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HomeMy WebLinkAbout2016 Single Audit CITY OF EVANSTON, ILLINOIS Single Audit Reports For the Year Ended December 31, 2016 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 5-7 Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance 8-9 Schedule of Findings and Questioned Costs 10-11  1     INDEPENDENT AUDITORS’ REPORT The Honorable Stephen H. Hagerty, 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, 2016 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 the audit requirements of Title 2 U.S. Code of Federal Regulation Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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, 2016 in accordance with accounting principles generally accepte d in the United States of America. Report on Other Legal and Regulatory Requirements In accordance with Title 2 U.S. Code of Federal Regulation Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), we have also issued our report dated September 12, 2017, on our consideration of the City’s compliance for each major program and on internal control over compliance required by the Uniform Guidance. 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 the Uniform Guidance. That report is an integral part of an audit performed in accordance with the Uniform Guidance and should be read in conjunction with this report. Chicago, Illinois September 12, 2017  CITY OF EVANSTON, ILLINOIS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2016 Federal CFDA Identifying Award Passed-Through Federal Number Number Date to Subrecipients 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 January 20, 2016 - 28,872$ Passed through the Illinois State Board of Education Summer Food Service Program for Children 10.559 ISBE 13-4225-00 - 05061510P00 June 6, 2016 - 147,748 Passed through the State of Illinois Department of Public Health Summer Food Inspection Program 10.559 52280014C July 1, 2015 - 700 Total Department of Agriculture 177,320 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Community Development Block Grants/Entitlement Grants Entitlement year 40 14.218 B14MC-170012 June 18, 2014 219,569 392,139 Entitlement year 41 14.218 B15MC-170012 June 15, 2015 80,831 229,725 Entitlement year 42 14.218 B16MC-170012 July 20, 2016 207,415 1,400,587 Total Community Development Block Grants/Entitlement Grants *2,022,451 Emergency Solutions Grant Program 14.231 E16MC-17002 June 15, 2015/ July 16, 2016 94,695 106,219 HOME Investment Partnerships Program 14.239 M12-MC-170218 April 19, 2012 81,534 81,534 HOME Investment Partnerships Program 14.239 M13-MC-170218 July 17, 2013 - 2,307 HOME Investment Partnerships Program 14.239 M14-MC-170218 June 18, 2014 27,248 136,395 HOME Investment Partnerships Program 14.239 M15-MC-170218 June 18, 2015 - 18,972 HOME Investment Partnerships Program 14.239 M16-MC-172018 July 20, 2016 20,538 36,969 Total Home Investment Partnerships Program 276,177 ARRA - Neighborhood Stabilization Program 14.256 S10-MC-170012 January 14, 2010 - 91,447 Total Department of Housing and Urban Development 2,496,294 DEPARTMENT OF JUSTICE Passed through City of Chicago Department of Police Edward Byrne Memorial Justice Assistance Grant 16.738 33674 October 1, 2015 - 1,821 Justice Assistance Grant Youth Engagement Temp Jobs for Skills 16.738 JAG093014 September 2, 2015 - 20,039 Passed through Illinois Criminal Justice Information Authority Crime Victim Assistance 16.575 215245 September 1, 2016 - 18,503 Total Department of Justice 40,363 DEPARTMENT OF TRANSPORTATION Highway Planning and Construction 20.205 P-91-301-16 July 27, 2015 - 198,636 Highway Planning and Construction 20.205 C-91-467.12 October 7, 2015 - 14,191 Highway Planning and Construction 20.205 C-91-248-13/ TE-00D1 (914)February 13, 2013 - 92,552 Total Highway Planning and Construction 305,379 Passed through Illinois Department of Transportation State and Community Highway Safety (STEP)20.600 500OP150075 October 5, 2015 - 10,585 State and Community Highway Safety (STEP)20.600 700OP160131 October 1, 2016 - 34,079 Total State and Community Highway Safety 44,664 Total Department of Transportation 350,043 DEPARTMENT OF ENVIRONMENTAL PROTECTION AGENCY Passed through the Illinois Department of Public Health Beach Monitoring and Notification Program Implementation Grant 66.472 65380089D Oct. 28, 2015 - 8,000 Total Department of Environmental Protection Agency 8,000 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, 2016 Federal CFDA Identifying Award Passed-Through Federal Number Number Date to Subrecipients Expenditures DEPARTMENT OF HEALTH AND HUMAN SERVICES Passed through Suburban Area Agency on Aging Special Programs for the Aging Title III, Part B Grants for Supportive Services and Senior Centers 93.044 B3 OMB/T3BO Ombudsman December 9, 2015/ December 20, 2016 - 29,956 Special Programs for the Aging Title III Part C Nutrition Services 93.045 T3C1 October 1, 2015 - 44,438 Affordable Care Act State Health Insurance Assistance Program (SHIP) and Aging and Disability Resource Center (ARDC) Option Counseling for Financial Medicare-Medicaid Individual in States with Approved Alignment Models 93.626 AS151613 April 4, 2016 - 1,000 Passed through the Illinois Department of Public Health Public Health Emergency Preparedness 93.074 5U90TP000520-04 CONTRACT #67180027D July 1, 2015 - 26,295 Public Health Emergency Preparedness 93.074 5NU90TP000520-05-00 AGREEMT 377180027E July 1, 2016 - 42,385 Public Health Emergency Preparedness 93.074 5U90TP000520-04 CONTRACT 67180103D July 1, 2015 - 25,888 Public Health Emergency Preparedness 93.074 5NU90TP000520-50-00 AGREEMT 77180103E July 1, 2016 - 18,661 Total Public Health Emergency Preparedness 113,229 Total Department of Health and Human Services 188,623 DEPARTMENT OF HOMELAND SECURITY Passed through the Illinois Emergency Management Agency Emergency Management Performance Grants 97.042 413 EMAEVANS October 1, 2015 - 29,005 Total Department of Homeland Security 29,005 NATIONAL ENDOWNMENT OF THE ARTS Promotion of the Arts 45.024 FY15-2313 May 7, 2015 - 3,000 Total National Endowment of the Arts 3,000 Total Expenditures of Federal Awards 3,292,648$ Federal Grantor/Pass-Through Grantor/ Program Title * 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, 2016 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 Uniform Guidance. The City of Evanston has not elected to use the 10% de minimis indirect cost rate. 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 $507,815 Emergency Solutions Grant Program 14.231 $94,695 HOME Investment Partnerships Program 14.239 $129,320 CITY OF EVANSTON, ILLINOIS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2016 6 NOTE 4 – PROGRAM INCOME The City of Evanston received the following program income amounts for the year ended December 31, 2016. 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 $218,738 Home Investment Partnerships Program 14.239 $13,692 ARRA- Neighborhood Stabilization Program 14.256 $10,000 NOTE 5– NOTES RECEIVABLE OUTSTANDING The City of Evanston has several notes receivable outstanding as at December 31, 2016. These loans are for various uses. The Community Development Block Grants/Entitlement Grants Loan funds a number of programs to make decent housing available and affordable to low- and moderate-income families, and to help low- and moderate-income residents maintain their property. The Home Investment Partnerships Program Loan provides loans to housing developers to acquire, rehab or construct housing for low and moderate income households. Program Title Federal CFDA Number Amount Community Development Block Grants/Entitlement Grants 14.218 $1,972,669 Home Investment Partnerships Program 14.239 $4,890,677 The notes receivable balances are not subject to continuing OMB Uniform Guidance compliance requirements. NOTE 6– LOANS PAYABLE OUTSTANDING The City of Evanston has the following loans payable outstanding as of December 31, 2016. These loans are from The Capitalization Grants for Drinking Water and Clean Water State Revolving Funds. Projects funded were the sewer lining at Emerson and Davis streets, rehab of large diameter sewers and rehab of the Cleveland street sewer. CITY OF EVANSTON, ILLINOIS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2016 7 NOTE 6– LOANS PAYABLE OUTSTANDING - Continued Program Title Federal CFDA Number Amount Capitalization Grants for Drinking Water State Revolving Funds 66.468 $400,564 Capitalization Grants for Clean Water State Revolving Funds 66.458 $1,006,226 The loan payable balances are not subject to continuing OMB Uniform Guidance compliance requirements. NOTE 7 – 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, 2016. NOTE 8 – FEDERAL INSURANCE The City of Evanston had no federal insurance for the year ended December 31, 2016.  8     INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE The Honorable Stephen H. Hagerty, 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 Compliance Supplement that could have a direct and material effect on the City’s major federal programs for the year ended December 31, 2016. 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 federal statutes, regulations, and the terms and conditions of its federal awards 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 the audit requirements of Title 2 U.S. Code of Federal Regulation Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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.  9  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, 2016. 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 the Uniform Guidance, 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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Chicago, Illinois September 12, 2017 CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2016 10 SECTION I – SUMMARY OF AUDITORS’ RESULTS Financial Statements 1) Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified 2) Internal control over financial reporting: · Material weakness(es) identified? X Yes No · Significant deficiency(ies) identified? Yes X None reported 3) Noncompliance material to financial statements noted? Yes X No Federal Awards 1) Internal control over major federal programs: · Material weakness(es) identified? Yes X No · Significant deficiency(ies) identified? Yes X None reported 2) Type of auditors’ report issued on compliance for major federal programs: Unmodified 3) Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Yes X No Identification of major programs: CFDA Number Name of Federal Program or Cluster 14.218 Community Development Block Grants/Entitlement Grants Dollar threshold used to distinguish between type A and type B Programs: $750,000 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, 2016 11 SECTION II – FINANCIAL STATEMENT FINDINGS See findings 2016-001 to 2016-002 in the separate report titled “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”. SECTION III – FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS No matters were reported. SECTION IV – PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None.