1998 RUNYON ,��
KERSTEEN � "
OUELLETTE �
CITY OF BANGOR, MAINE
Reports Required by Government Auditing Standarc�s
and OMB Circular A-133
June 30, 1998
Certi�ed
- Public �
-- Accountants
0
CITY OF BANGOR, MAINE
Reports Required by Government Auditing Standards
and OMB Circular A-133
June 30, 1998
Report Pa�e
Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of
Financial Statements Performed in Accordance with Government Auditing Standards 1-2
Report on Compliance with Requirements Applicable to Each Major Program and Internal Control
Over Compliance in Accordance with OMB Circular A-133 3-4
Schedule of Expenditures of Federal Awards 5-6
Notes to Schedule of Expenditures of Federal Awards 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 Federal Awards 10
Statement of Assurance and Determination Under 20-A MSRA, §6051 11
RUNYON
��
KERSTEEN
OUELLETTE
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL
Certified REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
Pub1iC IN ACCOR.DANCE WITH GOVERNMENT AUDITING STANDARDS
Accountants
City Council
Glenn S.Kersteen City of Bangor, MaiTle
Carl N.Ouellette
John J.Sullivan We have audited the general purpose financial statements of the City of Bangor as of and for the
Kathleen B.Tyson year ended June 30, 1998, and have issued our report thereon dated October 20, 1998. We
Alice M.Harris conducted our audit in accordance with generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the City of Bangor's financial statements
are free of material misstatement,we performed tests of its compliance with certain provisions of �
laws, regulations, contracts and grants,noncompliance with which could have a direct and material
effect on the deternunation 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 that are
required to be reported under Government Auditing Standards.
Internal Control Over Financial Reportin�
In planning and performing our audit,we considered the City's internal control over financial
reporting in order to deternune our auditing procedures for the purpose of expressing our opinion on
the financial statements and not to provide assurance on the internal control over financial reporting.
However, we noted a matter involving the internal control over financial reporting and its operation
that we consider to be a reportable condition. Reportable conditions involve matters coming to our
attention relating to significant deficiencies in the design or operation of the internal control over
financial repoRing that,in our judgment, could adversely affect the City of Bangor's ability to
record,process, summarize and report financial data consistent with the assertions of management �
in the financial statements. A reportable condition is described in the accompanying Schedule of
Findings and Questioned Costs as item#1998— l.
A material weakness is a condition in which the design or operation of one or more of the internal
control components does not reduce to a relatively low level the risk that misstatements in amounts
that would be material in relation to the financial statements being audited 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 over financial reporting would not necessarily
disclose all matters in the internal control that might be reportable conditions and, accordingly,
would not necessarily disclose all reportable conditions that are also considered to be material
" wealrnesses. However, we believe the reportable condition described above is not a material
• wealaiess.
20 Long Creek Drive
South Portland,ME 04106
207-773-2986 or 1-800-486-1784 �
FAX 207-7723361 or 1-800-486-1785 1
http://a�ww rkocpas.com
�.:.
.:.
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL � -
REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED - - -
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS,CONTINUED �
This report is intended for the information of the City Council, School Board,management and - -
federal awarding agencies and pass-through entities. However,this report is a matter of public - -
record and its distribution is not limited. � -� - � - - --
�`�`'°� 0�-�-`� - - _ -
October 20, 1998 - - -
South Portland, Maine - - -
2
RUNYON
KERSTEEN �
OUELLETTE �
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH
Certified �JOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN
Pub1iC ACCORDANCE WITH OMB CIRCULAR A-133
Accountants
City Council
Glenn S.Kersteen Clty Of Bangor, Maine
Carl N.Ouellette
Compliance
John j.Sullivan We have audited the compliance of the City of Bangor with the types of compliance requirements
Kathleen B.Tyson
n�ice M.xarris described in the U. S. Office of Management and Budget(OMB) Circular A-133 Compliance
Supplement that are applicable to each of its major federal programs for the year ended June 30,
1998. The City of Bangor'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 Bangor's management. Our responsibility is to express
an opinion on the City of Bangor's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards;
the standards applicable to financial audits conta.ined in GovernmentAuditing 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 refened to above that could have a direct and material
effect on a major federal program occuned. An audit includes examining, on a test basis, evidence
about the City of Bangor'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 deternunation on the City of
Bangor's compliance with those requirements.
As described in item#1998 -2 in the accompanying schedule of findings and questioned costs,the
City of Bangor did not comply with the requirements regarding cash management that is applicable
to its Local Entitlement grant(#84.027). Compliance with such requirements is necessary, in our
opinion, for the City to comply with requirements applicable to that program.
In our opinion except for the noncompliance described in the preceding paragraph,the City of
Bangor complied, in all material respects,with the requirements referred to above that are
applicable to each of its major federal programs for the year ended June 30, 1998.
Internal Control Over Compliance
The management of the City of Bangor is responsible for establishing and maintaining effective
intemal 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 expressing
our opinion on compliance and to test and report on internal control over compliance in accordance
20 Long Creek Drive with OMB Circular A-133.
South Portland,ME 04106
207-773-2986 or 1-800-486-1784 3
FAX 207-772-3361 or 1-800-486-1785
http://wwwrko-cpas.com
, � '
- -REP-ORT-ON COMPLIANCE_WITH.REQUIREMENTS_AP-P-LICABLE TO_EACH
MAJOR PROGRAM AND.INTERNAL..CONTROL_OVER_COMP-LIAN_CE_IN
ACCORDANCE WITH_OMB_CIRCULAR_A-133,_CONTIN.UED
.' Our_consideration of.the..infemal_controLovei.compliance would_notnecessaril.y_disclose_all_matters
�in-internal-control that might be_material.wealmesses._A material weakness�is..a condition_in which
the design or.operation,of one or_more of_the iriternal_control.components_does_not.reduce to_a
relatively.low-level..the-risk.that noncompliance_with.applicable requirements-of laws,_regulations;
contracts-and-grants that.would be material.in relation_to.a-major.federal program_being.audited�
1
-- may-occur and not-be-detected-within a timely�period-by_employees-in the-normal.course-of-
performing.their-.assigned.-functions.We noted-no-matters involving.the-internal-control_o�er
compliance.and�its operation-that-we-consider_to-be-material weaknes5es.
Schedule of-Exnenditures-of.Federal Awards .
We-have audited-the-general purpose-financial-statements ofxhe-City.of-Bangor_as�of_and_for the �
year ended-June.30�-1-998,.and�have.issued-our_report-thereon.dated-October_.20,�1.998.:,Our audit
was-performed£or-the.purpose-of-.forming-an opinion on-the-financial_statements-taken.as-a-whole. -.
The-accompanying-Schedule of-Expenditures�of.Federal_Awards..is-presented-for_purposes-of
additional.analysis�as r.equir.ed-by-.OMB-Circular-A-,133.and-is-not-a-requi.red-par.t-of_the-financiat
� statements.-Such-information-has-been-subjected to.:the-auditing-procedures-applied-in=the�audit-of
the<general--purpose-financial-statements-and;-in-our-opinion,_is-fair.l.y_stated,_in-all-material_respects, �
... ;
in-relation-tq the:general-purpose-financial-statements-taken�as-a whole:
� . - This-report-is-iritended-:for_the-information_of:the-Gity�Council,_School_Board,_management_and.`
feder"al=awardingagencies and:pass-through_entities.:�However,_this_report_is-a-matter_of_public "
recor.d-and-its.distribution-.is-notlimited. -•
�,�-��-�d�"�"""�dP -
!�^� v-
October 20;-1-9.98 �
South-Portland;-Maine �
_ 4
,
CTTY OF BANGOR,MAINE
Schedule of Expenditures of Fedcral Awards
For ycar ended June 30,1998
Pass-
Federal throughl
CFDA Award grantor Beginning Revenue Ending
Federal AwarJs num6er amount number balance Federal State Other E:penditures balance
Received Directiv
Departmen[of Energy,Institutional Conservation Pro�am 81.041 $ N/A Q 6,762) 35,538 18 776
Department of Housing and Urban Developmcnt:
Community Development Block Grants:
B-95-MC-23-0004 14.218 1,345,000 N/A - - - 32,696 32,696 -
B-96-MG23-0004 14.218 1,312,000 N/A (48,479) 277,205 - (221,769) 6,957 -
B-97-MC-23-0004 14.218 1,284,000 N/A - 1,014,989 - 499,114 1,575,385 (61,282)
Supportive Housing:
ME 06B96-0102(871'� 14235 46,695 N/A - 44,475 - - 44,475 -
ME 06B96-0105(8718) 14.235 63,000 N/A - 18,290 - - 18,290 -
Shelter Plus Caze:
ME 06C93-1135 7RA 14238 740,160 N/A - 185,799 - - 185,779 -
ME 06C93-1135 PRA 14.238 558,000 N/A 26,428 26,428
Total Department of Housing and Urban Development (48 479) l 567 166 310 041 1 890 O10 (61 282)
Department of Iustice:
Local Law Enforcement Block Grant 16.592 44,826 96LBVX0687 38,149 - - 1,963 40,112 -
Local Law Enforcement Block Grant 16.592 40,319 97LBVX2198 - 40,319 - 4,400 19,827 24,892
Cops More 16.710 55,000 97CMWX0029 - 6,361 - 20,476 9,253 17,584
Cops Fast 16.710 368,690 95CFWX3679 64 005 21 335 SS 340
Total Deparlment of Justice 38 149 110 685 48 174 154 532 42 476
Department of Transportation:
Airport Improvement Plan:
3-23-0005-20 20.106 1,440,000 N/A - 130,194 7,232 (48,471) 88,955 -
3-23-0005-21 20.106 1,270,724 N/A - (14,857) (825) 156,637 140,955 -
3-23-0005-22 • 20.106 2,260,800 N/A - 1,908,243 106,014 110,479 2,124,736 -
Passenger Facility Charges N/A N/A 1 094 710 592 356 64 970 150 763 1 601 273
Total Department of Transportation 1 094 710 2 615 936 112 421 283 615 2 505 409 1 60]273
Environmental Protection Agency,Special Purpose 66.606 6,000,000 N/A 957 392 783 320 1 740 712
Pass Throueh
Department of Agiculture,passed through Maine DepaRment of
Human Services:
Women,Infant and Children-Admin:
WIC 02-96(8714)Liq Enc 10.557 383,421 N/A (68) - - - (68) -
WIC 02-97(8703) 10.557 411,077 N/A - 97,416 - - 97,416 -
WIC 02-98(8705) 10.557 411,661 N/A - 270,883 - - 270,883 -
Women,InCant and Children-Food:
WIC 02-97 ]0.557 1,995,345 N/A - 528,663 - - 528,663 -
WICO2-98 10.557 1,8t7,797 N/A - 1,014,525 - - 1,014,525 -
Passed Uuough Maine Depaztment of Education:
Food Dislnbution-Food Donation Progarn 10.550 - 013-6134-OS 9,395 49,509 - - 41,321 17,583
School Breakfast Program 10.553 - 013-7127-OS - 33,871 - - 33,871 -
SchoolLunch Progam 10.555 - 013-7128-OS - 354,452 16,828 - 371,280 -
Summer Pood Program 10.559 013-7130-OS 17 q85 �7 qg$
Total Departmen[of Agriwlture 9 327 2 366 804 16 828 2 375 376 17 583
5
CITY OF AANGOR,MAINE
Schedule of Expenditures of Fedcral Awnrds,Continued
Pass-
Federal througW
CFDA Award grantor Beginning Revenue Ending
Federal Awards number amount numbcr balance Federal State Olher Ezpenditures balance
Pass Throueh,Continued
Environmental Protection Agency,passed through
the State Revolving Loan Fund Program:
Combined Sewcr Overflow 66.458 $ N/A 927,174 555,081 1,155,888 2,638,143
Federel Emergency Management Agency,passed through
Maine Emergency Management Agency:
Public Assislance 83.544 88,462 1106-ME-019-02795 - 56,307 14,268 6,658 77,233 -
Public Assistance 83.544 806,258 1198-IvfE-019-02795 674,966 131,292 69,021 875,279
TotaiFederal Emergency Management Agency 731,273 145,560 75,679 952,512
Department of Health&Human Services,passed through
Bureau of Health:
Lead Poisoning and Prevention 93.197 51,873 BH 98-23 - 34,582 - - 30,930 3,652
Bangor Children's Dental Clinic 13.994 16,000 DH 98-OS - 16,000 - 151,316 167,316 -
STD/HIV Clinical and Epidemiologic Services 13.977 159,650 BH 98-64 - 54,450 - 15,399 77,901 (8,052)
STD/HIV Clinical and Epidemiologic Services 13.977 106,900 BH 96-36 (3,28� 53,450 - 6,095 65,485 (9,22�
Field Representative 13.268 59,709 BH 96-25 (5,278) 30,000 - 4,709 29,714 (283)
Field Representative 13.268 100,000 BH 98-55 - 50,000 - - 27,058 22,942
Immunization Program Nursing 13.268 68,970 BH 96-23 5,980 34,485 - - 39,488 9'77
Health Education Oukeach 13.268 61,535 BH 95-33 4,709 - - (4,709) - -
Immunization Program Nursing 13.268 ]0,000 BH 98-56 - 5,000 - 21,317 22,986 3,331
Department of Health&Human Services,passed through
the Maine Deparlment of Education:
HIV/AIDS Prevention Ed Grant(94-95) 93.938 013-OSA-3169-15 1,384 1,384
Total Department of Hcalth&Human Services 3,509 277,967 194,127 460,878 14,725
DepaRment of Education,passed t}uough the Maine Department
of Education:
Adult Esteem Machine 84.255 25,193 013-OSA-5197-51 12,985 - - - 12,985 -
Adult Basic Education 84.002 33,574 7163 - 33,574 - - 33,561 13
Adult Basic Education 84.002 15,600 7158 - 15,600 - - 15,600 -
Adult Homeless 84.192 - 013-OSA-2509-17 5,853 - - - - 5,853
Title IA 84.010 741,149 013-OSA-6334-13 6,304 741,149 - - 691,907 SS,546
TitlelC 84.01] 99,135 013-OSA-7151-13 ]8,ll9 74,700 - - 85,419 7,400
Title Vf 84.298 36,036 015-OSA-5063-01 3,063 30,000 - - 6,859 26,204
EisenhowerElementaryandSecondary 84.281 29,112 013-OSA-8091-10 19,755 35,655 - - 26,115 29,295
Special Ed Local Entitlement Title VA EHA 84.027 248,056 013-OSA-7155-]2 (1,079) 248,056 - - 236,114 10,863
Impacted Aid-Title VIII 84.041 N/A N/A - 2,234 - - 2,234 -
Passed through the Maine Department of Substance Abuse:
Drug Free Schools and Communities 84.186 27,530 013-OSA-6346-57 19,179 27,530 46 709
• Total Dcpartment oCEducation 84,179 1,208,498 1 157 503 135 U4
Urban Mass Transportation Assistance,passed through Maine
Department oC Transportation:
Operating 20.507 219,291 ME-90-X099 - 219,291 37,000 541,602 797,893 -
Capital 20.507 25,600 ME-90-X091 - 25,600 2,129 6,932 34,661 -
Capitai 20.507 8,530 ME-90-X092 - 6,824 - 1,706 8,530 -
Capital 20.507 70,400 ME-90-X090 70 400 8 924 19 831 99 I55
Total Urban Mass TranspoRation Assistance 322 115 48 053 570 071 940 239
Total Federal Awards $ 1,164,633 11,120,548 877,943 3,420,915 14,815,314 1,768,725
6
CITY OF BANGOR,MAINE
Notes to Schedule of Expenditures of Federal Awards
June 30, 1998
PURPOSE OF THE SCHEDULE
Office of Management and Budget(OMB) Circular A-133,Audits of States, Local Governments and Non-profit
Or�anizations, requires a Schedule of Expenditures of Federal Awards showing total expenditures for each federal
award program as identified in the Catalog of Federal Domestic Assistance(CFDA).
SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity-The accompanying schedule includes a11 federal award programs of the City of Bangor for
the fiscal year ended June 30, 1998. The reporting entity is defined in Notes to Financial Statements of the
City of Bangor.
B. Basis of Presentation-The information in the accompanying Schedule of Expenditures of Federal Awards is
presented in accordance with OMB Circular A-133.
1. Pursuant to OMB Circular A-133, federal awards are defined as assistance provided by a federal agency,
either directly or indirectly, in the form of grants, contracts, cooperative agreements, loans, loan
guarantees, property, interest subsidies, insurance or direct appropriations.
2. Major- OMB Circular A-133 establishes the level of expenditures or expenses to be used in defining
major federal award programs. Major programs for the City of Bangor are identified in the summary of
auditor's results in the Schedule of Findings and Questioned Costs.
C. Basis of Accounting -The information presented in the Schedule of Expenditures of Federal Awards is
presented on the modified accrual basis of accounting, which is consistent with the reporting in the City's
financial statements.
7
CITY OF BANGOR,MAINE
Schedule of Findings and Questioned Costs
June 30, 1998
Section I - Summary of Auditor's Results
Financial Statements
Type of auditor's report issued: Unqualified
Internal control over financial reporting:
Material weaknesses identified? no
Reportable conditions identified
not considered to be a material weakness? yes
Noncompliance material to financial statements noted? no
Federal Awards
Internal Control over major programs:
Material weaknesses identified? no
Reportable conditions identified
not considered to be material wealrnesses? no
Type of auditor's report issued on compliance
for major programs: Qualified
Any audit findings disclosed that are required
to be reported in accordance with
Circular A-133, Section .510(a)? yes
Identification of major programs:
CFDA Numbers Name of Federal Pro�ram or Cluster
10.557 WIC—Nutrition Program
66.606 EPA— Special Pumose
83.544 FEMA—Public Assistance Grant
20.507 MDOT— Capital and Operatin�Assistance
10.533-559 School Lunch Cluster
84.010 Title lA
20.106 Airport Improvement Program
84.027 Local Entitlement
14.238 Shelter Plus Care
Dollar threshold used to distinguish
between Type A and Type B programs: $300,000
Auditee qualified as low-risk auditee? no
8
CITY OF BANGOR,MAINE
Schedule of Findings and Questioned Costs, Continued
Section II-Findings Required to be Reported Under Government Auditing Standards
#1998-1 - Sewer Svstem Controls
Controls at the sewer utility are potentially endangered because of the utility's relationship with the Bangor Water
District,which is a separate,non-City entity. The problem arises because the water and sewer utilities share many
aspects of billing and collection. Specifically, sewer bills are based upon water usage data, as provided by the
water districts;water and sewer bills are mailed together; sewer payments may be made at, among other places,the
water district; and the water district's billing and payment software, which is incompatible with the City's general
accounting soflware, is also employed by the sewer utility.
As a result, a number of problems arise. First,where payments are made at the water district, City funds remain
outside the City control for the period of time between their receipt from customers and the forwarding of payment
to the City. This, combined with the increased handling of the City assets introduces the potential for diversion of
City property by non-City employees. Second,the flow of funds between the two utilities and their timing often
results in the"float"of relatively large amounts due the City. Third,the incompatibility of systems between the
sewer utility and the rest of City government makes timely tracking of sewer utility performance difficult. Further,
it makes reconcilement increasingly important and time consuming.
We recommend the City review its relationship with the water utility to correct these cash handling and accounting
deficiencies.
9
CITY OF BANGOR,MAINE �
Schedule of Findings and Questioned Costs, Continued
Section III-Findings and Questioned Costs For Federal Awards
Program—Local Entitlement
#1998-2 -U.S. Department of Education, Local Entitlement. CFDA# 84.027, for the Period July 1, 1997 Throu�h
June 30, 1998:
Finding—The Local Entitlement program had excess cash balances on hand for excessive periods of time.
Criteria-Drawdowns of federal funds must be as close as possible to the time of making distributions. Time
should be minimized between the transfer from the U. S. Treasury and the disbursement of funds by the recipient.
Effect-Payment of federal funds could be delayed or denied.
Recommendation-Request for drawdowns,which are accomplished in the application, should be timed such that
they are received in the later periods of the grant resulting in these payments being reimbursements for expenditures
already made rather than advances.
Questioned Costs -None.
10
RUNYON
KERSTEEN
OUELLETTE
Certified
Public '
Accountants
Glenn S.Kersteen
Carl N.Ouellette
John J.Sullivan
Kathleen B.Tyson
Alice M.Harris
Statement of Assurance and Determination
Under 20.A MRSA,§6051
City Council
City of Bangor, Maine:
We have audited the financial statements of the City of Bangor including the Bangor School
� Department as of and for the year ended June 30, 1998, in accordance with applicable State laws
relating to financial and compliance audits. In connection with the audit:
. We determined that proper budgetary controls were in effect.
. We reviewed the annual financial report(Form EF-M-45)submitted to the State of Maine
Department of Education. Based on our review, we are riot aware of any material modificatioris
that should be made to the EF-M-45.
. We determined that the School Departtnent has complied with the applicable provisions of the
1Vlaine School Finance Act.
This report is issued as a supplement to our report dated October 20, 1998 on the City of Bangor
finaricial statements, and does not affect or modify that report.
\���,It,4.�1��Q,JCttJ�i�7`Q
-- - p— -
October 20, 1998
South Portland, Maine
20 Long Creek Drive
South Portland,ME 04106
207-773-298G or 1-800-48G-1784
I1
FAX 207-7723361 or 1-800-486-1785
http://w w w rko-cpas.co m