Loading...
9. Reports of Independent Public Accountants & Schedule of Expenditures of Federal AwardsREPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS ANII, SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AS REQUIRED BY U.S. OFFICE OF MANAGEMENT AND BUDGET CIRCULAR A- 13 3 . AUDITS OF STATE AND LOCAL GOVERNMENTS AND NON-PROFIT 00 � t C> 0 � <:) C� 00 r- C) W) 0 o1 In � -'t 00 C,4 C> (CRI ON I = 4 lrl�-, —1 —, to x C� P? 11. 0 C� C/J C) C) z — I as w cri C> ON (7) C> C) 0 al r0a-a u C-4 cq C14 00 00 00 w to NNN C> C) 0 C> 0 C) cq 1-0 '10 'IC! 110 C) C> C) C> C) C) cl " C14 C14 fn W) C) r- -s4 Cn W) 00 C) C> r- Wi h 10 OC 110 %lo to � wv o 0 0 0 r 4) .0 A 8 > > co o o >0 U cl .0 Z) A4 + z 0 0 Q -0 03 CC3 CD &. '5 co t .;= 0 Q " CIO >, W) cri t> Ro d) q3 .0 V; 0 u) rZP-40 C,5 -(D U W b-I 9 4 81 0o 0 En 0 I vi u u rA gPaAa Cd 0 to o C6 2 v q6) q6) cc 140 0-. C OF Q CITY OF KALISPELL NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Fiscal Year Ended June 30, 2012 Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of City of Kalispell, Flathead County, Montana, and is presented on the modified accrual basis of accounting. 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. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in preparation of, the basic financial statements. 141 Denning, Downey & Associates, P.C. CER TIFIED P UBLIC A CCO U.NTANTS 1740 US Hwy 93 South, P.O. Box 1957, .Kalispell, MT ;59903-19.57 REPORT ON INTERNAL CONTROL OVER FINANCIAL RE PORTING AND ON 7ND N' 0 COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL U IT I STATEMENTS PERFORMED IN ACCORDANCE WITH GOVEM�IVMENTA D N STANDARDS Mayor and City Council City of Kalispell Flathead County Kalispell, Montana We have audited the financial statements of the governmental activities, business -type activities, the aggregate discretely presented component units,, each major fund, and the aggregate remaining fund information of City of Kalispell, Flathead County-, Montana, as, of and for the year ended June 30, 2012, which collectively comprise the City of Kalispell's basic, financial statements and have 'Issued our report thereon dated December 28-, 2012. 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. Intornal Control Over Financial _.Reporting Management of City of Kalispell is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the City of Kalispell '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 Kalispell's 'internal control over financial reporting, Accordingly, we do, not express an opinion on the effectiveness -of the City of Kalispell'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 acombination of deficiencies, in, Internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statement will not beprevented, 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. However, we identified certain deficiencies in internal control over financial reporting, described in the accompanying schedule of findings and questioned costs that we consider to be significant deficiencies in internal control over financial reporting as 'item 12-1, - 142- Robert K Denning, CPA - Kim M Downey, CPA A significant dqflciency 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.. 'Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Kalispell'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 tobe reported under Government Auditing Standards, City of Kalispell's response to the findings identified in our audit is described bed in the Auditee's Response to Findings, We did not audit City of Kalispell's response, and accordingly, we express no opinion on it. This report is intended solely for the 'Information and use of management,, the Mayor and City Council, the Montana Department of Administration, 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. December 28, 2012 -143- Denning, Downe & Associates, P.C. Y CER TIFIED P UBLIC A CCO UNTANTS 1740 Z.I. S. Hwy 93 South, P. O. Box 195 7, Kalispell, MT 59903-195 7 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 Mayor and City Council City of Kalispell Flathead County Kalispell, Montana ^ C% CoMpliance We have audited City of Kalispell, Flathead County, Montana, compliance 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 City of Kalispell's major federal programs for the year ended June 30, 2012. 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 of 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 on the City's compliance with those requirements. In our opinion, City of Kalispell complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2012. ZN 'Cl Internal Control Over Compliance The management of the City 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'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 144 Robert K Denning, CPA - Kim M Downey, CPA expressing our opinion on compliance and to test and re -port 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.. 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. This report is intended for the information of management, the Mayor and City Council, the Montana Department of Administration, 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. IS�Ex;u,,�,, wrvcvw„ r „� G.;ku-ecut�� , CPR s, r�C. December 28, 2012 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Fiscal •. Ended June 30, 2012 Section I — Summary of Auditor's Results Financial Statements Type of auditor's report issued Unqualified Internal control over financial reporting: Material weakness(es) identified? No Significant deficiency(s) identified not considered to be material weaknesses Yes Noncompliance material to financial statements noted? No Federal Awards Internal control over major programs: Material weakness(es) identified? No Significant deficiency(s) identified not considered to be material weaknesses None Reported Type of auditor's report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section.510(a)? No Identification of major programs: CFDA Number Name of Federal Program or Cluster 16.753 BJA Congressionally Selected 97.036 Disaster Grants Dollar threshold used to distinguish between Type A and Type B programs: $ 30000 Auditee qualified as low -risk auditee? Yes OTV 101 Mwlli 111111UMU! 001 11 Section 11 — Financial Statement Findings 12-1 Credit Card Claims Condition: Based on the review of credit card claims, of the 25 individual credit card statements and supporting documentation provided, 7 of the billing statements did not have appropriate supporting documentation. Criteria: Proper controls should be in place to ensure credit card purchases are supported with proper documentation. Effect: Controls over credit card disbursements could be improved. Cause: Controls in place were not being followed on a consistent basis. Recommendation: All credit card purchases should be supported with adequate documentation including the original receipts. Section III — 'Federal Award Findings and Questioned Costs There were no federal award findings or questioned costs reported. 4-1 Denning, Downe & Associates, P.C. Y CER TIFIED P UBLIC A CCO UNTANTS 1740 U.S. Hwy 93 South, P.O. Box 1957, Kalispell, MT59903-1957 REPORT ON OTHER COMPLIANCE, FINANCIAL, AND INTERNAL ACCOUNTING CONTROL MATTERS Mayor and City Council City of Kalispell Flathead County Kalispell, Montana There were no other compliance, financial, or internal accounting matters. filla�.� �La� C Pn s,Pc December 28, 2012 Denning, Downe & Associates, P.C. Y CEJ? TIFIED P UBLIC A CCO UNTANTS 1740 U. S. Hwy 93 South, P. O. Box 195 7, Kalispell, MT 59903-195 7 Mayor and City Council City of Kalispell Flathead County Kalispell, Montana The prior audit report contained two recommendations. The action taken on each recommendation is as follows: Recommendation Parking Commission Segregation of Duties Ambulance Fund Receivables December 28,, 2012 Action Taken Implemented Not Repeated 149 Robert K Denning, CPA - Kim M. Downey, CPA City of Kalispell, Montana Response to Audit Findings Fiscal Year 2012 12-1 Credit Card Claims Condition: used on the review of credit card claims,, of the 25 individual credit card statements and supporting documentation provided, 7 of the billing statements did not have appropriate supporting documentation. Criteria: Proper controls should be m* place to ensure credit card purchases are supported with proper documentation. Effect: Controls over credit card disbursements could be improved. Cause: Controls in place were not being followed on a consistent basis. Recommendation: All credit card purchases should be supported with adequate documentation including the original receipts. Response: All departments, including component,, units will be required to provide adequate documentation including the original receipts for all credit card purchases. WO