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Single Audit Report on Federal Awards 07.01.2004 - 06.30.2005C0Nf-%1-XD CITY OF LA QUINTA La Quinta, California Single ,Audit Report on Federal Awards Year ended June 30, 2005 L.L.P. CERTIFIED PUBLIC ACCOUNTANTS FILA. COPY (File copy must be returned, tliankyou) CITY OF LA QUINTA La Quinta, California Single Audit Report on Federal Awards Year ended June 30, 2005 CITY OF LA QUINTA Single Audit Report on Federal Awards Year ended June 30, 2005 TABLE OF CONTENTS Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Report on Compliance with Requirements Applicable to Each Major Program, Internal Control over Compliance and on the Schedule of Expenditures of Federal Awards in Accordance with OMB Circular A-133 Schedule of Expenditures of Federal Awards Notes to the Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings Page 3 5 6 7 9 CONRADAND ASSOCIATES, L.L.P. Honorable Mayor and City Council City of La Quinta, California CERTIFIED PUBLIC ACCOUNTANTS 2301 DUPONT DRIVE, SUITE 200 IRVINE, CALIFORNIA 92612 (949)474-2020 Fax (949) 263-5520 REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS We have audited the financial statements of the City of La Quinta, California as of and for the year ended June 30, 2005, and have issued our report thereon dated August 18, 2005. We conducted our audit in accordance with 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. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of La Quinta, California'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 with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. However, we noted other matters involving compliance or other matters that we have reported to the management of the City of La Quinta in a separate letter dated August 18, 2005. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of La Quinta, California's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by MEMBERS OF AICPA AND CALIFORNIA SOJIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION Honorable Mayor and City Council City of La Quinta Page Two employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. However, we noted other matters involving the internal control over financial reporting that we have reported to the management of the City of La Quinta in a separate letter dated August 18, 2005. This report is intended solely for the information of management, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. August 18, 2005 2 CONRADAND ASSOCIATES, L.L.P. Honorable Mayor and City Council City of La Quinta, California CERTIFIED PUBLIC ACCOUNTANTS 2301 DUPONT DRIVE, SUITE 200 IRVINE, CALIFORNIA 92612 (949) 474-2020 Fax (949) 263-5520 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM, INTERNAL CONTROL OVER COMPLIANCE AND ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS IN ACCORDANCE WITH OMB CIRCULAR A-133 Compliance We have audited the compliance of the City of La Quinta, California with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2005. The City of La Quinta's major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City of La Quinta's management. Our responsibility is to express an opinion on the City of La Quinta'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 Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of La Quinta's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City of La Quinta's compliance with those requirements. In our opinion, the City of La Quinta, California 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. MEMBERS OF AICPA AND CALIFORNIA SOLTY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION Honorable Mayor and City Council City of La Quinta Page Two hiternal_Control Over Compliance The management of the City of La Quinta 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 of La Quinta'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. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. Schedule of Expenditures of Federal Awards We have audited the basic financial statements of the City of La Quinta as of and for the year ended June 30, 2005, and have issued our report thereon dated August 18, 2005. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the 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 solely for the information of management, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. August 18, 2005 /A 4 CITY OF LA QUINTA Schedule of Expenditures of Federal Awards Year ended June 30, 2005 Catalog of * Major Program N/A - Not Available Grant Pass-through Program Number Grantor's Number Expenditums 08-924419 CML 6164 (009) $419.323* 419,323 B -04 -UC -U6-0506 N/A 197,239 197,239 1 2 See accompanying notes to the schedule of expenditures of federal awards. 5 Federal Domestic Assistance Funding Agency/Program Name Number Department of Transportation: Pass-through from the Coachella Valley Association of Governments: Highway Planning and Construction 20.205 Total Department of Transportation Department of Housing and Urban Development: Pass-through County of Riverside Economic Development Agency: Community Development Block Grant 14.218 Total Department of Housing and Urban Development Total Federal Awards * Major Program N/A - Not Available Grant Pass-through Program Number Grantor's Number Expenditums 08-924419 CML 6164 (009) $419.323* 419,323 B -04 -UC -U6-0506 N/A 197,239 197,239 1 2 See accompanying notes to the schedule of expenditures of federal awards. 5 CITY OF LA QUINTA Notes to the Schedule of Expenditures of Federal Awards Year ended June 30, 2005 {1) Summary of Significant Accounting Policies Applicable to the Schedule of Expenditures of Federal Awards (a) Scope of Presentation The accompanying schedule presents only the expenditures incurred by the City of La Quinta that are reimbursable under federal programs of federal awards. For the purposes of this schedule, federal awards include both federal awards received directly from a federal agency, as well as federal funds received indirectly by the City from a non-federal agency or other organization. Only the portion of program expenditures reimbursable with such federal funds are reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with state, local or other non-federal funds are excluded from the accompanying schedule. (b) Basis of Accounting The expenditures included in the accompanying schedule were reported on the modified accrual basis of accounting. Under the modified accrual basis of accounting, expenditures are incurred when the City becomes obligated for payment as a result of the receipt of the related goods and services. Expenditures reported include any property or equipment acquisitions incurred under the federal program. (c) Subrecipients The City of La Quinta incurred $30,000 of Community Development Block Grant (CFDA No. 14.218) expenditures that was paid to 1 subrecipient. 6 CITY OF LA QUINTA Schedule of Findings and Questioned Costs Year ended June 30, 2005 (A) Summary of Auditors' Results 1. An unqualified report was issued by the auditors on the financial statements of the auditee. 2. There were no material weaknesses in internal control nor were there any reportable conditions. 3. The audit disclosed no noncompliance which is material to the financial statements of the auditee. 4. There were no material weaknesses or other reportable conditions in internal control over major programs of the auditee. 5. An unqualified report was issued by the auditors on compliance for major programs. 6. The audit disclosed no audit findings which the auditor is required to report under paragraph .510(a) of OMB Circular A-133. 7. The major program of the auditee was: • CFDA 20.205 Department of Transportation — Highway Planning and Construction 8. The dollar threshold used to distinguish Type A and Type B programs was $300,000. 9. The auditee was considercd a low risk auditee for the year ended June 30, 2005 for purposes of major program determination. 7 CITY OF LA QUINTA Schedule of Findings and Questioned Costs (Continued) (B) Findings Related to the Financial Statements which are Required to be Reported in Accordance with GAGAS There are no auditors' findings required to be reported in accordance with GAGAS. (C) Findings and Questioned Costs for Federal Awards as Defined in Paragraph .510(a) at OMB Circular A-133 There are no auditors' findings required to be reported in accordance with paragraph .510(a) of OMB Circular A-133. CITY OF LA QUINTA Summary Schedule of Prior Audit Findings Year ended June 30, 2005 There was no single audit report issued for the year ended June 30, 2004.