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HomeMy WebLinkAbout2014 Single Audit CITY OF EVANSTON, ILLINOIS Single Audit Reports For the Year Ended December 31, 2014 TABLE OF CONTENTS Independent Auditors’ Report on Schedule of Expenditures of Federal Awards 1-2 Schedule of Expenditures of Federal Awards 3-4 Notes to Schedule of Expenditures of Federal Awards 5-6 Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control over Compliance Required by OMB Circular A-133 7-8 Schedule of Findings and Questioned Costs 9-10 1 INDEPENDENT AUDITORS’ REPORT The Honorable Elizabeth B. Tisdahl, Mayor and Members of the City Council Evanston, Illinois Report on the Schedule of Expenditures of Federal Awards We have audited the accompanying Schedule of Expenditures of Federal Awards (Schedule) of the City of Evanston, Illinois (City), for the year ended December 31, 2014 and the related notes to the Schedule. Management’s Responsibility for the Schedule of Expenditures of Federal Awards Management is responsible for the preparation and fair presentation of the Schedule in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Schedule that is free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on the Schedule based on our audit. We conducted our audit 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 U.S. Office of Management and Budget (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 the Schedule is free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Schedule. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Schedule, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Schedule in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Schedule. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 2 Opinion In our opinion, the Schedule referred to above presents fairly, in all material respects, the respective expenditures of federal awards of the City for the year ended December 31, 2014 in accordance with accounting principles generally accepted in the United States of America. Report on Other Legal and Regulatory Requirements In accordance with the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement, we have also issued a report dated September 16, 2015, on our consideration of the City’s compliance for each major program and on internal control over compliance required by OMB Circular A-133. The purpose of that report is 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. That report is an integral part of an audit performed in accordance with U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement and should be read in conjunction with this report. Chicago, Illinois September 16, 2015 CITY OF EVANSTON, ILLINOIS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2014 Federal CFDA Identifying Federal Number Number Expenditures DEPARTMENT OF AGRICULTURE Passed through the Illinois State Board of Education Child and Adult Care Food Program 10.558 ISBE 13-4225-00 - 05016510P00 30,645$ Passed through the Illinois State Board of Education Summer Food Service Program for Children 10.559 ISBE 13-4225-00 - 05016510P00 99,516 Passed through the State of Illinois Department of Public Health Summer Food Inspection Program 10.559 45280148B 500 Total Department of Agriculture 130,661 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Community Development Block Grants/Entitlement Grants Entitlement year 37 14.218 B11MC-170012 6,118 Entitlement year 38 14.218 B12MC-170012 5,300 Entitlement year 39 14.218 B13MC-170012 183,869 Entitlement year 40 14.218 B14MC-170012 1,419,111 Total Community Development Block Grants/Entitlement Grants *1,614,398 Emergency Solutions Grant Program 14.231 E13-MC-170012/E14-MC-170012 169,959 Home Investment Partnerships Program 14.239 M09-MC-170218 33,555 Home Investment Partnerships Program 14.239 M10-MC-170218 421,410 Home Investment Partnerships Program 14.239 M11-MC-170218 298,404 Home Investment Partnerships Program 14.239 M12-MC-170218 55,474 Home Investment Partnerships Program 14.239 M13-MC-170218 130,638 Home Investment Partnerships Program 14.239 M14-MC-170218 20,538 Total Home Investment Partnerships Program 960,019 ARRA - Neighborhood Stabilization Program *14.256 S10-MC-170012 1,148,502 Total Department of Housing and Urban Development 3,892,878 DEPARTMENT OF JUSTICE Passed through Cook County Department Homeland Security and Emergency Management Edward Byrne Memorial Justice Assistance Grant 16.738 Public Law 109-162 30,471 Passed through Illinois Criminal Justice Information Authority Crime Victim Assistance 16.575 213045 & 214045 44,406 Total Department of Justice 74,877 DEPARTMENT OF TRANSPORTATION Highway Planning and Construction 20.205 D-91-410-10 8,970 Highway Planning and Construction 20.205 D-91-398-08 155,239 Highway Planning and Construction 20.205 D-91-467-12 54,199 Total Highway Planning and Construction 218,408 Passed through Illinois Department of Transportation State and Community Highway Safety 20.600 OP-14-004 31,058 Total Department of Transportation 249,466 Federal Grantor/Pass-Through Grantor/ Program Title * Denotes a major program See Accompanying Notes to Schedule of Expenditures of Federal Awards 3 CITY OF EVANSTON, ILLINOIS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2014 Federal CFDA Identifying Federal Number Number Expenditures Federal Grantor/Pass-Through Grantor/ Program Title DEPARTMENT OF ENVIRONMENTAL PROTECTION AGENCY Passed through the Illinois Department of Public Health Beach Monitoring and Notification Program Implementation Grant 66.472 45380191B 7,994 Passed through Illinois Environmental Protection Agency Capitalization Grants for Drinking Water State Revolving Funds *66.468 L17-4430 243,699 Capitalization Grants for Clean Water State Revolving Funds *66.458 L17-4775 1,099,646 Total Department of Environmental Protection Agency 1,351,339 DEPARTMENT OF HEALTH AND HUMAN SERVICES Passed through Suburban Area Agency on Aging Special Programs for the Aging Title III, Part B 93.044 B119 35,958 Special Programs for the Aging Title III, Part C Nutrition Services 93.045 B119 46,993 Affordable Care Act State Health Insurance Assistance Program (SHIP) and Aging 93.626 B119 2,625 Passed through the Illinois Department of Public Health Public Health Emergency Preparedness 93.069 47180027B/ 57180027C 59,249 Public Health Emergency Preparedness 93.069 47180103B/ 57180103C 43,073 Total Public Health Emergency Preparedness 102,322 Center for Disease Control and Prevention Investigation and Technical Assistance 93.283 45380121B 10,000 Maternal and Child Health Services Block Grant to the States 93.994 SFY14#33480115A 7,655 Total Department of Health and Human Services 205,553 DEPARTMENT OF HOMELAND SECURITY Passed through the Illinois Emergency Management Agency Emergency Management Performance Grants 97.042 413 EMAEVANS 1,928 Total Department of Homeland Security 1,928 Total Expenditures of Federal Awards 5,906,702$ and Disability Resource Center (ARDC) Option Counseling for Medicare-Medicaid Individual in States with Approved Financial Alignment Models Grants for Supportive Services and Senior Centers * Denotes a major program See Accompanying Notes to Schedule of Expenditures of Federal Awards 4 CITY OF EVANSTON, ILLINOIS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2014 5 NOTE 1 – REPORTING ENTITY This report on Federal Awards includes the federal awards of the City of Evanston, Illinois. The reporting entity for the city is based upon criteria established by the Governmental Accounting Standards Board (GASB). The City of Evanston is the primary government according to GASB criteria. On April 30, 2014, the Township was discontinued and dissolved following March 18, 2014 general election vote taken by the registered voters of the Evanston Township. Pursuant to 60 ILCS 1/27-15 and 1/27-20, effective 12:00 a.m. May 1, 2014, the City of Evanston assumed all rights, powers, assets, property, obligations and duties of the Evanston Township, including the responsibilities of providing the services that were previously provided by the Township. Beginning May 1, 2014, the functions of the Township are reported along with the City. NOTE 2 – BASIS OF PRESENTATION The accounting records for some grant programs are maintained on the modified accrual basis of accounting. Under the modified accrual basis, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the liability is incurred. The accounting records for other grant programs are maintained on the accrual basis, i.e., when the revenue has been earned and the liability is incurred. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-profit Organizations. NOTE 3 – SUBRECIPIENTS Of the federal expenditures presented in the schedule of expenditures of federal awards, the City of Evanston provided federal awards to subrecipients as follows: Program Title Federal CFDA Number Amount Provided to Subrecipients Community Development Block Grants/Entitlement Grants 14.218 $251,584 Emergency Solutions Grant Program 14.231 $159,322 HOME Investment Partnerships Program 14.239 $215,815 CITY OF EVANSTON, ILLINOIS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2014 6 NOTE 4 – PROGRAM INCOME The City of Evanston received the following program income amounts for the year ended December 31, 2014. The balances of receipts are from letter of credit drawdowns for the program. The program expenditures for the year include expenditures of this program income. Program Title Federal CFDA Number Amount Community Development Block Grants/Entitlement Grants 14.218 $58,572 Home Investment Partnerships Program 14.239 $27,384 ARRA- Neighborhood Stabilization Program 14.256 $1,148,272 NOTE 5– LOANS RECEIVABLE OUTSTANDING The City of Evanston had the following loan receivable balances outstanding at December 31, 2014: Program Title Federal CFDA Number Amount Community Development Block Grants/Entitlement Grants 14.218 $2,307,999 Home Investment Partnerships Program 14.239 $4,530,261 NOTE 6 – NONCASH ASSISTANCE Of the federal expenditures presented in the schedule of expenditures of federal awards, the City of Evanston did not receive any noncash assistance during the year ended December 31, 2014. NOTE 7 – FEDERAL INSURANCE The City of Evanston had no federal insurance for the year ended December 31, 2014.   7          INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 The Honorable Elizabeth B. Tisdahl, Mayor and Members of the City Council Evanston, Illinois Report on Compliance for Each Major Federal Program We have audited the City of Evanston, Illinois (City) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on the City’s major federal programs for the year ended December 31, 2014. The City’s major federal programs are identified in the summary of auditors’ 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. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for the City’s major federal programs 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’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 on compliance for each major federal program. However, our audit does not provide a legal determination of the City’s compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2014.   8   Report on Internal Control over Compliance   Management of the City 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’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each 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’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. 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. 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.  Chicago, Illinois September 16, 2015  CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2014 9 SECTION I – SUMMARY OF AUDITORS’ RESULTS Financial Statements 1) Type of auditors’ report issued: Unmodified 2) Internal control over financial reporting:  Material weakness(es) identified? X Yes No  Significant deficiency(ies) identified? X Yes None reported 3) Noncompliance material to financial statements noted? Yes X No Federal Awards 1) Internal control over major programs:  Material weakness(es) identified? Yes X No  Significant deficiency(s) identified? Yes X None reported 2) Type of auditors’ report issued on compliance for major programs: Unmodified 3) Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133? Yes X No Identification of major programs: CFDA Number Name of Federal Program or Cluster 14.218 Community Development Block Grants/Entitlement Grants 14.256 ARRA- Neighborhood Stabilization Program 66.458 Capitalization Grants for Clean Water State Revolving Funds 66.468 Capitalization Grants for Drinking Water State Revolving Funds Dollar threshold used to distinguish between type A and type B Programs: $300,000 Auditee qualified as low risk auditee? Yes X No CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2014 10 SECTION II – FINANCIAL STATEMENT FINDINGS See findings 2014-1, 2014-2, and 2014-3 in the separate Independent Auditors’ report titled “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”. SECTION III – FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS No matters were reported. SECTION IV – PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None.