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1999 , , � RIUnrYOli1 ,/°"�� ���Ek�.�T'EETd �/'� �'��JL�.I.ET'T'E �` � CIT�' OF �ANG��2, 1�1AIle1E �eports Required by Govea�mme�t Au��rn� S�anddrds and OMB Circular A-133 � June �0, 1999 Certs4ied � �'ul�Iic Acc.oaanta�ts o CITY OF BANGOR,MAINE Reports Required by Government Auditing Standards and OMB Circular A-133 June 30, 1999 R�ort 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 Circulaz A-133 3-4 Schedule of E�enditures 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 Certified Public Accountants &Business Consultants REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS City Council City of Bangor, Maine We have audited the general purpose financial statements of the City of Bangor as of and for the yeaz ended June 30, 1999, and have issued our report thereon dated October 12, 1999. We 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. Comnliance 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 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 that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting 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 e�cpressing 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 attenUon relating to significant deficiencies in the design or operation of the internal control over financial reporting 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- 1. 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 ofthe internal control over financial reporting would not 20 Long Creek Drive South Portland,ME 04106 207-773-298G or 1-8o0-48G-1784 � � FAX 207-7723361 or 1-800-486-1785 1 hctp://wwwrko-cpas.com The CPA. Never Underestimate The Value F��.I = .-�'� �_� `��_ _ 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 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 weaknesses. However,we believe the reportable condition described above is not a material wealrness. � We noted other matters involving the internal control over financial reporting that we have reported to the management of the City in a separate letter dated October 12, 1999. This report is intended for the information of the City Council, School Boazd,management and federal awazding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specific parties. '���� ���T`O� d.�f�c�� October 12, 1999 South Portland, Maine 2 . RUNYON KERSTEEN OUELLETTE Certified Public Accountants &Business Consultants REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 City Council City of Bangor, Maine Compliance We have audited the compliance of the City of Bangor with the types of compliance requirements 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, 1999. The City of Bangor's major federal programs are identified in the surnmary 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 e�ress 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 contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,Audits of States, Local Governments, and Non-profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program 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 determination on the City of Bangor's compliance with those retluirements. In our opinion the City of Bangor complied,in all material respects,with the requirements refened to above that are applicable to each of its major federal programs for the year ended June 30, 1999. Internal Control Over Compliance The management of the City of Bangor is responsible for establishing and rnaintauung effective internal control over compliance with requirements of laws,regulations, contracts and gtants applicable to federal programs. In planning and perfornung 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 20 Long Creek Drive South Portland,ME 04106 207-773-2986 or 1-800-486-1784 � . • FAX 207-7723361 or 1-800-48G-1785 3 hccp://wa�wrko-cpas.com The CPA. Never Underestimate The Value � . � ,r-'-, REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133, CONTINUED our opinion on compliance and to test and report on intemal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in internal control that might be material weaknesses. 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 noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of perfornung their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. Schedule of Exnenditures of Federal Awards We have audited the general purpose financial statements of the City of Bangor as of and for the year ended June 30, 1999, and have issued our report thereon dated October 12, 1999. Our audit was performed for 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 required by OMB Circular A-133 and is not a required part of the financial 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 fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole. This report is intended for the information of the City Council, School Board,management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specific parties. ��C��.l�.���� October 12, 1999 South Portland, Maine 4 CTTY OF BANGOR,MAINE Schedule of E:penditures of Federel Awards For year ended June 30,1999 Pass- Federal through/ CFDA Award grantor Beginning Revenue Ending Federal AwarJs number amount number balance Federal State Other Expenditures balance Received Directly Department of Housing and Urban Development: Community Development Block Grants: B-97-MC-23-0004 14.218 $ 1,284,000 N/A (260,396) 269,011 - - 8,615 - •B-98-MC-23-0004 14.218 1,244,000 N/A - 632,394 - 355,684 ],470,250 (482,172) Supportive Housing: ME 06B97-0201(8711) 14.235 348,581 N/A - 49,231 - - 49,231 - ME 06B96-0102(871� 14.235 46,695 N/A - 2,220 - - 740 1,480 ME 06B96-0105(8718) 14.235 63,000 N/A - 13,199 - - 13,199 - ME 06B96-0106(8719) 14.235 395,000 N/A - 187,350 - - 187,350 - Sheller Plus Caze: ME 06C93-1135 TRA 14.238 740,160 N/A - 169,440 - - 168,994 446 ME 06C93-1135 PRA 14.238 558,000 N/A 33,687 33,668 19 Total DepartmentofHousing and Urban Development (260,396) 1,356,532 355,684 1,932,047 (480,22'n Department of J�utice: Local Law Enforcement Block Grant 16.592 40,319 97LBVX2198 24,892 - - 581 25,473 - Local Law Enforcemenl Block Grant 16.592 33,822 98LBVX2198 - 33,822 - 3,758 37,580 - Cops More 16.710 SS,000 97CMWX0029 17,584 48,537 - 4,478 70,599 - Cops Fast 16.710 368,690 95CFWX3679 99,966 33,322 133,288 TolalDepartmentoflustice 42,476 182,325 42,139 266,940 DepaAment of Transportation: AirpoR Improvement Plan: 3-23-0005-22 20.106 2,260,800 N/A - 181,191 10,066 22,167 213,424 - 3-23-0005-23 20.106 1,270,724 N/A - 40,928 2,274 2,449 48,966 (3,315) 3-23-0005-24 20.106 2,260,800 N/A - - - 808,964 (808,964) Passenger Faciliry Charges N/A N/A 1,601,273 467,733 56,059 1,815,035 31Q030 Tofal Department of Transportation 1,601,273 689,852 12,340 80,675 2,886,389 (502,249) Environmental Protection Agency,Special Purpose 66.606 6,000,000 N/A 909,206 743,896 1,653,102 Pass Throueh Depaztment of Agriculture,passed Uvough Maine Depaztment of Human Services: Women,Infant and Children-Admin: WIC 02-98 10.557 411,661 N/A - 103,270 - - 103,270 - WIC 02-99 10.557 403,234 N/A - 280,535 - - 280,535 - Women,Infant and Children-Food: WIC 02-98 ]0.557 1,8ll,797 N/A - 717,696 - - 717,696 - WIC 02-99 10.557 1,797,747 N/A - 1,195,441 - - 1,195,441 - Passed through Maine Department of Education: Food Disvibution-Food Dona[ion Pro�am ]0.550 - 013-613405 17,583 43,557 - - 43,432 17,708 School Breakfast Progam ]0.553 - 013-7127-OS - 39,756 - - 39,�56 - SchoolLunch Progam 10.555 - 013-7128-OS - 405,634 - - 405,634 - Summer Food Pro�am 10.559 013-7130-OS 20,124 20,124 Total Department of Agicullure 17,583 2,806,013 2,805,888 17,708 5 CITY OF BANGOR,MAINE Schedule of Expendilures of Federal Awards,Continued For year ended June 30,1999 Pass- Federal through/ CFDA AwarJ grantor Beginning Revenue Ending Federal Awards number amounl number balance FeJeral State Other Expenditures balance Pass Throueh,Continued Environmental Proteclion Agency,passed through the SWte Revolving I.oan Fund Program: Combined Sewer Overflow 66.458 S N/A - 190,450 16,104 185,800 392,354 - Depailment of Health&Human Services,passed througJ� Bureau of HealOi: Lead Poisoning and Prevention 93.197 51,873 BH 98-23 3,652 17,291 - - 16,045 4,898 • Bangor Children's Dental Clinic 93.994 16,000 BH 99-58 - 16,000 - 17Q927 186,927 - � � STD/IIIV Clutical and Epidemiologc Services 93.977 108,900 BH 98-64 (8,052) - 56,950 21,856 77,717 (6,963) STD/HIV Clinical and Epidemiologjc Services 93.977 108,900 BH 99-168 - - 54,450 16,611 68,091 2,970 Field Representative 93.268 100,000 BH 98-55 22,942 - - - 22,304 638 Immuni7ationProgramNursing 93.268 20,000 BH98-56 3,331 - 5,000 39,481 41,159 6,653 Department of Health&Human Services,passed through the Maine Department of Education: FIIV/AIDS Prevention Ed Grant 93.938 013-OSA-3169-15 1 384 - 1 384 Total Department ofHealth&Human Services 23,257 33,291 116,400 248,875 412,243 9,580 Depadment of Education,passed Ihrough the Maine Department of Educa�ion: Adult Basic Educalion 84.002 36,062 7163 13 36,062 - - 36,062 13 Adult Basic Education 84.002 15,600 7158 - 15,600 - - 15,600 - Tiqe lA 84.010 749,290 6334 55,546 749,290 - - 724,136 80,700 Title 1C 84.011 82,S1 l 7151 7,400 106,946 - - 77,840 36,506 Title VI 84.298 24,987 5063 26,204 30,987 - - 53,083 4,108 Eisenhower Elementary and Secondary 84.281 2G,430 8091 29,295 32,947 - - 62,242 - Special Ed Local Entitlement Title VA EHA 84.027 287,202 6317 10,863 287,202 - - 298,065 - Impacted Aid-Title VIII 84.041 N/A N/A - 23,858 - - 23,858 - Passed through the Maine Deparlment of Substanea Abuse: Dtug Free Schools and Communities 84.186 55,660 6346 - 27,830 - 42,009 (14,1'/9) TotalDepaRmentofEducation 129,321 1,310,722 - - 1,332,895 107,148 Urban Mass Transportation Assistance,passed throu�h Maine Department of Transportalion: Operating 20.507 302,849 ME-90-X105 - 251,535 36,366 510,313 798,214 - RTAP 20.509 363 ME-18-X-020 - 363 - - 363 - RTAP 20.509 1,249 ME-18-X-021 - 1,249 - - 1,249 - RTAP 20.509 993 ME-18-X-025 - 993 - - 993 - CapiWl 20.507 231,252 ME-90-X096 - 229,587 15,240 42,157 286,984 - Capital 20.507 30,460 ME-90-X099 - 2,295 - 573 2,868 - CapiUl 20.509 127,662 ME-03-0027 - 127,662 - 42,554 170,216 Total Urban Mass Transpottation Assistance 613,684 51,606 595,597 1,260,887 - Tolal Federal AwarJs $ 1,553,514 8,092,075 196,450 2,252,666 12,942,745 (848,040) 6 CITY OF BANGOR,MAINE Notes to Schedule of Expenditures of Federal Awards June 30, 1999 PURPOSE OF TI� SCHEDULE Office of Management and Budget(OMB) Circular A-133,Audits of States. Local Governments and Non-profit Organizations, requires a Schedule of E�cpenditures 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, 1999. The reporting entity is defined in Notes to Financial Statements of the Ciiy of Bangor. B. Basis of Presentation-The information in the accompanying Schedule of Expenditures of Federal Awazds is presented in accordance with OMB Circula.r 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 e�enditures 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 E�enditures 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, 1999 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 wealaiesses? no Type of auditor's report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .510(a)? no Identification of major programs: CFDA Numbers Name of Federal Program or Cluster 10.557 WIC—Nutrition Pro�ram 20.507 MDOT—Capital and Operatin�Assista.nce 84.010 Title lA 14.218 CDBG 84.027 Local Entitlement 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 System Controls Controls at the sewer utility are potentially weakened 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 software,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 properry by non-City employees. Second,the flow of funds between the two utilities and their timing often results in the"float"of relatively lazge 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 conect these cash handling and accounting deficiencies. 9 Ir '::�' i . . , . , .:.�...�,�,�.�.,; _ �J i I f p � � • � � CITY OF BANGOR,MAINE � . - � . Schedule of Findings and Qaestioned Costs, Continued � Section III-Findings.and�Questioned Costs For Federal Awards � None � r-, r� . � � . , � . i� . . � � � . . � t . . ' . . � ' , , 1 . ' 1 . . �'-- • ,� ' ' r� J IQ i CITY OF � ��° . a,. � MAINE .,, .� 73 HARLOW STREET � BANGOR,MAINE 04401 FINANCE DEPARTMENT TEL.207/945-4400 Ronald I. Heller Finance Director Corrective Action Plan June 30, 1999 1999— None Status of Prior Year Findings Finding 1998-2 No excess cash balances were on hand for excessive periods of time during fiscal year 1999.