The URL can be used to link to this page

2005 �� , :�: . �. � �r . . i'�� i' �4"P��i,:.��I,i� �I7��^vl�l. . °��,1 n tlY1! HF ¢' CITY OF BANGOR,MAINE �� ,�� ;�.� Reports Required by Government Auditing .. , , :_ . :.� ��: .. Standards and OMB Circular A-133 June 30,2005 � . � �,�t.- �� xrv� � �m �� `� �;, � m' �� rt h ��'w�, � � i� ,� � �� "�'"� :e� � .� �`�` Ax� �' r�� CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS �7�t 1�L 1�' 01� � �� ersteev� � D�eltette '_ CITY OF BANGOR,MAINE Reports Required by GovernrnentAciditing Standards , and OMB Circular A-133 _ June 30,2005 ' R� Paae Report on Compliance and on Internal Control over Financial Reporting and on Compliance and �; Other Matters Based on an Audit of Financial Statements Performed in Accardance with _ GovernrrcentAt�c�iting Stanclar�ls 1-2 — Report on Compliance with Requirements Applicable to Each Major Prob am and Internal Control Over Compliance in Accordance with OMB Circular A-133 3-4 i Schedule of Expenditures of Federal Awards 5-� — Notes to Schedule of Expenditures of Federal Awards g Report on Compliance with Requirements Applicable to the Passenger Facility Charge Prograrn, — Internal Control over Compliaqce and Schedule of Expenditures of Passenger Facility Charges 9-10 � Schedule of Expenditures of Passenger Facility Charges 11 Schedule of Findings and Questioned Costs: — Section I-Summary of Auditar's Results 12 �I Section II-Findings Required to be Reported Under Government Ac�diting Stc�nclarcls 13 Section III-Findings and Questioned Costs for Federal Awards 14 � Section IV -Status of Prior Year Findings and Questioned Costs 15 - 16 I �I I � � � REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL � REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE — WITH GOVERIVMENT AUDITING STANDARDS, CONTINUED Compliance and Other 1Vlatters �,' As part of obtain'ing reasonable assurance aliout 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 grant agreements, noncompliance wit}i 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 I reported under Government Auditing Stan�lards. 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 7,2005. - a ^ Th�s report rs tntended solely fior the mformahon and use of the Crty Counc�l, School Board,mana�ement and federal awarding aaencies and pass-through entities and is not intended to be and should not be used by anyone other.than these specific paities. I I�� U October 7,2005 South Portland,Maine � _� � � � � I � I � � I 2 � J�u�.�o�. �C.ersteev� Or�ellette Certified Public Accountants and 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 Compl iance We have audited the compliance of the City of Bangor with the types of compliance requirements described in the U. S. Oftice of Management and Budget(OMB) CircularA-133 Corrcpliance Sarpplerrcent that are applicable to each of its major federal prob ams for the year ended June 30, 2005. The City of Bangor's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findin�s and questioned costs. Compliance with the requirements of laws, regulations, contracts, and b ants 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 auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in GovernmentAuditing Stanclarcls, issued by the Comptroller General of the United States; and OMB Circular A-"133, Audits of States,Local Governments, and Non-pro�t 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 rnajor federal program occurred. An audit includes examining, on a test basis,evidence about the City of Bangor's compliance with those requirements and performin�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 requirements. In our opinion,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 30,2005. Interna] Control Over Com�liance The management of the City of Bangor is responsible for establishing and maintaining effective internal control over compliance with requirements of laws,regulations,contracts,and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-"133. REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133, CONTINUED We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relatin�to significant deficiencies in the design or operation of the internal control over compliance that, in our judgment,could adversely affect the City of Bangor's ability to administer a major federal program in accordance with the applicable requirements of laws, regulations;contracts, and grants. The reportable condition is described in the accompanying schedule of findings and questioned costs as items #2005-2. A material weakness is a reportable condition in which the desib or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with the applicable requirements of laws, regulations,contracts, and grants caused by enor or fraud 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 performing their assib ed functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal controls 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 weakness. Schedule of Expenditures of Federal Awards We have audited the�nancial statements of the governmental activities,business-type activities,each major fund, and the aggregate remaining fund information of the City of Bangor as of and for the year ended June 30, 2005,and have issued our report thereon dated October 7, 2005. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City of Bangor's basic tinancial statements. 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 basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended for the information and use 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. � October 7,2005 South Portland,Maine 4 t� CITY OF BANGOR,MAINE Schedule of Expenditures of Federal Awards For year ended June 30,2005 Pass- Federal tl�rough/ CFDA Award grantor Beginning Revenue Ending Federal Awards number amount number balance Federal State Other Transfers Expenditures balance Received Directiv Department of Housing and Urban Development: Conununity Development Block Grants: B-02-MC-23-0004 14.218 $ I,292,000 N!A 266,716 5'75,113 - - - 182,107 659.722 B-03-MC-23-0004 14.218 1,275,000 N/A (277,101) I,069,724 - 79,768 - 872,391 - B-04-MG23-0004 ]4.218 1,252,000 N/A - - - 354,339 - 1,077,833 (723,494) EDI Special Projects: B-01-SP-ME-0265(7616) 14.246 997,800 N/A - 916,423 - - - 916,423 - B-04-SP-ME-0310(7616) 14.246 248,525 N/A - 248,525 - - - 248,525 - Supportive Housing: ME O1B30-1003(87]t) 14.235 I 18,422 N/A - 59,211 - - - 59,2ll - MEO1:B30-]005(8718) 14.235 18,600 N/A - 18,600 - - 18,600 - MEO1B30-1003(8714) 14.235 " 72,678 N/A - 72,678 - - - 72,678 - ME O 1.B30-I 002(8730) ]4.235 19,152 N/A - ]9,]52 - - - 19,152 - Shelter Plus Care: MEO]C90-1001 TRA(8713) 14.238 254,640 N/A - 75,982 - - - 75,982 - MEOlC00-1001 TRA(8712) 14.238 259,200 N/A - 48,587 - - - 48,587 - MEO1C00-1003 PRA(8716) 14.238 53,400 N/A - 19,395 - - - 19,895 - ME Ol C40-1010 TRA(8714) 14.238 170,268 N/A - 34,056 - - - 34,056 - ME O1C30-1009 TRA(8714) 14.238 147,300 N/A - 73,394 - - - 73,394 - ME O1C90-1002 TRA(3715) 14.238 804,540 N/A - 162,913 - - - 162,913 - ME O1 C90-1007 PRA(8716) 14.238 56,448 N/A - 13,312 - - - 13,3]2 - Total Department of Housing and Urban Development (10 385) 3 407 565 - 4�4 ]07 - 3 895 059 (6"�772) Department of Justice: Cops Homeland Security Overtime Program 16.710 28,705 20030MWX0017 - 18,925 - 6,307 - 25.232 - Cops lnteroperable Communication Tech Program 16.710 448,674 2004INWX0010 - 2,309 - 769 - 3,078 - Local Law Enfarcement Block Grant 16.592 29,A95 2002-LB-BX-1136 ]7,757 - - - - _ ��,�g� Local Law Enforcement Block Grant ]6.592 23,167 2003-LB-BX-1018 6,309 - - - - 4,712 1,597 L.ocal L,aw Enfarcement Block Grant 16.592 10,306 2004-LB-BX-1373 - 10,306 - 1,145 - - 11,45( Juvenile Accountability Incentive Block Grant 16.523 41 980 G1003199 (1 1) 6 7�1 - 8 835 - 15 555 Total Department of Justice 24 O55 38 271 - 17 056 - 48 577 'i0 805 Department of Transportation: Airport Improvement Plan: 3-23-0005-35 20.106 4,501,268 N/A 178,939 160,646 12,910 29,185 - 202,741 178,939 3-23-0005-36 20.106 134,7]0 N/A - 5,086 283 283 - 5,652 - 3-23-0005-38 20.106 541,071 N/A - 51.556 1,357 1,358 - 54,271 - 3-23-0005-39 20.106 1,387,220 N/A (1,146) 840,462 22,102 21,002 - 882,420 - 3-23-0005-40 20.106 1,42Q649 N/A - 855,654 22,517 31,850 - 910.021 - 3-23-0005-41 20.106 307,853 N/A - 11,356 299 298 - 11,953 - Small Conununity Air Service Development Pilot Prob am 20.930 310,000 N/A - 45,384 16,317 11,055 - 72,756 - Federal Highway Administration- Transportation&Community Service Preseivation(7609) 20.205 562 460 O1 ME01 - 495 372 - - - 495 372 - Total Department of Transportation 177 793 2 465 5]6 75 785 95 031 - 2 635 186 l78 939 Department of Commerce,Economic Development Administration 1 1300 1,200,000 01-01-07673 - 448'i71 - 298 9l4 - 747 285 - 5 CITY OF BANGOR,MAINE Schedule of Expenditures of Federal Awards,Continued For year ended June 30,2005 Pass- Federal through/ CFDA Award grantor Beginning Revenue Ending Federal Awards number amount number balance Federal State Other Transfers Expenditures balance Pass Throueh � Department of Agriculture,passed through Maine Department of Human Services: Women,Infant and Children-Admin: W1C 04-02 ]0.557 891,972 N/A - 157,187 - - - 157,187 - WIC OS-02 10.557 430,251 N/A - 297,752 - - - 297,752 - Women,Infant and Children-Food: WIC 04-02 10.557 ],903,267 N/A - 452,919 - - - 452,919 - WIC OS-02 10.557 1,567,994 N/A - 954,019 - - - 954,019 - Passed through Maine Department of Education: Food Disvibution-Food Donation Program ]0._550 N/A O13-6134-OS - 54,040 - - - 54,040 - School Breakfast Program 10.553 N1A Ol 3-7127-05 - 54,520 - - - 54,520 - School Lunch Program 10.555 N/A 013-7128-OS - 406,753 - - - 406,753 - Total Department of Agriculture - 2,377,]90 - - - 2,377,190 - Department of Homeland Security,Office of Domestic Preparedness,passed through the Maine Emergency Management Agency: State Domestic Preparedness(7706) 97.004 437,000 N/A $ 118,867 ]45,487 - - - 264,354 - State Domestic Preparedness(7909) 97.004 487,984 N/A - 95,188 - - - 95,188 - Public Assistance 97.036 178,753 N/A - 178,753 - 57,415 - 236,168 - Total Department of Homeland Security 1]8,867 4]9,428 - 57,415 - 595,710 - Environmental Protection Agency,passed through the State Revolving Loan Fund Program: Combined Sewer Overf7ow 66.458 2,650,000 N/A - 1,770,76� - - - 1,770,763 - Department of Health&Human Services,passed through Bureau of Health: Bangor Children's Denta]Clinic 93.994 15,354 BH OS-078 - ]5,354 - 204,697 - 220,OS l - HIV Prevention&Education 93.118 15,969 BH 04-208 965 ll,533 - - - 7,884 4,614 STD/HIV Clinical and Epidemiologic Services 93.977 147,405 BH 04-208 (6,939) 106,459 - 19,803 - 133,789 (14,466) Immunization Program Nursing 93.268 10,000 BH 04-249 295 5,000 - 21,532 - 39,040 (12,213) Immunization Program Nursing 9�.268 10,000 BN OS-l83 - 5,000 - 6Q179. - 40,736 24,443 Total Department of Health&Human Services (5,679) 143,346 - 306,211 - 441,500 2,378 � CITY OF BANGOR,MAINE Schedule of Expenditures of Federal Awards,Continued For year ended June 30,2005 Pass- Federal through/ CFDA Award grantor Beginning Revenue Ending Federal Awards number amount number Ualance Federal State Other Transfers Expenditures balance Pass Throueh,Continued Department of Education,passed fhrough the Maine Department ' of Education: � Adult Basic Educa6on 84.002 17,824 Ol3-OSA-6296-642 - 17,824 - - - 17,824 - Adult Basic Education 84.002 44,329 O]3-OSA-6297-642 - 44,329 - - - 44,329 - Title lA 84.O10 ],105,278 Ol3-OSA-6334-132 263,903 1,105,278 - - - ],163,707 205,474 Title V 84.298 24,276 Ol3-OSA-]072-662 28,567 24,27( - - 46,222 92,830 6,235 Tide IID-Ed Technology 84318 38,865 013-OSA-1006-072 2,152 38,865 - - 40,135 76,152 5,000 Specia]Education-Crants to Local States 84.027 815,255 Ol3-OSA-6317-122 48,528 815,255 - - - 857,834 5,949 Title]IA 84.367 334,432 Ol3-OSA-1138-112 2,827 334,432 - - (67,008) 270,235 1 C Preschool Local Entitlement 84.173 15,507 013-OSA-6241-023 1,379 ]5.507 - - - 16,886 - Passed through the Maine Department of Substance Abuse: Drug Free Schools and Communities 84.086 38,447 N/A 253 38 447 - (19 349) ]9�51 Tota]Department of Education 347 609 2 434 213 2 559 148 222 674 Urban Mass Transportation Assistance,passed through Mai�e Department of Transportation: Operating 20.507 TBD TBD - 486,854 72,831 827,249 - 1,386,934 - PIN 10390.00 20.507 473,814 ME 90-X-130 - 182,000 - 232,37] - 414,371 - PIN 11915.00 20.507 374,898 ME 90-X-135 - 6,400 - 1.60Q - 8,000 - RTAP 20.509 4,028 ME l 8-X-036 - 2,27g _ _ _ 2�2�g _ RTAP 20.509 2,750 ME 18-X-037 - 2,750 - - - 2,750 - Total Urban Mass Transportation Assistance - 680 282 72 8�7 1 06] 220 1 814 333 Department of Defense,passed through Iviaine Air Nafional Guard: . ' National Guard Military Projects 12.40] 8.703 251 DAHA-]17�2-2-2]Ol - 4 618 610 - 4 6]8 727 (l 17) Total Federal Awards 652,260 18,803,555 148,616 2,269,954 - 21,503,472 390,913 - 7 CITY OF BANGOR,MAINE Notes to Schedule of Expenditures of Federal Awards June 30,2005 PURPOSE OF THE SCHEDULE Office of Management and Budget(OMB) Circular A-133, Audits of States, Local Governments and Non-profit Organizations, 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). SIGNIFICAIVT ACCOUNTING POLICIES A. Reporting Entity -The accompanyi.ng schedule includes all federal award programs of the City of Bangor for the fiscal year ended June 30,2005. The reporting entity is defined in Notes to Basic Financial Statements of the City of Bangor. � B. Basis of Presentation -The.information in the accompanyin�Schedule of Expendittires of Federal Awards is presented in accordance with OMB Circular A-133. l. 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 fund financial statements. � . S � jZts vc�o vc � 7Gersteevc Otijelle�e Certified Public Accountants and Business Consultants REPORT ON COIVIPLIANCE WITH REQUIREMENTS APPLICABLE TO THE PASSENGER FACILITY CHARGE PROGRAM,INTERNAL CONTROL OVER COMPLIANCE AND SCHEDULE OF EXPENDITURES OF PASSENGER FACILITY CHARGES City Council City of Bangor, Maine Com liance We have audited the compliance of the City of Bangor with the compliance requirements described in the Pa,ssenger Faciliry Char�e Audit Guide for Public Agencies, issued by the Federa] Aviation Administration (Guide), for its passen�er facility charge program for the year ended June 30, 2005. Compliance wifh the requirements of laws and regulations applicable to its passenger facility charge program 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 auditing standards generally accepted in the United States of America; the standards applicable to financia] audits contained in Gover�ament Accditircg Stanc�ards, issued by the Comptroller General of the United States; and the Guide. Those standards and the Guide require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the compliance requirements referred to above that could have a direct and material effect on the passenger facility charge program occurred. 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 of the City of Bangor's compliance with those requirements. In our opinion, the City of Bangor complied, in all material respects, with the requirements referred to above that are applicable to its passenger facility charge program for the year ended June 30,2005. Internal Control Over Compliance The management of the City of Bangor is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws and re,;ulations applicable to the passenger facility charge program. In planning and performing our audit, we considered the City of Bangor's interna] control over compliance with requirements that could have a direct and material effect on the passenger facility charge program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in accordance with the Guide. REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO THE PASSENGER FACILITY CHARGE PROGRAM,INTERNAL CONTROL OVER COMPLIANCE AND SCHEDULE OF EXPENDITURES OF PASSENGER FACILITY CHARGES, CONTINUED Our consideration of the internal contro] over compliance would not necessarily disclose all matters in the internal control that might be materia] 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 and regulations that would be materia] in relation to the passenger facility charge program being audited 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 involvinc the interna] control over compliance and its operation that we consider to be material weaknesses. Schedule oF Expenditures of Passen�er Facility CharQ� We have audited the financial statements of the governmental activities, business-type activities, each major fund, and the abgregate remaining fund information of the City of Bangor as of and for the year ended June 30,2005, and have issued our report thereon dated October 7, 2005. Our audit was performed for the purpose of forming opinions on the basic financial statements taken as a whole. The accompanying schedule of expenditures of passenger facility charges is presented for purposes of additional analysis as specified in the Guide and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of fhe basic �nancial ' statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic�nancial statements taken as a whole. This report is intended solely for the information and use of the City Council, management, and the Federal Aviation Administration and is not intended to be and should not be used by anyone other than these specified parties. � I��t,�� V October 7, 2005 South Portland,Maine 10 CITY OF BANGOR,MAINE Schedule of Expenditures of Passenger Facility Charges For the Year and Each Quarter Within the Year Ended June 3(1,2005 Memorandum Memorandum Only Only Cumulative Quarter Ended Quarter Ended Cumulative Approved Amounts Total September 30, December 31, Quarter Ended Quarter Ended Year Ended Totals Impose and Use June 30,2004 2Q04 2004 March 31,2005 June 30,2005 June 30,2005 June 30,2005 95-01-C-00-BGR(as amended) �� Passenger facility charge revenue and interest $ 8,961,006 5,093,662 l 77,752 ]72,759 l 45,135 182,736 678,382 5,772,044 Expenditures: Reconstruct Domestic Terminal Apron-South 2,301,222 2,301,222 - - - - - 2,301,222 Reconstruct Domestic Termina]Apron-North 1,070,596 937,45] - - - - - 937,451 Reconstruct International Terminal Apron-North 3,464,415 - - - - - - - Reconstruct Commuter Apron Area 2,124,773 - - - - - - - Total expenditures $ 8,961,006 3,238,673 - - - - - 3,238,673 1l CITY OF BANGOR, MAINE Schedule of Findings and Questioned Costs June 30,2005 Section I-Summary of Auditor's Results Financial Stateme►zts 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 weaknesses? yes . Type of auditor's report issued on compliance for major prob ams: 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 tested: CFDA Numbers Name of Federal Program or Cluster _ 10.557 WIC-Nutrition Pro�ram 20.500-20.507 IVIDOT—Capital and operating Assistance 84.010 Title lA 14.246 EDI Special Projects 84.027, 84.173 Special Education—Grants to States Dollar threshold used to distinb ish between Type A and Type B programs: $ 645,104 Auditee qualified as low-risk auditee? yes 12 CITY OF BANGOR,MAINE Schedule of Findings and Questioned Costs, Continued Section II-Findings Required to be Reported Under Government Auditing Standards REPORTABLE CONDITION #2005 - 1 - Sewer Svstem Controls (Repeated) - 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. Specitically, 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 property by non-City employees. Second, the flow of funds between the two utilities and their timing often results in the "t1oaY' 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 dif�cult. 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. 13 CITY OF SANGOR,MAINE Schedule of Findings and Questioned Costs,Continued Section III-Findings and Questioned Costs For Federal Awards REPORTABLE CONDITION . #2005-2-Emnlovee Semi-annual Certification for Title IA and Snecial Education - Grants to States Our test work revealed that currently the School Department does not require semi-annual certifications of employees paid 100%through the Title lA and Special Education -Grants to States programs. The A-133 Compliance Supplement states that"An employee whose compensation is funded solely from a Single Cost Objective must furnish a semi-annual certi�cation that he/she has been engaged solely in activities supported by the applicable source in accordance with OMB Circular A-87,Attachment B paragraph 11.h.3". We recommend that certificates be distributed semiannually and be signed by the employee or superv.isory official having first hand knowledge of the work performed by the employee. � 14 CITY OF BANGOR, MAINE Status of Prior Year Findings and Questioned Costs Section IV—Findings Required to be Reported Under Government Auditing Standards #2004- 1 - Sewer Svstem Controls Controls at the sewer utility are potentially wealcened 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 bi.(ling 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 fi►nds 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 i.ncreased 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 timin�often results i.n 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 impoRant and time consuming. We recommend the C.ity rev.iew its relationship with the water utility to correct these cash handling and accounting deficiencies. Status— See current year findings required to be reported under GovernmentAccditing Stanclards#2005-1. 15 CITY OF BANGOR,MAINE Status of Prior Year Findings and Questioned Costs Section IV-Findings and Questioned Costs for Federal Awards NONE 16 � SOUTH PORTLAND WATERVILLE Tel. 207-773-2986 Tel. 207-877-9397 Fax 207-772-3361 Fax 207-877-9398