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2017CITY OF BANGOR, MAINE Reports Required by Maine Uniform Accounting and Auditing Practices for Community Agencies For the Year Ended June 30, 2017 CITY OF BANGOR, MAINE Reports Required by Maine Uniform Accounting and Auditing Practices for Community Agencies For the Year Ended June 30, 2017 Table of Contents Page(s) 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 1-2 Independent Auditor's Report on Compliance for Each Major Department Agreement; Report on Internal Control over Compliance; and Report on Schedule of Expenditures of Department Agreements Required by Maine Uniform Accounting and Auditing Practices for Community Agencies 3-5 Schedule of Expenditures of Department Agreements 6 Notes to Schedule of Expenditures of Department Agreements 7 Schedule of Findings and Questioned Costs: Section I –Summary of Auditor’s Results 8 Section II –Findings Required to be Reported Under Government Auditing Standards 9 Section III –Findings and Questioned Costs for State Agreements 10 Section IV –Status of Prior Year Audit Findings 11 1 Certified Public Accountants and Business Consultants 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 City Council City of Bangor, Maine We have audited, in accordance with the 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 governmental activities, the business-type activities, the discretely presented component unit, each major fund and the aggregate remaining fund information of the City of Bangor, Maine as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City of Bangor,Maine’s basic financial statements and have issued our report thereon dated January 30, 2018. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Bangor, Maine’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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 Bangor, Maine’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Bangor, Maine’s internal control. 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 a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected,on a timely basis. A significant deficiency 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. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 2 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, CONTINUED Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Bangor, Maine's financial statements are free from 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 have reported to the management of the City of Bangor, Maine in a separate letter dated January 30, 2018. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. January 30, 2018 South Portland, Maine 3 Certified Public Accountants and Business Consultants INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR DEPARTMENT AGREEMENT; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF DEPARTMENT AGREEMENTS REQUIRED BY MAINE UNIFORM ACCOUNTING AND AUDITING PRACTICES FOR COMMUNITY AGENCIES City Council City of Bangor, Maine Report on Compliance for Each Major Department Agreement We have audited the City of Bangor, Maine’s compliance with the types of compliance requirements described in Maine Uniform Accounting and Auditing Practices for Community Agencies that could have direct and material effect on each of the City of Bangor, Maine’s major department agreements for the year ended June 30, 2017. The City of Bangor, Maine's major department agreements are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, contracts, and the terms and conditions of its awards applicable to its department agreements. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the City of Bangor, Maine's major department agreements 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 Maine Uniform Accounting and Auditing Practices for Community Agencies. Those standards and Maine Uniform Accounting and Auditing Practices for Community Agencies, 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 department agreement occurred. An audit includes examining, on a test basis, evidence about the City of Bangor, Maine’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 department agreement. However, our audit does not provide a legal determination of the City of Bangor, Maine’s compliance. 4 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR DEPARTMENT AGREEMENT; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF DEPARTMENT AGREEMENTS REQUIRED BY MAINE UNIFORM ACCOUNTING AND AUDITING PRACTICES FOR COMMUNITY AGENCIES, CONTINUED Opinion on Each Major Department Agreement In our opinion, the City of Bangor, Maine 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 department agreements identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs for the year ended June 30, 2017. Report on Internal Control over Compliance Management of the City of Bangor, Maine 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 of Bangor, Maine’s internal control over compliance with the types of requirements that could have a direct and material effect on each major department agreement to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major department agreement and to test and report on internal control over compliance in accordance with Maine Uniform Accounting and Auditing Practices for Community Agencies, 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 of Bangor, Maine’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 department agreement 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 department agreement will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance with a type of compliance requirement of a department agreement 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 Maine Uniform Accounting and Auditing Practices for Community Agencies. Accordingly, this report is not suitable for any other purpose. 5 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR DEPARTMENT AGREEMENT; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF DEPARTMENT AGREEMENTS REQUIRED BY MAINE UNIFORM ACCOUNTING AND AUDITING PRACTICES FOR COMMUNITY AGENCIES, CONTINUED Report on Schedule of Expenditures of Department Agreements Required by Maine Uniform Accounting and Auditing Practices for Community Agencies We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Bangor, Maine as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City of Bangor, Maine’s basic financial statements. We issued our report thereon dated January 30, 2018, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of department agreements is presented for purposes of additional analysis as required by Maine Uniform Accounting and Auditing Practices for Community Agencies and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of department agreements is fairly stated in all material respects in relation to the basic financial statements as a whole. January 30, 2018 South Portland, Maine CITY OF BANGOR, MAINE Schedule of Expenditures of Department Agreements For the Fiscal Year Ended June 30, 2017 Total Local Total Department Grant Agreement Agreement Agreement Agreement Agreement Federal State Department Share Agree/Match Office Name Number Amount Period Service Status Expenses Expenses Expenses Expenses Expenses DHHS-Direct WIC Women Infant & Children CDC 16-168 $3,051,463 10/1/15 - 9/30/16 Health Promotion Final 859,419 - 859,419 - - WIC Women Infant & Children CDC 17-168 2,632,188 10/1/16 - 9/30/17 Health Promotion Interim 1,830,067 - 1,830,067 - - WIC WIC - Breastfeeding CDC 17-168 25,624 10/1/16 - 9/30/17 Health Promotion Interim 17,223 - 17,223 - - WIC WIC - Farmers Market CDC 17-168 1,571 10/1/16 - 9/30/17 Health Promotion Interim 1,571 - 1,571 - - CDC Lead Poison Prevent CDC 16-719B 37,500 6/30/16 - 12/31/16 Lead Poison Prevent Final - 10,813 10,813 - - CDC Lead Poison Prevent CDC 17-719 60,000 1/1/17 - 12/31/18 Lead Poison Prevent Interim - 7,987 7,987 - - CDC Sodium Reduction CDC 16-1049 132,000 9/1/15 - 9/29/16 Health Promotion Final 39,390 - 39,390 - - CDC In-home Asthma CDC 16-3057 119,731 7/1/15 - 8/31/16 Health Promotion Final 17,180 - 17,180 - - CDC In-home Asthma CDC 17-3057 102,627 9/1/16 - 8/31/17 Health Promotion Interim 84,772 - 84,772 - - CDC Healthy Maine Partnership CDC 16-337 762,001 7/1/15 - 9/30/16 Health Promotion Final 19,242 77,904 97,146 - - CDC Public Health Nurse Bridge CDC 17A-4101 99,203 8/15/16 - 3/31/18 Health Promotion Interim - 47,705 47,705 - - CDC Lead Fiscal Agent CDC 17-4501 160,000 7/1/16 - 6/30/17 Health Promotion Final - 150,311 150,311 - - CDC Public Health Nurse CDC 17-567B 116,795 7/1/16 - 3/31/18 Health Promotion Interim - 73,843 73,843 - - OSA Overdose Prevention OSA 17-373 100,000 7/1/16 - 6/30/18 Substance Abuse Interim - 48,150 48,150 - - OSA Substance Abuse CM SA 07-16 121,502 1/1/17 - 6/30/18 Substance Abuse Interim 9,664 - 9,664 - - Passed through: Maine Health Tobacco Prevention CDC 17-4415 97,613 12/1/16 - 9/30/17 Health Promotion Interim - 37,759 37,759 - - Barbara Bush Hospital Let's Go CDC 17-1681 85,000 2/1/17 - 9/30/17 Health Promotion Interim - 29,111 29,111 - - University of New England Substance Use Prevent CDC 17-4425 51,641 10/1/16 - 9/30/17 Substance Abuse Interim 32,514 - 32,514 - - University of New England Substance Use Prevent CDC 17-4425 100,604 10/1/16 - 9/30/17 Substance Abuse Interim 23,507 - 23,507 - - University of New England Supp Nutrition Assistance OFI 17-351 230,679 10/1/16 - 9/30/17 Health Promotion Interim 149,917 - 149,917 - - University of New England Supp Nutrition Assistance OFI 16-351 155,369 10/1/15 - 9/30/16 Health Promotion Final 35,552 - 35,552 - - Total Department of Health and Human Services 3,120,018 483,583 3,603,601 - - MDOT-Direct OPT Operating CSN 36353 101,109 7/1/16 - 6/30/17 Transportation Systems Final 101,109 - 101,109 101,109 202,218 Total Department of Transportation 101,109 - 101,109 101,109 202,218 Total $3,221,127 483,583 3,704,710 101,109 202,218 See accompanying notes to schedule of expenditures of department agreements. 6 7 CITY OF BANGOR, MAINE Notes to Schedule of Expenditures of Department Agreements June 30, 2017 PURPOSE OF THE SCHEDULE Maine Uniform Accounting and Auditing Practices for Community Agencies require a Schedule of Expenditures of Department Agreements showing total expenditures for each award as identified in the respective department agreements. SIGNIFICANT ACCOUNTING POLICIES A.Reporting Entity -The accompanying schedule includes all department agreements of the City of Bangor, Maine for the fiscal year ended June 30, 2017. The reporting entity is defined in Notes to Financial Statements of the City of Bangor, Maine. B.Basis of Presentation -The information in the accompanying Schedule of Expenditures of Department Agreements is presented in accordance with Maine Uniform Accounting and Auditing Practices for Community Agencies. 1.Pursuant to Maine Uniform Accounting and Auditing Practices for Community Agencies, department agreements are defined as a legally binding written document between two or more parties, including, but not limited to, a document commonly referred to as accepted application, proposal, prospectus, contract, grant, joint or cooperative agreement, purchase of service or state aid. 2.Major Agreement -Maine Uniform Accounting and Auditing Practices for Community Agencies establishes the levels of expenditures or expenses to be used in defining major department agreements. Major department agreements for the City of Bangor, Maine have been identified in the attached Schedule of Findings and Questioned Costs -Summary of Auditor’s Results. C.Basis of Accounting -The information presented in the Schedule of Expenditures of Department Agreements is presented on the modified accrual basis of accounting, which is consistent with the reporting in the City’s fund financial statements. D.During the fiscal year, the City had some grants that were not completely expended and the unspent funds were returned to the awarding or pass-through agencies. The amounts returned to the agencies have been excluded from current year expenditures. 8 CITY OF BANGOR, MAINE Schedule of Findings and Questioned Costs June 30, 2017 Section I -Summary of Auditor's Results Financial Statements Type of auditor’s report issued:Unmodified Internal control over financial reporting: Material weaknesses identified?No Significant deficiencies identified? None reported Noncompliance material to financial statements noted? No State Agreements Internal control over programs tested: Material weaknesses identified? No Significant deficiencies identified? None reported Type of auditor’s report issued on compliance for programs tested:Unmodified Any audit findings disclosed that are required to be reported in accordance with Maine Uniform Accounting and Auditing Practices for Community Agencies? No Federal Awards Required to have an audit in Accordance with the Uniform Guidance?Yes Identification of program(s) tested: Agreement Number(s)Name of Department -Agreement CDC –16-168 Women, Infants, and Children (WIC) CDC –17-168 Women, Infants, and Children (WIC) CDC –16-3057 Asthma Control and Prevention (In-Home Asthma) CDC –17-3057 Asthma Control and Prevention (In-Home Asthma) CDC –17-4501 Lead Fiscal Agent Percentage of department agreements tested:80% Auditee qualified as low-risk?No 9 CITY OF BANGOR, MAINE Schedule of Findings and Questioned Costs, Continued Section II –Findings Required to be Reported under Government Auditing Standards None 10 CITY OF BANGOR, MAINE Schedule of Findings and Questioned Costs, Continued Section III –Findings and Questioned Costs for State Agreements None 11 CITY OF BANGOR, MAINE Schedule of Findings and Questioned Costs, Continued Section IV –Status of Prior Year Audit Findings 2016-001 -Noncompliance with Cash Management Requirements for Agreement CDC 16-337 Criteria -The agreement for CDC 16-337 requires the grantee to comply with cash management requirements and those requirements extend to subrecipients of the grant. Condition -The City’s subrecipients did not spend grant proceeds in a timely manner and had cash on-hand for at least half of the fiscal year. Known Questioned Costs -None Likely Questioned Costs -None Cause -The City did not ensure that subrecipients adhered to cash management requirements. Recommendations -We recommend that the City prepare its subrecipient agreements in a way that ensures subrecipients will not have excess cash on hand. In addition, the City should implement procedures for monitoring the subrecipients’ compliance with cash management. Current year status –This finding was corrected and not repeated in the current year. 2016-002 -Noncompliance with Budget Requirements for Agreement CDC 15-1049 Criteria -MAAP regulations require a community agency to obtain a budget revision in the event that the total expenses per subcontract vary from the budgeted amount by at least ten percent or $1,000, whichever is greater. Condition -The City paid amounts to the subrecipients that were less than the amounts budgeted, which by individual contract and in the aggregate were less by both ten percent and $1,000. Known Questioned Costs -None Likely Questioned Costs -None Cause -The City did not request a budget amendment as required. Recommendations -Although total expenses were under budget and no questioned costs were identified, we nevertheless recommend that the City be sure to request budget revisions in the future, if agreement expenses in any category are expected to vary from budgeted levels by more than the allowable variance. Current year status -This finding was corrected and not repeated in the current year.