Full Text
CITY OF SALEM, MASSACHUSETTS REPORTS ON FEDERAL AWARD PROGRAMS YEAR ENDED JUNE 30, 2023 ---PAGE BREAK--- CITY OF SALEM, MASSACHUSETTS REPORTS ON FEDERAL AWARD PROGRAMS YEAR ENDED JUNE 30, 2023 TABLE OF CONTENTS Page 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 Report on compliance for each major federal program and report on internal control over compliance required by the Uniform Guidance 3 Report on the Schedule of Expenditures of Federal Awards required by the Uniform Guidance 6 Schedule of expenditures of federal awards 7 Notes to schedule of expenditures of federal awards 10 Schedule of findings and questioned costs 11 ---PAGE BREAK--- 1 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 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 Independent Auditor’s Report To the Honorable Mayor and members of the City Council City of Salem, Massachusetts 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, each major fund, and the aggregate remaining fund information of the City of Salem, Massachusetts, as of and for the year ended June 30, 2023, (except for the Salem Contributory Retirement System which is as of and for the year ended December 31, 2022) and the related notes to the financial statements, which collectively comprise the City of Salem, Massachusetts’ basic financial statements, and have issued our report thereon dated December 22, 2023. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Salem, Massachusetts’ 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 of Salem, Massachusetts’ internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Salem, Massachusetts’ 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 City of Salem, Massachusetts’ 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--- 2 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Salem, Massachusetts’ 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 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 City of Salem, Massachusetts’ 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 of Salem, Massachusetts’ internal control and compliance. Accordingly, this communication is not suitable for any other purpose. December 22, 2023 ---PAGE BREAK--- 3 Report on compliance for each major federal program and report on internal control over compliance required by the Uniform Guidance INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE Independent Auditor’s Report To the Honorable Mayor and Members of the City Council City of Salem, Massachusetts Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program We have audited the City of Salem, Massachusetts’ compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City of Salem, Massachusetts’ major federal programs for the year ended June 30, 2023. The City of Salem, Massachusetts’ major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. In our opinion, the City of Salem, Massachusetts 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, 2023. Basis for Opinion on Each Major Federal Program 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). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City of Salem, Massachusetts and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City of Salem, Massachusetts’ compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City of Salem, Massachusetts’ federal programs. ---PAGE BREAK--- 4 Auditor’s Responsibility for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City of Salem, Massachusetts’ compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City of Salem, Massachusetts’ compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City of Salem, Massachusetts’ compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. Obtain an understanding of the City of Salem, Massachusetts’ internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances 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 the City of Salem, Massachusetts’ internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on 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. ---PAGE BREAK--- 5 Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. 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. February 23, 2024 ---PAGE BREAK--- 6 Report on the Schedule of Expenditures of Federal Awards required by the Uniform Guidance REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE Independent Auditor’s Report To the Honorable Mayor and Members of the City Council City of Salem, Massachusetts Report on Schedule of Expenditures of Federal Awards Required by 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 City of Salem, Massachusetts’ as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City of Salem, Massachusetts’ basic financial statements. We issued our report thereon dated December 22, 2023, 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. December 22, 2023 ---PAGE BREAK--- Federal Assistance Pass-Through Amount Passed Listing Entity Identifying Through to Federal Grantor/Pass-Through Grantor/Program or Cluster Title Number Number Sub-Recipients Expenditures CHILD NUTRITION CLUSTER: U.S. DEPARTMENT OF AGRICULTURE: Passed through the Massachusetts Department of Elementary and Secondary Education: Non-Cash Assistance (Commodities): National School Lunch 10.555 05-258 $ - $ 298,072 Cash Assistance: National School Lunch 10.555 05-258 - 1,788,649 Total National School Lunch - 2,086,721 Cash Assistance: School Breakfast 10.553 05-258 - 761,154 Summer Food Service 10.559 05-258 - 102,206 Fresh Fruit and Vegetable 10.582 05-258 - 131,686 TOTAL CHILD NUTRITION - 3,081,767 COMMUNITY DEVELOPMENT BLOCK GRANTS CLUSTER: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: Direct Programs: Community Development Block Grant/Entitlement 14.218 Not Applicable 158,606 995,942 COVID-19 - Community Development Block Grant/Entitlement 14.218 Not Applicable - 374,859 TOTAL COMMUNITY DEVLOPMENT BLOCK GRANTS 158,606 1,370,801 EMPLOYMENT SERVICE CLUSTER: U.S. DEPARTMENT OF LABOR: Passed through the Massachusetts Executive Office of Labor and Workforce Development: Employment Service/Wagner Peyser Funded Activities (Fiscal Year 17.207 CT EOL 22CCSALEWP - 59,575 Jobs for Veterans State Grants (Fiscal Year 17.801 23CCSALEVETSUI-DVOP - 6,401 TOTAL EMPLOYMENT SERVICE - 65,976 WORKFORCE INNOVATION AND OPPORTUNITY ACT (WIOA) CLUSTER: U.S. DEPARTMENT OF LABOR: Passed through Massachusetts Executive Office of Labor and Workforce Development: WIOA - Adult Program (Fiscal Year 17.258 CT EOL 23CCSALEWIA - 199,108 WIOA - Adult Program (Fiscal Year 17.258 CT EOL 22CCSALEWIA - 375,983 Total WIOA - Adult - 575,091 WIOA - Youth Activities (Fiscal Year 17.259 CT EOL 23CCSALEWIA - 357,921 WIOA - Youth Activities (Fiscal Year 17.259 CT EOL 22CCSALEWIA - 322,503 Total WIOA - Youth - 680,424 WIOA - Dislocated Worker Formula Grants (Fiscal Year 17.278 CT EOL 23CCSALEWIA - 356,101 WIOA - Dislocated Worker Formula Grants (Fiscal Year 17.278 CT EOL 22CCSALEWIA - 293,030 Total WIOA - Dislocated Worker Formula - 649,131 TOTAL WORKFORCE INNOVATION AND OPPORTUNITY ACT CLUSTER…………………… - 1,904,646 HIGHWAY SAFETY CLUSTER: U. S. DEPARTMENT OF TRANSPORTATION: Passed through Massachusetts Executive Office of Public Safety and Security: State and Community Highway 20.600 - 12,134 National Priority Safety 20.616 - 219 TOTAL HIGHWAY SAFETY - 12,353 SPECIAL EDUCATION CLUSTER: U.S. DEPARTMENT OF EDUCATION: Passed through the Massachusetts Department of Elementary and Secondary Education: Special Education Grants to States (IDEA, Part B) (Fiscal Year 84.027 240-[PHONE REDACTED]-0258 - 961,127 Special Education Grants to States (IDEA, Part B) (Fiscal Year 84.027 645-[PHONE REDACTED]-0258 - 124,467 COVID-19 - Special Education Grants to States (IDEA, Part B) (Fiscal Year 84.027 252-[PHONE REDACTED]-0258 - 174,929 Special Education Grants to States (IDEA, Part B) (Fiscal Year 84.027 244-[PHONE REDACTED]-0258 - 20,000 Special Education Grants to States (IDEA, Part B) (Fiscal Year 84.027 240-[PHONE REDACTED]-0258 - 192,841 Special Education Grants to States (IDEA, Part B) (Fiscal Year 84.027 240-[PHONE REDACTED]-0258 - 2,249 Total Special Education Grants to States (IDEA, Part - 1,475,613 Special Education Preschool Grants (Fiscal Year 84.173 262-[PHONE REDACTED]-0258 - 49,878 Special Education Preschool Grants (Fiscal Year 84.173 262-[PHONE REDACTED]-0258 - 2,768 COVID-19 - Special Education Preschool Grants (IDEA, Preschool) (Fiscal Year 2022)……… 84.173 264-[PHONE REDACTED]-0258 - 20,729 Total Special Education Preschool - 73,375 TOTAL SPECIAL EDUCATION - 1,548,988 (Continued) SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2023 City of Salem, Massachusetts 7 Reports on Federal Award Programs ---PAGE BREAK--- Federal Assistance Pass-Through Amount Passed Listing Entity Identifying Through to Federal Grantor/Pass-Through Grantor/Program or Cluster Title Number Number Sub-Recipients Expenditures SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2023 AGING CLUSTER: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES: Passed through the North Shore Elder Services, Inc.: Special Programs for the Aging Title III, Part B Grants for Supportive Services and Senior 93.044 15COA258000000002015 - 27,829 Special Programs for the Aging Title III, Part C Nutrition 93.045 15COA258000000002015 - 1,584 TOTAL AGING - 29,413 DIRECT PROGRAMS: U.S. DEPARTMENT OF COMMERCE: Direct Program: Economic Adjustment 11.307 Not Applicable - 339,871 U.S. DEPARTMENT OF DEFENSE: Direct Program: ROTC Language and Culture Training 12.357 Not Applicable - 109,067 U.S. DEPARTMENT OF JUSTICE: Direct Program: Bulletproof Vest Partnership 16.607 Not Applicable - 19,529 U.S. DEPARTMENT OF TREASURY: Direct Program: COVID-19 - Coronavirus State and Local Fiscal Recovery 21.027 Not Applicable - 3,849,763 U.S. ENVIROMENTAL PROTECTION AGENCY: Direct Program: Brownfield Assessment & Cooperative Cleanup 66.818 Not Applicable - 1,843 U.S. DEPARTMENT OF HOMELAND SECURITY: Direct Program: Port Security Grant 97.056 Not Applicable - 22,542 PASS-THROUGH PROGRAMS: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: Passed through the North Shore Home Consortium: Home Investment Partnership 14.239 M19-DC250216 - 115,897 U.S. DEPARTMENT OF THE INTERIOR: Passed though the Massachusetts Division of Marine Fisheries: Clean Vessel 15.616 CVA REIMBURSEMENT - 18,632 Passed through the Massachusetts Secretary of State: Historic Preservation Fund 15.904 PVSEC480020351008000 - 18,918 Passed through the Massachusetts Department of Environmental Affairs: Outdoor Recreation Acquisition, Development and 15.916 CITYSALEMCVAEQEP2022 - 179,823 TOTAL U.S. DEPARTMENT OF THE - 217,373 U.S. DEPARTMENT OF LABOR: Passed through the Massachusetts Executive Office of Labor and Workforce Development: Unemployment 17.225 CT EOL 23CCSALENEGREA - 18,401 Trade Adjustment Assistance (Fiscal Year 17.245 CT EOL 22CCSALETRADE - 30,308 Trade Adjustment Assistance (Fiscal Year 17.245 22CCSAELTRADE-TAA-CM-22-01 - 10,885 Total Trade Adjustment - 41,193 Workforce Investment Act - National Emergency Grants (Fiscal Year 17.277 Not Available - 24,918 Apprenticeship USA Grants (Fiscal Year 17.285 FY23-COS-001 - 232,919 Apprenticeship USA Grants (Fiscal Year 17.285 FY22-COS-001 - 68,687 Total Apprenticeship USA - 301,606 TOTAL U.S. DEPARTMENT OF - 386,118 (Continued) City of Salem, Massachusetts 8 Reports on Federal Award Programs ---PAGE BREAK--- Federal Assistance Pass-Through Amount Passed Listing Entity Identifying Through to Federal Grantor/Pass-Through Grantor/Program or Cluster Title Number Number Sub-Recipients Expenditures SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2023 U.S. DEPARTMENT OF EDUCATION: Passed through the Massachusetts Executive Office of Labor and Workforce Development: Adult Basic Education - Basic Grants to 84.002 20CCSALEWP-W-PRTN 20 - 5,070 Passed through the Massachusetts Department of Elementary and Secondary Education: Title I Grants to Local Educational Agencies (Fiscal Year 84.010 305-[PHONE REDACTED]-0258 - 979,103 Title I Grants to Local Educational Agencies (Fiscal Year 84.010 320-[PHONE REDACTED]-0258 - 39,320 Title I Grants to Local Educational Agencies (Fiscal Year 84.010 305-[PHONE REDACTED]-0258 - 176,786 Title I Grants to Local Educational Agencies (Fiscal Year 84.010 305-[PHONE REDACTED]-0258 - 23,969 Total Title I Grants to Local Educational - 1,219,178 Career and Technical Education Basic Grants to States (Fiscal Year 84.048 400-[PHONE REDACTED]-0258 - 50,956 Career and Technical Education Basic Grants to States (Fiscal Year 84.048 422-[PHONE REDACTED]-0258 - 29,610 Career and Technical Education Basic Grants to States (Fiscal Year 84.048 400-[PHONE REDACTED]-0258 - 24,171 Career and Technical Education Basic Grants to States (Fiscal Year 84.048 400-[PHONE REDACTED]-0258 - 66 Total Career and Technical Education Basic Grants to - 104,803 Passed through Massachusetts Executive Office of Labor and Workforce Development: Education for Homeless Children and Youth (Fiscal Year 84.196 310-[PHONE REDACTED]-0258 - 8,163 Education for Homeless Children and Youth (Fiscal Year 84.196 310-[PHONE REDACTED]-0258 - 8,069 Total Education for Homeless Children and - 16,232 Twenty-First Century Community Learning Centers (Fiscal Year 84.287 645-[PHONE REDACTED]-0258 - 195,274 Twenty-First Century Community Learning Centers (Fiscal Year 84.287 646-[PHONE REDACTED]-0258 - 80,380 Twenty-First Century Community Learning Centers (Fiscal Year 84.287 647-[PHONE REDACTED]-0258 - 81,181 Twenty-First Century Community Learning Centers (Fiscal Year 84.287 646-[PHONE REDACTED]-0258 - 8,674 Total Twenty-First Century Community Learning - 365,509 English Language Acquisition Grants (Fiscal Year 84.365 180-[PHONE REDACTED]-0258 - 4,466 English Language Acquisition Grants (Fiscal Year 84.365 180-[PHONE REDACTED]-0258 - 56,745 English Language Acquisition Grants (Fiscal Year 84.365 180-[PHONE REDACTED]-0258 - 53,121 Total English Language Acquisition - 114,332 Supporting Effective Instruction State Grants (Fiscal Year 84.367 140-[PHONE REDACTED]-0258 - 82,449 Supporting Effective Instruction State Grants (Fiscal Year 84.367 140-[PHONE REDACTED]-0258 - 68,928 Supporting Effective Instruction State Grants (Fiscal Year 84.367 140-[PHONE REDACTED]-0258 - 2,500 Total Supporting Effective Instruction State - 153,877 Comprehensive Literacy Development (Fiscal Year 84.371 509-[PHONE REDACTED]-0258 - 167,212 Comprehensive Literacy Development (Fiscal Year 84.371 509-[PHONE REDACTED]-0258 - 87,085 Total Comprehensive Literacy - 254,297 Student Support and Academic Enrichment (Fiscal Year 84.424 309-[PHONE REDACTED]-0258 - 19,923 Student Support and Academic Enrichment (Fiscal Year 84.424 309-[PHONE REDACTED]-0258 - 67,200 Student Support and Academic Enrichment (Fiscal Year 84.424 309-[PHONE REDACTED]-0258 - 44,896 Total Student Support and Academic - 132,019 COVID-19 - Education Stabilization Fund (Fiscal Year 84.425D 113-[PHONE REDACTED]-0258 - 17,137 COVID-19 - Education Stabilization Fund (Fiscal Year 84.425D 115-[PHONE REDACTED]-0258 - 663,595 COVID-19 - Education Stabilization Fund (Fiscal Year 84.425U 119-[PHONE REDACTED]-0258 - 3,972,694 COVID-19 - Education Stabilization Fund (Fiscal Year 84.425D 210-[PHONE REDACTED]-0258 - 110,728 COVID-19 - Education Stabilization Fund (Fiscal Year 84.425D 324-[PHONE REDACTED]-0258 - 3,694 COVID-19 - Education Stabilization Fund (Fiscal Year 84.425D 332-[PHONE REDACTED]-0258 - 172,955 COVID-19 - Education Stabilization Fund (Fiscal Year 84.425D 344-[PHONE REDACTED]-0258 - 56,504 COVID-19 - Education Stabilization Fund (Fiscal Year 84.425C 525-[PHONE REDACTED]-0258 - 100,000 Total COVID-19 - Education Stabilization - 5,097,307 TOTAL U.S. DEPARTMENT OF - 7,462,624 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES: Passed through the Massachusetts Department of Elementary and Secondary Education: Teenage Pregnancy Prevention Program (Fiscal Year 93.297 717-[PHONE REDACTED]-0258 - 4,998 Improving Student Health and Academic Achievement (Fiscal Year 93.981 650-[PHONE REDACTED]-0258 - 10,000 Passed through Massachusetts Executive Office of Health and Human Services: Cooperative Agreement for Emergency Response - Public Health Crisis 93.354 INTF3202P01191929134 - 699,700 COVID-19 - Family Violence Prevention and Services/State Domestic 93.591 INTF3430P01226127032 - 138,871 TOTAL U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES……………………………. - 853,569 U.S. DEPARTMENT OF HOMELAND SECURITY: Passed through Massachusetts Emergency Management Agency: COVID-19 Disaster Grants - Public Assistance (Presidentially Declared Disasters)…………… 97.036 CTFEMA4496SALEM01291 - 153,902 $ 158,606 $ 21,546,042 (Concluded) See notes to schedule of expenditures of federal awards. City of Salem, Massachusetts 9 Reports on Federal Award Programs ---PAGE BREAK--- Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2023 City of Salem, Massachusetts 10 Reports on Federal Award Programs Note 1 – Basis of Presentation Notes to schedule of expenditures of federal awards The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal award activity of the City of Salem, Massachusetts (City) under programs of the federal government for the year ended June 30, 2023. 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 of Salem, Massachusetts, 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 The accounting and reporting policies of the City of Salem, Massachusetts are set forth below: a) Basis of Accounting – The accompanying Schedule of Expenditures of Federal Awards is presented on the modified accrual basis of accounting. Accordingly, expenditures are recognized when the liability is incurred. 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. b) Cash Assistance – School Breakfast and National School Lunch Programs – Program expenditures represent federal reimbursement for meals provided during the year. c) Non-Cash Assistance (Commodities) – National School Lunch Program – Program expenditures represent the value of donated foods received during the year. d) Disaster grants have been recorded the year that the grant was approved. e) The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Note 3 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) After a presidentially declared disaster, the Federal Emergency Management Agency (FEMA) provides disaster grants to reimburse eligible costs related to the disaster. The federal government makes reimbursements in the form of cost-shared grants that require state matching funds. In 2023, the City received $153,902 for costs incurred throughout 2022, which are reported as expenditures under FALN 97.036 in 2023, the year the grant was approved. ---PAGE BREAK--- Schedule of Findings and Questioned Costs Year Ended June 30, 2023 City of Salem, Massachusetts 11 Reports on Federal Award Programs A. Summary of Auditor’s Results Schedule of findings and questioned costs 1. The auditor’s report expresses an unmodified opinion on the financial statements of the City of Salem, Massachusetts. 2. No material weaknesses or significant deficiencies relating to the audit of the basic financial statements are reported in the 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. 3. No instances of noncompliance material to the financial statements of the City of Salem, Massachusetts were disclosed during the audit. 4. No material weaknesses or significant deficiencies relating to the audit of the major federal award programs are reported in the Report on Compliance for Each Major Federal Program; Report on Internal Control over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance. 5. The auditor’s report on compliance for the major federal award programs for the City of Salem, Massachusetts expresses an unmodified opinion on all major federal award programs. 6. There were no audit findings relative to the major federal award programs for the City of Salem, Massachusetts. 7. The programs tested as major grants were the COVID-19 Coronavirus State and Local Fiscal Recovery Funds (FALN 21.027) , Title 1 Grants to Local Educational Agencies (FALN 84.010), The Special Education Cluster (FALN 84.027, 84.173) and The COVID-19 - Educational Stabilization Fund (FALN 84.425). 8. The threshold for distinguishing Types A and B programs was $750,000. 9. The City of Salem, Massachusetts was not determined to be a low-risk auditee. B. Findings-Financial Statements Audit None. C. Findings and Questioned Costs-Major Federal Award Programs None. D. Summary Schedule of Prior Audit Findings None.