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CITY OF SALEM, MASSACHUSETTS REPORTS ON FEDERAL AWARD PROGRAMS YEAR ENDED JUNE 30, 2018 ---PAGE BREAK--- CITY OF SALEM, MASSACHUSETTS REPORTS ON FEDERAL AWARD PROGRAMS YEAR ENDED JUNE 30, 2018 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; report on internal control over compliance; and report on schedule of expenditures of federal awards required by the Uniform Guidance 3 Schedule of expenditures of federal awards 6 Notes to schedule of expenditures of federal awards 9 Schedule of findings and questioned costs 10 ---PAGE BREAK--- This page intentionally left blank. ---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 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, 2018, 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 18, 2018. 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) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City 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’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--- 2 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 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. 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’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. December 18, 2018 ---PAGE BREAK--- 3 REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXEPNDITURES OF FEDERAL REWARED 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 We have audited the City of Salem, Massachusetts’ 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 City of Salem, Massachusetts’ major federal programs for the year ended June 30, 2018. 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. 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 City of Salem, Massachusetts’ major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of Salem, Massachusetts’ compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City of Salem, Massachusetts’ compliance. ---PAGE BREAK--- 4 Opinion on Each Major Federal Program 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, 2018. Report on Internal Control Over Compliance Management of the City of Salem, Massachusetts, 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 Salem, Massachusetts’ 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 Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Salem, Massachusetts’ internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 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 Uniform Guidance. Accordingly, this report is not suitable for any other purpose. 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, each major fund, and the aggregate remaining fund information of the City of Salem, Massachusetts, as of the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the City of Salem, Massachusetts’s basic financial statements. We issued our report thereon dated December 18, 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 is presented for purposes of additional analysis as required by the Uniform Guidance and is not 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 ---PAGE BREAK--- 5 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 18, 2018 ---PAGE BREAK--- Federal Pass-Through Amount Passed CFDA 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 Massachusetts Department of Elementary and Secondary Education: Non-Cash Assistance (Commodities): National School Lunch 10.555 05-258 $ - $ 210,938 Cash Assistance: National School Lunch 10.555 05-258 - 1,456,134 After School Snack 10.555 05-258 - 8,093 Total National School Lunch - 1,675,165 Cash Assistance: School Breakfast 10.553 05-258 - 694,709 TOTAL CHILD NUTRITION - 2,369,874 EMPLOYMENT SERVICE CLUSTER: U.S. DEPARTMENT OF LABOR: Passed through State Division of Career Services - Workforce Development: Employment Service/Wagner Peyser Funded Activities (Fiscal year 2018)……… 17.207 18CCSALEWP-WP 18 - 45,711 Employment Service/Wagner Peyser Funded Activities (Fiscal year 2017)……… 17.207 18CCSALEWP-WP 17 - 16,811 Total Employment Service/Wagner Peyser Funded Activities………………… - 62,522 Disabled Veterans' Outreach Program (DVOP) (Fiscal year 17.801 18CCSALEVETSUI-DVOP18 - 28,712 TOTAL EMPLOYMENT SERVICE - 91,234 WORKFOCE INNOVATION AND OPPORTUNITY ACT (WIOA) CLUSTER: U.S. DEPARTMENT OF LABOR: Passed through State Division of Career Services - Workforce Development: WIOA - Adult Program (Fiscal Year 17.258 CT EOL 18CCSALEWIA - 302,549 WIOA - Adult Program (Fiscal Year 17.258 17CCSALEWIA-REG 18 - 45,111 WIOA - Adult Program (Fiscal Year 17.258 CT EOL 17CCSALEWIA - 349,928 Total WIOA - Adult - 697,588 WIOA - Youth Activities (Fiscal Year 17.259 CT EOL 18CCSALEWIA 235,417 443,832 WIOA - Youth Activities (Fiscal Year 17.259 CT EOL 17CCSALEWIA - 142,621 Total WIOA - Youth 235,417 586,453 WIOA - Dislocated Worker Formula Grants Worker Formula Grants (Fiscal Year 17.278 CT EOL 18CCSALEWIA - 282,231 WIOA - Dislocated Worker Formula Grants Worker Formula Grants (Fiscal Year 17.278 18CCSALEWIA-RRSS - 38,081 WIOA - Dislocated Worker Formula Grants Worker Formula Grants (Fiscal Year 17.278 CT EOL 17CCSALEWIA - 239,006 Total WIOA - Dislocated Worker Formula - 559,318 TOTAL WORKFORCE INNOVATION AND OPPORTUNITY ACT CLUSTER…… 235,417 1,843,359 SPECIAL EDUCATION CLUSTER: U.S. DEPARTMENT OF EDUCATION: Passed through Massachusetts Department of Elementary and Secondary Education: Special Education Grants to States (IDEA, Part B) (Fiscal Year 2018)…………… 84.027 240-[PHONE REDACTED]-0258 - 1,027,906 Special Education Grants to States (IDEA, Part B) (Fiscal Year 2018)…………… 84.027 274-[PHONE REDACTED]-0258 - 5,000 Special Education Grants to States (IDEA, Part B) (Fiscal Year 2018)…………… 84.027 248-[PHONE REDACTED]-0258 - 10,500 Special Education Grants to States (IDEA, Part B) (Fiscal Year 2017)…………… 84.027 240-[PHONE REDACTED]-0258 - 121,929 Total Special Education Grants to States (IDEA, Part - 1,165,335 Passed through Massachusetts Department of Early Education and Care: Special Education Preschool Grants (Fiscal Year 84.173 26218SALEMPUBLICPAY - 46,328 Special Education Preschool Grants (Fiscal Year 84.173 26217SALEMPUBLICPAY - 9,072 Total Special Education Preschool - 55,400 TOTAL SPECIAL EDUCATION - 1,220,735 AGING CLUSTER: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES: Passed through North Shore Elder Services, Inc.: Special Programs for the Aging Title III, Part B Grants for Supportive Services and Senior 93.044 15COA258000000002015 - 8,446 Special Programs for the Aging Title III, Part C Nutrition Services………………… 93.045 15COA258000000002015 - 15,307 TOTAL AGING - 23,753 (Continued) FOR THE YEAR ENDED JUNE 30, 2018 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS City of Salem, Massachusetts 6 Report on Federal Award Programs ---PAGE BREAK--- Federal Pass-Through Amount Passed CFDA Entity Identifying Through to Federal Grantor/Pass-Through Grantor/Program or Cluster Title Number Number Sub-Recipients Expenditures FOR THE YEAR ENDED JUNE 30, 2018 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS OTHER PROGRAMS: U.S. DEPARTMENT OF DEFENSE: Direct Program: ROTC Language and Culture Training 12.357 N/A - 62,354 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: Direct Program: Community Development Block Grant/Entitlement 14.218 N/A 221,229 1,247,649 U.S. DEPARTMENT OF JUSTICE: Direct Program: Grants to Encourage Arrest Policies and Enforcement of Protection Orders…. 16.590 N/A - 111,525 Local Law Enforcement Trust Funds 16.592 N/A - 21,726 Bulletproof Vest Partnership 16.607 N/A - 1,193 Public Safety Partnership and Community Policing 16.710 N/A - 118,458 Edward Byrne Memorial Justice Assistance Grant Program……………………… 16.738 N/A - 13,080 TOTAL U.S. DEPARTMENT OF - 265,982 U.S. ENVIROMENTAL PROTECTION AGENCY: Direct Program: Brownfield Assessment & Cooperative Cleanup Program………………………… 66.818 N/A - 47,250 U.S. DEPARTMENT OF HOMELAND SECURITY: Direct Program: Port Security Grant 97.056 N/A - 84,959 PASS-THROUGH PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE: Passed through Massachusetts Department of Elementary and Secondary Education: Child Nutrition Discretionary Grants Limited Availability…………………………… 10.579 722-009-7-0258 - 9,960 Fresh Fruit and Vegetable Program (Fiscal Year 10.582 05-258 - 66,471 Fresh Fruit and Vegetable Program (Fiscal Year 10.582 05-258 - 4,718 Total Fresh Fruit and Vegetable - 71,189 TOTAL U.S. DEPARTMENT OF AGRICULTURE…………………………………… - 81,149 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: Passed through Massachusetts Office for Communities and Development: Home Investment Partnership 14.239 M-15-DC-250216 - 37,658 U.S. DEPARTMENT OF THE INTERIOR: Passed through the Massachusetts Historical Commission: Historic Preservation Fund 15.904 05260113 - 22,717 U.S. DEPARTMENT OF LABOR: Passed through State Division of Career Services - Workforce Development: Unemployment 17.225 17CCSALENEGREA-REA7-18 - 65,534 Trade Adjustment 17.245 16CCSALETRADE-TAA-CM17 - 28,301 H-1b Job Training 17.268 16CCSALENEGREA-APPR 17 12,466 91,271 Apprenticeship USA 17.285 17CCSALENEGREA-APPEXP 18 97,600 178,446 TOTAL U.S. DEPARTMENT OF 110,066 363,552 U.S. DEPARTMENT OF TRANSPORTATION: Passed through Highway Safety Bureau: National Priority Safety 20.616 2017SALEMEUDL - 4,300 U.S. DEPARTMENT OF TRANSPORTATION: Passed through Massachusetts Department of Conservation and Recreation: Recreational Trails 20.219 P17-3138-G34A - 53,200 U.S. DEPARTMENT OF EDUCATION: Passed through Massachusetts Department of Elementary and Secondary Education: Title I Grants to Local Educational Agencies (Fiscal Year 84.010 305-[PHONE REDACTED]-0258 - 885,036 Title I Grants to Local Educational Agencies (Fiscal Year 84.010 323-[PHONE REDACTED]-0258 - 2,973 Title I Grants to Local Educational Agencies (Fiscal Year 84.010 305-[PHONE REDACTED]-0258 - 263,496 Title I Grants to Local Educational Agencies (Fiscal Year 84.010 323-050-7-0258 - 28,332 Title I Grants to Local Educational Agencies (Fiscal Year 84.010 305-[PHONE REDACTED]-0258 - 970 Title I Grants to Local Educational Agencies (Fiscal Year 84.010 305-[PHONE REDACTED]-0258-18 - 12,086 Total Title I Grants to Local Educational Agencies……………………………… - 1,192,893 (Continued) City of Salem, Massachusetts 7 Report on Federal Award Programs ---PAGE BREAK--- Federal Pass-Through Amount Passed CFDA Entity Identifying Through to Federal Grantor/Pass-Through Grantor/Program or Cluster Title Number Number Sub-Recipients Expenditures FOR THE YEAR ENDED JUNE 30, 2018 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Career and Technical Education Basic Grants to States (Fiscal Year 2018)…… 84.048 400-[PHONE REDACTED]-0258 - 42,285 Career and Technical Education Basic Grants to States (Fiscal Year 2017)…… 84.048 400-056-7-0258 - 17,468 Total Career and Technical Education - Basic Grants to States……………… - 59,753 Education for Homeless Children and Youth (Fiscal Year 84.196 310-[PHONE REDACTED]-0258 - 5,998 Education for Homeless Children and Youth (Fiscal Year 84.196 310-005-7-0258 - 17,168 Total Education for Homeless Children and - 23,166 Twenty-First Century Community Learning Centers (Fiscal Year 2018)………… 84.287 245-005-8-0258 - 11,240 Twenty-First Century Community Learning Centers (Fiscal Year 2018)………… 84.287 647-043-8-0258 - 132,407 Twenty-First Century Community Learning Centers (Fiscal Year 2018)………… 84.287 244-[PHONE REDACTED]-0258 - 9,180 Twenty-First Century Community Learning Centers (Fiscal Year 2018)………… 84.287 645-[PHONE REDACTED]-0258 - 508,886 Twenty-First Century Community Learning Centers (Fiscal Year 2017)………… 84.287 245-026-7-0258 - 1,620 Twenty-First Century Community Learning Centers (Fiscal Year 2017)………… 84.287 647-114-7-0258 - 74,766 Total Twenty-First Century Community Learning Centers……………………… - 738,099 English Language Acquisition Grants (Fiscal Year 84.365 184-[PHONE REDACTED]-0258 - 1,575 English Language Acquisition Grants (Fiscal Year 84.365 180-[PHONE REDACTED]-0258 - 22,124 English Language Acquisition Grants (Fiscal Year 84.365 180-[PHONE REDACTED]-0258 - 80,472 Total English Language Acquisition - 104,171 Improving Teacher Quality State Grants (Fiscal Year 84.367 140-[PHONE REDACTED]-0258 - 33,127 Improving Teacher Quality State Grants (Fiscal Year 84.367 140-[PHONE REDACTED]-0258 - 131,900 Improving Teacher Quality State Grants (Fiscal Year 84.367 140-[PHONE REDACTED]-0258-16 - 101 Total Improving Teacher Quality State - 165,128 DC School Choice Incentive 84.370 144-039-7-0258 - 30,000 Title 4A Student Support and Academic Enrichment……………………………… 84.424 309-[PHONE REDACTED]-0258 - 7,800 Hurricane Education 84.938 INTF969T201931781099 - 67,568 TOTAL U.S. DEPARTMENT OF - 2,388,578 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES: Passed through Center for Disease Control and Prevention: Cooperative Agreements to Promote Adolescent Health Through School Based Surveillance (Fiscal Year 93.079 649-[PHONE REDACTED]-0258 - 4,858 Cooperative Agreements to Promote Adolescent Health Through School Based Surveillance (Fiscal Year 93.079 649-012-7-0258 - 870 Total Cooperative Agreements to Promote Adolescent Health Through School Based Surveillance…………………………………… - 5,728 Passed through Massachusetts Department of Elementary and Secondary Education: Teenage Pregnancy Prevention Program (Fiscal Year 93.297 716-[PHONE REDACTED]-0258 - 35,649 Teenage Pregnancy Prevention Program (Fiscal Year 93.297 716-004-7-0258 - 23,325 Total Teenage Pregnancy Prevention - 58,974 Passed through Executive Office of Health and Human Services: Strengthening Public Health Infrastructure…………………………………………… 93.507 INTF1100P01203816184 - 31,189 TOTAL U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES…………… - 95,891 U.S. DEPARTMENT OF HOMELAND SECURITY: Passed through Massachusetts Emergency Management Agency: Disaster Grants - Public Assistance (Presidentially Declared Disasters)………… 97.036 CTFEMA4214SLAEM - 332,482 Hazard Mitigation Grant 97.039 HMGP189516-SPRING - 436,828 Emergency Management Performance Grants (Fiscal Year 97.042 FY18EMPG1700000SALEM - 14,460 Assistance to Firefighters 97.044 EMW-2016-FO-03341 - 32,228 TOTAL U.S. DEPARTMENT OF HOMELAND SECURITY………………………… - 815,998 $ 566,713 $ 11,120,192 See notes to schedule of expenditures of federal awards. (Concluded) City of Salem, Massachusetts 8 Report on Federal Award Programs ---PAGE BREAK--- Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2018 City of Salem, Massachusetts 9 Report 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 under programs of the federal government for the year ended June 30, 2018. 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 of Salem, Massachusetts. 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) The City of Salem, Massachusetts has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. ---PAGE BREAK--- Schedule of Findings and Questioned Costs Year Ended June 30, 2018 City of Salem, Massachusetts 10 Report 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 are the WIOA Cluster and the Twenty-First Century Community Learning Centers Grant. 8. The threshold for distinguishing Types A and B programs was $750,000. 9. The City of Salem, Massachusetts was 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