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Home My WebLink AboutFY2016-17 Single Audit ReportCITY OF SAN RAFAEL SINGLE AUDIT REPORT FOR THE YEAR ENDED JUNE 30, 2017 This Page Left Intentionally Blank CITY OF SAN RAFAEL SINGLE AUDIT REPORT For The Year Ended June 30, 2017 TABLE OF CONTENTS Schedule of Findings and Questioned Costs .............................................................................. 1 Section I -Summary of Auditor's Results ........................................................................... 1 Section II-Financial Statement Findings ........................................................................... 2 Section III -Federal Award Findings and Questioned Costs ............................................. 2 Schedule of Expenditures of Federal Awards ............................................................................ 3 Notes to Schedule of Expenditures of Federal A wards ............................................................. 5 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 ...................... 7 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 ........... 9 This Page Left Intentionally Blank CITY OF SAN RAFAEL SCHEDULE OF FINDINGS AND QUESTIONED COSTS For The Year Ended June 30, 2017 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: Unmodified Internal control over financial reporting: • Material weakness( es) identified? Yes • Significant deficiency(ies) identified? Yes Noncompliance material to financial statements noted? Yes Federal Awards Type of auditor's report issued on compliance for major programs: Unmodified Internal control over major programs: • Material weakness( es) identified? Yes • Significant deficiency(ies) identified? Yes Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.5 l 6(a)? Yes Identification of major programs: CFDA#(s) Name of Federal Program or Cluster 20.205 Highway Planning and Construction x x x x x x Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? x Yes No None Reported No No None Reported No No SECTION II-FINANCIAL STATEMENT FINDINGS Our audit did not disclose any significant deficiencies, or material weaknesses or instances of noncompliance material to the basic financial statements. We have also issued a separate Memorandum on Internal Control dated September 28, 2017 which is an integral part of our audits and should be read in conjunction with this report. SECTION III -FEDERAL AW ARD FINDINGS AND QUESTIONED COSTS Our audit did not disclose any findings or questioned costs required to be reported in accordance with Uniform Guidance. 2 CITY OF SAN RAFAEL SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS For the Fiscal Year Ended June 30, 2017 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 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, Part B -Grants for Supportive Services and Senior Centers 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 Downtown Rail Readiness Project Southern Heights Bridge Replacement 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 Selective Traffic Enforcement Program FY2017 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 FY 15-16 Total U.S. Department of Transportation 3 Federal CFDA Number 14.218 14.218 93.778 93.044 20.205 20.205 20.205 20.205 20.205 20.600 20.600 20.600 20.608 Pass-Th rough Identifying Number HUD-04527-01-15 HUD-4536-01-16 SFY 2013-14 10-204 CML-5043(036) BRL0-5043(038) STPL-5043 (035) RSTPL-6406(014) RSTPL-6406(014) HISPL 5043 (037) PT1673 PT17115 AL1628 Federal Expenditures $ 16,447 190,373 206,820 55,306 9,994 65,300 308,014 182,302 20,897 41,771 11,554 564,538 3,845 67,408 48,365 119,618 58,030 742, 186 (Continued) CITY OF SAN RAFAEL SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS For the Fiscal Year Ended June 30, 2017 Federal Grantor/ Pass-Through Grantor/Program or Cluster Title U.S. Department of Justice, Direct Program Bulletproof Vest Partnership Program PD Vest Grant 2017 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-Through Identifying Number SHSGP-2015 See Accompanying Notes to Schedule of Expenditures of Federal Awards 4 Federal Expenditures 18,570 18,570 27,650 27,650 $ 1,060,526 CITY OF SAN RAFAEL NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS For The Year Ended JUNE 30, 2017 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. 5 This Page Left Intentionally Blank 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 financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units , each major fund, and the aggregated remaining fund information of the City as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated September 28 , 2017 . Our report includes a reference to other auditors who audited the financial statements of the San Rafael Sanitation District, as described in our report on the City's financial statements . This report does not include the results of the other auditors' testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. Our report included an emphasis of a matter paragraph disclosing the implementation of new accounting principles . 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. 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. Accou ntancy Corporati on 3 4 78 Buskirk Aven ue, Suite 2 15 Pl easant Hill , CA 94523 7 T 925.930.0902 F 925 .930.0135 E m aze@mazeassoc iates .com w rnazeassoci ates.corn 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. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 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. 'Wl.<>-1a.-1 ~Mo~ Pleasant Hill, California September 28, 201 7 8 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 AW ARDS 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 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, 2017. 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 the requirements of federal statutes, regulations, and terms and conditions of 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 US. 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 e nded Jun e 30, 2017 . Accountancy Corporation 3478 Buskirk Avenue , Suite 2 15 Pleasant Hill, CA 94523 9 T 925 .930 .0902 F 925 .930 .0135 E maze@ mazeassociat es.com w mazeassociates.com Report on Internal Control Over Compliance Management 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 progiam 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. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 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. 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, 2017. We have issued our report thereon dated September 28, 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. tWl_tA~e. 'l J\M\~ Pleasant Hill, California · September 28, 2017 10