HomeMy WebLinkAbout; ; 2001-02 City of Carlsbad Audit; 2002-09-30CITY OF CARLSBAD
Compliance Reports
and Other Financial Information
June 30, 2002
CONTENTS
SCZ-IEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS 1— 2
Notes to Schedule of Expenditures of Federal and State Awards 3
INDEPENDENT AUDITOR' S REPORT ON:
Compliance and on Intemal Control over Financial Reporting Based on an Audit of
Financial Statements Performed in Accordance with Government Auditing Standards 4— 5
Compliance with Requirements Applicable to Each Major Program and Internal Control
over Compliance in Accordance with OMB Circular A-133 and on the Schedule of
Expenditures of Federal and State Awards 6— 7
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SUMMARY SCHEDULE OF PRIOR YEAR AUDIT FINDINGS
8-9
10
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON
PROCEDURES 11 — 12
Appropriations limit calculation 13
CITY OF CARLSBAD, CALIFORNIA
Schedule of Expenditures of Federal and State Awards
Year Ended June 30, 2002
Catalog of
Federal
Domestic
Assistance Pass-through Entity Program
Grantor/Pass-Through Grantor Program Title Number ldentifying Number Expenditures
FEDERAL
U.S. Department of Agriculture:
Pass-through the County of San Diego:
Child and Adult Caze Food Program 10.558 36832 $ 21,200
Pass-through the Department of Forestry
and Fire Protection:
Cooperative Forestry Assistance 10.664 7CA01000 44,426
65,626
U.S. Department of Housing and Urban Development:
Direct Programs:
Community Development Block Grant
Community Development Block Grant
Section 8 Housing Choice Voucher Program
U.S. Department of the Interior:
Direct Programs:
Bureau of Reclamation Cooperative Agreement
,_ Recycled Phase II Project
U.S. Department of Justice:
Direct Programs:
Local Law Enforcement Block Grant
Police Asset Forfeiture
U.S. Department of Transportation:
Pass-through State Department of Transportation:
Intermodal Surface Transportation
Efficiency Act - Carlsbad Blvd. Bridge
Retrofit Project
Intermodal Surface Transportation
Efficiency Act - Coastal Rail Trail Project
i
14.218 BOOMC060563 (1)
14.218 BOlMC060563 (1)
14.871 CA077V0 (])
15.504
16.592
16.000
20205
20.205
126,435
350,728
477,163
3,867,573
4,344,736
02-FC-35-0005 (1) 1,130,819
2001-LB-BX-3111 (1)
CA0370100 (1)
STPLZ 5308(008)
CML 5308(005)
103,879
13,215
117,094
24,260
342,828
367,088
CITY OF CARLSBAD, CALIFORNIA
Schedule of Expenditures of Federal and State Awards (Continued)
Year Ended June 30, 2002
Pass-through Entity Program
Grantor/Pass-Through Grantor Program Title Identifying Number Expenditures
FEDERAL (Continued)
Environmental Protection Agency:
Direct Programs:
Water Desalination - Recycled Phase II Project 66.606 XP-98998001-0 (1) 385,703
Federal Emergency Management Agency:
Pass-through the Office of Emergency Services:
Hazard Mitigation Program
U.S. Depadment of Health and Human Services:
Pass-through the County of San Diego:
Special Programs for the Aging - Title III, Part B
Special Programs for the Aging - Title III, Part C
83.548
93.044
93.045
FEMA-979-DR-CA 11,312
36832
36832
Total expenditures of federal awards
STATE
Office of Criminal Justice Planning:
California Law Enforcement Equipment Program
High Technology Grant
Total federal and state awards
(1) Grantee number
0000129M (1)
See accompanying Notes to Schedule of Expenditures of Federal and State Awards.
8,901
8Q877
89,778
$ 6,512,156
$ 55,734
$ 6,567,890
2
CITY OF CARLSBAD, CALIFORNIA
Notes to Schedule of Exoenditures of Federal and State Awards
Note 1. Basis of Presentarion
The accompanying schedule of expenditures of federal and state awards includes the federal and state
grant activity of the City of Cazlsbad (the City), California, and is presented on the modified-accrual basis
— of accounting. The information in this schedule is presented in accordance with the requirements of OMB
Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some
amounts presented in this schedule may differ from amounts presented in, or used in the preparation of,
_, the basic financial statements.
Note 2. Subrecipients
Of the federal expenditures presented in the schedule, the City provided federal awards to subrecipients as
follows:
Program Title Provided
Federal CFDA Number
Amount
Community Development Block Grant
Note 3. Section 108 Loans
14.218
$168,497
The City has Section 108 loans outstanding in the amount of $329,950 at June 30, 2002. Periodic
payments on these Section 108 loans are made from Community Development Block Grant (CDBG)
funds and are included in the federal expenditures for the Community Development Block Grant on the
Schedule of Expenditures of Federal and State Awards. Principal and interest payments made from
CDBG funds totaled $184,236 for the year ended June 30, 2002.
Note 4. Office of Criminal Justice Planning Disclosures
The expenditures incurred under the Califomia Law Enforcement Equipment Program High Technology
Grant, Grant No. 0000129M, for the year ended June 30, 2002 were for police equipment upgrades in the
- amount of $55,734. The amount awarded to the City under this program for the year ended June 30, 2002
was also $55,734.
3
�
M�GLADREY&PULLEN. LLr
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE
�. AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING
BASED ON AN AUDTT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and
Members of City Council
-" City of Carlsbad
Carlsbad, Califomia
We have audited the basic financial statements of the City of Carlsbad (City), California as of and for the
year ended June 30, 2002, and have issued our report thereon dated September 30, 2002. We conducted
our audit in accordance with 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.
Compliance
As paR of obtaining reasonable assurance about whether the City's basic financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grants, 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, acwrdingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance that are required to be reported under
Government Auditing Standards. However, we noted certain immaterial instances of noncompliance that
we have reported to management of the City in a separate letter dated September 30, 2002.
Internal Control Over Fina�cial Reporting
In planning and performing our audit, we considered City's internal control over financial reporting in
order to determine our auditing procedures for the purpose of expressing our opinion on the financia(
statements and not to provide assurance on the internal control over financial reporting. However, we
noted a certain matter involving the internal control over financial reporting and its operation that we
consider to be a repoRable condition. Reportable conditions involve matters coming to our attention
relating to significant deficiencies in the design or operation of the internal control over financial
reporting that, in our judgment, could adversely affect the City's ability to record, process, summarize and
report financial data consistent with the assertions of management in the financial statements. The
repoRable condition is described in the accompanying schedule of findings and questioned costs as item
RC 02-01.
— A material weakness is a condition in which the design or operation of one or more of the internal control
components does not reduce to a relatively low Ievel the risk that misstatements in amounts that would be
material in relation to the financial statements being audited may occur and not be detected within a
_ timely period by employees in the normal course of performing their assigned functions. Our
consideration of the intemal control over financial reporting would not necessarily disclose all matters in
the internal control that might be reportable conditions and, accordingly, would not necessarily discbse
_ all repor[able conditions that are also considered to be material weaknesses. However, we be►ieve that the
reportable condition described above is not a material weakness. We also noted other matters involving
the internal control over financial reporting that we have reported to management of the City in a separate
letter dated September 30, 2002.
This report is intended for the information of the City's 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.
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San Diego, C ifomia
September 30, 2002
�
M�GLADREY&PULLEN, LLr
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE
WITH REQUIItEMENTS APPLICABLE TO EACH MAJOR PROGRAM
AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH
OMB CIRCULAR A-133 AND ON THE SCHEDULE OF EXPENDITURES
OF FEDERAL AND STATE AWARDS
_; To the Honorable Mayor and
Members of City Council
City of Cazlsbad
Carlsbad, California
Compliance
We have audited the compliance of the City of Cadsbad (City) with the types of compliance requirements
described in the U.S O�ce ofManagement and Budget (OMB) Circular 1-133 Compliance Supplement
that are applicable to its major federal program for the yeaz ended June 30, 2002. The City's major
federal program is identified in the summary of independent auditor's results section of the accompanying
schedule of findings and questioned costs. Compliance with the requirements of laws, regulations,
contracts and grants applicable to its major federal program 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 standazds applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circulaz A-133, Audits of
States, Local Governments, and Non-Profit Organizations. Those standazds 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 perfoaning such othe� 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 its major federal program for the yeaz ended June 3Q 2002.
Internal Control Over Compliance
The management of the City is responsible for establishing and maintaining effective internal control over
compliance with 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
requirements thaf 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 and to test and repod on
- internal control over compliance in accordance with OMB Circular A-133.
— Our consideration of the internal control over compliance would not necessarily disclose all matters in the
internal control that might be material weaknesses. A material weakness is a condition in which the
design or opera.tion of one or more of the internal control components does not reduce to a relatively tow
__ level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants
that would be material in relation to a major federal program being audited may occur and not be detected
within a timely period by employees in the normal course of performing their assigned functions. We
_ noted no matters involving the internal control over compliance and its operation that we consider to be
material weaknesses.
Schedule of Expenditures of Federal and State Awards
We have audited the basic financial statements of the City as of and for the year ended June 30, 2002, and
have issued our repoR thereon dated September 30, 2002. Our audit was performed for the purpose of
forming an opinion on the basic financial statements taken as a whole. The accompanying Schedule of
Expenditures of Federal and State Awards is presented for purposes of additional analysis as required by
U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-
— Profit Organizations, and is not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a
,... whole.
This report is intended for the information of the City's management and federal awarding agencies and
pass-through entities and is not intended to be and should not be used by anyone other than ffiese
specified parties.
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San Diego, Ca � ornia
September 30, 2002
CITY OF CARLSBAD
' Schedule of Findings and Questioned Costs
" Year Ended June 30, 2002
_ I. Summary of Independent Auditor's Results
Financial Statements
Type of auditor's repod issued: Unqualified
Intemal control over financial reporting:
• Material weakness(es) identified? Yes X No
— • Reportable condition(s) identified that are not
considered to be material weaknesses? X Yes None Repoded
— Noncompliance material to financial statements noted? Yes X No
Federal Awards
Intemal control over major program:
.__ • Material weakness(es) identified? Yes X No
• Reportable condition(s) identi5ed that are not
,_ considered to be material weakness(es)? Yes X None Reported
Type of auditor's report issued on compliance for major programs: Unqualified
• Any audit findings disclosed that are required to be
reported in accordance with Section 510(a) of OMB
Circular A-133? Yes X No
Identification of major program:
- CFDA Number Name of Federal Program Amount Expended
14.871 Section 8 Housing Choice Voucher Program $3,867,573
Dollar threshold used to distinguish between type A and type B programs: $300,000
__ Auditee qualified as low-risk auditee? X Yes No
8
CITY OF CARLSBAD
Schedule of Findings and Questioned Costs (Continued)
- Year Ended June 30, 2002
II. Findings relating to the fnancial statement audit as required to be reported in accordance
with generally accepted Government Auditing Standards
A. Reportable Condition
RC 02-01
Condition: There is a lack of segregation of duties in that utility billing rate tables, within the
Harris system, are accessible by several people in various departments including at least two
people in the finance department. The same two individuals in the finance department also have
access to the utility billing stock and control processing and mailing of the billing information.
Recommendation: The segregation of duties related to utility billings could be strengthened by
adding access controls to the utility billing rate tables in the Harris system. Access should be
limited to appropriate accounting supervisors in the finance deparhnent who do not have access to
or perform utility billing.
B. Compliance Findings
None reported.
III. Findings and questioned costs for federal awards
A. Reportable Conditions
None reported.
B. Compliance Findings
None reported.
.�
CTTY OF CARLSBAD
Summary Schedule of Prior Year Audit Findings
Year Ended June 30, 2002
There were no prior year audit findings reported.
]0
�
M�GLADREY&PULLEN, LLr
Certified Public Accountants
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and
Members of City Council
City of Carlsbad
Carlsbad, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit
Calculation of the City of Carlsbad, Califomia (the City), for the year ended June 30, 2002. These
procedures, which were agreed to by the City and the League of California Cities (as presented in the
publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by
Article XIII-B of the California Constitution), were performed solely to assist the City in meeting the
requirements of Section 1.5 of ARicle XIIIB of the California Constitution. The City's management is
responsible for the Appropriations Limit Calculation.
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of these
procedures is solely the responsibility of those parties specified in this report. Consequently, we make no
representation regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
The procedures performed and our findings were as follows:
We obtained the completed internal calculations and compared the limit and annual adjustment
factors included in those calculations to the limit and annual adjustment factors that were adopted by
a resolution of the City Council. We also compared the population and inflation options included in
the aforementioned calculations to those that were selected by a recorded vote of the City Council.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Calculation, we added line A, last year's limit, to line E,
total adjustments, and compared the resulting amount to line F, this year's limit.
Finding: No exceptions were noted as a result of our procedures.
3. We compazed the current year information presented in the accompanying Appropriations Limit
Calculation to the supporting calculations described in item 1 above.
Finding: No exceptions were noted as a result of our procedures.
11
4. We compared the prior year Appropriations Limit presented in the accompanying Appropriations
'- Limit Calculation to the prior year Appropriations Limit adopted by the City Council during the prior
year.
Finding: No exceptions were noted as a result of our procedures.
We were not engaged to and did not conduct an examination, the objective of which would be the
— expression of an opinion on the accompanying Appropriations Limit Calculation of the City of Carlsbad,
California. Accordingly, we do not express such an opinion. Had we performed additional procedures,
other matters might have come to our attention that would have been reported to you. No procedures
_ have been performed with respect to the determination of the appropriation limit for the base year, as
defined by AKicle XIIIB of the California Constitution.
This report is intended solely for the information and use of the City Council and management of the City
of Carlsbad, Califomia, and is not intended to be and should not be used by anyone other than these
specified parties. However, this report is a matter of public record and its distribution is not limited.
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San Diego, lifomia
September 30, 2002
12
CITY OF CARLSBAD, CALIFORNIA
Appropriations Limit Calculation
Year Ended June 30, 2002
A. Last Year's Limit
B. Adjustment Factors:
1. Population change
2. Non-residential new construction change
Total Adjustment [(B.1. x B.2.) -1.0]
C. Annual Adjustment
D. Other Adjustments:
1. Lost responsibility (-)
2. Transfer to private (-)
3. Transfer to fees (-)
4. Assumed responsibility (+)
Subtotal
E. Total Adjustments
F. This Yeaz's Limit
13
Amount
$ 225,815,416
Source
1.01754236255 State Finance
1.12053757994 San Diego County
014019445642
$ 31,658,070
(B x A)
31,658,070
$ 257,473,486
(r �- D)
(A + E)