Full Text
COUNTY OF ALPINE SINGLE AUDIT REPORT JUNE 30, 2020 ---PAGE BREAK--- Table of Contents Page Schedule of Expenditures of Federal Awards 1-2 Notes to the Schedule of Expenditures of Federal Awards 3 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 5-6 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance and Schedule of Expenditures of Federal Awards Required by the Uniform Guidance Report and Supplemental Schedule of the California Office of Emergency Services (CalOES) Grant Expenditures 7-8 Schedule of Findings and Questioned Costs 9-11 Summary Schedule of Prior Audit Findings 12-13 Corrective Action Plan 14 Supplemental Schedule of the California Office of Emergency Services (CalOES) Grant Expenditures 16 ---PAGE BREAK--- COUNTY OF ALPINE Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2020 See the accompanying notes to the schedule of expenditures of federal awards and the independent auditor’s report on compliance for each major program and on internal control over compliance required by the Uniform Guidance. 1 Federal Agency / Federal Pass-Through Entity Passed through to Federal Federal Grantor/Pass-through Grantor/Program or Cluster Title CFDA No. Identifying Number Subrecipients Expenditures U.S. Department of Agriculture Passed through the State Department of Social Services: State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (SNAP) 10.561 - $ 52,131 $ Passed through State Controller's Office: Secure Payments for States and Counties Containing Federal Lands 10.665 PL 114-10 - 151,460 Total U.S. Department of Agriculture - 203,591 U.S. Department of the Interior Direct Federal Programs: Payments in Lieu of Taxes 15.226 115-31 - 176,215 Total U.S. Department of the Interior - 176,215 U.S. Department of Justice Passed through the California Office of Emergency Services (CalOES): Victim/Witness Assistance Program 16.575 VW17180020 - 75,107 Total U.S. Department of Justice - 75,107 U.S. Department of Transportation Passed through the State Department of Transportation: Highway Planning and Construction 20.205 1000020549L-N - 1,931,065 FTA 5311 Formula Grants for Other Than Urbanized Areas 20.509 - 42,243 Total U.S. Department of Transportation - 1,973,308 U.S. Department of Health and Human Services Passed through State Department of Alcohol and Drug Programs: Block Grants for Prevention and Treatment of Substance Abuse 93.959 - 254,051 Subtotal Passed through State Department of Alcohol and Drug Abuse - 254,051 Passed through State Department of Health Care Services: Medical Assistance Programs 93.778 - 3,066 Child Health & Disability Prevention Program 93.778 - 44,029 California Children's Services 93.778 - 30,896 Maternal and Child Health Services 93.994 201602 - 59,372 Subtotal Passed through State Department of Health Care Services - 137,363 Passed through State Department of Public Health: Immunization Program 93.268 15-10411 - 34,074 Hospital Preparedness Program 93.889 17-10143 - 115,580 Public Health Emergency Preparedness Program 93.069 17-10143 - 86,072 Subtotal Passed through State Department of Public Health - 235,726 continued ---PAGE BREAK--- COUNTY OF ALPINE Schedule of Expenditures of Federal Awards (continued) For the Year Ended June 30, 2020 See the accompanying notes to the schedule of expenditures of federal awards and the independent auditor’s report on compliance for each major program and on internal control over compliance required by the Uniform Guidance. 2 Federal Agency / Federal Pass-Through Entity Passed through to Federal Federal Grantor/Pass-through Grantor/Program or Cluster Title CFDA No. Identifying Number Subrecipients Expenditures U.S. Department of Health and Human Services (Continued) Passed through State Department of Social Services: Temporary Assistance for Needy Families (TANF) 93.558 - 93,439 Community-Based Child Abuse Prevention Grants 93.590 30,021 30,021 Guardianship Assistance 93.090 - 696 Foster Care - Title IV-E 93.658 - 1,579 Adoption Assistance Program 93.659 - 185 Stephanie Tubbs Jones Child Welfare 93.645 - 23,771 In-Home Supportive Services (Social Services Block Grant) 93.778 - 173,445 CWS Title XX (Social Services Block Grant) 93.667 - 8,418 Subtotal Passed through State Department of Social Services 30,021 331,554 Total U.S. Department of Health and Human Services 30,021 958,694 U.S. Department of Homeland Security Passed through the California Office of Emergency Services (CalOES): Emergency Management Performance Grant 97.042 2019-0042 - 85,789 Subtotal Passed through California Office of Emergency Services (CalOES) - 85,789 Passed through State Department of Homeland Security: Homeland Security Grant Program - SHSP 97.067 2018-0054 - 67,226 Subtotal Passed through Department of Homeland Security - 67,226 Total U.S. Department of Homeland Security - 153,015 Total Expenditures of Federal Awards 30,021 $ 3,539,930 $ ---PAGE BREAK--- COUNTY OF ALPINE Notes to the Schedule of Federal Awards For the Year Ended June 30, 2020 3 Note 1: Reporting Entity The accompanying Schedule of Expenditures of Federal Awards, (SEFA) for the fiscal year ended June 30, 2020, presents the activity of all federal award programs of the County of Alpine, California (the “County”). The County reporting entity is defined in Note 1 to the County’s basic financial statements. All federal awards received directly from federal agencies, as well as federal awards passed through other governmental agencies, are included on the SEFA. The County has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Note 2: Basis of Accounting Basis of accounting refers to when expenditures or expenses are recognized and reported on the SEFA. The accompanying SEFA is presented using the modified accrual basis of accounting for grants accounted for in the governmental fund types and the accrual basis of accounting for grants accounted for in the proprietary fund types, as described in Note 1 to the County’s basic financial statements. Note 3: Relationship to Financial Statements The amounts reported in the accompanying SEFA agree, in all material respects, to amounts reported within the County’s basic financial statements. Federal award revenues are reported principally in the County’s financial statements as intergovernmental revenues in the General, Special Revenue and Enterprise funds. Federal award expenditures are principally reported based on the function to which they relate. Note 4: Catalog of Federal Domestic Assistance (CFDA) Numbers The CFDA numbers included in the accompanying SEFA were determined based on the program name, review of grant contract information and the Office of Management and Budget’s Catalog of Federal Domestic Assistance. Note 5: Pass-Through Entity Identifying Numbers The County has included in the SEFA the identifying numbers for pass-through grants when such information has been provided by the pass-through entities. For grants that the County was not provided with such information by the pass- through entities, the County has indicted the pass-through identifying numbers as to disclose the information was not applicable or not available. ---PAGE BREAK--- 4 THIS PAGE IS LEFT BLANK INTENTIONALLY. ---PAGE BREAK--- 5 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 Board of Supervisors of the County of Alpine Markleeville, California 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, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Alpine, California (the “County”), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements and have issued our report thereon dated December 20, 2021. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the County’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 County’s internal control. Accordingly, we do not express an opinion on the effectiveness of the County’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. We did identify a certain deficiency in internal control, described in the accompanying schedule of findings and questioned costs as item 2020-001 that we consider to be a material weakness. ---PAGE BREAK--- 6 Compliance and Other Matters As part of obtaining reasonable assurance about whether the County’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. The County’s Response to Findings The County’s response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. The County’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. 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 County’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 County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Clovis, California December 20, 2021 ---PAGE BREAK--- 7 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE AND SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE AND SUPPLEMENTAL SCHEDULE OF THE CALIFORNIA OFFICE OF EMERGENCY SERVICES (CALOES) GRANT EXPENDITURES To the Board of Supervisors of the County of Alpine Markleeville, California Report on Compliance for Each Major Federal Program We have audited the County of Alpine, California’s (the “County”) 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 County’s major federal programs for the year ended June 30, 2020. The County’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 County’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 County’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 County’s compliance. Opinion on Each Major Federal Program In our opinion, the County of Alpine, California, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020. ---PAGE BREAK--- 8 Report on Internal Control over Compliance Management of the County of Alpine, California, 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 County’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 County’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. 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, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Alpine, California, as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements. We issued our report thereon dated December 20, 2021, 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. The accompanying Supplemental Schedule of the California Office of Emergency Services (CalOES) Grant Expenditures is presented for purpose of additional analysis as required by CalOES 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 and Supplemental Schedule of the California Office of Emergency Services (CalOES) Grant Expenditures are fairly stated in all material respects in relation to the basic financial statements as a whole. 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. Clovis, California January 5, 2022 ---PAGE BREAK--- COUNTY OF ALPINE Schedule of Findings and Questioned Costs For the Year Ended June 30, 2020 9 Section 1 - Summary of Auditor’s Results Financial Statements: Type of auditor's report issued: Unmodified Internal control over financial reporting: Material weaknesses identified? X Yes No Significant deficiencies identified that are not considered to be material weaknesses? Yes X None reported Noncompliance material to financial statements noted? Yes X No Federal Awards: Internal control over major programs: Material weaknesses identified? Yes X No Significant deficiencies identified that are not considered to be material weaknesses? Yes X 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 2CFR section 200.516(a)? Yes X No Identification of major programs: CFDA Number Name of Federal Program or Cluster 20.205 Highway Planning and Construction Dollar threshold used to distinguish between Type A and Type B programs: $750,000 Auditee qualified as low-risk auditee? X Yes No ---PAGE BREAK--- COUNTY OF ALPINE Schedule of Findings and Questioned Costs For the Year Ended June 30, 2020 10 Section 2 - Financial Statement Findings Finding 2020-001 – Financial Close and Reporting (Material Weakness) Criteria: As described in the California State Controllers “2015 Internal Control Guidelines” an effective internal control system and timely financial reporting of all financial activity provides reasonable assurance for the safeguarding of assets, the reliability of financial information, and compliance with laws and regulations. Conditions Found: The County’s year-end financial closing process was not timely, complete, or accurate. The lack of a complete and proper close resulted in numerous audit adjustments and significant delays in completing the annual audit. Cause: Significant turnover in the County’s auditor controller’s office and implementation of a new accounting system during the year contributed to the misstatements. Additionally, the COVID-19 pandemic and a natural disaster affecting the County (Tamarack Fire) contributed to the delays in the audit process. Effect: The County was not able to close its accounting records and generate adequate year-end reports in a timely manner. As a result, there were significant delays in providing audit documentation to the auditors and various schedules that were provided required further reconciliation and adjustment. These issues resulted in numerous adjusting journal entries proposed by the auditors across balance sheet and income statement accounts. Recommendation: We recommend that the County hire staff with the appropriate skills, knowledge, and experience to ensure the County’s ability in closing the books at year-end in a timely manner. In addition, we recommend that the County assign responsibility to staff for specific areas within financial reporting to ensure that supporting documentation is reconciled and prepared in accordance with Generally Accepted Accounting Principles to avoid future misstatements. Management’s Response: See corrective action plan. ---PAGE BREAK--- COUNTY OF ALPINE Schedule of Findings and Questioned Costs For the Year Ended June 30, 2020 11 Section 3 - Federal Awards Findings and Questioned Costs None reportable. ---PAGE BREAK--- COUNTY OF ALPINE Summary Schedule of Prior Audit Findings For the Year Ended June 30, 2020 12 FINANCIAL STATEMENT FINDINGS None reportable. FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS 2019-001 (Significant Deficiency) Program: Block Grants for the Prevention and Treatment of Substance Abuse CFDA Number: 93.959 Federal Agency: Department of Health and Human Services Passed-Through: State Department of Health Care Services Award Number: 17-94143 Passed-Through: State Department of Health Care Services Award Year: FY 2018 Compliance Requirement: Reporting Questioned Costs: Unknown Criteria: In accordance with 2 CFR §200.303(a), a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Per the program grant award agreement, the County shall submit the Quarterly Federal Financial Management Report and a quarterly general ledger detail 60 days after quarter-end. Conditions Found: We found the following exceptions during our review of the reporting requirement: The quarters ending September 2018 and December 2018 did not have adequate supporting documentation for both payroll and non-payroll related charges that support the amounts listed by Category on the The quarters ending September 2018, December 2018, March 2019, and June 2019 did not have adequate supporting documentation for payroll related charges that support the amounts listed by Category on the Cause: The County’s Behavioral Health Department did not have adequate documentation or systems in place to support how this requirement was being met. The Department also had internal personnel changes which also caused this issue as there was no documentation available for how these requirements were being tracked. Effect: As this is a requirement noted in the program grant award agreement, the County could potentially delay or lose funding from this program if not supported or reported correctly. In addition, not having support or documentation for the will create issues when preparing the subsequent versions of those reports for the next fiscal year. ---PAGE BREAK--- COUNTY OF ALPINE Summary Schedule of Prior Audit Findings For the Year Ended June 30, 2020 13 Recommendation: We recommend the Behavioral Health Department use the general ledger as a basis for the amounts reported on the and begin developing a reconciling worksheet to assist in the preparation of the every quarter. Current Year Status Implemented ---PAGE BREAK--- 14 ---PAGE BREAK--- 15 SUPPLEMENTAL SCHEDULE OF THE CALIFORNIA OFFICE OF EMERGENCY SERVICES (CALOES) GRANT EXPENDITURES ---PAGE BREAK--- COUNTY OF ALPINE Supplemental Schedule of the California Office of Emergency Services (CalOES) Grant Expenditures For the Fiscal Year Ended June 30, 2020 16 Expenditures Incurred For the Year Ended June 30, 2020 Federal State County Program Total Share Share Share VW17180020 - Victim Witness Program Personal services 8,191 $ 8,191 $ - $ - $ Operating expenditures 5,332 5,332 - - Totals 13,523 $ 13,523 $ - $ - $ VW18190020 - Victim Witness Program Personal services 19,417 $ 18,353 $ 1,064 $ - $ Operating expenditures 26,101 26,101 - - Totals 45,518 $ 44,454 $ 1,064 $ - $ VW19200020 - Victim Witness Program Personal services 28,615 $ 17,130 $ 11,485 $ - $ Operating expenditures 4,581 - 4,581 - Totals 33,196 $ 17,130 $ 16,066 $ - $ 2019-0042 - Emergency Management Performance Grant Personal services 80,000 $ 40,000 $ - $ 40,000 $ Operating expenditures 7,840 3,920 - 3,920 Equipment 83,738 41,869 - 41,869 Totals 171,578 $ 85,789 $ - $ 85,789 $