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HomeMy WebLinkAboutSingle Audit Report 2011CITY OF FRIENDSWOOD, TEXAS SINGLE AUDIT REPORT SEPTEMBER 30, 2011 C O N T E N T S Page 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 ......................................... 1 Independent Auditor’s Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 ................................................. 3 Schedule of Findings and Questioned Costs ............................................................................ 6 Schedule of Expenditures of Federal Awards ........................................................................... 8 Notes to the Schedule of Expenditures of Federal Awards ....................................................... 9 1 AN INDEPENDENT MEMBER OF BAKER TILLY INTERNATIONAL WEAVER AND TIDWELL LLP CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS WWW.WEAVERLLP.COM HOUSTON 24 GREENWAY PLAZA, SUITE 1800, HOUSTON, TX 77046 P: (713) 850 8787 F: (713) 850 1673 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 the City Council City of Friendswood, Texas 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 the City of Friendswood, Texas (the City), as of and for the year ended September 30, 2011, which collectively comprise the City’s basic financial statements and have issued our report thereon dated March 28, 2012. Our report includes a reference to other auditors. 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. Other auditors audited the financial statements of the West Ranch Management District, as described in our report on the City’s financial statements. The financial statements of the West Ranch Management District were not audited in accordance with Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City’s internal control over financial reporting as a basis for designing our auditing procedures 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 over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting. 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 combination of deficiencies, in internal controls such that there is a reasonable possibility that a material misstatement of the City’s f inancial statements will not be prevented, or detected and corrected on a timely basis. 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 deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. To the Honorable Mayor and Members of the City Council City of Friendswood, Texas Page 2 2 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 management, Members of the City Council, others within the entity, 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. WEAVER AND TIDWELL, L.L.P. Houston, Texas March 28, 2012 3 AN INDEPENDENT MEMBER OF BAKER TILLY INTERNATIONAL WEAVER AND TIDWELL LLP CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS WWW.WEAVERLLP.COM HOUSTON 24 GREENWAY PLAZA, SUITE 1800, HOUSTON, TX 77046 P: (713) 850 8787 F: (713) 850 1673 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Honorable Mayor and Members of the City Council City of Friendswood, Texas Compliance We have audited the compliance of the City of Friendswood, Texas (the City) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 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, 2011. 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. 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 of the City’s compliance with those requirements. In our opinion, the City complied, in all material respects, with the requirements refer red to above that are applicable to each of its major federal programs for the year ended September 30, 2011. Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the 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 the 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-133, but not for the purpose of expressing an opinion on the To the Honorable Mayor and Members of the City Council City of Friendswood, Texas Page 2 4 effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s 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. 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 deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. Schedule of Expenditures of Federal Awards 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 the City, as of and for the year ended September 30, 2011, and have issued our report thereon dated March 28, 2012, which contained unqualified opinions on those financial statements and was modified to include a reference to other auditors. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City’s 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. To the Honorable Mayor and Members of the City Council City of Friendswood, Texas Page 3 5 This report is intended solely for the information and use of management, Members of the City Council, others within the entity, 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. WEAVER AND TIDWELL, L.L.P. Houston, Texas March 28, 2012 6 CITY OF FRIENDSWOOD, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2011 SECTION I – SUMMARY OF AUDITOR’S RESULTS Financial Statements An unqualified opinion was issued on the financial statements. Internal control over financial reporting: • Material weakness(es) identified? Yes X No • Significant deficiencies identified that are not considered to be material weakness(es)? Yes X None reported • Noncompliance material to financial statements noted? Yes X No Federal Awards Internal control over major programs: • Material weakness(es) identified? Yes X No • Significant deficiencies identified that are not considered to be material weakness(es)? Yes X None reported An unqualified opinion was issued on compliance for major programs. • Any audit findings disclosed that are required to be reported in accordance with section 510(a) or Circular A-133? Yes X No Identification of major programs: 14.228 Community Development Block Grant • Dollar threshold used to distinguish between type A and type B programs? $300,000 Auditee qualified as low-risk auditee? X Yes _ No 7 CITY OF FRIENDSWOOD, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS – CONTINUED FOR THE YEAR ENDED SEPTEMBER 30, 2011 SECTION II – FINANCIAL STATEMENT FINDINGS NONE SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS NONE SECTION IV – SCHEDULE OF PRIOR AUDIT FINDINGS AND QUESTIONED COSTS NONE SECTION V – CORRECTIVE ACTION PLAN N/A CITY OF FRIENDSWOOD, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 See Notes to the Schedule of Expenditures of Federal Awards. 8 Federal Grantor/Federal Pass-Through Federal Pass-Through Grantor/CFDA Entity Identifying Program Program Title Number Number Expenditures U.S. DEPARTMENT OF HOMELAND SECURITY Passed through Office of the Governor - Emergency Management Division: Disaster Grants - Public Assistance 97.036 FEMA - 1791 - DR - TX 94,383$ Emergency Management Performance Grant 97.042 FY2011 43,710 Homeland Security Grant Program 97.067 2010-SS-TO-008 27,829 Passed through Texas Department of Public Safety - Division of Emergency Management: Hazard Mitigation Grant Program 97.039 DR-1791-15 50,183 Hazard Mitigation Grant Program 97.039 FEMA - 1780 - DR 46,843 Total Hazard Mitigation Grant Program 97,026 Total U.S. Department of Homeland Security 262,948 U.S. DEPARTMENT OF COMMERCE Direct Program: Economic Adjustment Assistance Program 11.307 08-79-04378 1,090,038 Total U.S. Department of Commerce 1,090,038 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Passed through Texas Department of Rural Affairs - Texas Community Development Block Grant Disaster Recovery Program 14.228 DRS010048 1,310,098 Total U.S. Department of Housing and Urban Development 1,310,098 U.S. DEPARTMENT OF JUSTICE Direct Program: Bulletproof Vest Partnership Program 16.607 N/A 2,780 Passed through Office of the Governor - Criminal Justice Division: Crime Victim Assistance Program 16.575 VA-10-V30-14062-11 38,014 Crime Victim Assistance Program 16.575 VA-11-V30-14062-12 4,506 Total Crime Victim Assistance Program 42,520 Total U.S. Department of Justice 45,300 U.S. DEPARTMENT OF ENERGY Passed through State Energy Conservation Office - Recovery Act: Energy Efficiency and Conservation Block Grant 81.128 DE-EE0000893 38,445 Total U.S. Department of Energy 38,445 TOTAL EXPENDITURES OF FEDERAL AWARDS 2,746,829$ CITY OF FRIENDSWOOD, TEXAS NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 9 NOTE 1. GENERAL The accompanying schedule of expenditures of federal awards presents the activity of all applicable federal awards of the City of Friendswood, Texas (the City). The City’s reporting entity is defined in Note 1 to the City’s financial statements. Federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included in the respective schedule. NOTE 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. NOTE 3. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Grant expenditures reports as of September 30, 2011, which have been submitted to grantor agencies will, in some cases, differ slightly from amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of year-end accruals. The reports will agree at termination of the grant , as the discrepancies noted are timing differences. NOTE 4. SCHEDULE OF FINDINGS AND QUESTIONED COSTS The schedule of findings and questioned costs, including the summary of auditor’s results for federal awards, is included beginning on page 6.