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.
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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.
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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)
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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
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CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED SEPTEMBER 30, 2015
None