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HomeMy WebLinkAbout2009-2010 Single AuditCITY OF EVANSTON, ILLINOIS SINGLE AUDIT ACT SUPPLEMENTARY FINANCIAL AND COMPLIANCE REPORT YEAR ENDED FEBRUARY 28,2010 This page has been intentionally left blank. CITY OF EVANSTON, ILLINOIS FOR THE FISCAL YEAR ENDED FEBRUARY 28 , 2010 TABLE OF CONTENTS 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 Report on Compliance with Requirements Applicable to each Major Program and Internal Control over Compliance In Accordance with OMB Circular A-133 and Schedule of Expenditures of Federal Awards.... .......... ............. .......... ............ ....... ............. ....... ......... ..... 3 Schedule of Expenditures of Federal Awards .... ...................... .............. ........ ....... .......... ............... ..... ..... 5 Notes to Schedule of Expenditures of Federal Awards ............ ............ ................... .................. ......... ..... 8 Schedule of Findings and Questioned Costs ........................................................................................... 11 Summary Schedule of Prior Audit Findings ........................................................................ ....... ...... ........ 16 -i - This page has been intentionally left blank. ~AKER TILLY Baker Tilly Virc how Krause. LLP 1301 W 22nd St. Ste 400 Oak Brook. IL 60523-3389 tel 630 990 3131 fax 630 990 0039 bakertilly.com 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 Elizabeth B. Tisdahl, Mayor and Members of the City Council Evanston, Illinois We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Evanston, Illinois, as of and for the year ended February 28, 2010, which collectively comprise the City of Evanston 's basic financial statements and have issued our report thereon dated August 23, 2010 . 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 . The financial statements of the Township of Evanston were not audited in accordance with Government Auditing Standards . Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Evanston'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 of Evanston's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Evanston's internal control over financial reporting. Our consideration of the internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses; and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified . However, as described in the accompanying schedule of findings and questioned costs , we identified certain deficiencies in internal control that we consider to be material weaknesses and other deficiencies that we consider to be significant deficiencies . 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 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. We consider the deficiencies described in the accompanying schedule of findings and questioned costs to be material weaknesses. These material weaknesses are items 2010-2 and 2010-3. ~"nindependC'nt me mbeIOI BAKER TILLY INTERNATIONAL -1 - Honorable Elizabeth B. Tisdahl, Mayor and Members of the City Council Evanston, Illinois A significant deficiency is a deficiency, or 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. We consider the deficiencies described in the schedule of findings and questioned costs to be significant deficiencies. This significant deficiency is item 2010-1 . Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Evanston's basic 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 . We noted certain matters that we reported to management of the City of Evanston in a separate letter dated August 23, 2010 . The City of Evanston's response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs . We did not audit the City of Evanston's response and , accordingly, we express no opinion on it. This report is intended solely for the information and use of the City of Evanston's management, the City Council, others within the entity , 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. ~;I!~ v. ¥NlUdQ, LLf August23,2010 - 2 - ~AKER TILLY Baker Tilly Virchow Krause, LLP 1301 W 22nd St, Ste 400 Oak Brook, IL 60523 -3389 tel 630 990 3131 fax 630 990 0039 bakerti lly.com INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS To the Honorable Elizabeth B. Tisd~hl, Mayor and Members of the City Council Evanston, Illinois Compliance We have audited the compliance of the City of Evanston, Illinois, 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 its major federal programs for the year ended February 28, 2010. The City of Evanston'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 of Evanston's management. Our responsibility is to express an opinion on the City of Evanston'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 of Evanston'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 on the City of Evanston's compliance with those requirements . In our opinion, the City of Evanston complied , in all material respects, with the requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended February 28,2010. Internal Control Over Compliance The management of the City of Evanston is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City of Evanston's internal control over compliance with 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, but not for the purpose of expressing an opinion on the effectiveness of the internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Evanston's internal control over compliance. ~aflindep8nden'membe rOI BAKER TILLY INTERNATIONAL - 3 - Honorable Elizabeth B. Tisdahl, Mayor and Members of the City Council Evanston, Illinois A deficiency in internal control over compliance 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, 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, each major fund, and the aggregate remaining fund information of the City of Evanston , Illinois, as of and for the year ended February 28 ,2010 , which collectively comprise the City of Evanston's basic financial statements and have issued our report thereon dated August 23, 2010 . Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City of Evanston'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. The City of Evanston's response to findings identified in our audit is described in the accompanying schedule of findings and questioned costs. We did not audit the City of Evanston's response and, accordingly, we express no opinion on it. This report is intended solely for the information and use of the City of Evanston's management, City Council, others within the entity, the 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. ~,1~ V~~~I UP November 22,2010, except for the schedule of expenditures of federal awards, as to which the date is August 23,2010. - 4 - CITY OF EVANSTON, ILLINOIS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED FEBRUARY 26, 2010 Direct Programs -Grants Federal GrantorlPass-Through Grantorl Program Title DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT COMMUNITY PLANNING AND DEVELOPMENT • Community Development Block Grant Entitlement year 27 Entitlement year 32 Entitlement year 33 Entitlement year 34 Entitlement year 35 ARRA Entitlement year 35 Total Community Development Block Grant Cluster Emergency Shelter Block Grant Total Emergency Shelter Block Grant HOME Program HOME Program HOME Program HOME Program HOME Program Total HOME Program ARRA -Homeless Prevention Assistance ( HPRP) • Total Homeless Prevention Assistance Total Department ofllousing and Urban Development DEPARTMENT OF JUSTICE Justice Assistant Grant Law Enforcement Prosecutor Based Victim Assistance Grant Law Enforcement Prosecutor Based Victim Assistance Grant Community Service Prog Grant Community Service Prog Grant Community Service Prog Grant Community Service Prog Grant Total Department of Justice Federal CFDA Number 14.218 14.218 14.218 14.218 14.218 ARRA-14.253 14.231 14.239 14.239 14.239 14.239 14.239 ARRA-14.257 16.710 16.575 16.575 16.523 16.523 16.523 16.523 "Denotes a major program The accompanying notes are an integral part of Ihis schedule -5- Pass-Through Identifying Number BOI-MC-170013 B06-MC-170012 B07-MC-170012 B08-MC-1700 12 B09-MC-170012 B09-MC-170012 S09-MC-170012 M04-MC-170218 M05-MC-170218 M06-MC-170218 M07-MC-170218 M08-MC-170218 S09-HY-170012 208045 209045 505029 505129 506029 506129 $ Expenditures for the Fiscal Year 20,694 7,898 17,929 172,125 2,166,838 372,660 2,758,144 86,767 86,767 81,477 63 ,971 65,185 246,413 64,260 521,306 119,926 119,926 3,486,143 18,209 16,161 19,824 2,905 10,548 10,296 5,300 83,243 CITY OF EVANSTON, ILLINOIS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED FEBRUARY 28, 2010 Federal GrantorlPass-Through Grantorl Program Title ENvmONMENTAL PROTECTION AGENCY OFFICE OF WATER • Passed through the Illinois Environmental Protection Agency ARRA -Water Pollution Control Revolving Loan Total Environmental Protection Agency FEDERAL EMERGENCY MANAGEMENT AGENCY STATE AND LOCAL PROGRAMS AND SUPPORT Passed through the Illinois Emergency Services and Disaster Agency Emergency Management Assistance Program Emergency Management Assistance Flooding Emergency Management Adm Allowance Total Federal Emergency Management Agency DEPARTMENT OF AGRICULTURE Summer Food Service Program Child & Adult Care Food Program Total Department of Agriculture DEPARTMENT OF HEALTH AND HUMAN SERVICES OFFICE OF HUMAN DEVELOPMENT SERVICES Passed through Suburban Area Agency on Aging Ombudsman (Older Americans Act Title 1II B) Special Programs for the Aging Total Office of Human Development Services HEALTH CARE FINANCING ADMINISTRATION Passed Through State of Illinois Department of Human Services Teen Pregnancy Prevention Teen Pregnancy Prevention Total Teen Pregnancy Prevention Teen Parent Services Total Teen Parent Services Passed Through State of Illinois Department of Public Health Bio Terrorism Grants Bio Terrorism Preparedness Cities Readiness Initiative (CRl) Total Bio Terrorism Grants Summer Food Inspection Program Total Summer Food Inspection Grant Federal CFDA Number ARRA-66.458 97 .042 97036 97_036 10559 10558 93633 93994 93 ,994 93 ,667 93 ,283 93283 10,559 "'Denotes a major program The accompanying notes are an integral part of this schedule -6 · Pass-Through Identifying Number 497-58830-4400 18000312458200 17290312458200 14-016-510P-00 BI19 llGK095234 IIGL095000 LGL095840 97181027 97181102 $ Expenditures for the Fiscal Year 1,157,451 1,157,451 21,972 24,653 6,595 53,220 109,380 13 ,780 123,160 47,579 47,579 51,087 7,987 59,074 29,872 29 .872 5,997 2,858 8,855 450 450 CITY OF EVANSTON, ILLINOIS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED FEBRUARY 2B , 2010 Federal GrantorlPass-Through Grantor/ ~P rograOl Title Passed Through State of Illinois Department of Public Health Beach water Testing Beach water Testing Total Beach Water Testing Total Department of Health and Human Services DEPARTMENT OF TRANSPORTATION REGIONAL TRANSPORTATION AUTHORITY Evanston Multimodal Transportation Plan Twiggs Park Expansion & Bike Path Twiggs Park Expansion & Bike Path Evanston Lakefront Corridor Reconstruction Evanston Lakefront Corridor Reconstruction Total Department of Transportation DEPARTMENT OF ENERGY ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT EECBG-Residential Weatherization Program EECBG-Water Plant HVAC System Total Energy Efficiency & Conservation Grant Total Federal Financial Awards Federal CFDA Number 66.472 66.472 20.505 20~205 20.205 20205 20,205 ARRA-81.128 ARRA-81.128 'Denotes a major program The accompanying noles are an integral part of this schedule -7 - Pass-Through IdentifYing Number 95380357 05380386 SAFETEA-LU HPP-0299 (106) 102121 102121 $ $ Expenditures for the Fiscal Year 1,000 13,970 14,970 160,800 80,000 13,232 3,976 77,559 91,746 266,513 950 7,535 8,485 5,339,015 CITY OF EVANSTON NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended February 28, 2010 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. The City of Evanston is the primary government according to GASB criteria, while the Town of the City of Evanston (Township) is a component unit. Federal awards received directly by the Township are not included in this report since the Township's maintains a different fiscal year end. Those amounts, if any, are audited in conjunction with that fiscal year end and reported in a separate report. 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 Emergency Shelter Block Grant Community Development Block Grant (CDBG) ARRA -Homeless Prevention Assistance (HPRP) -8 - Federal CFDA Number 14.231 14.218 14.257 Amount Provided to Subreci pients $84,688 $425,777 $108,060 CITY OF EVANSTON NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended February 28,2009 NOTE 4 -PROGRAM INCOME The City of Evanston received the following program income amounts for the year ended February 28, 2010. 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 income is not included in the award amount. Program Community Development Block Grant (CDBG) HOME Investment Partnership (HOME) NOTE 5 -LOANS RECEIVABLE OUTSTANDING CFDA No. 14.218 14.239 Amount $44,597 $31,694 The City of Evanston had the following loan receivable balances outstanding at February 28, 2010 : Program Community Development Block Grant (CDBG) HOME Investment Partnership (HOME) NOTE 6 -IEPA LOANS PAYABLE CFDA No . 14.218 14.239 Amount $1,910,788 $1,999,109 During the year ended February 28, 2010, the City has 27 outstanding loans from the IEPA. Federal funds are commingled with the IEPA loan balances . The City will repay loans solely from revenues derived from the sewer and water system; the loans do not constitute a full faith and credit obligation of the City. They will be repaid with equal installments consisting of principal plus simple interest, on unpaid principal balances , over a period of 20 years. Initial principal balances will consist of disbursements and interest accrued during construction . Repayments begin not later than six months after completion of the construction. -9 - CITY OF EVANSTON NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended February 28, 2009 Fiscal Year ending FebruarY 28 Princigal Interest 2011 $ 8,318,663 $ 2,502,705 2012 8,558,703 2,262,666 2013 8,683,160 2,015,534 2014 8,241,723 1,767,746 2015 7,791,421 1,546,488 2016 -2020 31,584,063 4,852,992 2021 -2025 16,778,439 1,649,211 2026 -2030 5,414 ,372 242 ,669 Total $ 95,370,544 $ 16 ,840 ,011 -10- CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED FEBRUARY 28 ,2010 Section I-Summary of Auditor's Results Financial Statements Type of auditor's report issued: Internal control over financial reporting : Material weakness(es) identified? Significant deficiency(s) identified? Noncompliance material to financial statements noted? Federal Awards Internal Control over major programs: Material weakness(es) identified? Significant deficiency(s) identified? Type of auditor's report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .510(a)? Identification of major programs: Name of Federal Program or Cluster Community Development Block Grants (CDBG) Water Pollution Control Revolving Loan ARRA -Homeless Prevention Assistance ( HPRP ) Dollar threshold used to distinguish between Type A and Type B programs : Auditee qualified as low-risk auditee? -11 - _--:-X-:--_yes __ X __ yes ____ yes ____ yes ____ yes ____ yes ____ yes Ungualified no ---- ----none reported _~X __ no X no -~--X none reported ---- Unqualified _~X __ no CFDA Number 14.218/14.253 66.458 14.257 $300,000 X no ---- CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED FEBRUARY 28 , 2010 Section II-Financial Statement Findings Finding number: 2010-1 Criteria: The City must have functioning internal controls over information technology . Condition: Significant deficiencies in internal control over information technology were found during our audit. Context: During the course of our audit, we assessed the internal controls over information technology (IT). We noted that some of the City's software systems such as CryWolf, JDE, and RecTrac require passwords but the passwords do not meet industry standards for length, expiration, characters, and history (characters cannot be repeated). Effect: Deficiencies in control over information technology could result in system errors or the compromise of the City's systems and thus impact the financial information of the City . Cause : This finding was caused by deficiencies in the information technology systems and procedures. Recommendation: We recommend that management evaluate their internal controls over information technology and develop controls to prevent and detect system errors or breaches. Management or information technology staff may consider seeking additional training in this area. Management Response: The referenced systems -CryWolf, JDE and RecTrac are purchased packages and the City cannot change the password handling in these systems. JDE could be upgraded to use our Active Directory and then would be in compliance with best practices. -12 - CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED FEBRUARY 28 ,2010 Section II-Financial Statement Findings Finding number: 2010-2 Criteria: The City must have functioning internal controls over its various transaction cycles. Condition: The City has a material weakness in its internal controls over journal entries . Context : The ability to prepare and initiate journal entries is delegated to various levels of finance employees. These entries do not post to the system until the Accounting Manager reviews and approves them . However, there is no review and approval of journal entries initiated and recorded by the Accounting Manager. An entry could be made or improperly supported without the City's knowledge. Effect: Lack of proper internal controls could result in a potential material misstatement of the financial statements. Cause: This material weakness was caused by a lack of adequate staffing and procedures in place to have an effective system of internal controls. Recommendation: We recommend that management review this material weakness and decide which controls management can implement to address it. Management Response: The City believes there are adequate controls in place for journal entry management. It is not common for organizations to have three steps in journal entry review and is much more accepted to have entries done by one staff member and reviewed by the manager. To add another level of management review would be overly redundant and not cost efficient. The City made changes during the fiscal year allowing only the Accounting Manager to approve journal entries based on the auditor's recommendation last year. Department directors periodically review transactions posted to their business units to identify/ investigate any material variances from the budget numbers . The Budget Division prepares monthly financials which would serve as yet another tool to discover any material misstatements. -13 - CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED FEBRUARY 28 , 2010 Section II-Financial Statement Findings Finding number: Criteria : Condition: Context: Effect: Cause : 2010-3 The City must have functioning internal controls over external financial reporting. Material audit entries and corrections to the footnotes were required for the financial statements to be properly stated as of February 28, 2010. During the course of our audit, material misstatements of the financial statements were found, resulting in audit adjustments. The adjustments to the financial statements included the following: 1. Reclassification of outstanding checks as accrued salaries in the General Fund. $2,146,718 2. Reclassification of capital lease payments as debt service in the General Fund and Capital Improvements Fund. $383,764 3. Reclassification of donated capital assets to capital grant and contribution revenue on the Statement of Activities. $3,776,532 4. Correction to recording of capital contribution and transfers between governmental activities anad business-type activities on the Statement of Activities. $1,090,750 5. Amendment of various footnote disclosures to agree with the basic financial statements. Management was unaware of material errors to their financial statements. This finding was caused by insufficient internal controls over the external financial reporting process. Recommendation: We recommend that management evaluate their internal controls over financial reporting and develop controls to prevent and detect material misstatements in the financial records . Management might consider seeking additional training in this area. Management Response: Each year the definitions of asset, liability, revenue and expense types may change. Moreover, different auditors may have different opinions on the specific definitions of these accounting terms and when each type and classification should be used. It is important to note that these adjustments did not change the City's overall net assets for the fiscal year 2009-201 o. 1. Accrued payroll is the amount of salaries that have been earned by employees but not yet paid as of year end. Outstanding checks are the ones issued by the City during the year but not yet cleared the bank as of year end. Since the auditors asked for a reclassification from outstanding checks to accrued salaries, it had no impact on the City's overall financial statements . 2. The City concurs this adjustment wasa necessary although it was only a reclassification adjustment for reporting purposes. Lease payments and debt service are both expenditures and therefore have no impact on the overall financial statements. 3. This is the amount which lOOT paid on behalf of the City of Evanston for various public works projects. The City agrees that this reclassification was necessary to properly disclose grants and contributions. It had no impact on the City's overall financial statements. 4. This is the amount charged to the Downtown TIF Fund and later capitalized as fixed assets in the Parking Fund . This was a reclassification adjustment to accurately report a capital contribution which had no impact to the City's overall financial statements. 5. These were changes to the footnotes without any impact to the financial statements. -14 - CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED FEBRUARY 28 , 2010 Section III-Federal Award Findings and Questioned Costs None reported. -15 - This page has been intentionally left blank. Finding CFDA# None reported. CITY OF EVANSTON, ILLINOIS SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED FEBRUARY 28 , 2010 Program Questioned Costs -16 - This page has been intentionally left blank.