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HomeMy WebLinkAbout; ; 2003-04 City of Carlsbad Audit Report; 2004-09-30City of Carlsbad - Compliance Reports and Other Financial Information June 30,2004 c 7 7 P c c P c Contents c- c c c c c c c 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 P . P , P P 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. 1 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. 2 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 c City of Carlsbad P Notes to Schedule of Expenditures of Federal and State Awards c c 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. c c- 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. c c Note 2. Subrecipients c 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 c i 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. c 1 r- 3 P i 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. 1 I 1 7 4 7 1 I c c c McGladrey & Pullen Certified Public Accountants P c 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. c- internal Control over Financial Reporting c P r 1 c c c 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. 5 P c c c- i c c c P c- . c c c c F 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 c c c P c 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 P c F P F 7 c City of Carlsbad Schedule of Findings and Questioned Costs Year Ended June 30,2004 c- c . 1. Summary of Independent Auditor's Results c Financial Statements Type of auditor's report issued: Unqualified c- Internal control over financial reporting: P 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 c 0 Reportable condition(s) identified that are not considered to be material weaknesses? Yes X NoneReported P c- c 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: P CFDA Number Name of Federal Program Amount Expended c c P 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 P k CI 8 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. 9 P 7 c P c c P c 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. 10 This page intentionally left blank 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. 11 c c r 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 12 City of Carlsbad c Appropriations Limit Calculation Year Ended June 30,2004 c i c 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 c C. Annual Adjustment D. Other Adjustments: 1. Lost responsibility (-) 2. Transfer to private (-) 3. Transfer to fees (-) 4. Assumed responsibility (+) Subtotal 7 ic E. Total Adjustments 6,787,829 (C -+ D) $ 134,693,483 (At E) c- F. This Year's Limit c c P 13 This page intentionally left blank