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Home My WebLink AboutFin Single Audit Report FY 2008-09CITY OF Agenda Item No: 5 Meeting Date: April 5, 2010 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: FINANCE Prepared by: Cindy Mosser City Manager Approval: bi Finance Director SUBJECT: FY 2008-2009 SINGLE AUDIT REPORT RECOMMENDATION: ACCEPT THE FY 2008-2009 SINGLE AUDIT REPORT I:: :1 All As is required by both local code and State law, the City of San Rafael must complete an annual audit of its financial activities. The auditing firm of Maze and Associates, Accountancy Corporation conducted the audit for fiscal year 2008-2009. Their work was completed in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget Circular A-133, Audits of State and Local Government and Non -Profit Organizations. The Federal Government requires that any local agency receiving or expending $500,000 or more in combined federal grant funds, either directly or indirectly in a fiscal year, is subject to a separate audit on those programs and a separate Single Audit Report is issued. This threshold amount occurred in fiscal year 2008-2009; therefore, this separate audit report was required. rvEX&VII&T As required under the Single Audit Act, a number of separate reports are contained within this document. Most of these reports comment on either compliance with Federal assistance regulations or recommendations regarding the City's accounting practices. With respect to compliance, the auditors have found no material instances of noncompliance with laws, regulations, contracts or grants applicable to our programs. There were no current findings or recommendations. FISCAL IMPACT: No fiscal impact occurs by having the Council accept the report. FOR CITY CLERK ONLY File No.: Council Meeting: Disposition: SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 OPTIONS: The City Council can choose to either: 1) Accept the Fiscal Year 2008-2009 Single Audit Report or 2) Reject the report. The Council is required under current law to accept the report and file it with numerous County, State and Federal agencies. Rejecting these reports would leave the City out of compliance with applicable laws. ACTION REQUIRED: Staff recommends Council accept the report as presented. Attachments: Single Audit Report W:\Management Services- WorkFile\Finance- WorkHe\Council Material\Staff Reports\2010\CityWudit report fy2008-09 Single Audit.doc CITY OF SAN RAFAEL SINGLE AUDIT REPORT FOR THE YEAR ENDED JUNE 30, 2009 This Page Left Intentionally Blank CITY OF SAN RAFAEL SINGLE AUDIT REPORT For The Year Ended June 30, 2009 TABLE OF CONTENTS Page Schedule of Findings and Questioned Costs.............................................................................. l Section I - Summary of Auditor's Results........................................................................... l Section II - Financial Statement Findings........................................................................... 2 Section III - Federal Award Findings and Questioned Costs .............................................. 2 Section IV - Status of Prior Year Findings andQuestioned Costs.................................................................................................... 2 Schedule of Expenditures of Federal Awards............................................................................ 3 Notes to Schedule of Expenditures of Federal Awards............................................................. 5 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 Report on Compliance with Requirements Applicable to Each Major Program and On Internal Control Over Compliance in Accordance With OMB Circular A-133.............................................................................. 9 This Page Left Intentionally Blank CITY OF SAN RAFAEL SCHEDULE OF FINDINGS AND QUESTIONED COSTS For The Year Ended June 30, 2009 SECTION I—SUMMARY OF AUDITOR'S RESULTS Financial Statements Type of auditor's report issued: Internal control over financial reporting: • Material weakness(es) identified? • Significant deficiency(ies) identified that are not considered to be material weaknesses? 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 that are not considered to be material weaknesses? Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A-133? Identification of major programs: Unqualified Yes X No X None Yes Reported X Yes No Unqualified Yes X No X None Yes Reported X Yes No CFDA#(s) Name of Federal Program or Cluster 20.205 Department of Transportation –Highway Planning and Construction 14.228 Department of Housing and Urban Development – ADA/DOJ Compliance – Curb Ramps Dollar threshold used to distinguish between type A and type B programs: $300,000 Auditee qualified as low-risk auditee? X Yes No 1 SECTION II — FINANCIAL STATEMENT FINDINGS Our audit did not disclose any significant deficiencies, or material wealmesses or instances of noncompliance material to the basic financial statements. We have also issued a separate Memorandum on Internal Control dated October 30, 2009 which is an integral part of our audits and should be read in conjunction with this report. SECTION III — FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Our audit did not disclose any findings or questioned costs required to be reported in accordance with section 510(a) of OMB Circular A-133. SECTION IV - STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS — Prepared by Management Financial Statement Prior Year Findines There were no prior year Financial Statement Findings reported. FederalAward Prior Year Findings and OaeWmed Costs There were no prior year Federal Award Findings and Questioned Costs reported. 2 CITY OF SAN RAFAEL SCHEDULE OF FMENDrfURES OF FEDERAL AWARDS Far tbeFiscal Year Ended Jane 30, 2009 3 IdentSying Federal Pass.Through Catalog program Gramor Agency and Award Tide Granth Number Expenditures U.S. Department of Housing and Urban Development Community Development Block Grant; Passed Through Marin County Chi dcaze B05 -UC -06-0004 14,218 $15,980 ADA/DOJ Compliance -Curb Ramps HUD 04536-01-08 14.228 300,000 Program Subtotal 315,980 U.S. Department of Health and Human Services Passed Through Bay Area Community Resources Preventlon and Treatment of Substance Abuse ADP -AD -510809/0910 93.959 7,429 Passed Through California Department ofPducadon Child Care and Development Block Grant CIMS -8310, CSCGr8169, and CRPM-8070 93.575 8,238 Passed Through Mario County Special Programs for the Aging Title IIL PartB 09-064 93.044 20,000 Program Subtotal - - 35,667 U.S. Department of Transportation Passed Through the California Department of Transportation: Medway/Canal Intersection Improvements 4 -MRN -0 -SRF 20.205 569,084 Safe Routes to School- San Rafael High School SR2SL-5043(022) 20205 144,896 Safe Routes to School- Sim Valley Elementary 045043R -013-N 20.205 45,791 Terra Linda Street Resurfacing STPL5043(021) 20.205 159,051 Francisco Boulevard East Improvements 04.5043R -013-N 20,205 368,091 Puerto Smile Transit Center Connector 04 -5043R -017-N 20.205 117,086 Mahan Creek Path- Transit Center Connector 04-5043MM-N 20,205 28,192 Tena Linda North San Robot Improvements 04 -5043R -014-N 20.205 87,090 Narthgate Gap Closure 04 -5043R -015-N 20205 97,079 Canal St. Pedestrian Access & Safety Improvements 04 -5043R -019-N 20.205 50,816 Subtotal 1.667,176 Office o£Traffic Safety - DUI Met Grant SC08381 20.600 12,705 Office of Traffic Safety -DUI Mini Great SCO9381 20.600 15,635 Office ofTmffio Safety -DUI Enforcement& Awareness Program AL0956 20.600 58,202 Office of Traffic Safety- Avoid the Marin 13 AL0613 20.600 37,072 Office of Traffic Safety -Avoid the Marin 13 AL0942 20.600 45,592 Office ofTmffic Safety- Selective Traffic Bufmancrout Program PT0734 20,600 76,227 Subtotal 245,432 Program Subtotal 1,912,608 U.S. Department of Justice Bureau o0watko Assistance Grant- Police Department Vest Grant 16.607 3,135 Program Subtotal 3,135 Office of Homeland Security Passed Through California Department of Boating and Waterways Boating Safety and Enforcement Grant 08-204-767 97.012 - 24,986 Passed Through Marin County State Homeland Security Grant 2008 2008.006 97.073 7,575 State Homeland Security Grant 2007 SHS02007 97.073 38.715 Subtotal 46290 Passed Through Mmin County 05 State Homeland Security -CERT Grant SH805-EQ-18 97.067 1,997 Program Subtotal 73,273 Total Federal Expenditures $2,340,663 Sea accompanying notes to Schedule ofExpenditmes ofFederal Awards 3 This Page Left Intentionally Blank CITY OF SAN RAFAEL NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended June 30, 2009 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 the District, if any, are excluded from the Schedule and are subject to a separate Single Audit performed by other auditors. NOTE 2 - BASIS OF ACCOUNTING 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 - DIRECT AND INDIRECT (PASS-THROUGH) FEDERAL AWARDS Federal awards may be granted directly to the City by a federal granting agency or may be granted to other government agencies which pass-through federal awards to the City. The Schedule includes both of these types of Federal award programs when they occur. This Page Left Intentionally Blank ACCOUNTANCY CORPORATION 3478 Buskirk Ave. - Suite 215 Pleasant Hill, California 94523 (925) 930-0902 • FAX (925) 930-0135 maze@mazeassociates.com www.mazeassociates.com REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOYERNMENTAUDITINGSTANDARDS Honorable Mayor and City Council of the City of San Rafael San Rafael, California We have audited the financial statements of the City of San Rafael as of and for the year ended June 30, 2009, and have issued our report thereon dated October 30, 2009. We conducted our audit in accordance with generally accepted auditing standards 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. Internal Control over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting as a basis for designing our auditing procedures 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 over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the City's ability to initiate, authorize, record, process or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the City's financial statements that is more than inconsequential will not be prevented or detected by the City's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the City's internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the fust paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. A Professional Corporation 7 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 and other matters that are required to be reported under GovernmentAuditing Standards. We have also issued a separate Memorandum on Internal Control dated October 30, 2009, which is an integral part of our audits and should be read in conjunction with this report. This report is intended solely for the information and use of City Council, management, 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. 4rVIG�Z12. � �i��w October 30, 2009 l d MAZE & ASSOCIATES ACCOUNTANCY CORPORATION 3478 Buskirk Ave. - Suite 215 Pleasant Hill, California 94523 (925) 930-0902 • FAX (925) 930-0135 maze @mazeassociates. com www.mazeassociates.com REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Honorable Mayor and City Council of the City of San Rafael San Rafael, California Compliance We have audited the compliance of the City of San Rafael with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2009. The City's major federal programs are identified in Section I - Summary of Auditor's Results included in 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 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. 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, 2009. Internal Control over Compliance The management of the City is responsible for establishing and maintaining effective internal controls 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 in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, 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 theeffectiveness of City's internal control over compliance. A Professional Corporation 9 A control deficiency in a City's internal control over compliance 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 noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the City's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the City's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the City's internal control. Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider material weaknesses, as defined above. Schedule of Expenditures of Federal Awards We have audited the financial statements of the City as of and for the year ended June 30, 2009, and have issued our report thereon dated October 30, 2009. Our audit was performed for the purpose of forming opinions on the financial statements. The accompanying schedule of expenditures of federal awards is presented for the purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole. This report is intended solely for the information and use of City Council,, management, 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. &Ip- ago December 31, 2009 10