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COUNTY OF ALPINE SINGLE AUDIT REPORT JUNE 30, 2017 ---PAGE BREAK--- Table of Contents Page Schedule of Expenditures of Federal Awards 1-2 Notes to the Schedule of Expenditures of Federal Awards 3-4 Independent Auditor’s Report on Internal Control Over Financing 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; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 7-9 Schedule of Findings and Questioned Costs 10-12 Status of Prior Year Findings 13 Corrective Action Plan 14 Supplementary Schedule of the California Emergency Management Agency Grant Expenditures 15 ---PAGE BREAK--- 1 COUNTY OF ALPINE Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017 Federal Agency / Federal Pass-Through Entity Federal Federal Grantor/Pass-through Grantor/Program or Cluster Title CFDA No. Identifying Number 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 32,221 $ Subtotal 10.561 32,221 Passed through State Controller's Office: Secure Payments for States and Counties Containing Federal Lands 10.665 98,886 Subtotal 10.665 98,886 Total U.S. Department of Agriculture 131,107 U.S. Department of the Interior Direct Federal Programs: Payments in Lieu of Taxes 15.226 115-31 158,988 Total U.S. Department of the Interior 158,988 U.S. Department of Justice Passed through the California Emergency Management Agency: Victim/Witness Assistance Program 16.575 VW16170020 107,832 Total U.S. Department of Justice 107,832 U.S. Department of Labor Passed through Golden Sierra Job Training Agency: WIOA Cluster: Workforce Investment Act (WIA/WIOA) Adult Program 17.258 K689660-03 26,791 Workforce Investment Act (WIA/WIOA) Adult Program 17.258 K7102029-03 22,406 Workforce Investment Act (WIA/WIOA) Dislocated Workers 17.278 K689660-03 1,430 Workforce Investment Act (WIA/WIOA) Dislocated Workers 17.278 K7102029-03 767 Workforce Investment Act (WIA/WIOA) Youth Activities 17.259 K689660-04 2,001 Workforce Investment Act (WIA/WIOA) Youth Activities 17.259 K7102029-04 11,095 Subtotal WIOA Cluster: 64,490 Total U.S. Department of Labor 64,490 U.S. Department of Transportation Passed through the State Department of Transportation: FHWA / Caltrans Bridge Maintenance Program 20.205 1000020549L-N 70,118 $ FHWA / Caltrans Bridge Maintenance Program 20.205 1000020549L-N 22,501 FTA 5311 Formula Grants for Other Than Urbanized Areas 20.509 34,673 Total U.S. Department of Transportation 127,292 continued See accompanying notes to 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. ---PAGE BREAK--- COUNTY OF ALPINE Schedule of Expenditures of Federal Awards (continued) For the Year Ended June 30, 2017 Federal Agency / Federal Pass-Through Entity Federal Federal Grantor/Pass-through Grantor/Program or Cluster Title CFDA No. Identifying Number Expenditures 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 93.959 347,446 Passed through State Department of Health Care Services: Medical Assistance Programs 93.778 22,367 Child Health & Disability Prevention Program 93.778 40,919 California Children's Services 93.778 10,388 Maternal and Child Health Services 93.994 201602 73,378 Subtotal Passed through State Department of Health Care Services 147,052 Passed through State Department of Public Health: Public Health Emergency Preparedness Program 93.069 14-10882 116,145 Public Health Emergency Preparedness Program 93.069 14-10882 27,243 Immunization Program 93.268 15-10411 24,975 Hospital Preparedness Program 93.889 14-10882 107,743 Subtotal Passed through State Department of Public Health 276,106 Passed through State Department of Social Services: Temporary Assistance for Needy Families (TANF) 93.558 70,483 Community-Based Child Abuse Prevention Grants 93.590 20,670 Foster Care - Title IV-E 93.658 133,521 Adoption Assitance Program 93.659 8,385 In-Home Supportive Services (Social Services Block Grant) 93.667 92,230 Subtotal Passed through State Department of Social Services 325,289 Total U.S. Department of Health and Human Services 1,095,893 U.S. Department of Homeland Security Passed through the California Emergency Management Agency: Emergency Management Performance Grant 97.042 2015-0049 91,200 Emergency Management Performance Grant 97.042 2016-0010 125,233 Pre-Disaster Mitigation 97.047 PDMC-09-CA-2014 1,869 Subtotal Passed through California Emergency Management Agency 218,302 Passed through State Department of Homeland Security Homeland Security Grant Program - SHSP 97.067 2015-0078 76,099 $ Total U.S. Department of Homeland Security 294,401 Total Expenditures of Federal Awards 1,980,003 $ See accompanying notes to 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 ---PAGE BREAK--- COUNTY OF ALPINE Notes to the Schedule of Federal Awards For the Year Ended June 30, 2017 Note 1: General The accompanying schedule of expenditures of federal awards (SEFA) for the fiscal year ended June 30, 2017, presents the activity of all federal award programs of the County of Alpine, California (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 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 indicated the pass-through identifying numbers as to disclose the information was not applicable or not available. 3 ---PAGE BREAK--- COUNTY OF ALPINE Notes to the Schedule of Federal Awards For the Year Ended June 30, 2017 Note 6: Program Clusters Federal programs, which must be audited together as a program cluster, include the following: Federal Federal CFDA Program Title Expenditures Workforce Innovation and Opportunity Act (WIOA) Program Cluster: 17.258 WIA/WIOA Adult Programs $ 49,197 17.259 WIA/WIOA Youth Activities 13,096 17.278 WIA/WIOA Displaced Workers Formula Grants 2,197 Total $ 64,490 4 ---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 discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Alpine (the “County”) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements, and have issued our report thereon dated March 29, 2018. 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) 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 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 County’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. ---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 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 an instance of noncompliance or other matters that is required to be reported under Government Auditing Standards and which is described in the accompanying Schedule of Findings and Questioned Costs as item 2017-001. County of Alpine’s Response to Findings The County’s response to the findings identified in our audit is described in the accompanying Schedule of Findings and Question Costs. 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 March 29, 2018 ---PAGE BREAK--- 7 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE 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, 2017. 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. Basis for Qualified Opinion on Block Grants for Prevention and Treatment of Substance Abuse As described in the accompanying schedule of findings and questioned costs, the County did not comply with requirements regarding CFDA 93.959, Block Grants for Prevention and Treatment of Substance Abuse as described in finding number 2017-001 for Allowable Costs. Compliance with such requirements is necessary, in our opinion, for the County of Alpine, California to comply with the requirements applicable to that program. ---PAGE BREAK--- 8 Qualified Opinion on Block Grants for Prevention and Treatment of Substance Abuse In our opinion, except for the noncompliance described in the Basis for Qualified Opinion paragraph, 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 Block Grants for Prevention and Treatment of Substance Abuse for the year ended June 30, 2017. Unmodified Opinion on Each of the Other Major Federal Programs 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 other major federal programs identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs for the year ended June 30, 2017. Other Matters The County of Alpine, California’s response to the noncompliance 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 compliance and, accordingly, we express no opinion on the response. 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. Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be a material weakness. 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. We consider the deficiency in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2017-001 to be a material weakness. 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. The County of Alpine, California’s response to the internal control over compliance 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 compliance and, accordingly, we express no opinion on the response. 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. ---PAGE BREAK--- 9 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 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, 2017, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements. We issued our report thereon dated March 29, 2018, 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 and supplemental Schedule of the California Emergency Management Agency Grant Expenditures are presented for purposes of additional analysis as required by the Uniform Guidance and the California Emergency Management Agency, and are not a required part of the 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 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 Expenditure of Federal Awards and supplemental Schedule of the California Emergency Management Agency Grant Expenditures are fairly stated in all material respects in relation to the basic financial statements as a whole. Clovis, California March 29, 2018 ---PAGE BREAK--- COUNTY OF ALPINE Schedule of Findings and Questioned Costs For the Year Ended June 30, 2017 10 Section 1 – 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 that are not considered to be material weaknesses? None reported Noncompliance material to financial Statements noted? No Federal Awards: Internal control over major programs: • Material weaknesses identified? Yes • Significant deficiencies identified that are not considered to be material weaknesses? None reported Type of auditor’s report issued on compliance for major programs Modified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a) Yes Identification of major programs: Program Title CFDA Number(s) • Payments in Lieu of Taxes 15.226 • Block Grants for Prevention and Treatment of Substance Abuse 93.959 Dollar threshold used to distinguish between Type A and Type B programs? $750,000 Auditee qualified as low-risk auditee? Yes ---PAGE BREAK--- COUNTY OF ALPINE Schedule of Findings and Questioned Costs For the Year Ended June 30, 2017 11 Section 2 – Financial Statement Findings None reportable. Section 3 – Federal Award Findings and Questioned Costs Finding 2017-001 - Allowable Costs (CFDA #93.959 – Block Grants for Prevention and Treatment of Substance Abuse) Condition: The County’s Department of Behavioral Health employee’s salary and related personnel costs were charged to federal awards based on budgeted amounts and not for actual time spent on the related activities. Criteria: 2 CFR Part 200, Subpart F (Uniform Guidance) Section 200.430 requires that personnel expenses (payroll) charged to federal awards must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Cause: County staff was unaware of intricacies related to the Uniform Guidance and related requirements of personnel expenses. Effect: Lack of proper documentation needed to corroborate employee hours worked results in noncompliance and questioned costs of $51,312. The amount was calculated by performing an analysis of actual time worked as compared to budgeted amounts. Recommendation: We recommend that the County implement a system of internal control at the Department of Behavioral Health that requires employees to record and monitor actual time-spent for work performed related to federal awards. ---PAGE BREAK--- COUNTY OF ALPINE Schedule of Findings and Questioned Costs For the Year Ended June 30, 2017 FINANCIAL STATEMENT FINDINGS None reportable. FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS None reportable. 12 ---PAGE BREAK--- COUNTY OF ALPINE Status of Prior Year Findings For the Year Ended June 30, 2017 Audit Reference Number Status of Prior Year Audit Findings There were no audit findings in the prior year. 13 ---PAGE BREAK--- P.O. Box 266 - 99 Water Street, Markleeville, CA 96120 (530) 694-2284 / Fax (530) 694-2491 Web Page - http://www.alpinecountyca.gov COUNTY OF ALPINE Department of Finance Carol McElroy- CAO/DOF Delana Lindsey- Asst CAO to Budget and Finance Memorandum To: Price Paige and Company From: Carol McElroy, CAO/Finance Director Date: March 26, 2018 Re: 2016-17 Finding 2017-01 Allowable Cost Finding 2017-001 The Finance office will work with the Department of Behavioral Health Services to implement a system of internal control that records and monitors actual time spent for work performed related to their federal awards. Process for correction will be completed for the FY 2017-18. BHS Director: Alissa Nourse BHS Senior Account Clerk: Pam Assistant CAO Budget and Finance: Delana Lindsey CAO Finance Director: Carol McElroy 14 ---PAGE BREAK--- 15 COUNTY OF ALPINE Supplementary Schedule of the California Emergency For the Year Ended June 30, 2017 The following represents the State of California Emergency Management Agency grant expenditures by grant, for the fiscal year ended June 30, 2017 Expenditures Incurred For the Year Ended June 30, 2017 Federal State Couty Program Total Share Share Share VW16170020 - Victim Witness Program Personal services 47,968 $ 47,968 $ - $ - $ Operating expenditures 59,864 59,864 - - Totals 107,832 $ 107,832 $ - $ - $ 2015-0049 - Emergency Management Performance Grant Personal services 11,704 $ 5,852 $ - $ 5,852 $ Operating expenditures - - - - Equipment 170,696 85,348 - 85,348 Totals 182,400 $ 91,200 $ - $ 91,200 $ 2016-0010 - Emergency Management Performance Grant Personal services 61,338 $ 30,669 $ - $ 30,669 $ Operating expenditures 7,600 3,800 - 3,800 Equipment 181,528 90,764 - 90,764 Totals 250,466 $ 125,233 $ - $ 125,233 $ PDMC-09-CA-2014 Pre-Disaster Mitigation Personal services 1,869 $ 1,869 $ - $ - $ Equipment - - - - Totals 1,869 $ 1,869 $ - $ - $