1991I
CITY OF BANGOR, MAINE
Auditor's Report on Supplementary Information
Schedule of Federal Financial Assistance
June 30,, 1991
r
and
Carter Certified Public Accountants
CITY OF BANGOR, MAINE
REPORT ON FEDERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30, 1991
TABLE OF CONTENTS
Paoe
Independent Auditor's Reports:
Schedule of Federal Financial Assistance 1
Internal Controls at the General Purpose Financial
Statement Level 2
Internal Accounting and Administrative Controls at
the Federal Financial Assistance Program Level --
Major Programs More Than 50 Percent 6
Compliance at the General Purpose Financial Statement
Level 11
Compliance with General Requirements
12
Compliance with Specific Requirements Applicable to
Major Federal Financial Assistance Programs 13
Schedule of General Findings 15
Schedule of Specific Findings 18
Schedule of Federal Financial Assistance 28
Notes to Schedule of Federal Financial Assistance 31
rooks
anter' Certified Public Accountants
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Independent Auditor's Report
The Honorable Mayor and City Council
City of Bangor, Maine
We have audited the general purpose financial statements of the City of
Bangor, Maine, for the year ended June 30, 1991, and have issued our report
thereon dated December 6, 1991. These general purpose financial statements
are the responsibility of the City of Bangor, Maine, management. Our
responsibility is to express an opinion on these general purpose financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing 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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the general purpose financial statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
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 this
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.
December 6, 1991
1
P.O. Box 1167, 84 Harlow Street, Bangor, Maine 04401 (207) 947-8568
rooks
Carter, Certified Public Accountants
Internal Controls at the General Purpose Financial Statement Level
Independent Auditor's Report
The Honorable Mayor and City Council
City of Bangor, Maine
We have audited the general purpose financial statements of the City of
Bangor, Maine for the year ended June 30, 1991, and have issued our report
thereon dated December 6, 1991.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing 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 financial statements of the
City of Bangor, Maine for the year ended June 30, 1991, we considered its
internal control structure in order to determine our auditing procedures
for the purpose of expressing our opinion on the 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 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.
2
P.O. Box 1167, 84 Harlow Street, Bangor, Maine 04401 (207) 947-8568
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
Our consideration of the internal control structure included all of the
control categories listed above. The purpose of our consideration of the
internal control structure was to determine the nature, timing, and extent
of the auditing procedures necessary for expressing an opinion on the
general purpose financial statements.
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.
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 entity's
ability to record, process, summarize, and report financial data consistent
with the assertions of management in the general purpose financial
statements. We noted the following reportable condition that we consider
to be a material weakness:
Reportable Condition
Condition: During our audit we noted the following:
1. CASH
Cash reconciliations are not performed timely.
Lack of segregation of duties concerning custody of cash and
accounting duties.
2. INVESTMENTS
Lack of segregation of duties concerning custody of investments and
accounting duties.
3. ACCOUNTS RECEIVABLE
Reconciliation of accounts receivables per the general ledger to the
subsidiary were not being done.
4. TAXES RECEIVABLE
Collection of tax receivables are not monitored closely.
5. INVENTORY
The perpetual inventory records do not reconcile to the general
ledger.
Inventory counts are not being done annually.
3
6. ENCUMBRANCES
Encumbrances are not being reconciled timely from the general ledger
to the subsidiary detail.
The encumbrance subsidiary files contained a $10,000,000 truncation
error; field sizes in software are insufficient.
Personnel were adjusting balances forward on line without providing an
audit trail.
7. CAPITAL PROJECTS FUND
The Capital Projects Fund does not contain the proper structure for
budget and actual as well as the necessary accounts for an operating
statement.
Proof of insurance could not be provided timely.
Capital project expenditures are not being monitored timely with
contracts; funding sources for Capital projects including interest
earned and project expenditures need to be timely scheduled. (Bond
money should be expended before other sources are used.)
8. SPECIAL REVENUE FUND
The Special Revenue Fund is not reconciling its subsidiary records to
the general ledger on a monthly basis.
There is a lack of segregation of duties on cash receipts collected on
CDBG loans and the accounting for such loans.
9. ENTERPRISE FUNDS
The Enterprise funds are not reconciling its subsidiary records to the
general ledger on a monthly basis.
Enterprise funds are not being recorded on the full accrual basis of
accounting as prescribed by generally accepted accounting principles.
Effects: Failure to reconcile the general ledger accounts to the
subsidiary accounts and to comply with the investment policy, to segregate
duties for persons having custody of cash and investments from the record
keeping function are violations of an effective internal control structure
and exposes City assets to a greater risk of loss.
Recommendations:
1. Reconciliations need to be done on a timely basis from the subsidiary
ledgers to the general ledger.
2. The proper segregation of duties must be established to segregate the
recordkeeping function from the custody of assets.
3. Inventory must be restricted, tagged and monitored on a timely basis.
4. Computer programs must be reviewed and corrected to insure that the
data output is accurate and representative of data input.
4
A material weakness is a reportable condition in which the design or
operation of the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the general purpose financial
statements being audited or 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 would not necessarily
disclose all reportable conditions that are also considered to be material
weaknesses as defined above. However, we believe the reportable condition
described above to be a material weakness.
We also noted other matters involving the internal control structure and
its operation that we have reported to the management of the City of
Bangor, Maine, in a separate letter dated December 6, 1991.
This report is intended for the information of the City Council, management
and the federal cognizant agency. This restriction is not intended to
limit the distribution of this report, which is a matter of public record.
December 6, 1991
5
rooks
ar'ter Certified Public Accountants
Internal Accounting and Administrative Controls at the Federal
Financial Assistance Program Level --Major Programs More Than 50 Percent
Independent Auditor's Report
The Honorable Mayor and City Council
City of Bangor, Maine
We have audited the general purpose financial statements of the City of
Bangor, Maine for the year ended June 30, 1991, and have issued our report
thereon dated December 6, 1991.
As part of our audit, we made a study and evaluation of the internal
control systems, including applicable internal administrative controls,
used in administering federal financial assistance programs to the extent
we considered necessary to evaluate the systems as required by generally
accepted auditing standards, Government Auditing Standards, issued by the
Comptroller General of the United States, the Single Audit Act of 1984, and
the provisions of Office of Management and Budget Circular A-128, "Audits
of State and Local Governments".
The management of the City of Bangor, Maine, is responsible for
establishing and maintaining internal control systems used in administering
federal financial assistance programs. In fulfilling that responsibility,
estimates and judgements by management are required to assess the expected
benefits and related costs of control procedures. The objectives of
internal control systems used in administering federal financial assistance
programs are to provide management with reasonable, but not absolute,
assurance that, with respect to federal financial assistance programs,
resource use is consistent with laws, regulations, and policies; resources
are safeguarded against waste, loss, and misuse; and reliable data are
obtained, maintained, and fairly disclosed in reports.
Because of inherent limitations in any system of internal accounting and
administrative controls used in administering federal financial assistance
programs, errors or irregularities may nevertheless occur and not be
detected. Also projection of any evaluation of the systems to future
periods is subject to the risk that procedures may become inadequate
because of changes in conditions or that the degree of compliance with the
procedures may deteriorate.
6
P.O. Box 1167, 84 Harlow Street, Bangor, Maine 04401 (207) 947-8568
For the purpose of this report, we have classified the significant internal
accounting and administrative controls used in administering federal
financial assistance programs in the following categories:
Accounting Controls:
* Treasury or financing
* Revenue/receipts
* Purchases/disbursements
* External financial reporting
Administrative Controls:
General Requirements -
* Political Activity
* Davis -Bacon Act
* Civil Rights
* Cash Management
* Relocation Assistance and Real Property Acquisition
* Federal Financial Reports
* Drug Free Work Place Act
* Allowable Costs/Cost Principles
Specific Requirements:
* Types of services
* Eligibility
* Matching level of effort
* Reporting
Our study included all of the applicable control categories listed above.
During the year ended June 30, 1991, the City of Bangor, Maine expended
100% of its total federal financial assistance under major federal
financial assistance programs. With respect to internal control systems
used in administering major federal financial assistance programs, our
study and evaluation included considering the types of errors and
irregularities that could occur, determining the internal control
procedures that should prevent or detect such errors and irregularities,
determining whether the necessary procedures are prescribed and are being
followed satisfactorily, and evaluating any weaknesses.
With respect to the internal control systems used solely in administering
the nonmajor federal financial assistance programs of the City of Bangor,
Maine, our study and evaluation was limited to a preliminary review of the
systems to obtain an understanding of the control environment and the flow
of transactions through the accounting system. Our study and evaluation of
the internal control systems used solely in administering the nonmajor
federal financial assistance programs of the City of Bangor, Maine, did not
extend beyond this preliminary review phase. Accordingly, our audit would
not necessarily disclose material weaknesses in the internal control
systems used solely in administering nonmajor federal financial assistance
programs.
7
Our study and evaluation described in the two preceding paragraphs was more
limited than would be necessary to express an opinion on the internal
control systems used in administering the major and nonmajor federal
financial assistance programs of the City of Bangor, Maine. Accordingly,
we do not express an opinion on the internal control systems used in
administering the major and nonmajor federal financial assistance programs
of the City of Bangor, Maine, taken as a whole, or on any of the control
categories identified above. However, our study and evaluation and our
audit disclosed the following condition that we believe results in more
than a relatively low risk that errors or irregularities in amounts that
would be material to a federal financial assistance program may occur and
not be detected within a timely period.
Reportable Condition
Condition: During our audit we noted the following:
1. CASH
Cash reconciliations are not performed timely.
Lack of segregation of duties concerning custody of cash and
accounting duties.
2. INVESTMENTS
Investments are not sufficiently collateralized.
3.
Lack of segregation of duties concerning custody of investments and
accounting duties.
Encumbrances are not being reconciled timely from the general ledger
to the subsidiary detail.
The encumbrance subsidiary files contained a $10,000,000 truncation
error; field sizes in software are insufficient.
Personnel were adjusting balances forward on line without providing an
audit trail.
Improper cutoff at June 30, 1991, impaired the subsidiary account
balances.
4. CAPITAL PROJECTS FUND
The Capital Projects Fund does not contain the proper structure for
budget and actual as well as the necessary accounts for an operating
statement.
Subsidiary schedules of capital projects are not maintained.
Proof of insurance could not be provided timely.
Capital project expenditures are not being monitored timely with
contracts; funding sources for Capital projects including interest
earned and project expenditures need to be timely scheduled. (Bond
money should be expended before other sources are used.)
8
5. SPECIAL REVENUE FUND
The Special Revenue Fund is not reconciling its subsidiary records to
the general ledger on a monthly basis.
The Loans Receivable account and the Deferred Revenue account did not
reconcile.
There is a lack of segregation of duties on cash receipts collected on
CDBG loans and the accounting for such loans.
Approximately $227,000 of deferred rehabilitation loans were not
recorded on the general ledger.
Improve procedures to reconcile disbursements to loan documents and
track accrued interest.
6. ENTERPRISE FUNDS
Enterprise funds are not being recorded on the full accrual basis of
accounting as prescribed by generally accepted accounting principles.
Fixed assets funding source and depreciation expense are not being
recorded timely for Enterprise funds.
The Airport's income statement contained a $1,000,000 truncation and
revenue was understated by $1,000,000; internal financial statements,
as a whole, were not in balance.
Effects: Failure to reconcile the general ledger accounts to the
subsidiary accounts and to comply with the investment policy, to segregate
duties for persons having custody of cash and investments from the record
keeping function are violations of an effective internal control structure
and exposes City assets to a greater risk of loss.
Recommendations:
1. Reconciliations need to be done on a timely basis from the subsidiary
ledgers to the general ledger.
2. The proper segregation of duties must be established to segregate the
recordkeeping function from the custody of assets.
3. Inventory must be restricted, tagged and monitored on a timely basis.
4. Computer programs must be reviewed and corrected to insure that the
data output is accurate and representative of data input.
A material weakness is a reportable condition in which the design or
operation of the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the general purpose financial
statements being audited or 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.
We also noted other matters involving the internal control structure and
its operation that we have reported to the management of the City of
Bangor, Maine in a separate letter dated December 6, 1991.
9
These conditions were considered in determining the nature, timing, and
extent of the audit tests to be applied in (1)our audit of the June 30,
1991, general purpose financial statements and (2)our audit and review of
the City of Bangor, Maine, compliance with laws and regulations
non-compliance with which we believe could have a material effect on the
allowability of program expenditures for each major federal financial
assistance program and non -major federal financial assistance programs.
This report does not affect our reports on the general purpose financial
statements and on the City of Bangor, Maine, compliance with laws and
regulations dated December 6, 1991.
This report is intended for the information of the City Council, management
and the federal cognizant agency. The restriction is not intended to limit
the distribution of this report, which is a matter of public record.
December 6, 1991
10
ElroOks
and
EBrtP,rCertified Public Accountants
Compliance at the.General Purpose Financial Statement Level
Independent Auditor's Report
The Honorable Mayor and city Council
City of Bangor, Maine
We have audited the general purpose financial statements of the, City of
Bangor, Maine for the year ended June 30, 1991, and have issued our report
thereon dated December 6, 1991.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing 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.
Compliance with laws, regulations, contracts, and grants applicable to the
City of Bangor, Maine is the responsibility of the City's management. As
part of obtaining reasonable assurance about whether the financial
statements are free of material misstatement, we performed tests of the
City's compliance with certain provisions of laws, regulations, contracts,
and grants. However, it should be noted that our objective was not to
provide an opinion on overall compliance with such provisions.
Accordingly, we do not express such an opinion.
The results of our 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 City Council, management
and the federal cognizant agency. This restriction is not intended to
limit the distribution of this report, which is a matter of public record.
gmko--k aoz-x-�--
December
6, 1991
11
P.O. Box 1167;' " 84 Harlow Street, Bangor, Maine. 04401 (207) 947-8568
Brooks
and EartP',rCertified Public Accountants
Compliance with General Requirements
Independent Auditor's Report
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,•1991, and have issued
our report thereon dated December 6, 1991.
We have also applied procedures to test the City of Bangor, Maine's
compliance with the following requirements applicable to each of its major
federal financial assistance programs, which are identified in the schedule
of federal financial assistance for the year ended June 30, 1991: political
activity, Davis -Bacon Act, civil rights, cash management, relocation
assistance, federal financial reports, and drug free workplace.
Our procedures were limited to the applicable procedures described in the
Office of Management and Budget's Compliance Supplement for Single 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 immaterial instances of
noncompliance with those requirements, which are described in the
accompanying schedule of findings and questioned costs.
This report is intended for the information of the City Council, management
and the federal cognizant agency. This restriction is not intended to
limit the distribution of this report, which is a matter of public record.
40/11-1 14�
December 6, 1991
12
P.O. Box 1167, 84 Harlow Street, Bangor, Maine 04401 (207) 947-8568
: Brooks
and
Carter- Certified Public Accountants
Compliance with Specific Requirements Applicable to
Major Federal Financial Assistance Programs
Independent Auditor's Report
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, 1991, and have issued
our report thereon dated December 6, 1991.
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, 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, 1991. 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 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 findings and questioned costs. We
considered these instances of noncompliance in forming our opinion on
compliance, which is expressed in the following paragraph.
13
P.O. Box 1167, 84 Harlow Street, Bangor, Maine 04401 (207) 947-8568
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, 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, 1991.
&t4j-- "-✓ 1'5�
December 6, 1991
14
CITY OF BANGOR, MAINE
SCHEDULE OF GENERAL FINDINGS
FOR THE YEAR ENDED JUNE 30, 1991
Condition
The City of Bangor adopted a policy on alcohol and drug abuse. The existing
policy is deficient on several issues and will require revisions.
Criteria•
In 1988 the Federal Government passed the Drug Free Work Place Act. The
law requires that recipients of federal funding must adopt a formal written
policy concerning alcohol and drug use in the work place.
Effect•
The City has had a year to amend the deficiencies of the existing policy as
prescribed by the Department of Labor, and to date it has not been amended.
Recommendation:
The City of Bangor should make revisions to the existing drug free policy
as soon as possible to avoid loss of federal funding.
Auditee Response:
Policy statement is being redrafted to cure deficiencies and the City
anticipates final council action.by September 30, 1992.
15
CITY OF BANGOR, MAINE
SCHEDULE OF GENERAL FINDINGS
FOR THE YEAR ENDED JUNE 30, 1991
Condition:
The City of Bangor is currently using an outdated indirect cost allocation
plan (ICRP).
Criteria:
OMB Circular A-87 requires that indirect costs charged to a federal program
be supported by an ICRP.
Effect:
If City departments do not consistently use current federally approved ICAP
rates, grant programs will be inappropriately charged for indirect costs.
If the rates used are higher than the approved rates, the grants will be
over -billed, and this will result in questioned costs. If the rates used
are lower than the approved rates, the City will end up absorbing the
additional costs.
Recommendation:
A new indirect cost allocation plan must be implemented and submitted to
the Department of Health and Human Services as soon as possible.
Auditee Response:
The City received proposals for preparation of an ICAP on July 15, 1992,
and will award contract with fiscal year 1992 audit contract. ICAP will be
based on fiscal year 1991 audited amounts and be completed by October 31,
1992.
kV
CITY OF BANGOR, MAINE
SCHEDULE OF GENERAL FINDINGS
FOR THE YEAR ENDED JUNE 30, 1991
Condition:
The City of Bangor did not prepare or include the supplemental schedules as
required by the Maine Uniform Accounting and Auditing Practices for
Community Agencies. The Maine Department of Human Services noted the
following findings.
Criteria:
1. The City of Bangor did not properly prepare or include the supplemental
schedules as required by the Maine Uniform Accounting. and Auditing
Practices for Community Agencies (MAAP) (MAAP (7/1/89), Section .02E):
a. The "Schedule of Federal Financial Assistance (Supplemental
Information - pg. 22 - 24) did not extend to State funding and be
identified as the "Schedule of Federal/State Financial Assistance";
b. The "Schedule of Federal Financial Assistance" did not
appropriately identify each agreement awarded by the respective
Departments in relation to agreement/pin number, agreement period,
and agreement activity;
C. A "Schedule of Agreement Operations" was not prepared which
identified the financial activity of each agreement awarded
consistent to the agreement budget or operating plan.
Effect:
The City could loose funding if the following deficiencies are not
corrected as soon as possible.
Recommendation:
We recommend that the City prepare the necessary MAAP Schedules at the same
time that the Schedule of Federal Financial Assistance is prepared.
Auditee Response:
See pages 17a and 17b.
17
CITY OF BANGOR, MAINE
SCBEDULE OF REVENUES AND EXPENDITURES
FOR TER YEAR ENDED JUNE 30, 1991
SURPLUS/(DEFICIT)
17a
Capital
Urbanized
Total
Reserve Capital
Operating
REVENUES
Bus Fares
$ 241,694
$ - $ -
$ 241,694
Bus Reimbursement
60,259
- -
60,259
City of Bangor
110,911
10,910 2,237
97,764
Other (UMO)
5,000
- -
5,000
Other
1,360
- -
1,360
State Grant 3853.00
13,041
- -
13,041
State Grant 4554.00
18,962
- -
18,962
State Grant 4765.00
8,821
- -
8,821
4664.02 Section 9
106,671
- -
106,671
4730.00 Section 9
97,451
- -
97,451
4105.10 Section 9
8,947
8,947
TOTAL REVENUES
673,117
10,910 11,184
651,023
EXPENDITURES
Personnel Costs
412,100
- -
412,100
Pension and Benefits
62,567
- -
62,567
Supplies
1,950
- -
1,950
Contractual Services
4,116
- -
4,116
Telephone
2,131
- -
2,131
Other Communications
320
- -
320
Fuel and Utilities
65,609
- -
65,609
Equipment Costs
81,578
- -
81,578
Vehicle Insurance
20,883
- -
20,883
Equipment Insurance
43
- -
43
Department Overhead
143,143
- -
143,143
Credits
(143,417)
- -
(143,417)
Section 9 Equipment
11,184
11,184
TOTAL EXPENDITURES
662,207
- 11,184
651,023
OTHER USES
Equipment Replacement Reserve
10,910
10,910
TOTAL EXPENDITURES AND
OTHER USES
673,117
10,_9.10 11,184
651.023
SURPLUS/(DEFICIT)
17a
/ \ CITY OF BANGOR, NAIVE
tl���'SCBBDULS OF DIIS FEDERAL ARD ST�TTS FINANCIAL ASSISTANCE
�� FOR TRE YEAR ENDED JUNE 30, 1991
ill !jj Pass- bin d coa
Federal Thru Federal State
Funding CFDA Grantor Award Award Carry Federal State Total Total
Term Number -Number Amount Amount Forward Revenue Revenue Revenue Expenditures Balance
Department of Agriculture OA
-t
Fundst
Maine Department of Human
q.
Services \
Women, Infants, and 10/01/90- 3� ($,OHO ��% _ 13��i1gi.CZlo
Children 09/30/91 10.557 WIC 02-9111$237,310 $ - $ - $144,354 $ $144,354 $ 173,469 $(29,115)
Women, Infants, and 10/01/89- q _ 5a3aa•oS= 3(ol�5�t�1,��pg'inV `�(e1r qq N,q,\y7��
ai.99
Children 09/30/90 10.557 WIC 02-90 221,543 - (22,363) 78,920 78,920 56,557 -
Total DHS Assistance - USDA 458,853 - (22,363)- )
233-2`1'4' 223,274 X39 -x026 5
Department of Health and i% �aqa \TM)LAL-1
Human Services _ Q�
Pass-Thru Funds: II�a� �J `C
Maine Department of Human
Services
Dental 07/01/90-
06/30/91 13.994 DH 90-06 16,000 - - 16,0001 - 16,000 16,096 (96)
Childhood Immunization 01/01/91- ('24,02 _U as X5712/31/91 3.268 BH 91-13 45,151 - �'j - 24,028 )
Childhood Immunization 01/01/90-(
12/31/90 \13.268 BH 90-01 44,315 -(23,726) 44,315'i/ -,ah� 44,315 20,445 144
STD 01/01/90-
12/31/90 13.977 BH 90-07 57,775 - - 28,08 28,087 28,887 (800)
STD 01/01/91-
12/31/91 13.977 BH 91-19 64,272 -p 'J1`a�J1 31,236 �"- �`a 31,236 32,136 (900)
STD/HIV 02/08/91-
12/31/91 13.118 BH 91-10 22,066 - - 2,705_ - 2,705 9,797 (7,092)
Total DHS Assistance 249,579 - (23,726) 122,343 - 122,343 131,389 (32,772)
State of Maine --Maine
Department of Human
Services
Maternal and Child Health 07/01/90 -
Care 06/30/91 BHCH 90-46 - 71,541 (1,952) - 71,541 71,541 70,867 (1,278)
Total DHS State Assistance - 71,541 (1,952) - 71,541 71,541 70,867 (1,278)
Total - Accrual Basis ` $708,432 71 5414$( 8,041) $345,617 71,541 $417,IS8 $ 432,282 $(63,165)
\ ' /b ri10. S�vJ U ► � � �i �i
CITY OF BANGOR, MAINE
SCHEDULE OF SPECIFIC FINDINGS AND
QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 1991
Federal Grantor: Department of Housing and Urban Development
City Department: Community Development
Pass -Through Grantor: N/A
FINDING/NON-COMPLIANCE NO. 1
QUESTIONED
COSTS
Program Condition:
Community The City is currently using an outdated
Development indirect cost allocation plan.
Block Grant
CFDA No.
14.218
Criteria:
OMB Circular A-87 requires that indirect
costs charged to a federal program be
supported by an ICAP.
Effect:
If City departments do not consistently
use current federally approved CAP rates,
grant programs will be inappropriately
charged for indirect costs. If the rates
used are higher than the approved rates,
the grants will be over -billed and this
will result in questioned costs.
Conversely, lower rates could result in
the City absorbing the cost difference.
Recommendation:
A new indirect cost allocation plan must
be implemented and submitted to HHS as
soon as possible.
-- i
Auditee Response:
Indirect Cost Allocation Plan is currently
in RFP process with responses due
July 15, 1992. ICAP will be implemented
when Plan is submitted by contractor.
18
CITY OF BANGOR, MAINE
SCHEDULE OF SPECIFIC FINDINGS AND
QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 1991
Federal Grantor: Department of Housing and Urban Development
City Department: Community. Development
Pass -Through Grantor: N/A
FINDING/NON-COMPLIANCE NO. 2
QUESTIONED
COSTS
Program Condition:
Community The grantee performance report did not
Development reconcile to the City's general ledger by
Block Grant $9,605.
CFDA No. Criteria:
14.218 General requirements require that federal
financial reports be reviewed for
propriety and adjustments to the general
ledger be evaluated for propriety.
Effect•
Program expenditures must be reconciled toy
the general ledger to insure that the
proper expenditures have been charged
against the program.
Recommendation:
Monthly reconciliations must be made from
the subsidiary records to the general
ledger. Quarterly reconciliations must bei
made from the grantee performance reports
to the general ledger to verify that all
of the expenditures have been properly
recorded as per objectives as prescribed
by OMB Circular A-87.
Auditee Response:
Program modifications make general and
subsidiary ledgers fully integrated.
Additional accountant to be hired after
July 1, 1992 will work with grants.
1
19
CITY OF BANGOR, NAINE
SCHEDULE OF SPECIFIC FINDINGS AND
QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 1991
Federal Grantor: Department of Housing and Urban Development
City Department: Community Development
Pass -Through Grantor: N/A
FINDING/NON-COMPLIANCE NO. 3
QUESTIONED
COSTS
Program Condition:
Community Nonadministrative expenditures for $30,505
Development had been classified as administrative
Program expenditures and were reclassified in the
subsequent period to proper line items.
CFDA No.
14.218
Criteria•
24 CFR 570.200(G) allows no more than 20%
of the total grant plus program income mays
be expended for planning and
administration. I
Effect•
Over expenditures for planning,
administration, and public services could
result in the City incurring unnecessary
costs.
Recommendation:
we recommend that the City monitor its
administrative expenditures on a monthly
basis to insure that the 20% ceiling is
being adhered to. Although HUD approved
the reallocation mentioned above the
internal financial statements are
misleading throughout the year with costs
misappropriated.
Auditee Response:
Program modifications make general and
subsidiary ledgers fully integrated.
Additional accountant to be hired after
July 1, 1992 will work with grants
CITY OF BANGOR, NAINE
SC®ULE OF SPECIFIC FINDINGS AND
QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 1991
Federal Grantor: Department of Housing and Urban Development
City Department: Community Development
Pass -Through Grantor: N/A
FINDING/NON-COMPLIANCE NO. 4
QUESTIONED
COSTS
Program Condition: I
Community A mortgage was authorized and approved by $355.52
Development council on a deferred rehabilitation loan.
Block The monies disbursed to the mortgagor were
Grant $355.52 less than approved.
CFDA No. Criteria:
14.218 Proper reconciliations of loans disbursed
to loan documents should be done timely.
Effect:
The loan disbursed was understated by
$355.52.
Recommendation:
I � �
We recommend that loans disbursed be
reconciled to the loan agreements on a
monthly basis to insure that accounts
reconcile.
Auditee Response: I
Loan and mortgage payoff figure reduced I I
due to client making additional payment
before loan closing. Client had option toy
use monies for additional rehab work or
reduce principal. She chose to us a
portion to replace a window and remainder
will be used to reduce principal. I I
21
CITY OF BANGOR, NAINE
SCHEDULE OF SPECIFIC FINDINGS AND
QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 1991
Federal Grantor: Department of Transportation
City Department: Airport
Pass -Through Grantor: N/A
FINDING/NON-COMPLIANCE NO. 5
QUESTIONED
COSTS
Program Condition:
Airport The City is currently using an outdated $ 4,878
Development Aids indirect cost allocation plan.
Program/Airports �.
Improvement
Program
CFDA No. Criteria:
20.106 OMB Circular A-87 requires that indirect
costs charged to a federal program be
supported by an ICAP.
Effect:
If City departments do not consistently
use current federally approved CAP rates,
grant programs will be inappropriately
charged for indirect costs. If the rates
used are higher than the approved rates,
the grants will be over -billed and this
will result in questioned costs.
Conversely, lower rates could result in
the City absorbing the cost difference.
Recommendation:
A new indirect cost allocation plan must
be implemented and submitted to HHS as
soon as possible.
Auditee Response:
Indirect Cost Allocation Plan is currently
in RFP process with responses due
July 15, 1992. ICRP will be implemented
when plan is submitted by contractor.
CITY OF BANGOR, MAINE
SCSSDULE OF SPECIFIC FINDINGS AND
QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 1991
Federal Grantor: Department of Housing and Urban Development
City Department: Community Development
Pass -Through Grantor: N/A
FINDING/NON-COMPLIANCE NO. 6
23
QUESTIONED
COSTS
Program
Condition:
Community
Approximately $227,000 of deferred
Development
rehabilitation loans were not booked on
Block Grant
the general ledger. At present, the
subsidiary computer program can not
properly record the deferred loans.
CFDA No.
Criteria:
14.218
The loans were not recorded on the City's
internal financial statements.
Effect: I
The audit trail could be lost if loans ares
not recorded on the general ledger.
Recommendation: I
We recommend that all loans be recorded onj
the general ledger and the computer
programs be revised to accommodate all
types of loans disbursed with federal
funds.
Auditee Response:
Program modifications make general and I I
I
subsidiary ledgers fully integrated.
Additional accountant to be hired after
July 1, 1992 will work with grants. I
23
CITY OF BANGOR, MAINE
SCHEDULE OF SPECIFIC FINDINGS AND
QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 1991
Federal Grantor: Department of Agriculture
City Department: WIC
Pass -Through Grantor: Department of Human Services
FINDING/NON-COMPLIANCE NO. 7
QUESTIONED
COSTS
Program Condition:
WIC In the subsequent period the City disposed)
of old certification documents proving
income verification and only retained the
latest document.
CFDA No. ( Criteria:
10.557 The City of Bangor has a records retention
policy and grants require that documents
be retained for a specific time frame,
usually three years.
Effect•
The City could not prove income
verification for food stamp recipients ford
June 30, 1991.
Recommendation:
We recommend that all City departments
receiving grant monies review their grant
policies, city ordinances, and check with
the finance department before implementing
any policy changes concerning grants.
Auditee Response:
Corrective action regarding City policies
for record retention rather than verbal
instructions from State have been reviewed
and emphasized. I
24
CITY OF BANGOR, MAIN$
SCHEDULE OF SPECIFIC FINDINGS AND
QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 1991
Federal Grantor: Department of Agriculture
City Department: WIC
Pass -Through Grantor: Department of Human Services
FINDING/NON-COMPLIANCE NO.. 8
QUESTIONED
COSTS
Program Condition:
Women, Infants,1 Monthly reconciliations were not being
and Children done from the monthly claims reports to
the City's internal operating and outlay
detail.
CFDA No. Criteria:
10.557 General requirements require that federal
financial reports and the general ledger
be reviewed for propriety and any
adjustments be evaluated.
Effect-
Cutoff on expenditures existed.
Recommendation:
We recommend that the general ledger and
the monthly reports be reconciled.
Auditee Response:
Program modifications make general and
subsidiary ledgers fully integrated.
Additional accountant to be hired after
July 1, 1992 will work with grants.
25
CITY OF BANGOR, NAINE
SCHEDULE OF SPECIFIC FINDINGS AND
QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 1991
Federal Grantor: Department of Agriculture
City Department: WIC
Pass -Through Grantor: Department of Human Services
FINDING/NON-COMPLIANCE NO. 9
26
QUESTIONED
COSTS
Procrram
Condition:
Women, Infants,j
WIC food coupons are recorded as a credit
and Children
to food supplies in the operating and
outlay account. This is a form of net �.
budgeting.
CFDA No.
Criteria:
10.557
Food vouchers are recorded as an
expenditure when disbursed and the same
account is credited when the month is
closed out.
Effect:
The internal financial statements reflect
the food vouchers at net which should be
zero.
Recommendation:
We recommend that the food vouchers be
recorded to a revenue account and the
expenditures should reflect the amount of
food vouchers disbursed. This is a better
method for accounting for food stamps.
Auditee Response:
Program modifications make general and
subsidiary ledgers fully integrated.
Additional accountant to be hired after
July 1, 1992 will work with grants.
26
CITY OF BANGOR, MAINE
SCHEDULE OF SPECIFIC FINDINGS AND
QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 1991
Federal Grantor: Department of Education
City Department: School
Pass -Through Grantor: Department of Educational and Cultural Services
FINDING/NON-COMPLIANCE NO. 10
QUESTIONED
COSTS
Program Condition:
ESEA Chapter I The school department did not have
adequate documentation on hand to satisfy
the requirements for determining numbers
and needs of educationally deprived
children in private schools.
CFDA No. Criteria:
84.010 The EF -U-422 form requires that the files
contain documentation of correspondence
sent to the school along with a registry
receipt indicating delivery.
Effect:
The school department does not have the
registry receipts.
Recommendation:
We recommend that the school department
save the registry receipts and increase
the correspondence to the private schools
for Chapter I funding.
Auditee Response:
Director of Chapter I has developed a
letter to be sent by registered mail
soliciting Chapter I funding. Proof will
be retained by School Department.
27
CITY OF BANGOR, !MAINE
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
FOR THE YEAR EHDND JUNE 30, 1991
Reference
Catalogue Federal
of Federal Received Through State Other Local Total Total
Assistance Directly State Grants Income Income Transfers Revenues Expenditures
Department of Agriculture
WIC 10.557 $ $1,720,292 $ $ $ - $ - $1,720,292 $1,699,208
Department of Health &
Human Services
Venereal Disease Clinics 13.977 $
- $ 59,324 $ - $
24,541 $ - $ -
$ 83,865 $
70,402
Childhood Immunization 13.268
- 66,891 -
- - -
66,891
58,171
Public Health Nurse
- - 90,865
3,358 90,333 -
184,556
184,556
Dental Clinic 18.994
16,000
55,288 47,005 -
118,293
118,293
Total - Cash Basis
- 142,215 90,865
83,187 137,338 -
453,605
431,422
Receivables - 7/1/90
- (19,535) (19,324)
- - -
(38,859)
-
6/30/91
-
-
-
Total - Accrual Basis S $ 122,680 $ 71,541 $ 83,187 $ 137,338 $ - $ 414,746 $ 431,422
Department of Housing and
Urban Development
Community Development
Block Grants/Entitle-
ment Grantes 14.218
B -89 -MC -23-0004 402,893 - - - - - 402,893 873,655
90 -MC -23-0004 866,861 - - - - - 866,861 398,659
royiem Income y 12.221 - - - 187,227 - - 187,227
Urban Development
Action Grantss
Program Income - - - - - - -
Total - Cash Basis 1,269,754 - - 187,227 - - 1,456,981 1,272,314
Receivables - 7/1/90 (416,528) - - - - - (416,528) -
6/30/91 101,914 101,914
Total - Accrual Basis $ 955,140 $ $ $ 187,227 $ S - $1,142,367 $1,272,314
28
CITY OF BANGOR, KA
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
FOR THE MBAR ENDED JUNE 30, 1991
Reference
Catalogue Federal
of Federal Received Through State Other Local Total Total
Assistance Directly State Grants Income Income Transfers Revenues Expenditures
Department of Education
Adult Basic Education
84.002 $
- $ 31,610
$ - $
- $ - $ - $ 31,610
$ 31,610
E.S.E.A. Chapter I
84.010
- 629,061
-
- - - 629,061
629,061
Local Entitlement
84.027
- 146,500
-
- - - 146,500
146,500
E.S.E.A. Chapter I Handicapped
84.009
- 15,092
-
- - - 15,092
15,092
E.S.E.A. Chapter I Migrant
84.011
- 82,068
-
- - - 82,068
82,068
E.S.E.A. Chapter II
84.151
- 51,202
-
- - - 51,202
51,186
Teacher Recertification
- -
60,000
- - - 60,000
56,500
Dwight D. Eisenhower Act
84.164
- 12,463
-
- - - 12,463
12,463
Drug Free Schools
84.186
- 41,875
-
- - - 41,875
41,880
Aids Grant
13.118 -
5,325
-
- - - 5,325
5,325
Project Rebound
-
-
65,500
- - - 65,500
65,500
Total - Accrual Basis
$
$1,015,196
$ 125,500 $
S $ $1,140,696
$1,137,185
Department of Economic and
Community Development Office
of Comprehensive Planning
$ -
$ 2,220
$ - $ -
$ - $ - $ 2,220
$ -
Waste Management Agency
-
-
- -
- - -
150,460
Total - Cash Basis
-
2,220
- -
- - 2,220
150,460
Receivables - 7/1/90
-
-
- -
- - -
-
6/30/91
112,877
112,877
Total - Accrual Basis
S
$ 2,220
$ 112,877 $
S S S 115,097
$ 150,460
29
CITY OF SAHGOR, NAIHB
SCHEDULE OF FEDERAL FIHAHCIAL ASSISTANCE
FOR THE YEAR ENDED JUNE 30, 1991
Reference
Catalogue Federal
of Federal Received
Through
State
Other
Local
Total
Total
Assistance Directly
State
Grants
Income
Income Transfers
Revenues Expenditures
Department of Transportation
Airport Development Aid
Program/Airport
Improvement Program
20.106
6-23-0005-06
$ -
$ -
$ -
$ -
$ - $ -
$ -
$ -
6-23-0005-06 Amendment
-
-
-
-
(93,737) -
(93,737)
-
6-23-0005-07
-
-
-
-
457 -
457
-
6-23-0005-09
-
-
159
-
(888) -
(729)
-
6-23-0005-10
-
-
-
-
(11,224) -
(11,224)
-
6-23-0005-11
10,220
-
-
-
63,223 -
73,443
-
3-23-0005-01
11,782
-
-
-
77,675 -
89,457
-
3-23-0005-02
21,691
-
10,752
-
17,597 -
50,040
-
3-23-0005-03
-
-
-
-
(82,634) -
(82,634)
-
3-23-0005-04
-
-
4,716
-
217,197 -
221,913
-
3-23-0005-05
-
-
-
-
31,083 -
31,083
-
3-23-0005-06
-
-
-
-
38,248 -
38,248
-
3-23-0005-07
-
-
-
-
990 -
990
-
3-23-0005-0889
-
-
348
-
408 -
756
17,242
3-23-0005-09
1,094,334
-
43,325
-
78,162 -
1,215,821
39,976
3-23-0005-10
1,419,640
79,090
4,011
1,502,741
1,694,497
Subtotal
2,557,667
-
138,390
-
340,568 -
3,036,625
1,751,715
Other Airport Projects
-
-
-
-
11110 -
1,110
-
Total - Cash Basis
2,557,667
-
138,390
-
341,678 -
3,037,735
1,751,715
Receivables - 7/1/90
(2,094,718)
-
(68,102)
-
(341,678) -
,(2,504,498)
-
6/30/91
1,077,615
-
26,050
-
114,357
1,218,022
-
Total - Accrual Basis
$1,540,564
$
$ 96,338
$
$ 114,357 $
$1,751,259
$1,751,715
Urban Mass Transportation
Capital and Operating
Assistance
20.057
Operating
$ -
$ 204,122
$ 40,824
$ 243,053
$ 174,208 $ -
$ 662,207
$ 662,207
Capital
-
-
-
-
- -
-
-
Total - Cash Basis
-
204,122
40,824
243,053
174,208 -
662,207
662,207
Receivables - 7/1/90
-
-
-
-
- -
-
-
6/30/91
54,724
10,945
65,669
Total - Accrual Basis
$
$ 258,846
$ 51,769
$ 243,053
$ 174,208 $
$ 727,876
$ 662,207
30
CITY OF BANGOR, MAINE
NOTES TO THE SC®ULE OF FEDERAL FINANCIAL ASSISTANCE
JUNE 30, 1991
Basis of Prenaration
Receipts and expenditures presented in the Schedule of Federal Financial
Assistance are taken directly from the books and records of the City, with
the net change in receivables being added to convert the statements to
accrual basis, which is in conformance with generally accepted accounting
principles.
Maior Federal Programs
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,
1991, is defined as any program for which total expenditures of federal
financial assistance are the larger of $300,000 or 3% of total federal
financial assistance expenditures.
CFDA
Source: Catalogue of Federal Domestic Assistance
31