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HomeMy WebLinkAboutSingle Audit Report September 30, 2015CITY OF FRIENDSWOOD, TEXAS SINGLE AUDIT REPORT SEPTEMBER 30, 2015   CITY OF FRIENDSWOOD, TEXAS SEPTEMBER 30, 2015 TABLE OF CONTENTS Page Number Independent Auditors’ 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 ............................................................ 1 – 2 Independent Auditors’ Report on Compliance With Requirements for Each Major Program and on Internal Control Over Compliance in Accordance With OMB Circular A-133..................................................... 3 – 5 Schedule of Expenditures of Federal Awards ........................................................................ 6 – 7 Notes to Schedule of Expenditures of Federal Awards ......................................................... 8 Schedule of Findings and Questioned Costs .......................................................................... 9 Summary Schedule of Prior Audit Findings .......................................................................... 10 THIS PAGE LEFT BLANK INTENTIONALLY 1 INDEPENDENT AUDITORS’ 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 City Council and City Manager, City of Friendswood, Texas We have audited 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, the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information the City of Friendswood, Texas as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City of Friendswood, Texas’ basic financial statements, and have issued our report thereon dated April 15, 2016. Our report includes a reference to other auditors who audited the financial statements of the West Ranch Management District, as described in our report on the City of Friendswood, Texas’ 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 of Friendswood, Texas’ internal control over financial reporting (internal control) to determine 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 of Friendswood, Texas’ internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Friendswood, Texas’ 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. 1 2 Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Friendswood, Texas’ 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 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. 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 City of Friendswood, Texas’ internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Waco, Texas April 15, 2016 INDEPENDENT AUDITORS’ REPORT ON COMPLIANE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Honorable Mayor, City Council and City Manager City of Friendswood, Texas Report on Compliance for Each Major Federal Program We have audited the City of Friendswood, Texas’ compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on the City of Friendswood, Texas’ major federal program for the year ended September 30, 2015. The City of Friendswood, Texas’ major federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for the City of Friendswood, Texas’ major federal program based on our audit of the types of compliance requirements referred to above. 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 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 on compliance for each major federal program. However, our audit does not provide a legal determination of the City of Friendswood, Texas’ compliance. 3 4 Opinion on Each Major Federal Program In our opinion, the City of Friendswood, Texas complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended September 30, 2015. Report on Internal Control over Compliance Management of the City of Friendswood, Texas is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City of Friendswood, Texas’ internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program as a basis for designing auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Friendswood, Texas’ 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 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 first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 5 Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 We have audited the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of City of Friendswood, Texas as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise City of Friendswood, Texas ’ basic financial statements. We issued our report thereon dated April 15, 2016, 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 OMB Circular A-133 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. The information has been subjected to the auditing procedures applied in the audit of the 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. 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 OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Waco, Texas April 15, 2016 Federal Pass-through Federal Grantor/Pass-through Grantor/CFDA Entity Identifying Federal Program Title Number Number Expenditures U. S. Department of Commerce Direct Program: Economic Development Administration 11.307 08-79-04378 208,756$ Total U. S. Department of Commerce 208,756 U. S. Department of Housing and Urban Development Passed through the Texas Department of Rural Affairs: Texas Community Development Block Grant 14.228 DRS010048 20,000 Texas Community Development Block Grant 14.228 DRS220048 2,996,916 Total Passed through the Texas Department of Rural Affairs 3,016,916 Total U. S. Department of Housing and Urban Development 3,016,916 U. S. Department of Justice Direct programs: FBI - Safe Streets Task Force 16.000 281D-H0-C63504-B 3,880 Bulletproof Vest Partnership Program 16.607 FY14 3,578 Total direct programs 7,458 Pass through Office of the Governor: Crime Victim Assistance Program 16.575 2015-VA-GX-0009 50,907 Total Passed through the Office of the Governor - Criminal Justice Division 50,907 Total U. S. Department of Justice 58,365 U.S. Institute of Museum and Library Services Passed through the Texas State Library and Archives Commission Edge Reimbursement Program 45.310 LS-00-14-0044-14 8,830 Total Passed through the Texas State Library and Archives Commission 8,830 Total U. S. Institute of Museum and Library Services 8,830 CITY OF FRIENDSWOOD, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 6 Federal Pass-through Federal Grantor/Pass-through Grantor/CFDA Entity Identifying Federal Program Title Number Number Expenditures Executive Office of the President Office of National Drug Control Policy Direct Programs: High Intensity Drug Trafficking Areas Program 95.001 G14HN0018A 13,638$ Total Executive Office of the President Office of National Drug Control Policy 13,638 U. S. Department of Homeland Security Pass through Office of the Governor: Emergency Management Performance Grant 97.042 15TX-EMPG-0338 37,324 Total U. S. Department of Homeland Security 37,324 Total Expenditures of Federal Awards 3,343,829$ CITY OF FRIENDSWOOD, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (Continued) 7 8 CITY OF FRIENDSWOOD, TEXAS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS SEPTEMBER 30, 2015 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, 2015. 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. Section I. Summary of Auditors' Results Financial Statements: Type of auditors' report issued Unmodified Internal control over financial reporting: Material weakness(es) identified?None Significant deficiency(ies) identified?None reported Noncompliance material to financial statements noted?None Federal Awards: Internal control over major program: Material weakness(es) identified?None Significant deficiency(ies) identified?None reported Type of auditors' report issued on compliance for major program Unmodified Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A-133?None Identification of major programs: CFDA Number(s)Name of Federal Program or Cluster: 14.228 Texas Community Development Block Grant Dollar threshold used to distinguish between type A and type B federal programs $300,000 Auditee qualified as low-risk auditee?No Section II. Financial Statement Findings None Section III. Federal Awards Findings None FOR THE YEAR ENDED SEPTEMBER 30, 2015 CITY OF FRIENDSWOOD, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS 9 10 CITY OF FRIENDSWOOD, TEXAS SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED SEPTEMBER 30, 2015 None