HomeMy WebLinkAboutFIN Annual Audit of Federal Grant Expenditures____________________________________________________________________________________
FOR CITY CLERK ONLY
Council Meeting: 02/18/2020
Disposition: Accepted report
Agenda Item No: 5.d
Meeting Date: February 18, 2020
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Finance
Prepared by: Nadine Atieh Hade,
Finance Director
City Manager Approval: ______________
TOPIC: ANNUAL AUDIT OF FEDERAL GRANT EXPENDITURES
SUBJECT: SINGLE AUDIT REPORT FOR THE YEAR ENDED JUNE 30, 2019
RECOMMENDATION: ACCEPT REPORT
BACKGROUND: Federal regulations provide that any local agency receiving or expending $750,000 or
more in combined federal grant funds, either directly or indirectly in a fiscal year, is subject to a
separate audit on those programs. This threshold was reached in fiscal year 2018-2019; therefore, a
separate (Single Audit) report was required. The firm of Maze and Associates Accountancy
Corporation, who also performed the City’s financial audit, conducted the Single Audit for fiscal year
2018-2019.
ANALYSIS: The City incurred a total of $4,147,318 in federal expenditures during fiscal year
2018-2019 that fell under the parameters of the audit. The auditor identified one major program to be
audited, Disaster Grants – Public Assistance (Presidentially Declared Disasters). Funds from this
program supported emergency slide repairs at 70 Irwin, 80 Upper Toyon, 21 San Pablo, and 70 D
Street as well as public safety support following the Mendocino Complex Fires.
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. The auditor issued the reports with an
unmodified opinion and no reported deficiencies in internal control.
FISCAL IMPACT: There is no fiscal impact resulting from the acceptance of this report.
RECOMMENDED ACTION: Accept Report.
ATTACHMENT: Single Audit Report for the Year Ended June 30, 2019
CITY OF SAN RAFAEL
SINGLE AUDIT REPORT
FOR THE YEAR ENDED JUNE 30, 2019
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CITY OF SAN RAFAEL
SINGLE AUDIT REPORT
For The Year Ended June 30, 2019
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 Awards ............................................................. 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
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CITY OF SAN RAFAEL
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For The Year Ended June 30, 2019
SECTION I-SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of report the auditor issued on whether the financial
statements audited were prepared in accordance with GAAP
Internal control over financial reporting:
• Material weakness(es) identified?
• Significant deficiency(ies) identified?
Umnodified
Yes
Yes
X
X ------
Noncompliance material to financial statements noted?
Federal Awards
Internal control over major federal programs:
• Material weakness(es) identified?
• Significant deficiency(ies) identified?
Type of auditor's report issued on compliance for major
federal programs:
Any audit findings disclosed that are required to be reported
in accordance with 2 CFR 200.516(a)?
Identification of major programs:
Yes X ------
Yes X
Yes X ---
Unmodified
Yes X
Name of Federal Program or Cluster
No
None
Reported
No
No
None
Reported
No
CFDA#(s)
97.036 Disaster Grants -Public Assistance (Presidentially Declared Disasters)
Dollar threshold used to distinguish between type A and type B programs: $750,000
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 weaknesses or instances of noncompliance
material to the basic financial statements. We have also issued a separate Memorandum on Internal Control
dated November 8, 2019 which is an integral part of our audits and should be read in conjunction with this
report.
SECTION ID -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, 2019
Federal Grantor/
Pass-Through Gran tor/Program or Cluster Title
U.S. Department of Housing and Urban Development, Direct
Community Development Block Grants/ Entitlement Grants
Pass-Through County of Marin, California
Community Development Block Grants/ Entitlement Grants
Childcare
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
Southern Heights Bridge Replacement
Third St at Hetherton Intersection Improvement
Grand Avenue Pathway Connector Project
Francisco Blvd. East Sidewalk Improvements
Third Street Safety Improvement Study
Subtotal for Highway Planning and Construction
Pass-Through California Office ofTraftic Safety
State and Community Highway Safety
Selective Traffic Enforcement Program FY2018
Selective Traffic Enforcement Program FY2019
Subtotal for State and Community Highway Safety
Total U.S. Department of Transportation
U.S. Department of Justice, Direct Program
Bulletproof Vest Partnership Program
PD Vest Grant 2019
Total U.S. Department of Justice
U.S. Department of Homeland Security, Pass-Through Programs
Pass-Through State of California Governer's Office ofEmergency Services
Disaster Grants -Public Assistance (Presidentially Declared Disasters)
Disaster Grants -Public Assistance (Presidentially Declared Disasters)
Program Subtotal
Assistance to Firefighters Grant Program
Total U.S. Department of Homeland Security
Total Federal Expenditures
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
16.607
97.036
97.036
97.044
Pass-Through
Identifying
Number
40CDBGI 9CD4527
SFY 2013-14
10-204
BRLO-5043(038)
HSIPL-5043(040)
CML-5043(039)
A TPL-5043(042)
HSIPL-5043 (043)
PTl8131
PT!9132
FEMA-4301-DR-CA
FEMA 4382 CDAA 2018
EMW-2017-FO-04380
See Accompanying Notes to Schedule offoqienditures of Federal Awards
3
Federal
Expenditures
$ 195,315
36,447
231,762
140,706
12,050
152,756
329,130
61,532
1,261,704
200,127
11,074
I 863,567
38,607
64,003
102,610
1,966,177
10.145
10,145
1,642,554
9,140
1,651,694
134,784
1,786,478
$ 4,147,318
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CITY OF SAN RAFAEL
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS
For The Year Ended June 30, 2019
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 minim is indirect cost rate allowed under the Uniform Guidance.
5
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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 Gov ernment Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the govenm1ental
activities , the business-type activities, the aggregate discretely presented component unit each major fund,
and the aggregate remaining fund information of the City as of and for the year ended June 3 0, 2019, and
the related notes to the financial statements, which collectively comprise the City's basic financial
statements, and have issued our repo1t thereon dated November 8, 2019 . Our report includes a reference
to other auditors who audited the financial statements of San Rafael Sanitation District, as described in
our repo1t 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 repo1ted on
separately by those auditors. Our repo1t included an emphasis of a matter paragraph disclosing the
implementation of a new accounting principle.
Intemal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the 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 the City's internal control. Accordingly, we do
not express an opinion on the effectiveness of the 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 wealmess is a deficiency, or a combination
of deficiencies , in internal control such that there is a reasonable possibility that a material misstatement
of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A
significant d eficiency 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.
Accountancy Corporation
3478 Bu skirk Ave nu e, Suite 215
Ple as an t Hill , CA 94 523
7
T 925 .930 .0902
F 925 .930 .0 135
e maze@ mazeassoci at es .co m
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. The
results of our tests and those of other auditors disclosed no instances of noncompliance or other matters
that are required to be reported under Govermnent Auditing Standards.
Pwpose 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.
~0.~e_ ~ ~/j4D ~
Pleasant Hill, California
November 8, 2019
8
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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 011 Complia11ce for Each Major Federal Program
We have audited the City of San Rafael's (City) compliance with the types of compliance requirements
described in the 0MB 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, 2019 . 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.
Ma11agement's Respo11sibility
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 Gov ernment 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 a udit includes examini ng , 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 pro gram. However, our audit does not provide a legal determination of the City's compliance.
Opinio11 011 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, 2019.
Accountancy Corporation
3478 Buskirk Ave nu e, Su ite 2 15
Pl easant Hill , CA 94523
9
T 925 .930.0902
F 925 .930.0 135
E maze@ mazeassociat es.com
w mazeassociates.com
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 proce_dures 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 a 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 sign,i_ficant 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 have not been identified. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material wealmesses 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, the
aggregate discretely presented component unit, each major fund, and the aggregate remaining fund
information of the City as of and for the year ended June 30, 2019, and the related notes to the financial
statements, which collectively comprise the City's basic financial statements. We issued our rep01i
thereon dated November 8, 2019, which contained an unmodified opinion on those financial statements.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the basic financial statements. 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 financial statements
as a whole.
IWll\lR-{ ~/J()O~
Pleasant Hill, California
January 21, 2020
11
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