HomeMy WebLinkAbout; ; 2003-04 City of Carlsbad Audit Report; 2004-09-30City of Carlsbad
- Compliance Reports and Other Financial Information
June 30,2004
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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
Compliance with requirements applicable to each major program and internal control over
financial statements performed in accordance with Govemmenf Auditing Standards 5
compliance in accordance with OMB Circular A-I33 and on the schedule of expenditures of
federal and state awards 6 and 7
Schedule of Findings and Questioned Costs 8 and 9
Summary Schedule of Prior Year Audit Findings 10
Independent Accountant's Report on Applying Agreed-upon Procedures 11 and 12
Appropriations limit calculation 13
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City of Carlsbad
Schedule of Expenditures of Federal and State Awards
Year Ended June 30,2004
Catalog of
Assistance Identifying Number/ Federal
Federal Domestic Pass-through Entity
GrantorlPass-through Grantor Program Title Number Grant Number Expenditures
Federal
U.S. Department of Agriculture:
Pass-through the County of San Diego:
Child and Adult Care Food Program
Pass-through the Office of Emergency Services:
Forest Service-Cooperative Forestry Assistance
U.S. Department of Housing and Urban Development:
Direct Programs:
Community Development Block Grant
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:
Police Asset Forfeiture
Local Law Enforcement Block Grant
Bulletproof Vest Partnership Program
Direct Programs:
10.558
10.664
14.218
14.218
14.218
14.871
15.504
16.000
16.592
16.607
See Notes to Schedule of Expenditures of Federal and State Awards.
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4581 1
7CA01000
BO1 MC060563
B02MC060563
B03MC060563
CA077VO
02-FC-35-0005
CA0370100
NIA
200X-LB-BX
$ 16,489
146,079
162,568
192,943
422,695
92,546
708,184
5,719,138
6,427,322
1,674,909
331,144
52,841
5,512
389,497
City of Carlsbad
Schedule of Expenditures of Federal and State Awards, Continued
Year Ended June 30,2004
Catalog of
Assistance Identifying Number/ Federal
Federal Domestic Pass-through Entity
GrantorlPass-through Grantor Program Title Number Grant Number Expenditures
Federal, Continued
U.S. Department of Transportation:
Pass-through State Department of Transportation:
lntermodal Surface Transportation Efficiency Act:
Carlsbad Blvd. Bridge Retrofit Project
Coastal Rail Trail Project
Pavement Management
Rancho Santa Fe Road
National Foundation on the Arts and Humanities:
Pass-through the California State Library:
LSTA Library Grant Award
Environmental Protection Agency:
Direct Programs:
Water Desalination-Recycled Phase II Project
Federal Emergency Management Agency:
Pass-through the Mice of Emergency Services:
Hazard Mitigation Program
U.S. Department of Health and Human Services:
Pass-through the County of San Diego:
Special Programs for the Aging-Title Ill, Part B
Special Programs for the Aging-Title 111, Part C
U.S. Department of Homeland Security:
Pass-through the County of San Diego:
State Domestic Preparedness Equipment
Support Program
Total expenditures of federal awards
State
Office of Criminal Justice Planning:
High Technology Grant
California Law Enforcement Equipment Program
Total federal and state awards
20.205
20.205
20.205
20.205
45.310
66.606
83.548
93.044
93.045
97.004
NIA
NIA = Not applicable
See Notes to Schedule of Expenditures of Federal and State Awards.
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STPLZ 5308(008) $ 13,565
CML 5308(005) 407,825
STPLZ5308(013) 869,678
HP21 STPL-5308( 01 4) 4,692,652
5.983.720
4 0 - 5 8 9 6 4,257
XP-98998001-0 1,090,240
FEMA-979-DR-CA 504,291
4581 1 15,000
4581 1 90,900
105,900
NIA 61,076
16,403,780
00001 29M 33,170
$ 16,436,950
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City of Carlsbad P
Notes to Schedule of Expenditures of Federal and State Awards c
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i. Note 1. Basis of Presentation
The accompanying schedule of expenditures of federal and state awards (the Schedule) presents the activity of all
federal award programs and a state award of the City of Carlsbad, California, (the City). The Schedule includes
federal awards received directly from federal agencies, as well as federal awards passed through other agencies.
The City's reporting entity is defined in Note 1 to the City's basic financial statements. Because the Schedule
presents only a selected portion of the operations of the City, it is not intended to, and does not, present the financial
position of the City.
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c The accompanying Schedule 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.
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Note 2. Subrecipients
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b Of the federal expenditures presented in the Schedule, the City provided federal awards to subrecipients as follows:
c . Program Title Provided Federal CFDA Number Amount
Community Development Block Grant (CDBG) 14.218 $133,073
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Note 3. Section 108 Loans
c The City repaid its existing Section 108 loans as of June 30,2004. Periodic payments on these Section 108 loans are
made from CDBG funds and are included in the federal expenditures for the CDBG on the Schedule. Principal and
interest payments made from CDBG funds totaled $176,980 for the year ended June 30,2004.
Note 4. Office of Criminal Justice Planning Disclosures c
The expenditures incurred under the California Law Enforcement Equipment Program High Technology Grant, Grant
No. 0000129M, for the year ended June 30,2004 were for police equipment upgrades in the amount of $33,170.
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City of Carlsbad
Notes to Schedule of Expenditures of Federal and State Awards
Note 5. HOME Investment Partnership Act
The City, along the with the cities of Encinitas, La Mesa, Santee, San Marcos and Vista and the County of San
Diego, California, (County), formed a HOME Consortium in June 1993 named the San Diego County Consortium
(Consortium) for the purpose of receiving a HOME allocation and administering the HOME program as a single
participating jurisdiction. The Consortium, renewed every three years with the U.S. Department of Housing and
Urban Development, is currently effective October 1,2003 and is eligible to receive HOME funding through
September 30,2006. The County, the Consortium's lead entity, has assumed the overall responsibility for ensuring
that the Consortium is compliant with all HOME program requirements, including the receipt, disbursement and
accounting of all HOME program and matching funds. For the fiscal year ended June 30,2004, the City allocated its
fiscal years' 2001-2002,2002-2003 and 2003-2004 HOME funds, in the amount of $537,000, to Solutions Family
Center Limited L.P. (recipient), a Community Housing Development Organization. The agreement between the City
and the recipient creates a control fund administered by a bank and defers the oversight over the disbursements of
these funds to the city of Vista. The City has, therefore, elected not to reflect the HOME program on the
accompanying Schedule.
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McGladrey & Pullen
Certified Public Accountants
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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 Mayor and
Members of City Council
City of Carlsbad, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund
and the aggregate remaining fund information of the City of Carlsbad, California, (the City) as of and for the year
ended June 30, 2004, which collectively comprise the City’s basic financial statements, and have issued our report
thereon dated September 30,2004. 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.
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internal Control over Financial Reporting
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In planning and performing our audit, we considered the City’s internal control over financial reporting in order to
determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to
provide assurance on the internal control over financial reporting. Our consideration of the internal control over
financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might
be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low level the risk that misstatements caused
by error or fraud 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.
We noted no matters involving the internal control over financial reporting and its operation that we consider to be
material weaknesses.
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 or other matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of the City’s management, Mayor, City Council, 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.
San Diego, California
September 30,2004
McGladrey 8 Pullen, LLP is a member firm of RSM International,
an affiliation of separate and independent legal entities.
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McGladrey & Pullen
Certified Public Accountants
Independent Auditor's Report on Compliance with Requirements Applicable to Each
Major Program and Internal Control over Compliance in accordance with OMB
Circular A433 and on the Schedule of Expenditures of Federal and State Awards
To the Honorable Mayor and
Members of City Council
City of Carlsbad, Carlsbad
Compliance
We have audited the compliance of the City of Carlsbad, California, (the City) with the types of compliance
requirements described in the U.S. Ofice of Management and Budget (OMB) Circular A-I33 Compliance
Supplement that are applicable to each of its major federal programs for the year ended June 30, 2004. The City's
major federal programs are 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 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 30,2004.
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 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 and to test and report on internal control over compliance in accordance with
OMB Circular A-1 33.
McGladrey 8 Pullen, LLP is a member firm of RSM International,
an affiliation of separate and independent legal entities. 6
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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 reportable condition in which the design or
operation of one or more of the internal control components does not reduce to a relatively low level the risk that
noncompliance with applicable requirements of laws, regulations, contracts and grants caused by error or fraud 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 financial statements of the governmental activities, the business-type activities, each major fund
and the aggregate remaining fund information of the City as of and for the year ended June 30,2004, which
collectively comprise the City’s basic financial statements, and have issued our report thereon dated September 30,
2004. 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 US. OMB Circular A-133, 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, Mayor, City Council, federal and state awarding
agencies, and pass-through entities, and is not intended to be, and should not be, used by anyone other than these
specified parties.
San Diego, California
September 30,2004
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City of Carlsbad
Schedule of Findings and Questioned Costs
Year Ended June 30,2004
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1. Summary of Independent Auditor's Results
c Financial Statements
Type of auditor's report issued: Unqualified
c- Internal control over financial reporting:
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0 Material weakness(es) identified? Yes X No
0 Reportable condition@) identified that are not
considered to be material weaknesses? Yes X NoneReported
Noncompliance material to financial statements noted? Yes X No
Federal Awards
CI Internal control over major program:
0 Material weakness(es) identified? Yes X No
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0 Reportable condition(s) identified that are not
considered to be material weaknesses? Yes X NoneReported P
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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:
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CFDA Number Name of Federal Program Amount Expended
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14.218 Community Development Block Grant
14.871
83.548 Hazard Mitigation Program
Section 8 Housing Choice Voucher Program
$ 708,184
5,719,138
504,291
Dollar threshold used to distinguish between type A and type B programs: $492.1 13 c
Auditee qualified as low-risk auditee? X Yes No c
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City of Carlsbad
Schedule of Findings and Questioned Costs
Year Ended June 30,2004
II. Findings Related to the Financial Statement Audit as Required to be Reported in accordance with
Generally Accepted Government Auditing Standards
A. Reportable Conditions
None reported.
B. Compliance Findings
None reported.
111. Findings and Questioned Costs for Federal Awards
A. Reportable Conditions
None reported.
B. Compliance Findings
None reported.
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City of Carlsbad
Summary Schedule of Prior Year Audit Findings
Year Ended June 30.2004
There were no audit findings reported for the year ended June 30,2003.
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McGladrey & Pullen
Certified Public Accountants
Independent Accountant's Report on
Applying Agreed-upon Procedures
To the Honorable Mayor and
Members of City Council
City of Carlsbad, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit Calculation of the
City of Carlsbad, California, (the City) for the year ended June 30,2004. 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 XI//-I3 of the California Constitution), were performed solely to
assist the City in meeting the requirements of Section 1.5 of Article XlllB 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.
For the accompanying Appropriations Limit Calculation, we added line A, last year's limit, as revised, 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.
We compared 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.
We compared the revised prior year Appropriations Limit presented in the accompanying Appropriations Limit
Calculation to the revised prior year Appropriations Limit adopted by the City Council during the current year.
Finding: No exceptions were noted as a result of our procedures.
McGladrey 8 Pullen, LLP is a member fin of RSM International,
an affiliation of separate and independent legal entities.
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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. 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 Article XlllB of the California Constitution.
This report is intended solely for the information and use of the City Council and management of the City 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.
San Diego, California
September 30,2004
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City of Carlsbad c
Appropriations Limit Calculation
Year Ended June 30,2004 c
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i Amount Source
A. Last Year's Limit (as revised) $ 127,905,654
B. Adjustment Factors:
1. Population change
2. Per capita income change
Total adjustment [(B.I. x 8.2.) -1.01
c- 1.02929237645 State Finance
1.02310000000 State Finance
0.05306903035
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C. Annual Adjustment
D. Other Adjustments:
1. Lost responsibility (-)
2. Transfer to private (-)
3. Transfer to fees (-)
4. Assumed responsibility (+)
Subtotal
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E. Total Adjustments 6,787,829 (C -+ D)
$ 134,693,483 (At E)
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F. This Year's Limit
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