Full Text
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, City Council And City Manager City of Laramie, Wyoming 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 units, each major fund, and the aggregate remaining fund information of City of Laramie, Wyoming, as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise City of Laramie, Wyoming’s basic financial statements and have issued our report thereon dated November 23, 2013. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered City of Laramie, Wyoming’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 City of Laramie, Wyoming’s internal control. Accordingly, we do not express an opinion on the effectiveness of City of Laramie, Wyoming’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 were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. ---PAGE BREAK--- 6 However, material weaknesses may exist that have not been identified. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs that we consider to be significant deficiencies at finding 2013-001. Compliance and Other Matters As part of obtaining reasonable assurance about whether City of Laramie, Wyoming’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. City of Laramie, Wyoming’s Response to Findings City of Laramie, Wyoming’s response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. City of Laramie, Wyoming’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 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. City of Laramie, Wyoming November 23, 2013 ---PAGE BREAK--- INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 To the Honorable Mayor, City Council And City Manager City of Laramie, Wyoming Report on Compliance for Each Major Federal Program We have audited the City of Laramie, Wyoming’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the City of Laramie, Wyoming’s major federal programs for the year ended June 30, 2013. The City of Laramie, Wyoming’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 the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the City of Laramie, Wyoming’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 OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of Laramie, Wyoming’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 City of Laramie, Wyoming’s compliance. ---PAGE BREAK--- 8 Opinion on Each Major Federal Program In our opinion, the City of Laramie, Wyoming 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, 2013. Report on Internal Control over Compliance Management of the City of Laramie, Wyoming 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 of Laramie, Wyoming’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 OMB Circular A-133, 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 of Laramie, Wyoming’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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as items 2013-001, that we consider to be significant deficiencies. The City of Laramie, Wyoming’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 City of Laramie, Wyoming’s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. ---PAGE BREAK--- 9 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 OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. City of Laramie, Wyoming November 23, 2013 ---PAGE BREAK--- CITY OF LARAMIE, WYOMING 10 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2013 1. Summary of Auditor’s results: The auditor’s report expresses an unmodified opinion on the financial statements of the City of Laramie, Wyoming. One significant deficiency disclosed during the audit of the financial statements is reported in the 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. No material weaknesses are reported. No instances of noncompliance material to the financial statements of the City of Laramie, Wyoming, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. One significant deficiency in internal control over major federal award programs disclosed during the audit is reported in the Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over compliance Required by OMB Circular A-133. No material weaknesses are reported. The auditor’s report on compliance for the major federal programs for the City of Laramie, Wyoming expresses an unmodified opinion on all major federal programs. Audit findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-133 are reported in this schedule. The following was determined to be a major program: Federal CFDA Federal Grantor/Pass-Through Grantor/Program/Title Number Expenditures Federal Highway Administration Passed through Wyoming Department of Transportation Highway Planning and Construction 20.205 200,000 $ The dollar threshold used to distinguish between Type A and Type programs was $300,000. The City of Laramie, Wyoming qualifies as a low risk auditee. (Continued) ---PAGE BREAK--- CITY OF LARAMIE, WYOMING 11 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2013 (Continued) 2. Findings relating to the financial statements which are required to be reported in accordance with Government Auditing Standards: 2013-001 Authorized check signors Condition: A former City Council member’s signature continued to be printed on checks up to four months subsequent to the date the council member left office. Criteria: Internal Controls should be in place that provide reasonable assurance that only signatures of currently authorized individuals are being printed on checks through the City of Laramie, Wyoming’s check signing software. Cause: Although management repeatedly made efforts to remove the signature from the check signing software, the software company did not get the signor’s signature removed until months later. Effect: Because of the failure to remove the signature from the check signing software, the former council member’s signature was being printed on checks as an authorized signor after the council member left office. Recommendation: Procedures should be implemented to prevent outdated, unauthorized signatures from being printed on checks through the check signing software. Views of Responsible Officials and Planned Corrective Actions: The City of Laramie, Wyoming agrees with the finding and the recommended procedures have been implemented. 3. Findings and questioned costs: No such findings