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HomeMy WebLinkAboutCouncil Presentation 02/01/2022 Single Audit Package SINGLE AUDIT REPORTING PACKAGE Year Ended June 30, 2021 Financial Reports TOWN OF MARANA, ARIZONA SINGLE AUDIT REPORTING PACKAGE Year Ended June 30, 2021 CONTENTS Page Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 1 Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance 3 Schedule of Expenditures of Federal Awards 6 Notes to the Schedule of Expenditures of Federal Awards 8 Schedule of Findings and Questioned Costs 9 Summary Schedule of Prior Audit Finding 11 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and City Council Town of Marana, Arizona We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Marana, Arizona, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the Town of Marana, Arizona’s basic financial statements, and have issued our report thereon dated January 4, 2022. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Town of Marana, Arizona’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of Marana, Arizona’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town of Marana, Arizona’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies, and therefore, material weaknesses or significant deficiencies may exist that have not been identified. Tempe • Scottsdale • Casa Grande www.hhcpa.com Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town of Marana, Arizona’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. 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 or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Tempe, Arizona January 4, 2022 INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Honorable Mayor and Town Council Town of Marana, Arizona Report on Compliance for Each Major Federal Program We have audited Town of Marana, Arizona’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Town of Marana, Arizona’s major federal programs for the year ended June 30, 2021. The Town of Marana, Arizona’s major federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations and the terms and conditions of its federal awards applicable to its federal programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for the Town of Marana, Arizona’s major federal program based on our audit of the types of compliance requirements referred to above. 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 Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 occurred. An audit includes examining, on a test basis, evidence about the Town of Marana, Arizona’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 on compliance for each major federal program. However, our audit does not provide a legal determination of the Town of Marana, Arizona’s compliance. Tempe • Scottsdale • Casa Grande www.hhcpa.com Opinion on Each Major Federal Program In our opinion, the Town of Marana, Arizona, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2021. Report on Internal Control Over Compliance Management of the Town of Marana, Arizona, is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Town of Marana, Arizona’s internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Town of Marana, Arizona’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Marana, Arizona, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the Town of Marana, Arizona’s basic financial statements. We issued our report thereon dated January 4, 2022, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Tempe, Arizona January 4, 2022 See accompanying notes to the schedule of expenditures of federal awards. TOWN OF MARANA, ARIZONA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2021 Assistance Listing Grantor's Number Number Expenditures U.S. Department of Housing and Urban Development Passed through Pima County Community Development Block Entitlement Grant Cluster Community Development Block Grant 2019-2020 14.218 CT.CD.20*215 15,272$ Community Development Block Grant 2018-2019 14.218 CT-CR-21-288 37,786 Total Community Development Block Entitlement Grant Cluster 53,058 Total U.S. Department of Housing and Urban Development 53,058 U.S. Department of Justice Direct Grant Bulletproof Vest Partnership Program 16.607 JAG-06-135 7,745 Law Enforcement Assistance_Narcotics and Dangerous Drugs_Laboratory Analysis 16.001 Resolution 2018-076 MOU 15,645 Passed through City of Tucson Edward Byrne Memorial Justice Assistance Grant Program 16.738 DC-20-013 86,645 Total U.S. Department of Justice 110,035 Executive Office of the President, Office of National Drug Control Policy Passed through Pima County - High Intensity Drug Trafficking Program 95.001 HT-19-2915 32,726 High Intensity Drug Trafficking Program 95.001 HT-20-2930 79,100 High Intensity Drug Trafficking Program 95.001 HT-21-2930 33,505 Total Executive Office of the President, Office of National Drug Control Policy 145,331 U.S. Department of Transportation Passed through Governor's Office of Highway Safety- Highway Safety Cluster Selective Traffic Enforcement (Step/Speed)20.616 2020-PTS-030 15,156 Selective Traffic Enforcement (Step/Speed)20.616 2021-PTS-033 21,766 DUI/Impaired Driving Enforcement 20.616 2020-II-003 7,537 DUI/Impaired Driving Enforcement 20.616 2021-II-003 30,527 Total Highway Safety Cluster 74,986 U.S. Department of Agriculture Passed through Arizona State Parks and Trails Cooperative Forestry Assistance 10.664 TREE-17-105 1,621 Pass-Through Grantor / Cluster / Program Title Federal Grantor / 6 See accompanying notes to the schedule of expenditures of federal awards. TOWN OF MARANA, ARIZONA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2021 Assistance Listing Grantor's Number Number Expenditures U.S. Department of Homeland Security Passed through Arizona Department of Emergency and Military Affairs Homeland Security Grant Program - Operation Stonegarden 97.067 190419-01 367,286 Homeland Security Grant Program - Operation Stonegarden 97.067 190419-02 1,050 Total U.S. Department of Homeland Security 368,336 U.S. Department of Treasury Direct Grant COVID-19 - AZ Cares Fund 21.019 ERMT-20-057 2,480,555 * COVID-19 - State and Local Fiscal Recovery Fund 21.027 AZ-0032 8,187,523 * Total U.S. Department of Treasury 10,668,078 Federal Aviation Administration Direct Grant COVID-19 FAA Cares Act Grant 20.106 3-04-0058-023-2020 38,780 U.S. Environmental Protection Agency Passed through the Water Infrastructure Finance Authority of Arizona Clean Water State Revolving Fund Cluster Capitalization Grants for Clean Water State Revolving Funds 66.458 910176-19 1,171,761 * Drinking Water State Revolving Fund Cluster Capitalization Grants for Drinking Water State Revolving Funds 66.468 9202993-19 5,311,335 * Total U.S. Environmental Protection Agency 6,483,096 Total Expenditures of Federal Awards 17,943,321$ * Denotes major program Federal Grantor / Pass-Through Grantor / Cluster / Program Title 7 TOWN OF MARANA, ARIZONA NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2021 NOTE 1 BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the Town of Marana under programs of the federal government for the year ended June 30, 2021. The information in this schedule is presented in accordance with requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Town of Marana, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Town of Marana. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A)Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance and/or OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are limited as to reimbursement. B)The Town of Marana has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. 8 TOWN OF MARANA, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2021 SECTION I – SUMMARY OF AUDITORS’ RESULTS Financial Statements Type of auditors’ report issued: Unmodified Internal control over financial reporting: •Material weakness(es) identified?__ yes __X _no •Significant deficiency(ies) identified that are not considered to be a material weakness(es)?__ _ yes __X_ none reported Noncompliance material to financial statements noted? yes __X_ no Federal Awards Internal control over major programs: •Material weakness(es) identified?____ yes __X_ no •Significant deficiency(ies) indentified that are not considered to be a material weakness(es)?__ _ yes __X_ none reported Type of auditors’ report issued on compliance for each major program listed below Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR section 200.516(a)? ____ yes __X_ no Identification of major programs: CFDA Numbers Name of Federal Program or Cluster 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (American Rescue Plan) 21.019 COVID-19 - Coronavirus Aid, Relief, and Economic Security Act (CARES Act) 66.468 66.458 Capitalization Grants for Drinking Water State Revolving Funds Capitalization Grants for Clean Water State Revolving Funds Dollar threshold used to distinguish between Type A and Type B programs: $750,000 Auditee qualified as low-risk auditee? __ _ yes __X__ no 9 TOWN OF MARANA, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2021 SECTION II – FINDINGS RELATED TO FINANCIAL STATEMENTS REPORTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS None Noted SECTION III – FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS None Noted 10