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HomeMy WebLinkAbout2015 Special Purpose Report CITY OF BROOKLYN CENTER HENNEPIN COUNTY, MINNESOTA Special Purpose Audit Reports on Single Audit, Internal Controls, and Compliance With Laws and Regulations Year Ended December 31, 2015 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF BROOKLYN CENTER HENNEPIN COUNTY, MINNESOTA Table of Contents Page Schedule of Expenditures of Federal Awards1 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 Standards2–3 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 Guidance4–6 Independent Auditor’s Report on Minnesota Legal Compliance7 Schedule of Findings and Questioned Costs8–9 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF BROOKLYN CENTER Schedule of Expenditures of Federal Awards Year Ended December 31, 2015 FederaFedera ll CFDA No.Expenditures Federal Grantor/Pass-Through Grantor/Program Title U.S. Environmental Protection Agency Passed through Minnesota Public Facilities Authority Capitalization Grants for Drinking Water State Revolving Fund66.46814,608,787$ s U.S. Department of Housing and Urban Development Passed through Hennepin Count y Community Development Block Grants – Entitlement Grant14.218291,922 s Community Development Block Grants – State’s Program and Non-Entitlement Grants in Hawaii14.22876,466 U.S. Department of Justice Direct progra m Bulletproof Vest Partnership Progra16.6078,776 m Passed through Hennepin Count y Edward Byrne Memorial Justice Assistance Grant Progra16.73820,970 m U.S. Department of Transportation Passed through the City of Brooklyn Par k Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.6085,632 ational Priority Safety Program20.6162,851 Ns Total federal awards$15,015,405 TheScheduleofExpendituresofFederalAwardsispreparedontheaccrualbasisofaccounting.Theinformation Note 1: AuditsofStates,LocalGovernments, inthisscheduleispresentedinaccordancewithbothOMBCircularA-133, andNonprofitOrganizationsUniformAdministrativeRequirements,CostPrinciples,andAudit andtheOMB’s RequirementsforFederalAwards, whenapplicable.Therefore,someamountspresentedinthisschedulemay differ from the amounts presented in, or used in the preparation of, the City’s basic financial statements. Note 2:All pass-through entities listed above use the same CFDA numbers as the federal grantors to identify these grants, and have not assigned any additional identifying numbers. Note 3:The City did not elect to use the 10 percent de minimis indirect cost rate. -1- THIS PAGE INTENTIONALLY LEFT BLANK 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 City Council and Management City of Brooklyn Center, Minnesota 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 Brooklyn Center, Minnesota (the City) as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated May 23, 2016. ICOFR NTERNALONTROLVERINANCIAL EPORTING In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the 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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’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. (continued) -2- COM OMPLIANCE AND THERATTERS 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 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. PTR URPOSE OF HISEPORT 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 City’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 City’s internal control and compliance. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota May 23, 2016 -3- 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 City Council and Management City of Brooklyn Center, Minnesota RCEMFP EPORT ON OMPLIANCE FOR ACHAJOREDERALROGRAM We have audited the City of Brooklyn Center, Minnesota’s (the City) compliance with the types of compliance requirements described in the U.S. Office of Management and Budget Compliance Supplementthat could have a direct and material effect on each of the City’s major federal programs for the year ended December 31, 2015. 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. M’R ANAGEMENTSESPONSIBILITY Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. A’R UDITORSESPONSIBILITY 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. (continued) -4- OEMFP PINION ON ACHAJOREDERALROGRAM In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to on the previous page that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2015. ICOC R EPORT ON NTERNALONTROL VER OMPLIANCE Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to on the previous page. 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 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. PTR URPOSE OF HISEPORT 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. (continued) -5- RSEFARU EPORT ON CHEDULE OF XPENDITURES OF EDERALWARDSEQUIRED BY THE NIFORM G UIDANCE 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 December 31, 2015, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated May 23, 2016, 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. Minneapolis, Minnesota May 23, 2016 -6- THIS PAGE INTENTIONALLY LEFT BLANK INDEPENDENT AUDITOR’S REPORT ON MINNESOTA LEGAL COMPLIANCE To the City Council and Management City of Brooklyn Center, Minnesota 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 Brooklyn Center, Minnesota (the City) as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated May 23, 2016. MLC INNESOTA EGALOMPLIANCE TheMinnesota Legal Compliance Audit Guide for Cities, promulgated by the Office of the State Auditor pursuant to Minnesota Statute § 6.65, contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our audit considered all of the listed categories. In connection with our audit, nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City’s noncompliance with the above referenced provisions. PTR URPOSE OF HISEPORT The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing, and not to provide an opinion on compliance. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota May 23, 2016 -7- THIS PAGE INTENTIONALLY LEFT BLANK CITY OF BROOKLYN CENTER Schedule of Findings and Questioned Costs Year Ended December 31, 2015 A. SUMMARY OF AUDIT RESULTS This summary is formatted to provide federal granting agencies and pass-through agencies answers to specific questions regarding the audit of federal awards. Financial Statements X What type of auditor’s report is issued?Unmodified Qualified Adverse Disclaimer Internal control over financial reporting: Material weakness(es) identified?YesXNo X Significant deficiency(ies) identified?YesNone reported X Noncompliance material to the financial statements noted?YesNo Federal Awards Internal controls over major federal award programs: X Material weakness(es) identified?YesNo X Significant deficiency(ies) identified?YesNone reported Type of auditor’s report issued on compliance for major programs?XUnmodified Qualified Adverse Disclaimer Any audit findings disclosed that are required to be reported in accordance with the Uniform Guidance?X YesNo Programs tested as major programs: Program or ClusterCFDA No. U.S. Environmental Protection Agency Capitalization Grants for Drinking Water State Revolving Funds66.468 Threshold for distinguishing between type A and B programs:$ 750,000 Does the auditee qualify as a low-risk auditee?XYesNo -8- CITY OF BROOKLYN CENTER Schedule of Findings and Questioned Costs (continued) Year Ended December 31, 2015 B. FINDINGS – FINANCIAL STATEMENT AUDIT None. C. FINDINGS – MAJOR FEDERAL AWARD PROGRAMS AUDIT None. D. FINDINGS – MINNESOTA LEGAL COMPLIANCE AUDIT None. E. SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS – MAJOR FEDERAL AWARD PROGRAMS AUDIT None. -9-