CITY OF LOS ANGELES, CALIFORNIA. Single Audit Reports. For the Fiscal Year Ended June 30, 2014

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1 Single Audit Reports

2 Single Audit Reports Table of Contents Pages Introduction to the Organization of the City of Los Angeles... 1 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... 7 Independent Auditor s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Federal Awards Required by OMB Circular A Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs Schedule of Prior Year s Findings... 57

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5 Attachment STATUS OF THE FISCAL YEAR SINGLE AUDIT 1. GENERAL GOVERNMENT Responsible for providing for the health, welfare and public safety of the City including police, fire, public works, building inspections and issuance of permits, City planning, libraries and recreation and parks under the authority of the City Charter. Fiscal Year: July 1 to June 30 Fiscal Year Budget: $7,685,509,000 Fiscal Year Federal Award Expenditures: $449,655,000 Fiscal Year Financial Audit: Completed Fiscal Year Single Audit: Completed Federal Cognizant Agency for Audit: Department of Housing and Urban Development Auditor: Macias Gini & O Connell LLP 2. DEPARTMENT OF AIRPORTS Responsible for the management, supervision and control of the City s airports and airport facilities. Controls its own funds, establishes its own budget and sets rates subject to City Council review. Governed by a Board of Commissioners appointed by the Mayor and confirmed by the City Council. Fiscal Year: July 1 to June 30 Fiscal Year Budget: $4,362,755,000 Fiscal Year Federal Award Expenditures: $31,277,000 Fiscal Year Financial Audit: Completed Fiscal Year Single Audit: Completed Federal Cognizant Agency for Audit: Department of Homeland Security Auditor: Macias Gini & O Connell LLP 3

6 STATUS OF THE FISCAL YEAR SINGLE AUDIT (Continued) 3. HARBOR DEPARTMENT Responsible for the management, supervision, and control of the Port of Los Angeles. Provides for the needs of maritime commerce, navigation, and marine recreations for the citizens of California. Constructs and maintains its own facilities and controls its own funds in accordance with the Charter and State of California Tidelands Trust. Governed by a Board of Commissioners appointed by the Mayor and confirmed by the City Council. Fiscal Year: July 1 to June 30 Fiscal Year Budget: $1,071,114,000 Fiscal Year Federal Award Expenditures: $34,453,000 Fiscal Year Financial Audit: Completed Fiscal Year Single Audit: Completed Federal Oversight Agency for Audit: Department of Homeland Security Auditor: Simpson & Simpson, CPAs 4

7 STATUS OF THE FISCAL YEAR SINGLE AUDIT (Continued) 4. HOUSING AUTHORITY OF THE CITY OF LOS ANGELES Responsible for the elimination of unsafe and unsanitary dwelling units in the City to protect the health and safety of the inhabitants and to develop and administer low-rent housing projects within the City limits. Established by the City Council in accordance with the California Health and Safety Code (Section et seq.) and Section 8 of the Federal Housing Act of Prepares its own budget for the approval by the Board of Housing Authority Commissioners and forwards it to the U.S. Department of Housing and Urban Development for approval in accordance with Federal guidelines. Employs personnel not included in the classified Civil Service established by the Charter and participates in the State Public Employees Retirement System. Fiscal Year: January 1 to December 31 Fiscal Year 2013 Budget: $1,089,562,000 Fiscal Year 2014 Budget: $1,008,314,000 Fiscal Year 2013 Federal Award Expenditures: $1,005,813,000 Fiscal Year 2014 Federal Award Expenditures: $1,077,500,000 (Unaudited) Fiscal Year 2013 Financial and Single Audits: Completed Fiscal Year 2014 Financial and Single Audits: In Process Federal Cognizant Agency for Audit: Department of Housing and Urban Development Auditor: Macias Gini & O Connell LLP 5

8 STATUS OF THE FISCAL YEAR SINGLE AUDIT (Continued) 5. DEPARTMENT OF WATER AND POWER Responsible for supplying the City and its inhabitants with water and electric energy by constructing, operating, and maintaining facilities located throughout the City and Inyo and Mono counties. Governed by a Board of Commissioners appointed by the Mayor and confirmed by the City Council. Controls its own funds, establishes its own budget and sets rates, subject to Council approval. Fiscal Year: July 1 to June 30 Fiscal Year Budget: $2,238,455,000 (Water System) $4,961,511,000 (Power System) Fiscal Year Federal Award Expenditures: $217,392,000 (Water System) $27,656,000 (Power System) Fiscal Year Financial Audit: Completed Fiscal Year Single Audit: Completed Federal Oversight Agencies for Audit: Environmental Protection Agency (Water System) Auditor: KPMG LLP 6

9 Los Angeles 777 S. Figueroa Street, Suite 2500 Los Angeles, CA Sacramento Walnut Creek 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 Members of the City Council City of Los Angeles, California Oakland Century City Newport Beach San Diego Seattle 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 Los Angeles, California (City), as of and for the fiscal year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the City s basic financial statements and have issued our report thereon dated March 31, As discussed in Note 1 to the basic financial statements, effective July 1, 2013, the City adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities. Our report includes a reference to other auditors who audited the financial statements of the following City departments/funds, which are reported as enterprise and pension and other postemployments benefits trust funds: Department of Harbor, Department of Water and Power, Los Angeles Fire and Police Pension System, Los Angeles City Employees Retirement System, and Water and Power Employees Retirement, Disability and Death Benefit Insurance Plans. This report does not include the results of the other auditors testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. The financial statements of the Los Angeles City Employees Retirement System, and Water and Power Employees Retirement, Disability and Death Benefit Insurance Plans were not audited in accordance with Government Auditing Standards. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City 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 City s internal control. Accordingly, we do not express an opinion on the effectiveness of the City s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph 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. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be a material weakness and a significant deficiency.

10 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. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item to be a material weakness. 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. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item to be a significant deficiency. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City 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 s Response to Findings The City s response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. The City 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. Los Angeles, California March 31,

11 Los Angeles 777 S. Figueroa Street, Suite 2500 Los Angeles, CA Sacramento Walnut Creek Independent Auditor s 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 OMB Circular A-133 To the Honorable Members of the City Council City of Los Angeles, California Report on Compliance for Each Major Federal Program We have audited the City of Los Angeles, California s (City) 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 s major federal programs for the fiscal year ended June 30, The City s major federal programs are identified in the summary of auditor s results section of the accompanying schedule of findings and questioned costs. The City s basic financial statements include the operations of the Department of Airports, Harbor Department, and Department of Water and Power, which expended $31,277,000, $34,453,000, and $245,048,000, respectively, in federal awards, which are not included in the schedule of expenditures of federal awards for the fiscal year ended June 30, Our audit, described below, did not include the operations of these departments. We were engaged to perform an audit in accordance with OMB Circular A-133, Audit of States, Local Governments, and Non-Profit Organizations (OMB Circular A-133), and report on the results separately to the Department of Airports. The Harbor Department and the Department of Water and Power engaged other auditors to perform an audit in accordance with OMB Circular A-133. 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 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. 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 s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. Oakland Century City Newport Beach San Diego Seattle

12 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 s compliance. Opinion on Each Major Federal Program In our opinion, the City 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 fiscal year ended June 30, Other Matters The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as items , , , , , and Our opinion on each major federal program is not modified with respect to these matters. The City s response to the noncompliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City 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 City 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 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 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 material weaknesses and significant deficiencies. 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 deficiencies in internal control over compliance described in 10

13 the accompanying schedule of findings and questioned costs as items , , , and to be material weaknesses. 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. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items and to be significant deficiencies. The City s response to the internal control over compliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City 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 OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 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 as of and for the fiscal year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the City s basic financial statements. We issued our report thereon dated March 31, 2015, 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 OMB Circular A-133 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. Los Angeles, California March 31,

14 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS DEPARTMENT OF AGRICULTURE Recreation and Parks State of California - Summer Food Service Program V $ 684,000 $ -- Department of Education for Children Aging California Department of Food Senior Farmers Market Nutrition CA810CA4 120, ,000 and Agriculture Program TOTAL FOR DEPARTMENT OF AGRICULTURE 804, ,000 DEPARTMENT OF COMMERCE Recreation and Parks National Fish and Wildlife Foundation Habitat Conservation , Mayor University of Southern California MBDA Business Center MB11SFR , TOTAL FOR DEPARTMENT OF COMMERCE 110, DEPARTMENT OF DEFENSE Police Direct Donations/Loans of Obsolete DOD Unknown 358, Property TOTAL FOR DEPARTMENT OF DEFENSE 358, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Housing and Community Investment Direct Community Development Block B-14-MC ,648,000 36,976,000 Grants/Entitlement Grants (Notes 6 and 7) and Prior Awards B-08-MN ,922,000 1,298,000 B-11-MN ,084, ,000 Subtotal ,654,000 38,576,000 Housing and Community Investment State of California - Department of Community Development Block Grants/ DRI , Housing and Community Development State's Program and Non-Entitlement Grants in Hawaii (Note 6) Housing and Community Investment Direct Emergency Solutions Grant Program E-14-MC ,319,000 5,189,000 and Prior Awards Housing and Community Investment Direct HOME Investment Partnerships M-14-MC ,265, Program (Notes 6) and Prior Awards See accompanying Notes to Schedule of Expenditures of Federal Awards. 12

15 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS Housing and Community Investment Direct Housing Opportunities for Persons CA-H $ 389,000 $ 369,000 with AIDS (Note 6) CA-H14-F005 12,459,000 12,136,000 and Prior Awards Subtotal ,848,000 12,505,000 Economic Workforce Development Direct Community Development Block Grants B-11-MC B 27,237,000 6,333,000 Section 108 Loan Guarantees (Note 6) and Prior Awards Housing and Community Investment Direct ARRA - Neighborhood Stabilization B-09-LN-CA ,815,000 3,637,000 Program (Note 6) Housing and Community Investment Direct McKinney Act Savings (Note 6) 14.Unknown Unknown 73, Economic Workforce Development Direct Community Challenge Planning Grants CCPCA ,335,000 1,042,000 and the Department of Transportation's TIGER ll Planning Grants Housing and Community Investment Direct Lead Hazard Reduction Demonstration CALHD ,113, Grant Program CALHD ,083, Subtotal ,196, Housing and Community Investment Direct Healthy Homes Production Program CAHHP , TOTAL FOR DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 162,374,000 67,282,000 DEPARTMENT OF THE INTERIOR City Planning State Department of Parks & Historic Preservation Fund , Recreation Grants-In-Aid , Subtotal , TOTAL FOR DEPARTMENT OF THE INTERIOR 30, See accompanying Notes to Schedule of Expenditures of Federal Awards. 13

16 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS DEPARTMENT OF JUSTICE Police Direct Law Enforcement Assistance SW-CAC-1044 $ 9,000 $ -- Narcotics and Dangerous Drugs SW-CAC , Training SW-CAC , SW-CAC , SW-CAC , SW-CAC , SW-CAC , SW-CAC , SW-CAC , SW-CAC , SW-CAC , SW-CAC , SW-CAC , SW-CAC , , R , Subtotal , Police Direct Alcohol, Tobacco, and Firearms LOS-214-AFF 185, Training Assistance SW-CAC , SW-CAC , Subtotal , Police Direct Law Enforcement Assistance - FBI LA-A R 75, Advanced Police Training 28IN-LA , A-LA-C CE-1 15, SW-CAC , SW-CAC , SW-CAC , PL# /HR , D-LA , Unknown 188, Unknown 80, Subtotal ,035, Mayor State of California - Department of Juvenile Accountability Block Grants BSCC , Corrections and Rehabilitation Mayor Direct OVW Technical Assistance Initiative EW-AX-K005 14, Police Direct Missing Children's Assistance MC-FX-K , See accompanying Notes to Schedule of Expenditures of Federal Awards. 14

17 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS Police State of California - Office of Missing Children's Assistance IC $ 99,000 $ -- Emergency Services Subtotal , Police Direct National Institute of Justice Research, DN-BX-K013 43,000 20,000 Evaluation, and Development Project 2012-DN-BX-K ,000 62,000 Grants Subtotal ,000 82,000 City Attorney County of Los Angeles Crime Victim Assistance VW , City Attorney State of California - Office of Crime Victim Assistance UV , Emergency Services UV , Subtotal , Mayor Direct Grants to Encourage Arrest Policies WE-AX , ,000 and Enforcement of Protection Orders Program Police Direct Corrections -Technical Assistance/ JLEO , Clearinghouse JLEO , Subtotal , Police Direct Bulletproof Vest Partnership Program Unknown 66, Police Direct Public Safety Partnership and CKWX , Community Policing Grants 2011CSWX , ULWX0004 2,007, Subtotal ,283, Police State of California - Office of PREA Program: Demonstration Projects PD ,000 95,000 Emergency Services to Establish "Zero Tolerance" Cultures for Sexual Assault in Correctional Facilities Mayor Direct Gang Resistance Education and Training PB-FX-K , ,000 See accompanying Notes to Schedule of Expenditures of Federal Awards. 15

18 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS Police State of California - Office of Edward Byrne Memorial Justice HF $ 164,000 $ 37,000 Emergency Services Assistance Grant Program Cluster with CFDA No City Attorney County of Los Angeles Edward Byrne Memorial Justice Unknown 48, Assistance Grant Program Cluster with CFDA No Mayor Direct Edward Byrne Memorial Justice DJ-BX , ,000 Assistance Grant Program 2011-DJ-BX , ,000 Cluster with CFDA No DJ-BX ,106, ,000 Subtotal ,363,000 1,532,000 Mayor Direct ARRA - Recovery Act - Edward Byrne SB-B ,608, Memorial Justice Assistance Grant (JAG) Program/Grants To Units of Local Government Cluster with CFDA No Subtotal JAG Cluster (16.738, ) 7,971,000 1,532,000 Police Direct DNA Backlog Reduction Program DN-BX-K ,000 12, DN-BX ,000 43,000 Subtotal ,000 55,000 Police State of California - Office of Paul Coverdell Forensic Sciences CQ , Emergency Services Improvement Grant Program CQ , Subtotal , City Attorney Direct Criminal and Juvenile Justice and MO-BX , Mental Health Collaboration Program Police Direct Edward Byrne Memorial DG-BX ,000 18,000 Competitive Grant Program City Attorney Direct Economic High-Tech and DG-BX , Cyber Crime Prevention Police Direct Economic High-Tech and ZP-BX , Cyber Crime Prevention Subtotal , See accompanying Notes to Schedule of Expenditures of Federal Awards. 16

19 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS Mayor Direct Congressionally Recommended Awards DD-BX-0397 $ 81,000 $ 76,000 City Attorney Direct Equitable Sharing Program Unknown 15, Police Direct Equitable Sharing Program Unknown 10,217, Subtotal ,232, TOTAL FOR DEPARTMENT OF JUSTICE 26,803,000 2,505,000 DEPARTMENT OF LABOR Economic Workforce Development State of California-Employment Employment Service/Wagner K , ,000 Development Department Peyser Funder Activities Aging State of California- Senior Community Service TV ,334, Department of Aging Employment Program Economic Workforce Development State of California- Employment Workforce Investment Act (WIA) K , ,000 Development Department Adult Program K ,000 3,000 Cluster with CFDA Nos , K ,103,000 3,103,000 and K ,839,000 6,665,000 Subtotal ,174,000 9,910,000 Economic Workforce Development State of California- Employment WIA Youth Activities K (4,000) -- Development Department Cluster with CFDA Nos , K , and K ,952,000 9,708,000 K ,468, Subtotal ,419,000 9,708,000 Economic Workforce Development South Bay Workforce Investment WIA Dislocated Worker Formula Grants WO-62 2,018,000 1,832,000 Board, Inc. Cluster with CFDA Nos and Economic Workforce Development State of California- Employment WIA Dislocated Worker Formula Grants K ,000 1,000 Development Department Cluster with CFDA Nos and K ,517,000 2,165,000 K ,363,000 5,414,000 Subtotal ,899,000 9,412,000 Subtotal WIA Program Cluster (17.258, , ) 44,492,000 29,030,000 See accompanying Notes to Schedule of Expenditures of Federal Awards. 17

20 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS Economic Workforce Development State of California- Employment ARRA - WIA National Emergency Grants K $ 184,000 $ 155,000 Development Department Economic Workforce Development South Bay Workforce Investment WIA National Emergency Grants W113 7,282,000 5,494,000 Board, Inc. Subtotal ,466,000 5,649,000 Economic Workforce Development Direct Workforce Innovation Fund IF A-6 3,915,000 2,985,000 TOTAL FOR DEPARTMENT OF LABOR 57,511,000 37,810,000 DEPARTMENT OF TRANSPORTATION Recreation and Parks State of California - Highway Planning and HPLUL-5006(507) 2, Department of Transportation Construction Public Works State of California - Highway Planning and Various 47,893, Department of Transportation Construction Transportation State of California - Highway Planning and Various 16,940, Department of Transportation Construction Public Works State of California - ARRA - Highway Planning and ESPL-5006(598) 87, Department of Transportation Construction Transportation State of California - ARRA - Highway Planning and ESPL-5006(674) 651, Department of Transportation Construction ESPL-5006(593) 328, Subtotal ,901, Transportation Direct Federal Transit - Capital Investment Grants CA , Cluster with CFDA No /MOU-WBRTL 4,829, Subtotal ,067, Transportation Direct Federal Transit - Formula Grants CA-95-X ,716, Cluster with CFDA No CA-90-Y ,251, CA-95-X ,200,000 Subtotal ,167, Subtotal Federal Transit Cluster (20.500, ) 17,234, See accompanying Notes to Schedule of Expenditures of Federal Awards. 18

21 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS Aging Los Angeles County Metropolitan Job Access Reverse Commute MOU.JARCLAC08 $ 38,000 $ -- Transportation Authority (LACMTA) Cluster with CFDA No Aging Los Angeles County Metropolitan New Freedom Program MOU.NFLACITY08 9, Transportation Authority (LACMTA) Cluster with CFDA No Subtotal Transit Services Programs Cluster (20.516, ) 47, City Attorney State of California - State and Community Highway Safety AL , Office of Traffic Safety Cluster with CFDA No D , Police State of California - State and Community Highway Safety PT , Office of Traffic Safety Cluster with CFDA No PT ,100, Subtotal ,764, Housing and Community Investment State of California- Child Safety and Child Booster Seats OP , Office of Traffic Safety Incentive Grants Cluster with CFDA No Subtotal Highway Safety Cluster (20.600, ) 1,902, Housing and Community Investment State of California- National Priority Safety Programs OP , Office of Traffic Safety Police State of California- Minimum Penalties for Repeat SC , Office of Traffic Safety Offenders for Driving While SC ,600, Intoxicated Subtotal ,291, TOTAL FOR DEPARTMENT OF TRANSPORTATION 87,669, DEPARTMENT OF THE TREASURY Police Direct Equitable Sharing Program Unknown 141, Police Direct Taxpayer Service Unknown 83, Police Direct Tax Counseling for the Elderly Unknown 11, TOTAL FOR DEPARTMENT OF THE TREASURY 235, See accompanying Notes to Schedule of Expenditures of Federal Awards. 19

22 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS NATIONAL ENDOWMENT FOR THE ARTS Cultural Affairs Direct Promotion of the Arts - Grants to $ 185,000 $ 75,000 Organizations and Individuals , , , Subtotal ,000 75,000 TOTAL FOR NATIONAL ENDOWMENT FOR THE ARTS 262,000 75,000 ENVIRONMENTAL PROTECTION AGENCY Public Works Direct Brownfields Assessment and Cleanup BF , Cooperative Agreements BF-00T , Subtotal , TOTAL FOR ENVIRONMENTAL PROTECTION AGENCY 119, DEPARTMENT OF ENERGY Housing and Community Investment Direct ARRA - Energy Efficiency and Conservation EE , Block Grant Program (EECBG) (Note 6) TOTAL FOR DEPARTMENT OF ENERGY 26, DEPARTMENT OF HEALTH AND HUMAN SERVICES Aging State of California - Special Programs for the Aging A ,000 11,000 Department of Aging Title VII, Chapter 3 Programs for A ,000 38,000 Prevention of Elder Abuse, Neglect, and Exploitation Cluster with CFDA Nos , , , , and Subtotal ,000 49,000 See accompanying Notes to Schedule of Expenditures of Federal Awards. 20

23 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS Aging State of California - Special Programs for the Aging A $ 18,000 $ 18,000 Department of Aging Title VII, Chapter 2 Long Term Care A ,000 63,000 Ombudsman Services for Older Individuals Cluster with CFDA Nos , , , , and Subtotal ,000 81,000 Aging State of California - Special Programs for the Aging A ,000 47,000 Department of Aging Title III, Part D Disease Prevention A , ,000 PART F-Disease Prevention and Health Promotion Services Cluster with CFDA Nos , , , , and Subtotal , ,000 Aging State of California - Special Programs for the Aging A , ,000 Department of Aging Title III, Part B Grants for Supportive A ,367,000 1,952,000 Services and Senior Centers. Cluster with CFDA Nos , , , , and Subtotal ,126,000 2,548,000 Aging State of California - Special Programs for the Aging A ,145,000 1,042,000 Department of Aging Title III, Part C Nutrition Services. A ,039,000 3,681,000 Cluster with CFDA Nos , , , , and Subtotal ,184,000 4,723,000 Aging State of California - National Family Caregiver Support A , ,000 Department of Aging Title III, Part E A , ,000 Cluster with CFDA Nos , , , , and Subtotal ,126, ,000 Aging State of California - Nutrition Services Incentive Program A , ,000 Department of Aging Cluster with CFDA Nos , , A , , , , and Subtotal , ,000 Subtotal Aging Cluster (93.041, , , , , , ) 10,762,000 9,187,000 See accompanying Notes to Schedule of Expenditures of Federal Awards. 21

24 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS Aging State of California - Medicare Enrollment Assistance Program MI $ 37,000 $ -- Department of Aging Police Chabad of California Drug-Free Communities Support H79SP , Program Grants City Planning County of Los Angeles - PPHF - Community Transformation Grants PH , Department of Public Health and National Dissemination and Support for Community Transformation Grants - financed solely by Prevention and Public Health Funds Economic Workforce Development County of Los Angeles - Temporary Assistance for Needy Families IA1102 1,170,000 1,051,000 Department of Community and IA0114 2,484,000 1,840,000 Senior Services Subtotal ,654,000 2,891,000 Housing and Community Investment State of California - Community Services Block Grant F ,222,000 3,271,000 Department of Community 14F , ,000 Services and Development Subtotal ,122,000 3,991,000 Recreation and Parks State of California - Child Care and Development CSPP , Department of Education Block Grant CCTR , Cluster with CFDA No Subtotal , Recreation and Parks State of California - Child Care Mandatory and Matching Funds CSPP , Department of Education of the Child Care and Development Fund CCTR , Cluster with CFDA No Subtotal , Subtotal CCDF Cluster (93.575, ) 49, Recreation and Parks Community Health Councils, Inc. (CHC) PPHF : Community Transformation Grants CDC-RFA-DP12-19, Small Communities Program financed 1216PPHF12 solely by Public Prevention and Health Funds See accompanying Notes to Schedule of Expenditures of Federal Awards. 22

25 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS Aging State of California - Centers for Medicare and Medicaid H $ 130,000 $ 122,000 Department of Aging Services (CMS) Research, HI ,000 58,000 Demonstrations and Evaluations Subtotal , ,000 TOTAL FOR DEPARTMENT OF HEALTH AND HUMAN SERVICES 20,180,000 16,249,000 DEPARTMENT OF HOMELAND SECURITY Fire Direct National Urban Search and Rescue EMW-2011-CA , (US&R) Response System EMW-2012-CA-K , EMW-2013-CA-K , Subtotal , City Administrative Officer State of California- Disaster Grants - Public Assistance Unknown 351, Office of Emergency Services (Presidentially Declared Disasters) Emergency Management County of Los Angeles - Emergency Management Performance , Office of Emergency Management Grants Mayor State of California- Pre-Disaster Mitigation , ,000 California Emergency Management Agency Police Direct Port Security Grant Program PU-T0-K , Mayor County of Los Angeles- Homeland Security Grant Program , Office of Emergency Management 2011-SS , SS , Police Direct Homeland Security Grant Program Unknown 113, Mayor State of California- Homeland Security Grant Program ,993,000 6,000 California Emergency ,423,000 13,204,000 Management Agency 2011-SS ,709,000 21,833, ,179,000 10,755, ,418, ,000 Subtotal ,907,000 46,038,000 See accompanying Notes to Schedule of Expenditures of Federal Awards. 23

26 CITY OF LOS ANGELES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED JUNE 30, 2014 (CONTINUED) GRANT/PASS FEDERAL GRANTOR/ CFDA THROUGH CITY DEPARTMENT PASS THROUGH GRANTOR PROGRAM TITLE NUMBER NUMBER EXPENDITURES SUBRECIPIENTS Police Direct Competitive Training Grant GT-T8-K029 $ 874,000 $ -- Police Direct Law Enforcement Officer CA , Reimbursement Agreement Program Mayor Direct Securing the Cities Program DN , Mayor State of California- Regional Catastrophic Preparedness CA-T ,018, ,000 Emergency Management Agency Grant Program (RCPGP) ,000 44,000 Subtotal ,276, ,000 TOTAL FOR DEPARTMENT OF HOMELAND SECURITY 93,174,000 47,219,000 TOTAL FEDERAL AWARDS $ 449,655,000 $ 171,260,000 See accompanying Notes to Schedule of Expenditures of Federal Awards. 24

27 Notes to Schedule of Expenditures of Federal Awards 1. Reporting Entity for Single Audit The City of Los Angeles, California (City) has defined its single audit reporting entity for the purpose of this report, in accordance with the Single Audit Act, as: "Those Departments and Offices over which the Mayor and the City Council have direct legislative, executive and budgetary control." The Housing Authority of the City of Los Angeles is fiscally independent of the City and therefore excluded from the City s reporting entity under generally accepted accounting principles and, accordingly, from its Single Audit reporting entity. For the purpose of the Schedule of Expenditures of Federal Awards, the reporting entity consists of the following City Departments and Offices: Aging Animal Services Building and Safety City Administrative Officer City Attorney City Clerk City Ethics Commission Community Development Controller Convention Center Council Cultural Affairs Disability El Pueblo de Los Angeles Emergency Management Employee Relations Board Finance Fire General Services Housing and Community Investment Information Technology Agency Library Mayor Neighborhood Empowerment Personnel Planning Police Public Works Recreations and Parks Transportation Zoo Note: Effective April 23, 2014, Convention Center was reorganized and renamed Convention and Tourism Development. The Federal award programs administered by the following City Departments and affiliated separate legal entities are not included in the Schedule of Expenditures of Federal Awards but have separate independent single audits: Federal Single Audit Department/Agencies Cognizant/Oversight Agencies Auditors Airports Department of Homeland Macias Gini & Security O Connell LLP Harbor Department of Homeland Simpson & Security Simpson CPAs 25

28 Notes to Schedule of Expenditures of Federal Awards (Continued) 1. Reporting Entity for Single Audit (Continued) Federal Single Audit Department/Agencies Cognizant/Oversight Agencies Auditors Housing Authority of the Department of Housing and Macias Gini & City of Los Angeles Urban Development O Connell LLP Water and Power Environmental Protection KPMG LLP Agency (Water System) 2. Basis of Accounting Department of Energy (Power System) a. The accompanying Schedule of Expenditures of Federal Awards is presented using the modified accrual basis of accounting. Accordingly, expenditures represent amounts incurred during the fiscal year that meet Federal grant eligibility requirements. b. Accounting for Federal expenditures for disaster recovery activity is based on actual expenditures incurred for the approved Project Worksheet (formerly Damage Survey Reports) including expenditures incurred in prior fiscal years which became eligible under the grant in the current fiscal year. c. Amounts reported in the accompanying Schedule of Expenditures of Federal Awards agree or can be reconciled with amounts reported in the City s basic financial statements. 3. Changes in CFDA Numbers and Other Reclassifications a. Programs that are no longer included in the current CFDA book are being retained to report expenditures incurred or to show outstanding loans of those programs. b. Expenditures for CFDA No , grant no K reflect a credit balance due to the refunds from subrecipients. c. The California Health and Human Services Agency, Department of Aging, has designated CFDA No , , and to be added to the Aging Cluster. 4. Change in Program Title Program titles for the following programs have been changed in the current year. 26

29 Notes to Schedule of Expenditures of Federal Awards (Continued) 4. Change in Program Title (Continued) CFDA No. Old Program Title New Program Title PPHF 2012: Community PPHF Community Transformation Transformation Grants and Grants and National Dissemination National Dissemination and and Support for Community Support for Community Transformation Grants - financed Transformation Grants solely by Prevention and Public Health Funds PPHF 2012: Community PPHF: Community Transformation Transformation Grants Grants Small Communities Small Communities Program Program financed solely by Public Financed solely by 2012 Public Prevention and Health Funds Prevention and Health Funds 5. Major Federal Programs Under the risk based approach to determine major programs under OMB Circular A-133, major programs of the City may have expenditures as low as $300,000 if the program is considered to be high risk. Level of risk is determined by the auditor s judgement and guidelines issued by OMB and Federal agencies. 6. Outstanding Loans of Federal Funds The following is a summary of outstanding loans at cost by CFDA number as of June 30, The outstanding loan balances do not reflect an allowance for uncollectibles of $895,226,000. The principal balances of loans that originated in previous years are not included in the total expenditures in the accompanying SEFA; however, these loans are subject to the City s internal continuing monitoring of compliance requirements. CFDA No. Federal Grantor Administering City Departments Outstanding Balance as of June 30, HUD Housing $ 3,569, HUD Economic & Workforce Development 34,102,000 Housing 292,320,000 Subtotal for CFDA No ,422, HUD Housing 4,500, HUD Housing 2,141, HUD Housing 639,211, HUD Housing 13,336, * HUD Economic & Workforce Development 169,604,000 Housing 34,712,000 Subtotal for CFDA No ,316, HUD Economic & Workforce Development 1,465, HUD Housing 39,580, Unknown HUD Housing (previously reported under CFDA No ) 6,799, HUD Economic & Workforce Development 3,649,000 Grand total $ 1,244,988,000 *Loans are subject to Federal continuing compliance requirements and are considered for the purpose of major program determination. 27

30 Notes to Schedule of Expenditures of Federal Awards (Continued) 7. Industrial Commercial Revolving Loan Program (CFDA Nos and ) The City and the Los Angeles LDC, Inc. (LA LDC), a not-for-profit organization, had entered into an agreement which authorized LA LDC to administer the City s Industrial Commercial Revolving Loan Program (Program). The Program was funded by federal allocations that the City received from the Economic Adjustment Assistance Economic Development Administration Revolving Loan Fund (CFDA No ) and Community Development Block Grant (CFDA No ). LA LDC s independent external auditors opined that LA LDC did not comply in all material respects with the requirements of the Economic Adjustment Assistance Economic Development Administration Revolving Loan Fund (CFDA No ) and Community Development Block Grant (CFDA No ) for the fiscal years ended September 30, 2006, 2007, 2008, and Beginning fiscal year , the City worked with its contracted certified public accounting firm (CPA Firm) to obtain financial records from LA LDC and determine the loan balances and program income. On December 17, 2009, the City presented a demand letter to LA LDC requesting the return of $11,050,000, consisting of $3,331,000 outstanding loans and $7,719,000 program income. The City s litigation against the LA LDC is ongoing (City of Los Angeles v. LA LDC, Inc, Los Angeles Superior Court Case No. BC460924). A tentative settlement was reached in court at the Mandatory Settlement Conference in October, 2014 and the February, 2015 trial date has been vacated. The parties are working toward a formalized settlement agreement and the required Council and committee approvals. The Federal grantor, Economic Development Administration, was informed by the City regarding the litigation to recover any remaining Federal funds from LA LDC. The outstanding loan balances are not included in the total expenditures in the accompanying Schedule of Expenditures of Federal Awards and in the summary of outstanding loans of Federal funds in Note 6 of this report. 8. Department of Alcoholic Beverage Control (ABC) The following schedule is being included per the requirements of the ABC. State Grantor/ Agreement City Department Program Title Number Expenditures State of California Department of Alcoholic Beverage Control Police Operation Alcoholic Beverage Control 13G-LA21 $ 100,000 28