these matters. City's Response to Findings The City's response to the noncompliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program 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 first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as item SA 2016-001, that we consider to be significant deficiencies. The City's response to the internal control over compliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. 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. 12 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, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated February 22, 2017 which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. 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 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 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 schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole . Pleasant Hill, California February 22, 2017 13 This Page Left Intentionally Blank