HomeMy WebLinkAbout; ; 1989-90 Auditor's Reports and Schedule of Federal Financial Assistance; 1990-06-30a
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CITY OF CARLSBAD
Schedule of Federal Financial Assistance
Under the Single Audit Act of 1984
June 30, 1990
0 and Auditors' Reports Required
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CITY OF CARLSBAD, CALIFORNIA
Schedule of Federal Financial Assistance
and Auditors' Reports Required
Under the Single Audit Act of 1984
Year ended June 30, 1990
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Table of Contents 0
Independent Auditors' Report on Supplementary Schedule of Federal
Financial Assistame
e Schedule of Federal Financial Assistance
Notes to Schedule of Federal Financial Assistance
Independent Auditors' Report on Compliance at the General Purpose
Financial Statement Level a
Independent Auditors' Report on Compliance with General Requirements
Independent Auditors' Report on Compliance with Specific Major and
Nonmajor Program Requirements
c) Special Tests and Provisions
Schedule of Findings and Questioned Costs
Independent Auditors' Report on Internal Controls at the Federal
Financial Assistance Program Level 0
Independent Auditors' Report on Internal Controls at the General
Purpose Financial Statement Level
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KPMG Peat Marwick
Certified Public Accountants
a 750 B Street
San Diego, CA 92101
Independent Auditors' Report
on Supplementary Schedule
of Federal Financial Assistance e
The Honorable Members of City Council
City of Carlsbad, California: e
We have audited the general purpose financial statements of the Ci
Carlsbad, California (the City) as of and for the year ended June 30,
and have issued our report thereon dated October 19, 1990. These gc
purpose financial statements are the responsibility of the management a
City. Our responsibility is to express an opinion on these general pi
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auc
standards and Government Auditing Standards, issued by the Comptroller Gt
of the United States. Those standards require that we plan and perfor
audit to obtain reasonable assurance about whether the financial statt
are free of material misstatement. An audit includes examining, on a
basis, evidence supporting the amounts and disclosures in the general pi
financial statements. An audit also includes assessing the accoi
principles used and significant estimates made by management, as we
evaluating the overall financial statement presentation. We believe thz
audit provides a reasonable basis for our opinion.
Our audit was made for the purpose of forming an opinion on the g(
purpose financial statements of the City of Carlsbad, California taken
whole. The accompanying schedule of federal financial assistance is pre,
for purposes of additional analysis and is not a required part of the g(
purpose financial statements. The information in that schedule has
subjected to the auditing procedures applied in the audit of the gi
purpose financial statements and, in our opinion, is fairly stated i
material respects in relation to the general purpose financial stat
taken as a whole.
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October 19, 1990
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Membe Firn of
Klynve d Peat Marn ck Goerdiler
Schedi a
CITY OF CARLSBAD
Schedule of Federal Financial Assistance
0 For the year ended June 30, 1990
Pass-
Federal/Pass-Through Grantor/ Through Federal Pass-Through Tot2
Program Title Agencv CFDA # Grantor's 11 hDendi e Ma j or Program :
Lower Income Housing
Assistance Program
(Section 8-Existing Housing e and State Agency Program) - 14.156 N /A $ 1,503
Nonmajor Programs:
Housing Voucher Program - 14.177 N /A 154
Community Development Block
- 14.218 N /A 137 * Grant /En t i t 1 emen t Grants
Community Development Block
Grant/Small Cities Program A 14.219 26299-E 8
@ State and Local Government
- 21.300 N/A 145
Fiscal Assistance General Revenue Sharing
National Endowment for the
Arts - Locals Program - 45.023 N /A 18 e
Special Programs for the Aging,
Title 111, Parts A &. B B 13.633 25081-E 9
Special Programs for the Aging,
Title 111, Part C, a Nutrition Services B 13.635 25081-E 14c
$ 2.116
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Notes :
A. Passed through the County of San Diego, California
B. Passed through the San Diego County Department of the Area Agency on 1
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See accompanying notes to schedule of federal financial assistance.
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CITY OF CARLSBAD
Notes to Schedule of Federal Financial Assistance
For the year ended June 30, 1990 0
(I) General
The accompanying schedule of federal financial assistance presents
of Carlsbad (the City). The City's reporting entity is define
Note 1 to the City's general purpose financial statements.
expenditures of federal financial assistance received directly
federal agencies as well as expenditures of federal final
assistance passed through other government agencies are included ir
e expenditures of all federal financial assistance programs of the
e schedule.
(2) Basis of Accounting
The accompanying schedule of federal financial assistance is presc
using the modified accrual basis of accounting, which is describe
Note 1 to the City's general purpose financial statements. Y
(3) Relationship to General Purpose Financial Statements
Federal financial assistance programs revenues and expenditures
reported in the City's general purpose financial statements as follc
Beg inning End!
Fund FUl
Bala
(Deficit ) Revenues Expenditures (Defi
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Ba 1 an c e
* Special Revenue Funds:
Community Development
National Endowment
Section 8 Housing
Block Grant $ 499,016 26,184 - 525,
for the Arts - - 18,461 (18,
Senior Nutrition 9,554 150,368 150,368 9,
Authority 132,510 1,643,725 1,657,690 118,
Capital Projects Funds :
Community Development
Block Grant 5,013 100,121 146,782 (41: * Revenue Sharing 352.392 15,158 145.294 ~ 222.
Total $ 998,485 UQLzili 2*100*13 4 &
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* KPMG Peat Marwick
Certified Public Accountants
750 B Street
San Diego, CA 92101 *
Independent Auditors ' Report
on Compliance at the General Purpose
Financial Statement Level *
The Honorable Members of City Council
City of Carlsbad, California: t
We have audited the general purpose financial statements of the Cit
Carlsbad, California (the City) as of and for the year ended June 30, '
and have issued our report thereon dated October 19, 1990. * We conducted our audit in accordance with generally accepted aud
standards and Government Auditing Standards, issued by the Comptroller Gel
of the United States. Those standards require that we plan and perforn
audit to obtain reasonable assurance about whether the general pu
financial statements are free of material misstatement.
a Compliance with laws, regulations, contracts, and grants applicable tc
City is the responsibility of the City's management. As part of obta
reasonable assurance about whether the general purpose financial state]
are free of material misstatement, we performed tests of the City's compl
with certain provisions of laws, regulations, contracts, and grants. How
our objective was not to provide an opinion on overall compliance with * provisions. Accordingly, we do not express such an opinion.
The results of our tests indicate that, with respect to the items tested
City complied, in all material respects, with the provisions referred i
the preceding paragraph. With respect to items not tested, nothing car
our attention that caused us to believe that the City had not complied, i
material respects, with those provisions.
This report is intended for the information of members of City Cou
management and the state of California. This restriction is not intend
limit the distribution of this report, which is a matter of public record.
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e KPdG U4m.A
October 19, 1990
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Mernbei Firr or
Klvnveld Peat boa wick Coeioele
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KPMG Peat Marwick
Certified Public Accountants
a 750 B Street
San Diego, CA 921 01
Independent Auditors' Report
on Compliance with General Requirements *
The Honorable Members of City Council
City of Carlsbad, Califoraia:
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We have audited the general purpose financial statements of the Citj
Carlsbad, California (the City), as of and for the year ended June 30, *
and have issued our report thereon dated October 19, 1990.
We have also applied procedures to test the City's compliance with * following requirements applicable to its major federal financial assis
program, which is identified in the schedule of federal financial assist,
for the year ended June 30, 1990:
0 Political activity
* Civil rights
b Drug-free workplace
a Federal financial reports
e - Cash management
Our procedures were limited to the applicable procedures described in
Office of Management and Budget's Compliance S uwlement for Single Audi
than an audit, the objective of which is the expression of an opinion 01
City's compliance with the requirements listed in the preceding parag
Accordingly, we do not express such an opinion.
With respect to the items tested, the results of those procedures disclos
material instances of noncompliance with the requirements listed in the 6
paragraph of this report. With respect to items not tested, nothing ca
our attention that caused us to believe that the City had not complied, j
material respects, with those requirements. However, the results oj
procedures disclosed immaterial instances of noncompliance with
requirements, which are described in the accompanying schedule of finding
a State and Local Governments. Our procedures were substantially less in
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questioned costs.
This report is intended for the information of members of City COI
limit the distribution of this report, which is a matter of public record,
management and the state of California. This restriction is not intend
KBMG f%d Md e
October 19, 1990
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Menber Firm of
Klynveld Pea Varnick Goerde er
8 KPMG Peat Marwick
Certified Public Accountants
750 B Street
San Diego, CA 921 01 *
Independent Auditors' Report
on Compliance with Specific
Major and Nonmajor Program Reauirements e
The IIonore.ble Members of City Council
City of Carlsbad, California: *
We have audited the general purpose financial statements of the Cit
Carlsbad, California (the City), as of and for the year ended June 30,
and have issued our report thereon dated October 19, 1990.
We have also audited the City's compliance with the requirements gove
types of services allowed or unallowed; eligibility; reporting; special
and provisions as identified in the attachment; and claims for advance
reimbursements that are applicable to its major federal financial assis
program, which is identified in the accompanying schedule of federal fina
assistance, for the year ended June 30, 1990. The management of the Ci
responsible for the City's compliance with those requirements.
responsibility is to express an opinion on compliance with those require
based on our audit.
We conducted our audit in accordance with generally accepted aud
standards and Government Auditing Standards, issued by the Comptroller Ge e of the United States, and Office of Management and Budget (OMB) Cir
A-128, Audits of State and Local Governments. Those standards and
Circular A-128 require that we plan and perform the audit to obtain reasc
assurance about whether material noncompliance with the requirements ref
to above occurred. An audit includes examining, on a test basis, evj
about the City's compliance with those requirements. We believe tha
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The results of our audit procedures disclosed immaterial instancc
noncompliance with the requirements referred to above, which are descril
the accompanying schedule of findings and questioned costs. We cons
these instances of noncompliance in forming our opinion on compliance, * is expressed in the following paragraph.
In our opinion, the City of Carlsbad, California, complied, in all ma
respects, with the requirements governing types of services allow
unallowed; eligibility; reporting; special tests and provisions as iden
in the attachment; and claims for advances and reimbursements tha
I) applicable to its major federal financial assistance program for the
ended June 30, 1990.
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Menbe Firn of
Klynvela ?eat Varmick Goe deler
0 In connection with our audit of the 1990 general purpose financial state1
of the City and with our study and evaluation of the City's internal COI
systems used to administer federal financial assistance programs, as reql
by OMB Circular A-128, we selected certain transactions applicable to cei
nonmajor fzderal financial assistance programs for the year ended Jmc
1990.
As required by OMB Circular A-128, we have performed auditing procedure
test compliance with the requirements governing types of services allowe
unallowed and eligibility that are applicable to those transactions.
procedures were substantially less in scope than an audit, the objectiv
which is the expression of an opinion on the City's compliance with t
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a requirements. Accordingly, we do not express such an opinion.
With respect to the items tested, the results of those procedures disclose
material instances of noncompliance with the requirements listed in
preceding paragraph. With respect to items not tested, nothing came to
attention that caused us to believe that the City had not complied, in e material respects, with those requirements.
This report is intended for the information of members of City COUII
management and the state of California. This restriction is not intende
limit the distribution of this report, which is a matter of public record.
,WE e& dd e
October 19, 1990
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CITY OF CARLSBAD
Special Tests and Provisions
Year ended June 30, 1990 a
Program C omp 1 ian c e Re a ui r emen t
Lower Income a The Public Housing Agency (PHA) is required to revie\ e Housing contract rent and utility allowances for each uni
Assistance assure that they do not exceed certain rent limitation
Program
a The PHA is required to annually adjust contract rent!
tenant utility allowances, upon request from tne o
Special adjustments may also be granted to the e
determined necessary by the PHA and HUD. *
* The PHA is required to conduct an initial (ann1
thereafter) inspection of units prior to executing
housing assistance payment contract to insure that
unit meets Housing Quality Standards (applies to exi
housing and moderate rehabilitation programs only). e
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CITY OF CARLSBAD
Schedule of Findings and Questioned Costs
Year ended June 30, 1990 0
PROGW: Lower Income Housinrr Assistance Pronram
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Finding #l
In three of the 40 files reviewed, certain required documents were ei
missing or incomplete. Specifically, the Certificate of Rent Reasonable
was missing in one file and incomplete and unsigned in another file and, 0 third file, neither form 50058 "Tenant Data Summary" or form 5
"Certification/Recertification of Tenant Eligibility" was present for
current year of recertification.
Recommendat ion
e The City should complete a pre-file review checklist for each certifica
and recertification. The checklist should be reviewed and signed by soml
other than the preparer to ensure that all necessary documents are present
completed.
City's Response
The City has developed a list of documents and their locations within
file. This list will be updated and revised to meet current changes in
clerical process. A file contents checklist will also be placed on
file. The file will be reviewed and signed off by Housing Division manage'
after all actions have been completed to assure all critical up-to-
documents are in the file.
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Finding #2
Certificates of Rent Reasonableness and Tenant Data Summary sheets are
being reviewed by immediate supervisor or program coordinator.
Recommendation
These forms should be reviewed for completeness and accuracy by the Ci
program director.
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CITY OF CARLSBAD
Schedule of Findings and Questioned Costs, Continued
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FROGRAM: Lower Income Housins? Assistance Proaram, Continued
Citv's Response
The HUD regQlations require that the PIIA certify rent reasonableness (Hanc
7420.7, Chapter 6.5(a)). The regulations do not identify who in the PHA
this responsibility. The Carlsbad Housing Authority Administrative Plan
"'staff will certify rent reasonableness for each individual lease applic
to Section 8 Housing Assistance Program and Voucher Program." The HOI.
Administrator has determined that the housing specialist or management anz
working with the specific case and determining rent reasonableness
certify that the contract rent is reasonable.
In the City's opinion, HUD regulations do not require a supervisor's revif
the Certificates of Rent Reasonableness and Tenant Data Summary sheets.
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STATUS OF PRIOR YEAR FINDINGS
e PROGRAM: Highway Research, Planning and Construction
Finding/Ouestioned Cost #1
It is still unresolved as to whether the prime contractor has fulfilled 6 obligation to perform 50% of the contract work with his own organization.
matter is currently being handled by the City Attorney's office and Fed
Highway Administration (FHA).
Finding/Ouestioned Cos t fl2 e
Prevailing wage rates were actually paid by the prime contractor
subcontractor. Prior year's finding resulted from the fact that the City
not monitoring the contractor or subcontractors for compliance with
Davis-Bacon Act. As of the date of this report, the City has not f
implemented its monitoring system due to a lack of documentation for the
performed. We suggest that the City sign and date all payroll informa
submitted by the prime contractor and subcontractor. In addition, a cor
sheet should be established for each contractor to document when pay
reviews and field interviews are performed.
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CITY OF CARLSBAD
Schedule of Findings and Questioned Costs, Continued
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STATUS OF PRIOR YEAR FINDINGS. CONTINUED
PROGRAM: Highway Research. Planning and Construction. Continued a
Findinq/Ouestioned Cost 83
Since the completion of fieldwork for the 1988-1989 single audit, no c.
for reimbursement have been submitted by the City. The F'HA has rejectec e previous claims. Until the legal action is settled, no claims will be :
by the City and the status of this finding will remain unresolved.
The remaining conditions disclosed in the Single Audit for the ended Jun~
1989 have been satisfactorily resolved. e
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KPMG Peat Marwick
Certified Public Accountants
750 B Street
San Diego, CA 921 01
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Independent Auditors' Report
on Internal Controls at the e Federal Financial Assistance Program Level
The Honorable Members of City Council
City of Carlsbad, California:
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We have audited the general purpose financial statements of the Cil
Carlsbad, California (the City), as of and for the year ended June 30,
and have issued our report thereon dated October 19, 1990.
a As part of our audit, we made a study and evaluation of the internal cc
systems, including applicable internal administrative controls, use
administering federal financial assistance programs to the exten
considered necessary to evaluate the systems as required by generally acc
auditing standards, Government Auditing Standards, issued by the Comptx
General of the United States, the Single Audit Act of 1984, and the provi
Governments .
Under the date of October 19, 1990, we reported separately on the resul
our consideration of the internal control structure performed in conne
with our audit of the general purpose financial statements. The resul
0 our study and evaluation of internal accounting and administrative COY
used in administering federal financial assistance programs are pres
a of Office of Management and Budget Circular A-128, Audits of State and
herein,
The management of the City is responsible for establishing and maintz
internal control systems used in administering federal financial assir 0 programs. In fulfilling that responsibility, estimates and judgmeni
management are required to assess the expected benefits and related cos
control procedures. The objectives of internal control systems us4
administering federal financial assistance programs are to provide manag
with reasonable, but not absolute, assurance that, with respect to fc
financial assistance programs, resource use is consistent with
regulations, and policies; resources are safeguarded against waste, loss
misuse; and reliable data are obtained, maintained, and fairly disclos
reports. Because of inherent limitations in any system of internal accot
and administrative controls used in administering federal financial assi!
programs, errors or irregularities may nevertheless occur and not be detc
Also, projection of any evaluation of the systems to future periods Is si 0 to the risk that procedures may become inadequate because of chang
conditions or that the degree of compliance with the procedure5
deteriorate.
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Men-her Cirm of
Klynveld Pea- Varmck Goerde er
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0 For the purpose of this report, we have classified the significant intc accounting and administrative controls used in administering the major fec
financial assistance programs in the following categories:
Accounting Con t ro 1 s
a a Purchases/disbursements
c External financial reporting
Administrative Controls
General requirements:
m Political activity
a Civil rights
m Cash management
* Drug-free workplace
a Federal financial reports
Specific requirements:
a Types of services
Eligibility
a Reporting
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0 1 Special requirements, if any
Our study and evaluation included all of the applicable control categc
listed above.
During the year ended June 30, 1990, the City expended 71% of its i 0 federal financial assistance under its major federal financial assisi
program. With respect to internal control systems used in administering
major federal Zinancial assistance program, our study and evaluation inc:
considering the types of errors and irregularities that could o(
determining the internal control procedures that should prevent or detect
errors and irregularities, determining whether necessary procedures 0 prescribed and are being followed satisfactorily, and evaluating
weaknesses.
With respect to the internal control systems used solely in administc
nonmajor federal financial assistance programs, our study and evaluation
limited to a preliminary review of the systems to obtain an understandin e the control environment and the flow of transactions through the accour
system. Our study and evaluation of the internal control systems used sc
in administering the nonmajor federal financial assistance programs of
City did not extend beyond this preliminary review phase. Accordingly,
audit would not necessarily disclose material weaknesses in the intc
control systems used solely in administering nonmajor federal final
assistance programs. a
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Our study and evaluation described in the two preceding paragraphs was
limited than would be necessary to express an opinion on the internal cc
systems used in administering the major and nonmajor federal. fix
assistance programs of the City. Accordingly, we do not express an opinj
the internal control systems used in administering the major and nor
federal financial assistance programs of the City taken as a whole, or c
and our audit disclosed no condition that we believe to be a materizl we;
in relation to a federal financial assistance program of the City. 11
letter to management dated October 19, 1990, we have separately communi
our observations and recommendations regarding certain other mat
including those pertaining to nonmaterial internal control findings.
This report is intended solely for the use of management, members of the
Council and the state of California, and should not be used for any
purpose. This restriction is not intended to limit the distribution of
report, which, upon acceptance by the City, is a matter of public record.
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of the control categories identified above. However, our study and evah e
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e KPvrl6 Pedf fld
October 19, 1990
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KPMG Peat Marwick
Certified Public Accountants
0 750 B Street
San Diego, CA 921 01
Independent Auditors' Report
on Internal Controls at the
General PurDose Financial Statement Level 0
The Honorable Members of City Council
City of Carlsbad, California: 0
We have audited the general purpose financial statements of the Cit
Carlsbad, California (the City), as of and for the year ended June 30,
and have issued our report thereon dated October 19, 1990.
We conducted our audit in accordance with generally accepted aud
standards and Government Auditing Standards, issued by the Comptroller Ge
of the United States. Those standards require that we plan and perfori
audit to obtain reasonable assurance about whether the general pu
financial statements are free of material misstatement.
In planning and performing our audit of the general purpose fina
statements of the City for the year ended June 30, 1990, we considerec
internal control structure in order to determine our auditing procedure:
the purpose of expressing our opinion on the general purpose fina
statements and not to provide assurance on the internal control structure.
The management of the City is responsible for establishing and maintainii
internal control structure. In fulfilling this responsibility, estimate;
judgments by management are required to assess the expected benefits
related costs of internal control structure policies and procedures.
objectives of an internal control structure are to provide management
reasonable, but not absolute, assurance that assets are safeguarded ag
loss from unauthorized use or disposition, and that transactions are exe
in accordance with management's authorization and recorded properly to p
the preparation of general purpose financial statements in accordance
generally accepted accounting principles. Because of inherent limitatio
any internal control structure, errors or irregularities may neverth
occur and not be detected. Also, projection of any evaluation of
structure to future periods is subject to the risk that procedures may b
inadequate because of changes in conditions or that the effectiveness oi
design and operation of policies and procedures may deteriorate.
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lvlen-ber Firm of
Klynvpd Pear Varh ck Goerd-ler
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For the purpose of this report, we have classified the significant intc
control structure policies and procedures in the following categories: e
Accounting Controls
Investments
Purchases /disbursements
Fxternal financial reporting
a 6 Revenue /rece ip t s
Controls Used in Administerina Federal Pronrams -
0 General requirements:
Political activity
Civil rights
Cash management
Drug-free workplace
Federal financial reports
Specific requirements:
Types of services
Eligibility
0 Reporting
Special requirements, if any
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Our consideration of the internal control structure included all of
control categories listed above except that we did not evaluate the int
control structure over the investments or the revenue/receipts cycle be
we believed the audit could be performed more efficiently by expa
substantive testing rather than placing reliance on the internal co
structure and because these categories are not significant to the
federal financial assistance program. The purpose of our consideration o
internal control structure was to determine the nature, timing, and ate
the auditing procedures necessary for expressing an opinion on the ge
purpose financial statements.
Our consideration of the internal control structure would not necess
disclose all matters in the internal control structure that might be mat
weaknesses under standards established by the American Institute of Cert
Public Accountants. A material weakness is a condition in which the desi
operation of one or more of the specific internal control structure ele
does not reduce to a relatively low level the risk that error
irregularities in amounts that would be material in relation to the ge
purpose financial statements being audited may occur and not be det
within a timely period by employees in the normal course of performing
assigned functions. We noted no matters involving the internal cc
structure and its operation that we consider to be material weakness1
defined above.
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0 However, we noted certain matters involving the internal control structurl
its operation that we have reported to the management of the City
separate letter dated October 19, 1990.
This report is intended for the information of members of City Cou
management and the state of California. This restriction is not intendc
limit the distribution of this report, which is a matter of public record. e
kPW@dt If-Vjd
October 19, 1990 0
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