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1992 CITY OF �ANG � R MAIIVE � AUDITOR'S REP�RT ON SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE J U N E 30, 1992 CONTENTS Paqes Independent auditor's report on supplementary schedule of federal financial assistance 1 Schedule of federal financial assistance 2'4 Notes t� sched,��le of federal f.inancial �ssistan�e 5 . Report on Internal control structure based on an audit of general purpose or basic financial statements performed in accordance with Government Auditinq Standards 6-8 Compliance based on an au�it of gen�:ral purpos� or _ basic financial statemen��s performed in accordance - with Government Auditinq Standards 9 Single audit report on Internal control structure used in administering federal Financial assistance programs 10-13 Compliance with the general requirements applicable to . federal. financial assistance programs 14-15 Compliance with specific requirements applicable to m�jor federal financial assistance programs 16�17 Compliance with specific requirements applicable to nonmajor federal financial assistance program transactions 18 Schedule of reportable conditions considered to be material weaknesses , . 19 . Schedule of other reportable conditions 20 Schedule of general findings 21-22 . Schedule of specific findings and questioned costs 23-28 Status of prior year reportable conditions considered to be material weaknesses 2g CONTENTS PaQes Status of prior year general findings 30 Status of prior year specific findings and questioned costs 31 �chedule of federal/state financial assistar_ce �2 Schedule of agreement operations 33 Report on Supplementary Sched�ale of Federal Financial Assistan.ce Ind�pendent Auditor's �epo�t The Honorable Mayor and City Council City of Bangor, Maine We have audited the general purpose financial statements of the City of Bangor, Maine as of and for the year ended June 30, 1992, and have issued our report thereon dated March 2 , 1993 . These general purpose financial statements are the responsibi.lity of the City o� Bangor, Maine's managem��t. Our responsibility i� to express an opinion on these general purpose financial statements based �n our audit. �7e conducted �ur audit in accordance with ��nerally accep�ted �uditing� standards and Government AuditinQ Standards, issued by the Comptroller General of the United States . Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free �f material misstatement. An audit includes examining, �n a test basis, evidence supporting the amounts and disclosures ir� �he general purpose fir.ancial statements . An audit also includes assessing the accounting prir�ciples used and significant estimates made by management, as well as evaluating the overall financial statement �resentation. We believe that our audit provides a reasonable basis for our opir.ion. Our audit was made for the purpose of forming an opinion on the general purpose financial statements of the City of Bangor, Maine taken as a whole. The accompanying Schedule of Federal Financial Assistance is presented for purposes of additional analysis and is not a required part of the general purpose financial statements . The information in that _ schedule has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. . �.t,Q..-.�-��-, ��--�--•-- �" �}/S1.�r-�-s�- _ March 2, 1993 1 cz2�r or ar�rx�R, r�rr� sc►�� or i�Dc�.L r•i��r�cu� Psszsr� � roR �i�tiL Yc� r::rmrn ��nai3 3G, i��2 Reference Catalogue Federal • of Federal Received Through State OLher Local Total 7bta1 Ass�stance Directly SL-aLe Grant Incw� Incar� Revenue E� cndi.tures De nt of Agriculture WIC 10.557 $ - $ 1,Q39,136 $ - $ - $ - $ 1,839,13 $ 1,811,589 Food Distribution - P'ood Donation / �rogram ].0.550 55,f353' - _ _ _ 55,£353� 54,011�/ ool }3reakfasl: Program 10.553 34,3G7 34,367 / 39,3G7�/ chool Lunch Program 10.555 - 329,103 - - - 329,103✓ 329,103� • Total 1lccrual IIasis $ 55,Ei53 $ 2,20?.LOG_$ - $ - $ - < 2,25�,459 $ 2,229,070 Departrrient of Health & Human � Services I� Venereal Disease Clinic 13.977 $ - $ 70,034 {�$ - $ 32,916 $ - $ 102,450`N$ 100,771 Childhood Iirnninization 13.268 - 46,2120�� - - - 46,21 / 47,31B�' Venereal Disease - HIV 13.11f3 - 29,566 - - - 29,56Fr✓ 23,721��'�� —�ent-al Cl�nic 13.99�1 - 16,000� - � 61,382 53,938 131,320��` 131,320�� Maternal and Child Health Care - - "i0 1§i 2,091 126,527 198,779c�r� 19fi,779� Total Accrual Basis $ - $ 161,II12 $ . 7(1L161 $ 95,8II9 $ 1E30,465 $ 50II,327 $ 501,909 Depart�nent of Housing and Urban ' Develotsnent C�ity Develo�snent Block Grants: 14.218 _ _ _ _ / _ ,, �-89-I�-23-0004 $ 107,139 $ _ $ $ _ $ _ $ 9�0�000�$ 780,495� -90-t�-23-0004 910,00� � �91-N�-23-0004 36�,802 - - - - 368,802� ,o A65,531� am Inccere 12.221 - - - 227,600 - 227,600 �„F�,^�, - L�r-�-B�vei �anent ' n-Crants: t�,c�y�� p�h�� - - - 19,171 -,.___ 19,171 r' 33,566 Total Cash Basis 1,385,941 - - 296,771 - 1,632,712 1,679,612 Receivables 7/O1/91 (10�,914) - - - - (101,914) - 6/30/92 �50�299 - - - - _._ ].50,299 - Total Pccrual Basis $ 1,4?4,326 $ - $ - $ 246,771 $ - ; '_,6II1,097 $ 1,679,612 2 ci�y or �uaooi�, c�rNL SCHEDULE OF FEDII2AL FINANCIAL ASSISTANC� Il�it T[IE YL:AR I:ND1:D JUFI� 30, 1992 Reference Catalogue T'ederal. of P'ederal Received 77�rough State Other Lpcal Toi:al 'Ibtal Assistance DirectlY State Grant Incoire Inc� Revenue �xpendiLures Department of Education Adult IIasic 13ducation (91-92) 84.002 $ - $ 34,365 $ - $ - $ - $ 34,365 $ 34,365 E.S.E.A. Chapter 1 (90-91) fl4.010 - - - - - - 4,205 �.S.E.A. Chapter 1 (91-92) �4.010 - 696,962 - - - 696,962 696,962 � Local EnL-itlement- (91-92) II4.027 - 139,0£3U - - - 139,Ofl0 139,OE30 E.S.E.A. Cliapter I Handicapped(90-91) 84.009 - - - - - - 2,665 • E.S.E.A. ChapL-er I Handicapped(91-92) �4.009 - 1.3,II00 - - - 13,800 12,057 E.S.E.A. Cl�apt-er Z Migrant �4.U11 - G9,75Q - - - 69,75E3 69,758 E.S.E.A. Chapter II 84.151 - 52,204 - - - 52,204 30,035 Dwight D. Eisenhaaer Act (90-91) 89.164 - - - - -• - 7,020 Dwight D. Eisenhawer Act (91-92) f34.164 - 19,407 - �- - 19,407 1,569 Ilrug FYee Schools (90-91) , �4.1II6 - - - - - - 26,097 Drug EYee Schools (91-92) B4.186 - 46,241 - - - 46,241 29,817 Adult Hareless (91-92) f39.192 - 34,500 - - - 34,500 30,498 Rids Grant (90-91) 13.11£3 - - - - - - 1,092 Aids Grant (91-92) 13.17.II - 2 300 - - - _ 2,300 2,300 Total Accrual Basis $ - $ 1,108,617 $ - •$ - $ - $ 1,108,617 $ 1,085,220 Env' onmental Protection Agency ,� / � tate Revolving Loan �nd Program 66.45II $ - $ 3,51.0,283 $ - $ - $ - $ 3 510 283 $ 3 510 283' � Departr�nt of Environmental Protection Canbined Sewer Overflaa Planning $ - $ - $ - $ - $ 503,455 $ 503,455`�,$' f341,727� State Revolving Loan �nd Program - .___ - 720,568 - - 720,668� 720,666 Total Cash Basis - - 720,668 - 503,455 1,224,123 1,562,395 Receivables 6/30/92 - = 338,272 - - 338,272 - Total Accrual Basis $ - $ - $ 1,05E3,940 $ - ' $ 503,4�5 $ 1,562,395 $ 1,562,395 Maine Waste Managerrent Agency Recycling Grant S - S -__$__. 116,566�5 - S 36,366 S 152,932 S 2,430✓ Total Cash Basis - - 116,566 - 36,3bE 152,932 2,430 Receivables 7/O1/91 - - (112,877) - - (112,£377) - 4bta1 Accrual IIasis $ - $ - $ 3,689 $ - $ 36,366 $ 40,055 $ 2,930 3 CITY OF I3AD1�012, MAiN� SCEfEDULT Or I'EDL:��L FIt1ANCI.III, ASSIS`l`P.NCG lUR `l't!L' YCAtt LNDIi'D .TUNI: 3�, 1992 12eference Catalogue rederal of I'e�leral Received Through State Other IAcal ibtal Total Assi.stance Directiv State Grant Incrarn Incarn Revenue Ext�nditures Depax-t�rnnt of Transportation � /�irport Iirqarov�st�nt Proyram: 20.106 V 6-23-0005-07 $ - S - $ - $ - $ - $ - $ - 6-23-0005-09, _ '3-23-0005 �0�j 102,007 - - - - 102,007�/ - 3-23-0005��/ 253,415 - - - - 253,415 :/ - . 3-23-0005- 5 - - - _ _ _ _ 3-23-0005-06 - - -• _ _ _ _ 3-23-0005-07 - - - - _ _ _ -- 3-23-0005-08 - - -. _ _ _ _ 3-23-0005-0 - - - - _ _ / _ 3-23-0005� 45,£352 - — 2,507 - - 48,359�/ 54,727�j 3-23-0005 1 41.6,537 - 45,150 - 1,Q39,96Q 2,301,676 ,� 3,531,016 £?17 811 47 657 1 839 9fi9 2,705,457 3,585,743 Urban Mass�TransporL-ation Capital & O�erar;,�. l�ssistance 20.507 � / O��rating � - ?.10,354 92,069 - - 252,A23� 267,024 Capital - 97.127 97,127 307,441 42,069 349,550 267,024 Zbtal Cash Basis 817,811 307,481 89,72;i - 1,839,9f39 3,055,007 3,852,764 Receivables 7/O1/91 (1,077,615) (47,294) (35,509) - (114,3�?) (1,274,775) - • 6/30/92 1,858,070 61,013 2�(' 667 2 119 750 Total Acc�al Basis $ 1,59fl,266 $ 321,200 $ 254,8II4 $ - $ 1,725,632 $ 3,899,982 $ 3,852,764 � CITY OF BANGOR, MAINE NOTES TO THE SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE JUNE 30, 1992 Basis of Presentation Receipts �nd expenditures presented in the Schedule of Fed.eral rinanci,sl Assistance are taker� diY'�ct1.1� fr_or.r� t::�e books ar..3 r�cords �f the City, wi�h t1��e net chan�e ili recciv��ies being adc��d to con��r_t the statements to accrual basis, �hich is in conform.iiy with generally accepted accounting principles . Ma�or Federal Proqrams A major federal financial assistance program, in accordance with the Single Audit Act of 1984 as it relates to the City for the year ended June 30, 1992 , is defined as any program for which total expenditures of federal financial assistance are the larger of $�00, 000 or 3� of total federal financial assistance expenditur�s . CFDA Source: Catalogse of Federal Domestic Assistance I • ' 5 BRANTNER THIBODEAU �L ASSOCIATES Cextified Public Accountants Key Plaza• 23 Water Street Post Office Box 864 Bangor, ME 04402-0864 (207) 947-3325 Report on the Internal Control Structure Based on an Audit of General Purpose or Basic Financial Statements Performed in Accordance With Government Auditinq Standards The Honorable Mayor and City Council City of Bangor, Maine We have audited the general purpose financial statements of the City of Bangor, Maine as of and for the year ended June 30, 1992 , and have issued our report thereon dated March 2, 1993 . We conducted our audit in accordance with generally accepted auditing standards and Government Auditinq Standards, issued by the Comptroller General of the United States . Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit of the general purpose financial statements of the City of Bangor, Maine for the year ended June 30, 1992, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure. The management of the City of Bangor, Maine is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures . The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles . Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. 6 For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories : * Treasury or financing * Revenue/receipts * Purchases/disbursements * External financial reporting * Payroll/personnel P'or all of the internai control �tr,�ctu.Me catec��riF�s listed �.�bove, w� obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants . Fceportable conditions involve Matters com�ng to ou..r attention relating to significant deficienci�s in the design or o�;�ration of tii� internal control structure that, in our judc�ment , could adversely a�'fect the entity's ab.ility to record, process , summarize, and regort financial data consistent with the assertions of management in the general purpose financial statements . Reportable conditions other than material weaknesses that we found are identified in the accompanying Schedule of Other F:eportable Conditions . A matE�rial weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elemF3its does not reduce to a relatively low le�rel the risk that erro�s or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occu� and not be detected within a timely period by employees in the normal course of perfoz-min� their assigned functions . Our considerGtion of the internal control structure would not necessarily , disclose all matters in the internal control structure that might be reportable conditions and, accordingly , would not necessarily disclose all reportable conditions that are also considered to be material � weaknesses as defined above. However, we noted reportable conditions that we believe to be material weaknesses, which are identified in the accompanying Schedule of Reportable Conditions Considered to be Material Weaknesses . We also noted other matters involving internal control structure and its operation that we have reported to the management of the City of Bangor, Maine in a separate letter dated March 2 , 1993 . 7 This report is intended for the information of the finance committee, City Council, management and the federal cognizant agency. However, this report is a matter of public record and its distribution is not limited. r3.,.,�-�, � � A�,s.,R.:.�. March 2 , 1993 8 Report on Compliance Based on an Audit of GeneraJ Purpos� or Ba�ic Financia]_ Stat�ment� P�rformed �r. Accordance �ith Govarnmer.� AuditinQ Standar�� The Honorable Mayor and City Council City of Bangor, Maine We have audited the general purpose financial statements of the City of Bangor, Maine as of and for the year ended June 30, 1992, and have issued our report thereon dated March 2,� 1993 . We conducted our audit in accordance with generally accepted auditing siandards and Government Au�itinQ Standards, issued by the Comptrol�er Gen�ral of. the United Stat�s . Thase standar�s require that we �lan and perform �he audit to obtain rea�onable assurance aboL.t whethe; the financi�l state�e�ts are free �f mat��ial misstatem�nt. Compliance with laws, regulations, contracts , and grants applicable to the City of Bangor, Maine is the resp�nsibility of the City of Bangor, Maine's management. As part of obtainir.,g reasonable assurance about whether the financial �tatements are free of material misstatement, we performed tests of the �ity of Bangor, Maine' s compliance with certain provisions of laws, regulations, contracts and grants . However, the objective of our audit cf the general purpose financial statements was not to provide an opinion on overall compliance with such provisions . Accordingly, we do not express such an opinion. • The results of aur tests indicate that, with respect to the items tested, the City of Bangor, Maine complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Bangor, Maine had not complied, in_all material respects, with _ those provisions . This report is intended for the information of the finance committee, City Council, management and the federal cognizant agency. However, this report is a matter of public record and its distribution is not limited. �3.�,d...,�, J � �- ��..�...:.�� March 2, 1993 9 BRANTNER THIBODEAU 8L ASSOCIATES Cextified Public Accountants . Key Plaza•23 Water Street Post Office Box 864 Bangor, ME 04402-0864 (207) 947-3325 Single Audit Report on the Internal Control Structure Used in Administering Federal Financial Assistance Programs The Honorable Mayor and City Council City of Bangor, Maine We have audited the general purpose financial statements of the City of Bangor, Maine as of and for the year ended June 30, 1992, and have issued our report thereon dated March 2 , 1993 . We have also audited the compliance of the City of Bangor, Maine with requirements applicable to major federal financial assistance programs and have issued our report �hereon dated March 2, 1993 . We conducted our audits in accordance with generally accepted auditing standards ; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget Circular A-128, "Audits of State and Local Governments" . Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the City of Bangor, Maine, complied with laws and regulations, noncompliance with which would be material to a major federal financial assistance program. In planning and performing our audits for the year ended June 30, 1992 , we considered the internal control structure of the City of Bangor, Maine in order to determine our auditing procedures for the purpose of expressing our opinions on the general purpose financial statements of the City of Bangor, Maine and on compliance of the City of Bangor, Maine with requirements applicable to major programs, and to report on the internal control structure in accordance with OMB Circular A-128 . This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to federal financial assistance programs . We have addressed internal control . structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated March 2, 1993 . The management of the City of Bangor, Maine, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures . The objectives of an internal control structure are to provide management with reasonable, but not 10 absolute , assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that federal financial assistance programs are managed in compliance with applicable laws and regulations . Because of inherent limitations in any internal control structure, errors, irregularities or instances of noncompliance may nev�rthele�s occur and not be dEtected. Also projection of any evaluation of the �tructur_P to future pes•iods is su.bject te the �°isk tha� proceaurEs may bF-come inadequate because of chan�es in conditi�ns ar that the effectiveness of the design and operation of policies and proced��res may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering federal financial assistance programs in the following categories : Activity Cyclts : ' * Treasury or financing * Revenue/receipts - * Purchases/disbursements • * External financial reporting * Payroll/personnel Genera� Reauirements : * Political activity * Davis-Bacon Act * Civil rights * Cash management * Feder�l financial reports * Allowable costs/cost principles * Drug Free Workplace �ct * Administrative requirements Specific Requirements : * Types of services * Eligibility * Matching, level of effort, and/or earmarking * Reporting Claims for Advances and Reimbursements Amounts Claimed or Used for Matching � For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and 11 procedures and determined whether they have been placed in operation, and we assessed control risk. During the year ended June 30, 1992 , the City of Bangor, Maine expended 93 . 4$ of its total federal financial assistance under major federal financial assistance programs. We performed tests of controls, as required by OMB C�rcular A-128, to �valuate the effectiveness �f t��e de��gn and operat�on of in��,rnal control structure �olicies and proced��res that we co�,sid�red relevar.t to preventing or detecting mat�rial noncompli�nce with spec�fic requirements, general requirements, and requirements gcverning claims for advances and reimbursements and amounts claimed or used for matching that are applicable to each of the City of Bangor, Maine's major federal financial assistance programs, which are identified in the accompanying Schedule of Federal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion. We noied certain matters involving the int�rnal c��ntrol structure and it:- operati_on that we cons.id�r. to be xeportable conditions un�er standards establisned by the �nerican Institute of Certified Public Accouri�ants . Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the City of_ Bangor, Maine's ability to administer federal financial assistance pr�grams in accordance with applicable laws and regu] ations . Reportable conditions other than material weaknesses tha.t we ��und are identif.ied in the accompanying Schedule of Other Reporta��e Conditions . A material weakness is a reportable conditioi� in which ��he design or oper.ation of one or more of the internal control structure. elements do�s not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a federal financial assistance program may occur and not be detected within a timely period by employees . in the normal course of performing their assigned functions. Our consideration of the internal control' structure policies and procedures used in administering federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we noted reportable conditions that we believe to be material weaknesses, which are identified in the accompanying Schedule of Reportable Conditions Considered to be Material Weaknesses. We also noted other matters involving the internal control structure and its operation that we have reported to the management of the City of 12 Bangor, Maine in a separate letter dated March 2 , 1993 . This reoort is intended for the information of the finance committee, City Council, management and the federal cognizant agency. However, this report is a matter of public record and its distribution is not limited. �.,,...�,� � A�.:.�.- , March 2 ,: 1��3 . 13 BRANTNER THIBODEAU �L ASSOCIATES Cextified Public Accountants Key Plaza• 23 Water Street Post Office Box 864 Bangor,ME 04402-0864 (207) 947-3325 Single Audit Report on Compliance With the General Requirements Applicable to Federal Financial Assistance Programs Independent Auditor's Report on the Citv of Banqor, Maine's Compliance With General Requirements The Honorable Mayor and City Council City of Bangor, Maine We have audited the general purpose financial statements of the City of Bangor, Maine as of and for the year ended June 30, 1992 , and have issued our report thereon dated March 2 , 1993 . We have also applied procedures to test the City of Bangor, Maine's compliance with the following requirements applicable to its federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance for the year ended June 30, 1992 : political activity, Davis-Bacon Act, civil rights, cash management, federal financial reports, allowable costs/cost principles, Drug Free Workplace Act and administrative requirements . Our procedures were limited to the applicable procedures described in the Office of Management and Budget's Compliance Supplement for Sinqle Audits of State and Local Governments . Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the City of Bangor, Maine's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Bangor, Maine had not complied, in all material respects, with those requirements . However, the results of our procedures disclosed i.mmaterial instances of noncompliance with those requirements, which are described in the accompanying Schedule of General Findings . 14 This report is intended for the information of the finance committee, City Council, management and the federal cognizant agency. However, this report is a matter of public record and its distribution is not limited. G3.,,,�..,�,.�, • --.t- A . March 2 , 1993 15 BRANTNER THIBODEAU 8L ASSOCIATES Certified Public Accountants , Key Plaza• 23 Water Street Post Office Box 864 Bangor, ME 04402-0864 (207) 947-3325 Single Audit Opinion on Compliance With Specific Requirements Applicable to Major Federal Financial Assistance Programs The Honorable Mayor and City Council City of Bangor, Maine We have audited the general purpose financial statements of the City of Bangor, Maine as of and for the year ended June 30, 1992, and have issued our report thereon dated March 2, 1993 . We have also audited the City of Bangor, Maine's compliance with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort , and/or earmarking; reporting; claims for advances and reimbursements; and amounts claimed or used for matching that are applicable to each of its major federal financial assistance programs, which are identified in the accompanying Schedule of Federal Financial Assistance, for the year ended June 30, 1992 . The management of the City of Bangor, Maine is responsible for the City of Bangor, Maine's compliance with those requirements . Our responsibility is to express an opinion on compliance with those requirements based on our audit. We conducted our audit of compliance with those requirements in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-128, Audits of State and Local Governments . Those standards and OMB � Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the City of Bangor, Maine's compliance with those requirements . We believe that our audit provides a reasonable basis for our opinion. The results of our audit procedures disclosed immaterial instances of noncompliance with the requirements referred to above, which are described in the accompanying Schedule of Specific Findings and Questioned Costs . We considered these instances of noncompliance in forming our opinion on compliance, which is expressed in the following paragraph. 16 In our opinion, the City of Bangor, Maine complied, in all material respects , with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort, and/or earmarking; reporting; claims for advances and reimbursements ; and amounts claimed or used for matching that are applicable to each of its major federal financial assistance programs for the year ended June 30 , 1992 . This report is intended for the information of the finance committee, City Council, management and the federal cognizant agency. However, this report is a matter of �ubli_c recor� and its distribution is not limited. ^ � . � A ' � March 2 , 1993 17 Single Audit Report on Compliance With Specific Requirements ApplicablP to Nonma.jor Fed�ral F�nancial Assistance Program `rrar.�ac:i�ns Independent Auditor's Report on the City of Bangor, Maine`s Compliance With Its Nonmaior Federal Financial Assistance Programs We have audited the general purpose financial statements of the City of Bangor, Maine as of and for the year ended June 30, 1992, and have issued our report thereon dated March 2, 1993 . In connection wit�� ou.r audit of the 3ener.al purposE financial statemer�ts of the City of Bangor, :�Iaine and with our consider.ati�n cf the City of Banc�or, Maine's control structure used to administer federal financial assistanc� programs, as requiz��l by the Offic� o� Management and Budget Circular A-128 , Audits of State and Local Governments, we selected certain transactions applicable to certain nonmajor federal financial assistance programs for the year ended June 30, 1992 . As required by OMB Circular A-128, we have performed auditing procedures to test compliance with the requiremer�ts governing tvpes of services allowed or unallowed and eiigibility that are applicable to those transactions . Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the City of Bangor, Maine's compliance with these requirements . Accordingly, we do not express such an o�inion. With r�spect to the i�ems t�sted, the results of those procedures disclose�3 no material instances of noncompliance with the requirements listed in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Bangor, Maine had not complied, in all material respects, with those requirements . This report is intended for the information of the finance committee, City Council, management, and the federal cognizant agency. However, this report is a matter of public record and its distribution is not limited. �� . March 2 , 1993 � 18 City of Bangor, Maine SCHEDULE OF REPORTABLE CONDITIONS CONSIDERED TO BE MATERIAL WEAKNESSES Year ended June 30, 1992 Bass Park - State Fair and Harness Racin� During our audit, we noted that the supporting documentation for the 1991 and 1992 State Fair gate receipts and the Harness Racing admissions, pr.ogram sales and concessions had b�en discardFd or could no� be locate�.. As a result, it is not po�sib�� to v��rify the completeness of these deposits. . ?Ne recom�iend that the City review its procedures for control�.ing the cash receipts at the State Fair and during Harness Racing, and that documentation supporting such receipts be retained. It was also brought to our attention that due to the lack of adequate controls being in place at Bass Park, receivables went unbilled and undetected for an extended period of time. We recommend that the City establish and implement accounts receivable billing procedures for Bass Park to ensure that billings are complete and timely. It is our understanding that the City has since implemented procedures to avoid the above probl�ms in the fut�zre. _ _ Cash Cash represents the City` s most accessible asset. Certain procedures must be followed to assure its safekeeping. One such procedur� is the timely reconciliation of each bank account. We noted an instance during the year where a debt payment wire transfer which was �equested in November 1991 was not processed. Because bank reconciliations were not being reconciled on a timely basis, this omission was not detected until June 1992 . The City has since taken steps to assure that bank reconciliations are perfori�led timely. 19 City of Bangor, Maine SCHEDULE OF OTHER REPORTABLE CONDITIONS Year ended June 30, 1992 Sewer Liens The City does not currently lien its delinquent sewer bills. As a result, when a property with sewer bill. delinquencies is sold, the Cir.y must attempt to seek collertion in the car�city as ar ansecure� creditci. We recommend the City implement lier� pracedures so t"r.at the City w�ll receiv� deli�quent seGTer bill payments *.�hene-✓er a proper.ty is so�d, thus improving co].�ections. The City is in the process of reviewing their inhouse sewer billing program and other computer program packages for the sewer lien process. Excise Taxes During our audit, we noted that voided excise tax forms (preprinted and nonpreprinted) , unused preprinted excise tax t�rms, and state preprinted excise receipts control :,heets were being discarded - �naking it difficui.t_ to control and test tine accour.r_ability of the excise tax receipts. We recommeLd that ail excise tax receipts (used or unused) be kept for future accountability. Accounts Pavable At June 30, 1992, an adjustment was made to record an addi.ti.onal $1,024,529 of accounts payable which wer� generally related to capitel projects. We recommend that the City review its procedures for recording accounts payable at year end to ensure that transactions are recorded in the proper period. 20 City of Bangor, Maine SCHEDULE OF GENERAL FINDINGS Year ended June 30, 1992 Condition: The City of Bangor adopted a drug and alcohol abuse policy in compliance with federal "Drug-Free Workplace Act" requirement's. A copy of the statement had not been di stributed �o certain employees i.r:�olved with federal programs until i�ecembe.i' 7, 1992. Criteria: The Drug-Free Workplace Act makes it a requirement that each employee to be engaged in the performance of a Federal agency grant be given a copy of the policy statement notifying employees that the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance is prohibited in the granr_ee' s workplace and specifying the actions that will be taken against employees i.or violations of such prohibition. Effee.t: Noncompliance could result in the loss of federal funding. Recommendation: The City of Bangor should establish a procedure to ensure that all employees involved with federal prograrns receive a copy of the City' s Drug-Free Workglace Act Administrative Policy. Auditee Response: On or about the commencement of the City af Bangor' s fiscal year (July lst) , the Human Resources Division shall distribute copies of the City's Drug-Free Workplace Act Administrative Policy to all employ�es involved with federal . programs. Additionally, any newly hired employees involved with federal programs shall be provided a copy of the policy at the time of hire. 21 City of Bangor, Maine SCHEDULE OF GENERAL FINDINGS Year ended June 30, 1992 Condition: ' During the year ended June 30, 1992, the City of Bangor was using an outdated indirect cost allocation plan (ICAP) . Criteria: The cost of federally supported program is comprised of allowable direct costs plus its allocable portion of allowable indirect costs less applicable credits. Effect: During the year ended June 30, 1592, the City of Bangor absorbed indirect casts wt.ich were allocacle to the fe�eral programs for wh�.ch reimbursement cou]_d not be requested as tt:e City' s ICAY was outdated. Recommendation: The City of Bangor is currently waiting for a City-wide cost allocation plan - based on fiscal year 1991 audited costs and the establishment of_ indirect cost r.ates for certain departments. Auditee Response: The City- cf Bangor received the City-Wide Cost Allocation Plan from L�eger, Ade in April of 1993 . The City will also purchase a lotus based plan fYom the Center for Public Management and will use the Laeger, Ade plan as the base. 22 City of Bangor, Maine SCHEDULE OF SPECIFIC FINDINGS AND QUESTIONED COSTS Year ended June 30, 1992 QUESTIONED COSTS � � Program � Cor.dition: f I � ESEA Cha�ter 1 � Currently, th.e Bangor Schaol Department does � � not prr,vide for the participation on an � � equitable basis of eligible private school � � children in the Chapter I program. � � � � � CFDA No. � Criteria: � � � 84.010 � Local Education Agencies must provide Chapter I � � services and arrangements for children enrolled � ; in its public schools and also to children j ; enrolled in priva:.e e�ementary and secondary � � schools who are educationally dagrived and who j � reside in Chapter I project areas. � � � � � � Effect: � � ! � Noncompliance of wh�cri could effect the City' s j � ESEA Cha�ater I funding. , � � � � � Recommendation: � � � � We recommend the Bangor School Department � � develop procedures to determine the number and � � needs of educationally deprived children in � � private schools and ascertain that Chapter I � � services are provided to eligible psivate � - � schoolchildren. � � � � � � Auditee Response: � � � � The Bangor School Department developed � � procedures during the winter of 1992 to � � determine the number and needs of educationally � � deprived children in private schools. These � � procedures were put in effect with area private � � schools during the fall of 1992. � � � 23 City of Bangor, Maine SCHEDULE OF SPECIFIC FINDINGS AND QUESTIONED COSTS Year ended June 30, 1992 QUESTIONED COSTS � � Program � Cor_iition: ! , � I ESEA Chapter I j The Ban�or School Department �?oes not have � � procedures in place to ensure its compliance � � with its Chapter I program policy adopted � � September 15, 1986 concerning parents � � involvement in the Chapter I program. � � � � � CFDA No. � Criteria: � � � 84.�10 � The federal i:�quirements state thaL a Lccal � � Educational Age�.cj> (LE�1) shall develop and. � 1' implement programs, activities and procedure: � � fo.r. ;.he involvement oi parei.�.� in the Chapter � � � program that meet the goals anc? requirements � � specified in section 1016 of Chapter I. � � - � � � � �ffect: � � � � Noncomplisnce could eifect the City' s ESEA � � Chapter I funding. � � � � � � Recommendation: � � � � We recommend the Bangor SchooJ_ Department � � implement procedures to documex�t its compliance � � with the Chapter I program policy. � � -- � - � � � Auditee Response: � � � � The Bangor School Department has developed � � formal procedures documenting parental � � involvement in the Chapter I program. Further, � � during our March 16, 1993 Site Review from the � � State Department of Education, we were � � commended for all we do to involve parents in � � our program. � � � 24 City of Bangor, Maine SCHEDULE OF SPECIFIC FINDINGS AND QUESTIONED COSTS Year ended June 30, 1992 QUESTIONED COSTS � � Program � Conditi.�n: � � ! ESEA Chapter I � in our test cf eligibili.ty t� determine th.at � � the children served under the Chapter I program � � are educationally deprived, we noted one � � instance where the participant's records had � � not been updated since September 1990. � � � � � CFDA No. � Criteria: � � � 84.07_0 � Chapter I £unds may oniy be used for �rograms � � and projects that are desiQr.ed 3nd impl�mented ! � to meet the sp�rial educational needs of � � educationally depriv:>� children. � �— � � � � Ef.fect: � � � � If records are not currently updated to � � determine that the children served are � � educationally deprived, certain expendit«x'es � � could prove to be disallowed costs under the � � program. � � � � � � Recommendation: � � � � We recommend that procedures be implemented � � to periodically review Chapter I participant � � files to ensure that services provided under � - � the program are for only those children that � � are educationally deprived. � � � � � � Auditee Response: � � � ( The Bangor School Department has developed � � individual student record cards for its � � Chapter I students. Updates are made with the � � Director's office an a continual basis. ( � Participant files will be reviewed randomly � � twice a year to ensure the accuracy of � � information. � � � 25 City of Bangor, Maine SCHEDULE OF SPECIFIC FINDINGS AND QUESTIONED COSTS Year ended June 30, 1992 QUESTIONED COSTS � � Program � Condition: � � � Naciona� � In our test of applica�,�_ons for fr�� and j Sc:.00l I.unch j r�ciuced price mFals to determine ��hether tize i � procedures prc�vide reasonable assurance that � � only children m�eting the income eligibility � � guidelines will be approved to receive meals � � free or at reduced price, we noted an instance � � (1) where there was no application or � � predetermined letter in the individual's file � � who is receiving meals free and there was � � another instance (2) where the application had � � no financial data to support the approval .for � � the individual to receive free meals. � i _ f I i CFDA ido. � Criteria: � � � 10.555 � 7 CFR 245.6 states that to qualify a child for � � meals served free or at reduced price under the � � program, the child's family must submit an � � application. The applicati.oiz milat be approved � � and maintained on file. The application � � establishes triat the child' s family income and � � family size place him/her within income ( � eligibility standards issued by the State ( � agency in accordance with guidelines published � � by FNS. f � � � � � Effect: � � � � The City could be liable for_ providing free � - � meals or at reduced price to individuals that � � do not meet the guidelines. � � � 26 City of Bangor, Maine SCHEDULE OF SPECIFIC FINDINGS AND QUESTIONED COSTS Year ended June 30, 1992 QUESTIONED COSTS � � Program � � � � National � Recommer.c3ation: � Sch�ol Lunch � � � We recommend that applicatior�s be uore ( � carefully reviewed before approval is given for � � free meals or at reduced price. � � � � � � Auditee Response: � � � � (1) Child listed on eligibility listing from � � Maine Dept. of ?-�uman Services of July 30, 1991. � � Parent did not co�perate by sending let*er/ � � application. � ; (2) Applications with zero income written in on i � applic�.tian can be approv�d tempo:�arily per � � Approving Officer Handbook (pg. llj .. � � Extenuating circumstances developed with this � � family according to the schcol .principal. � � ( 27 City of Bangor, Maine SCHEDULE OF SPECIFIC FINDINGS AND QUESTIONED COSTS Year ended June 30, 1992 QUESTIONED COSTS � � Program ! Condition: � � � Co:nmunity � The gra:ltee pP�formance report' s un.expended � Development � CDBG funds at the beginning of the year did not � Block Grant � reconcile to the City's general ledger by � � $421,741. Also, the program income recorded � � for the year ended June 30, 1992 on the grantee � � performance report did not reconcile with the � � general ledger by $6,736. � � � � � CFDA No. � Griteria: � i I 14.218 � The requirement states th3t "Federai Financial � � Report�" data be tracable t.� supporti?:F.g � � documentation, i.e. ledgers, worksheets, etc. � � � � � � Effect: � � � � When federal financial reports are prepared, � ; program revenues, expenditures and fund � � balances need to be reconciled to the general � � ledger to ensure accurate reporting. � � � I � � Recommendation: � � � � Grantee performance reports must be reconciled � � to the general ledger on a quarterly basis to � � ensure proper reporting of pzogram-activity. � - � � � � � Auditee Resnonse: � � � � Additional accounting staff have been employed � � by the City and monthly reconciliations are � � being made from the subsidiary CDBG records to � � the City's general ledger. � � � 28 City of Bangor, Maine STATUS OF PRIOR YEAR REPORTABLE CONDITIONS CONSIDERED TO BE MATERIAL WEAKNESSES Year ended June 30, 1992 Condition Status CASH Reconcilia�ions Resol�ed Se�reg�tion r,r cil:Lies Re,olved INVESTMENTS Collateralization Resolved Segregation of duties Resolved ACCOUNTS RECEIVABLE Reconciliations Unresolved * TAXES RECEIVABLE Collecticns Resolved INVENTORY Rec�nc:�.liations Un.esel.ved * Inveni:ory counts Unresolved * ENCUMBRANCES Reconciliations Resolved Truncation Ur�resolved * Adjustments audit trail Resolved Cutoff Resolved CAPITAL PROJECTS FUND Budget/operating structure Resolved Subsidiary schedules R,esolved Proof of insurance Resi�ived Monitoring expenditures Resolved SPECIAL REVENUE FUND Reconcile subsidiary & general ledger -_ Unresolved * - Reconcile loan/deferred accounts Resolved Segregation of duties Resolved Unrecorded loans Unresolved * Reconcile disbursements/ track accrued interest Resolved ENTERPRISE FUNDS Reconciliation - accounts receivable Unresolved * Accrual basis Unresolved �' � Fixed assets Resolved Truncation Unresolved * * Items addressed in more detail in a separate letter to management dated March 2, 1993 29 City of Bangor, Maine STATUS OF PRIOR YEAR GENERAL FINDINGS Year ended June 30, 1992 General Findings Status Driig Free Workpla.ce Act Resolved Indirect Cost Allocation Plan Unresolved * MAAP Schedules Resolved * Item addressed in more detail in a separate letter to management dated March 2, 1993 30 City of Bangor, Maine STATUS OF PRIOR YEAR SPECIFIC FINDINGS AND QUESTIONED COSTS Year ended June 30, 1992 Finding No. Program Finding/Noncompliance No. Status 1 CDBG Indirect Cost Allocation Plan Unresolved * 'L CDBG Grantee Perf�rmance Report Resolved 3 CDBG Planning and Administrative Expenditure Limitation Resolved 4 CDBG Deferred Rehabilitation Loan Disbursement Resolved S ADAP/AIr In.direct Cost A1locarion Plan tTnresolved �° 6 CDBG Deferred Rehabilitation Loans Incorporated in General Ledger Resolved 7 WIC Record Retention Resolved 8 WIC Reconciliations Resolved 5 WIC Food Vouchers Revenue Resolved � 10 Chapter I Documentation Unresolved ** k Items addressed in more detail in a separate letter to management dated March 2, 1993 ** Item addressed in more detail in Schedule of Specific Findings and Questioned Costs 31 CITY OL' SANC3C;i2, NIIIING SCHEDULE OF P'EDL�2AL/S`I'I�TI: FIT_�iANCIAL ASSZSTANCG FOR I'H� YI1�Ii �NDED �!It� 30, 1992 Pass- I'ederal Thzv Federal State PLinding CL'I�1 Grantor Award Award Carry Federal S�ate Total Total Term Number t�h�mber Aaiount I��unt Foraard Revenue Revenue Revenue E�menditures I3alance DeparUnent of Agriculture Pass-Ttizu PUnds Maine Deparl�nent of Human Services Wanen, Infants and Children 10/O1/91- 10.557 WIC 02-92 Admin $ 279,583 $ - $ - $ 171,172 S - $ 171,172 $ 204,930 $(33,758) 09/30/92 L'ood 1,436,473 - - 1,149,657 - 1,149,657 1,149,657 - 10/O1/90- 10.557 WIC 02-91 lk3�nin 237,310 - (29,115) 92,292 - 92,292 63,177 - 09/30/91 L'ood 1,51.9,457._= - 426,015 - 426 015 426.015 - Total DF�.S Assistance - USL�11 3,472,Q].ii -• (29,1151 1,839,136 _- 1 839 136 1 843,779 (33,7581 Departsrent of Health & Human Services PassJI'hru Ftuids Ma.ine Departr�nt of Human Services � Dental 07/O1/91- 13.994 DF� 91-46 16,000 - - 16,000 - 16,000 16,000 - 06/30/92 Childhood 7lmaznization O1/O1/91- 13.26E3 BI3 91-1.3 45,151 - (1,452) 22,57� - 22,576 20,766 357 ' 12/31/91 O1/O1/92- BIi 92-09 47,27`L - - 23,E36 - 23,636 24,Of32 (446) $2/31/92 �p O1/O1/91- 13.977 BH 91-1.9 G4,272 - (900) 33,036 -• 33,036 32,136 - 12/31/91 O1/O1/92- Y,ii 92-11 73,995 - - 36,998 - 36,998 36,998 - 12/31/92 STD/HIV 02/08/91- 13.116 r�H 91-10 ' 22,Oo6 - (7,092) 22,066 - 22,066 12,269 2,705 12/31/91 O1/O1/92- �iH 91-43 22,9Q�__ - - 7,500 - 7 500 11,A52 (3,952) 12/31/92 Total DHS 1lssistance 291,66J. - (9,444) 161,812 _ - 161 812 153 703 (1,3351 State of Maine Maine Degartrnent of Human Services Maternal and Child Iiealth Care 07/O1/91- III1CH 91-21 -_ 70 161 - - 70,16i 70 161 70,161 - 06/30/92 Total DHS State Assistance - 70.161 - - ____70 161 70 161 70,161 - Total Accrual IIasis $4,193,493 $70,161 S(38,559) $2,000,948 y70,161 $2,071,109 $2,067,643 $(35,093) 32 CITY OF BANCIOR, MAII� SCHEDUl� OF AG� OFERATIONS FOR Tf� YF�AR ErIDID JiJNE 30, 1992 � Capital Urbanized Total Reserve Operatinq Revenues , �� Bus Fares'' $ 232,819 $ - $ 232,819 Bus Reimburseme�i��a 59,965 - 59,965 City of Bangor,,, 142,802 10,910 131,892 State Grant 4765.00 33,500 - 33,500 - 4730.00 Section 9 225,357 - 225,357 4054.10 Section 3 97,127 _ - 97,12; '�'�tal Rzv�r,ues 79?,570 _ 10,91(? 780,�60 Expenditures Personnel Costs 412,510 - 412,510 Pension & Benefits 109,695 - 109,695 Supplies 5,246 - 5,246 Contractual Services 5,065 - 5,065 Telephone 1,207 - 1,207 Other C�ni.cations 417 - 417 Ftiel & Utilities 51,678 - 51,678 Equ>�nent Costs �I,�tl.d�rs�di��in�llQlK�76�717 - 7E�71? Vehic�e Insi.rance 20,998 - 20�958 Depax-t�i�t Overhead 140,5u� - 1�8,594 �:redits (i48,594� - (148,�941 Tota1 E�enditures 683,533 - 683,533 Other Uses , Eqiii�it Replac�re.nt Res;�ve 7.�,91� 10,910 -�• City of Bangor Reimbursr_ment 97,127 - _, 97,:.�27 Total �penditures �i Other Uses 791,570 10,910 780,660 Surplus/(Deficit) $ - $ - � - --� • -- - �' � 33 � I ,