HomeMy WebLinkAboutSingle Audit Report September 30, 2022CITY OF FRIENDSWOOD, TEXAS
FEDERAL SINGLE AUDIT REPORT
For the Fiscal Year Ended
September 30, 2022
CITY OF FRIENDSWOOD, TEXAS
TABLE OF CONTENTS
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
Independent Auditor's Report on Compliance for Each Major Federal Program; Report on
Internal Control over Compliance; and Report on Schedule of Expenditures of Federal Awards
Required by the Uniform Guidance
Schedule of Findings and Questioned Costs
Schedule of Expenditures of Federal Awards
Notes to Schedule of Expenditures of Federal Awards
Summary Schedule of Prior Audit Findings
Page
10
11
Corrective Action Plan 12
Houston Office
in 3737 Buffalo Speedway
Suite 1600
whit I eypemilIIIII0 Houston, Texas 77098
713.621.1515 Main
whitleypenn.com
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 Friendswood, Texas
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of
the United States, the financial statements of the governmental activities, the business -type activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information of City of
Friendswood, Texas (the "City"), as of and for the year ended September 30, 2022, and the related notes to the financial
statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated
March 22, 2023. Our report includes a reference to other auditors who audited the financial statements of West Ranch
Management District, a discretely presented component unit of the City, as described in our report on the City's financial
statements. The financial statements of West Ranch Management District were not audited in accordance with
Government Auditing Standards.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial
reporting (internal control) as a basis for designing the audit procedures that are appropriate in the circumstances for the
purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's
internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees,
in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely
basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a
reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected
and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was
not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies.
Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
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THE GLO BAL LADVISORY 1 City of Friendswood, Texas 2022 SA
AND ACCOUNTING NETWORK
To the Honorable Mayor and Members
of the City Council
City of Friendswood, Texas
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements, noncompliance with which could have a direct and material effect on the financial statement. 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.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of
that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report
is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's
internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Wk-fi y ." L L,P
Houston, Texas
March 22, 2023
2 City of Friendswood, Texas 2022 SA
in
whit Ieypenn'
Houston Office
3737 Buffalo Speedway
Suite 1600
Houston, Texas 77098
713.621.1515 Main
whitleypenn.com
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM;
REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED
BY THE UNIFORM GUIDANCE
To the Honorable Mayor and Members
of the City Council
City of Friendswood, Texas
Report on Compliance for Each Major Federal Program
Opinion on Each Major Program
We have audited City of Friendswood, Texas' (the "City") compliance with the types of compliance requirements described
in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal
programs for the year ended September 30, 2022. The City's major federal programs are identified in the summary of
auditor's results section of the accompanying schedule of findings and questioned costs.
In our opinion, the City's complied, in all material respects, with the compliance requirements referred to above that could
have a direct and material effect on each of its major federal programs for the year ended September 30, 2022.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of
America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code
of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, Audit Requirements for Federal
Awards (Uniform Guidance), Our responsibilities under those standards, the Uniform Guidance are further described in the
Auditor's Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant
ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a
legal determination of the City's compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation,
and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules
and provisions of contracts or grant agreements applicable to the City's federal programs.
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THE GLO BAL LADVISORY 3 City of Friendswood, Texas 2022 SA
AND ACCOUNTING NETWORK
To the Honorable Mayor and Members
of the City Council
City of Friendswood, Texas
Auditor's Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance
requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City's compliance
based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a
guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, the Uniform Guidance, will
always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud
is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to
above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the
judgment made by a reasonable user of the report on compliance about the City's compliance with the requirements of
each major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, the Uniform Guidance, we
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform
audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding
the City's compliance with the compliance requirements referred to above and performing such other procedures
as we considered necessary in the circumstances.
• Obtain an understanding of the City's internal control over compliance relevant to the audit in order to design
audit procedures that are appropriate in the circumstances and to test and report on internal control over
compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we
identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not
allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and
correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness
in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance,
such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the Auditor's
Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal
control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance.
Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we
consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal
control over compliance may exist that were not identified.
4 City of Friendswood, Texas 2022 SA
To the Honorable Mayor and Members
of the City Council
City of Friendswood, Texas
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal
control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly,
this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business -type activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of and
for the year ended September 30, 2022, and the related notes to the financial statements, which collectively comprise the
City's basic financial statements. We issued our report thereon dated March 22, 2023, which contained unmodified
opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial
statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal
awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of
the basic financial statements. Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying accounting and
other records used to prepare the basic financial statements or to the basic financial statements themselves, and other
additional procedures in accordance with auditing standards generally accepted in the United States of America. In our
opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic
financial statements as a whole.
JJA fi-fi y ., L LP
Houston, Texas
March 22, 2023
5 City of Friendswood, Texas 2022 SA
City of
ripnoodd�w
Texas
City of Friendswood, Texas 2022 SA
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended September 30, 2022
I. Summary of Auditors' Results
Financial Statements
Type of auditors' report issued: Unmodified
Internal control over financial reporting:
Material weakness (es) identified? No
Significant deficiencies identified that are not considered to be material
weaknesses? None reported
Noncompliance material to financial statements noted? No
Federal Awards
Internal control over major programs:
Material weakness (es) identified?
No
Significant deficiencies identified that are not considered to be material
weaknesses?
None reported
Type of auditors' report issued on compliance with major programs:
Unmodified
Any audit findings disclosed that are required to be reported in accordance
with 2 CFR 200.516 (a) ?
No
Identification of major programs:
Name of Federal Program or Cluster
Assistance Listing Number (ALN)
U.S. Department of Housing and Urban Development
Community Development Block Grant/State's Program
14.228
Dollar Threshold Considered Between Type A and Type B Federal Programs $750,000
Auditee qualified as low risk auditee? Yes
7 City of Friendswood, Texas 2022 SA
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued)
For the Year Ended September 30, 2022
II. Financial Statement Findings
None Noted
III. Federal Award Findings and Questioned Costs
None Noted
8 City of Friendswood, Texas 2022 SA
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended September 30, 2022
Federal Grantor/Pass-Through Grantor/Program Title
U.S. Department of Housing and Urban Development
Passed through the Texas General Land Office
Community Development Block Grant/State's Program
Community Development Block Grant/State's Program
Community Development Block Grant/State's Program
Community Development Block Grant/State's Program
Total ALN 14.228
Total U.S. Department of Housing and Urban Development
U.S. Department of Justice
Direct:
Bulletproof Vest Partnership Program - FY 20
Bulletproof Vest Partnership Program - FY 21
Total ALN 16.607
Passed through the Texas Office of the Governor - Criminal Justice Division:
Crime Victim Assistance
Total U.S. Department of Justice
U.S. National Endowment for the Humanities
Passed through the Texas State Library & Archives Commission
ILMS Reimbursement Program
Total U.S. National Endowment for the Humanities
U.S. Department of Homeland Security
Passed through the Texas Department of Public Safety/TDEM:
Disaster Grants - Public Assistance
Total U.S. Department of Homeland Security
Total Expenditures of Federal Awards
Federal
Assistance
Pass -Through
Listing
Entity Identifying
Number
Number
14.228
14.228
14.228
14.228
19-147-002-13409
19-147-002-13490
20-065-134-C451
20-066-045-C444
16.607 None
16.607 None
16.575 2020-V2-GX-004
45.310 LS-249990-OLS-21
97.036 DR 458/6
Federal
Expenditures
$ 425,337
17,958
88,608
2,088,603
2,620,506
2,620,506
60
5,505
5,565
76,908
82,473
3,776
3,776
309,998
309,998
$ 3,016,753
9 City of Friendswood, Texas 2022 SA
CITY OF FRIENDSWOOD, TEXAS
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended September 30, 2022
Note 1- Summary of Significant Accounting Policies
The City accounts for awards under federal programs in the General and Special Revenue governmental funds.
In the Governmental funds, these programs are accounted for using a current financial resources measurement focus. With
this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating
statements of these funds present increases (i.e. revenues and other financing sources) and decreases (i.e. expenditures
and other financing uses) in net current assets.
The modified accrual basis of accounting is used for these funds. This basis of accounting recognizes revenues in the
accounting period in which they become susceptible to accrual, i.e., both measurable and available, and expenditures in the
accounting period in which the liability is incurred, if measurable, except for certain compensated absences and claims and
judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial
resources. Expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain
types of expenditures are not allowable or are limited to reimbursement. Pass -through entity identifying numbers are
presented where available.
Federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and,
accordingly, when such funds are received, they are recorded as unearned revenues until earned. Generally, unused
balances are returned to the grantor at the close of specified project periods. The City has elected not to use the 10 percent
de minimis indirect cost rate allowed under the Uniform Guidance.
Note 2 - Basis of Presentation
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal grant activity of the
City under programs of the federal government for the year ended September 30, 2022. The information in this schedule is
presented in accordance with the requirements of the Office of Management and Budget (OMB) Uniform Guidance.
Because the schedule presents on a selected portion of the operations of the City, it is not intended to and does not
present the financial position, changes in net position or cash flows of the City.
10 City of Friendswood, Texas 2022 SA
CITY OF FRIENDSWOOD, TEXAS
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the Year Ended September 30, 2022
Federal regulations, Title 2 U.S. Code of Federal Regulations §200.511 states, "The auditee is responsible for follow-up and
corrective action on all audit findings. As part of this responsibility, the auditee must prepare a summary schedule of prior
audit findings." The summary schedule of prior audit findings must report the status of the following:
All audit findings included in the prior audit's schedule of findings and questioned costs and
All audit findings reported in the prior audit's summary schedule of prior audit findings except audit findings listed
as corrected.
I. Prior Audit Findings
None reported
11 City of Friendswood, Texas 2022 SA
CITY OF FRIENDSWOOD, TEXAS
CORRECTIVE ACTION PLAN
For the Year Ended September 30, 2022
Federal regulations, Title 2 U.S. Code of Federal Regulations §200.511 states, "At the completion of the audit, the auditee
must prepare, in a document separate from the auditor's findings described in §200.516 Audit findings, a corrective action
plan to address each audit finding included in the current year auditor's reports."
I. Corrective Action Plan
Not applicable
12 City of Friendswood, Texas 2022 SA
