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Home My WebLink About2003 09 30 Single Audit Report - CITY OF FRIENDSWOOD, TEXAS SINGLE AUDIT REPORT SEPTEMBER 30, 2003 • CITY OF FRIENDSWOOD,TEXAS SEPTEMBER 30,2003 TABLE OF CONTENTS JI, Page Number Independent Auditors' Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 1 —2 Independent Auditors' Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance With OMB Circular A-133 3—4 Schedule of Expenditures of Federal Awards - 5—6 Notes to Schedule of Expenditures of Federal Awards 7 Schedule of Findings and Questioned Costs 8 Summary Schedule of Prior Audit Findings 9 • I1rll• PATTILLO, BROWN & HILL, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Mayor and City Council City of Friendswood,Texas • We have audited the financial statements of the City of Friendswood, Texas, as of and for the year ended September 30, 2003, and have issued our report thereon dated January 23, 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. Compliance As part of obtaining reasonable assurance about whether the City of Friendswood, Texas' 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 accordingly, 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. 1 401 WEST HIGHWAY 6■P.O.BOX 20725•WACO,TX 76702-0725■(254)772-4901■FAX:(254)772-4920■www.pbhcpa.com AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583 TEMPLE,TX(254)791-3460■ALBUQUERQUE,NM(505)266-5904■RIO RANCHO,NM(505)898-3516 Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Friendswood, Texas' internal control over financial reporting in order to determine our-auditing procedures for the purpose of expressing our opinion 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 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 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. However, we noted other matters involving the internal control over financial reporting that we have reported to management of the City of Friendswood, Texas, in a separate letter dated January 23, 2004. • This report is intended solely for the information and use of the City's management, City Council, 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. gaix P J • January 23,2004 2 wI PATTILLO, BROWN & HILL, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS • INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Mayor and City Council City of Friendswood, Texas Compliance We have audited the compliance of the City of Friendswood, Texas, with the types of compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A- 133, Compliance Supplement that are applicable to each of its major federal programs for the year ended September 30, 2003. The City of Friendswood, Texas' major federal programs are identified in the summary of auditors' 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 of Friendswood, Texas' management. Our responsibility is to express an opinion on the City of Friendswood, Texas' 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 Nonprofit 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 of Friendswood, Texas' 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 of Friendswood, Texas' compliance with those requirements. In our opinion, the City of Friendswood, Texas, 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 September 30, 2003. 3 401 WEST HIGHWAY 6■P.O.BOX 20725■WACO,TX 76702-0725•(254)772-4901■FAX:(254)772-4920■www.pbhcpa.com AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583 J TEMPLE,TX(254)791-3460•ALBUQUERQUE,NM(505)266-5904■RIO RANCHO,NM(505)898-3516 1 • Internal Control Over Compliance • The management of the City of Friendswood, Texas, 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 of Friendswood, Texas' 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 the 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 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 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 Awards We have audited the financial statements of the City of Friendswood, Texas, as of and for the year ended September 30, 2003, and have issued our report thereon dated January 23, 2004. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City of Friendswood, Texas' basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis, as required by 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 solely for the information and use of the City's management, City Council, 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. payixiiii January 23, 2004 4 CITY OF FRIENDSWOOD TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 1 FOR THE YEAR ENDED SEPTEMBER 30,2003 Federal Pass-through Federal Grantor/Pass-through Grantor/ CFDA Entity Identifying Federal Program Title Number Number Expenditures U.S.Department of Justice Passed through Houston/Galveston Area Council: Crime Victim Assistance Program 16.575 VA-002-167-03 $ 51,250 Crime Victim Assistance Program. 16.575 VA-03-V30-14062-04 11,143 Total Passed through Houston/Galveston Area Council • 62,393 Direct Programs: Local Law Enforcement Block Grant(LLEBG) 16.592 2003-LB-BX-0842 14,102- Bulletproof Vest Grant 16.607 N/A 2,587 Total Direct Programs 16,689 1 Total U. S.Department of Justice 79,082 U,S.Department of Transportation Passed through Texas Department of Transportation: Surface Transportation Program 20.205 CSJ 0912-73-091 63,654 Total Passed through Texas Department of Transportation 63,654 Total Texas Department of Transportation 63,654 U,S.Environmental Protection Agency Direct Program: Local Government for Emergency Response to Hazardous Substance N/A N/A 11,403 Total Direct Program 11,403 Total U. S.Environmental Protection Agency 11,403 Federal Emergency Management Passed through Texas Department of Public Safety: Hazard Mitigation Grant Program 83.548 FEMA-1379-DR 59,268 EM DPS Local Grant 83.552 FY 03-019 1,000 Emergency Management Performance 83.552 EMT-2003-GM-050 54,460 Total Passed through Texas Department of Public Safety 114,728 Total Federal Emergency Management 114,728 (continued) 5 CITY OF FRIENDSWOOD TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) FOR THE YEAR ENDED SEPTEMBER 30,2003 • Federal Pass-through { Federal Grantor/Pass-through Grantor/ CFDA Entity Identifying Federal Program Title Number Number Expenditures U.S.Department of Education Passed through Houston/Galveston Area Council: School Resource Officer Program 84.186 ED-005-201-03 $ 93,338 Total Passed through Houston/Galveston Area Council 93,338 ' Total U. S.Department of Education 93,338 U.S.Department of Homeland Security Passed through Texas Engineering Extension Service: Domestic Preparedness Equipment Grant 97.004 27648 46,150 Total Passed through Texas Engineering Extension Service Total U. S.Department of Homeland Security 46,150 • Total Federal Awards $ 408,355 • 1 . 6 CITY OF FRIENDSWOOD,TEXAS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS SEPTEMBER 30,2003 1. GENERAL The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Friendswood, Texas, for the year ended September 30, 2003. The City's reporting entity is defined in Note 1 to the City's financial statements. Federal financial assistance received directly from federal agencies and other agencies are included in the Schedule of Expenditures of Federal Awards. 2. BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards is presented using the modified accrual basis of accounting,which is described in Note 1 to the City's financial statements. CITY OF FRIENDSWOOD,TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30,2003 Summary of the Auditors' Results Type of report on financial statements Unqualified Internal control over financial reporting: Material weakness(es)identified? No Reportable condition(s) identified that are not considered to be material weakness(es)? None reported • Internal control over major programs: Material weakness(es)identified? No Reportable condition(s) identified that are not considered to be material weakness(es)? None reported Noncompliance which is material to the financial statements noted? No Type of report on compliance with major programs Unqualified Findings and questioned costs for federal awards as defined in Section 501(a), OMB Circular A-133 disclosed None Dollar threshold considered between Type A and Type B federal programs $300,000 Low risk auditee statement The City was classified as a low-risk auditee in the context of OMB Circular A-133 Major federal programs Surface Transportation Program—20.205 School Resource Officer Program—84.186 Findings Relating to the Financial Statements Which are Required to be Reported in Accordance With Generally Accepted Government Auditing Standards None Findings and Questioned Costs for Federal Awards None 8 f CITY OF FRIENDSWOOD,TEXAS SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED SEPTEMBER 30,2003 -ti Finding 02-1: The City is not monitoring cumulative purchases of similar items which, in the aggregate over a 12-month period, could be subject to state bidding requirements. Status: This matter has been resolved. • Finding 02-2: Instances were noted in which expenditures should have been accrued and included in accounts payable as of September 30, 2002. Status: This matter has been resolved. _J 1 9