FY 2019/20 Single Audit ReportCity of La Quinta
CITY COUNCIL MEETING: February 16, 2021
STAFF REPORT
AGENDA TITLE: RECEIVE AND FILE FEDERAL AWARDS REPORTS IN
ACCORDANCE WITH THE UNIFORM GUIDANCE FOR FISCAL YEAR ENDED JUNE
30, 2020
RECOMMENDATION
Receive and file Federal Awards Reports in Accordance with the Uniform
Guidance for the fiscal year ended June 30, 2020.
EXECUTIVE SUMMARY
Government agencies receiving an excess of $750,000 from Federal
funds during a fiscal year must obtain a single audit by an independent
auditor.
The annual single audit of federal funds produces the Federal Awards
Report (Attachment 1), which is submitted to external awarding and
oversight agencies.
The independent auditors found no internal control deficiencies or
findings.
This Report is being presented to the Financial Advisory Commission on
February 24, 2021.
FISCAL IMPACT - None
BACKGROUND/ANALYSIS
Agencies awarded an excess of $750,000 in federal funds during a fiscal year
require an additional audit and analysis by Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards (Uniform Guidance). This audit is
in addition to the basic financial statements audit, which produced the
Comprehensive Annual Financial Report (CAFR), however, it uses the
underlaying accounting and records used to prepare the CAFR.
CONSENT CALENDAR ITEM NO. 8
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The federal awards audit was completed by Eide Bailly Certified Public
Accountants for the fiscal year ended June 30, 2020. The independent audit
involved auditing internal control over compliance with the types of
requirements that could have a direct and material effect on each major
federal program and to test and report on internal controls over compliance
in accordance with the Uniform Guidance. The independent auditors found no
internal control deficiencies or findings.
Many State funds, such as those administered by the State of California
Department of Transportation, are subrecipients of federal funds and therefore
subject to Uniform Guidance regulations under this audit. For fiscal year ended
June 30, 2020, the City of La Quinta expensed a total of $2,607,229 awarded
by six grant programs. These funds were leveraged for road improvements,
emergency preparedness, and accessibility compliance.
The Federal Awards Report was submitted to the State Controller’s Office,
Federal Audit Clearinghouse, and the California Department of Transportation
(Caltrans). The Report demonstrates proper oversight of federal funds and
compliance with regulatory requirements. This Report shall be used to qualify
for future federal funds.
The Report will be presented to the Financial Advisory Commission during their
next meeting on February 24, 2021.
ALTERNATIVES
The Federal Awards Report is a requirement for agencies receiving more than
$750,000 in federal funds during a fiscal year, therefore, no alternatives are
recommended.
Prepared by: Claudia Martinez, Accounting Manager
Approved by: Karla Romero, Finance Director
Attachment: 1. Federal Awards Reports in Accordance with the Uniform
Guidance June 30, 2020
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eidebailly.com
Federal Awards Reports in Accordance
with the Uniform Guidance
June 30, 2020
City of La Quinta, California
ATTACHMENT 1
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City of La Quinta, California
Table of Contents
June 30, 2020
Independent Auditor’s 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 Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal
Control over Compliance; and Report on the Schedule of Expenditures of Federal Awards
Required by the Uniform Guidance...................................................................................................................... 3
Schedule of Expenditures of Federal Awards ....................................................................................................... 6
Notes to Schedule of Expenditures of Federal Awards ......................................................................................... 7
Schedule of Findings and Questioned Costs
Section I - Summary of Auditor’s Results .......................................................................................................... 8
Section II - Financial Statement Findings .......................................................................................................... 9
Section III - Federal Award Findings and Questioned Costs ..............................................................................10
Summary Schedule of Prior Audit Findings..........................................................................................................11
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Independent Auditor’s 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 Members of City Council
City of La Quinta, California
We have audited, 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, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information
of the City of La Quinta, California (City), as of and for the year ended June 30, 2020, and the related
notes to the financial statements, which collectively comprise the City’s basic financial statements and
have issued our report thereon dated December 23, 2020.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City'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 City's internal control.
Accordingly, we do not express an opinion on the effectiveness of the City '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. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City'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.
Riverside, California
December 23, 2020
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Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal
Control over Compliance; and Report on the Schedule of Expenditures of Federal Awards
Required by the Uniform Guidance
To the Honorable Mayor and Members of City Council
City of La Quinta, California
Report on Compliance for Each Major Federal Program
We have audited the City of La Quinta, California’s (City) 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 City’s major federal programs for the year ended June 30, 2020. The City’s major federal
programs are 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the City’s major federal programs
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 City’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 City’s compliance.
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Opinion on Each Major Federal Program
In our opinion, the City 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, 2020.
Report on Internal Control over Compliance
Management of the City 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 City’s internal control over compliance with the types of
requirements that could have a direct and material effect on each 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 City’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 a 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.
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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 City as of and for the year ended
June 30, 2020, and the related notes to the financial statements, which collectively comprise the City’s
basic financial statements. We issued our report thereon dated December 23, 2020, 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.
Riverside, California
February 11, 2021
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See Notes to Schedule of Expenditures of Federal Awards 6
City of La Quinta, California
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2020
Pass-through
Federal Entity Amounts Passed-
CFDA Identifying Through to
Number Number Expenditures Subrecipients
U.S. Department of Housing and Urban Development
Community Development Block Grants/Entitlement Grants Cluster:
Passed through the County of Riverside- Economic Development Agency:
Community Development Block Grants/Entitlement Grants 14.218 4.LQ.30-17 46,735$ 18,105$
Total Community Development Block Grants/Entitlement Grants Cluster 46,735 18,105
Total U.S Department of Housing and Urban Development 46,735 18,105
U.S. Department of Transportation
Highway Planning and Construction Cluster:
Passed through the State of California - Department of Transportation
Highway Planning and Construction (Dune Palms Bridge)20.205 BRLKS-5433(014)633,360 -
Highway Planning and Construction- Highway Safety Improvement Program (HSIP)20.205 HSIPL-5433(015)107,826 -
Highway Planning and Construction- Highway Safety Improvement Program (HSIP)20.205 HSIPL-5433(017)1,791,503 -
Highway Planning and Construction- Highway Bridge Program 20.205 BR-NBIL(547)6,506 -
Total Highway Planning and Construction Cluster 2,539,195 -
Total U.S. Department of Transportation 2,539,195 -
U.S. Department of Homeland Security
Passed through the California Governor's Office of Emergency Services:
Emergency Management Performance Grants (EMPG)97.067 2015-SS-00078 3,194 -
Total U.S. Department of Homeland Security 3,194 -
2,589,124$ 18,105$
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
Total Federal Financial Assistance
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City of La Quinta, California
Notes to Schedule of Expenditures of Federal Awards
Year Ended June 30, 2020
Note 1 - Basis of Presentation
The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award
activity of the City of La Quinta, California (City) under programs of the federal government for the year ended
June 30, 2020. The information in this Schedule is presented in accordance with the 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 City, it is not intended to and does not present the financial position, changes in net
position, or cash flows of the City.
Note 2 - Summary of Significant Accounting Policies
Expenditures reported in the Schedule are reported on the modified accrual basis of accounting for the
governmental funds and the accrual basis of accounting for the proprietary funds, which is described in Note 1
of the City’s financial statements except for subrecipient expenditures, which are recorded on the cash basis.
When applicable, such expenditures are recognized following the cost principles contained in the Uniform
Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Note 3 - Indirect Cost Rate
The City has not elected to use the 10-percent de minimis indirect cost rate.
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City of La Quinta, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2020
Section I – Summary of Auditor’s Results
FINANCIAL STATEMENTS
Type of auditor's report issued Unmodified
Internal control over financial reporting:
Material weaknesses identified No
Significant deficiencies identified not considered
to be material weaknesses None Reported
Noncompliance material to financial statements noted?No
FEDERAL AWARDS
Internal control over major program:
Material weaknesses identified No
Significant deficiencies identified not considered
to be material weaknesses None Reported
Type of auditor's report issued on compliance
for major programs:Unmodified
Any audit findings disclosed that are required to be reported in
accordance with Uniform Guidance 2 CFR 200.516:No
Identification of major programs:
CFDA Number
Highway Planning and Construction Cluster 20.205
Dollar threshold used to distinguish between type A
and type B programs:$ 750,000
Auditee qualified as low-risk auditee?Yes
Name of Federal Program
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City of La Quinta, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2020
Section II – Financial Statement Findings
None Reported.
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City of La Quinta, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2020
Section III – Federal Award Findings and Questioned Costs
None Reported.
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City of La Quinta, California
Summary Schedule of Prior Audit Findings
Year Ended June 30, 2020
None Reported.
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