CITY OF RACINE Racine, Wisconsin

Transcription

1 Racine, Wisconsin REPORT ON FEDERAL AND STATE AWARDS Reporting Package Page 1

2 TABLE OF CONTENTS 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 Report on Compliance For Each Major Federal and Major State Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal and State Awards Required By the Uniform Guidance and the State Single Audit Guidelines Schedule of Expenditures of Federal Awards Schedule of Expenditures of State Awards Notes to Schedule of Expenditures of Federal and State Awards Schedule of Findings and Questioned Costs Schedule of Settlement of DHS Cost Reimbursement Awards Reporting Package Page 2

3 ~AKER TILLY Baker Tilly Virchow Krause, LLP 777 E Wisconsin Ave, 32nd Floor Milwaukee, WI rel fax bakerrilly.com 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 Auditors' Report To the Mayor and Common Council City of Racine Racine, Wisconsin We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Racine, Wisconsin as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the City of Racine's basic financial statements and have issued our report thereon dated July 22, Our report includes a reference to other auditors who audited the financial statements of Racine Water and Wastewater Utilities and the Downtown Racine Business Improvement District #1, as described in our report on the City of Racine's financial statements. The financial statement of the Downtown Racine Business Improvement District #1 was not audited in accordance with Government Auditing Standards. The financial statements of Racine Water and Wastewater Utilities were audited in accordance with Government Auditing Standards. 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. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Racine'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 of Racine's internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Racine's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance....:: J n rn de.-, dl tr u rllro BAKER TILLY INTERNATIONAL Page 1 An Affirmative Acrion Equal Opporruniry Employer Reporting Package Page 3

4 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. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Racine'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. 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 ~ot suitable for any other purpose. e:a JIM_~ v~ ~~ t_u} Milwaukee, Wisconsin July 22, 2016 Page 2 Reporting Package Page 4

5 ~ ci BAKER TILLY Baker Tilly Virchow Krause, LLP 777 E Wisconsin Ave, 32nd Floor M ilwaukee, Wl tel fax bake rtilly.com REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL AND MAJOR STATE PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS REQUIRED BY THE UNIFORM GUIDANCE AND THE STATE SINGLE AUDIT GUIDELINES Independent Auditors' Report To the Mayor and Common Council City of Racine Racine, Wisconsin Report on Compliance for Each Major Federal and Major State Program We have audited the City of Racine, Wisconsin's compliance with the types of compliance requirements described in the OMB Compliance Supplement and the State Single Audit Guidelines that could have a direct and material effect on each of the City of Racine's major federal and major state programs for the year ended December 31, The City of Racine's major federal and major state programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. The City of Racine's basic financial statements include the operations of the Racine Water and Wastewater Utilities ("Utilities"), which expended $1,238,061 in federal and state awards, which are not included in the City of Racine's schedule of federal and state awards, during the year ended December 31, Our audit, described below, did not include the operations of the Utilities because the Utilities engaged other auditors to perform an audit in accordance with Uniform Guidance and the State Single Audit Guidelines. Management's Responsibility Management is responsible for compliance with federal and state statutes, regulations, and the terms and conditions of its federal and state awards applicable to its federal and state programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City of Racine's major federal and major state 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; 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); and the State Single Audit Guidelines. Those standards, the Uniform Guidance, and the State Single Audit Guidelines 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 or major state program occurred. An audit includes examining, on a test basis, evidence about the City of Racine's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. Page 3 ~ n r den ~ toi~t., rntlntol BAKER TILLY INTERNATIONAL An Affi rmative Action Equal Opporcu nicy Employer Reporting Package Page 5

6 We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal and major state program. However, our audit does not provide a legal determination of the City of Racine's compliance. Opinion on Each Major Federal and Major State Program In our opinion, the City of Racine 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 and major state programs for the year ended December 31, Other Matters The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with the Uniform Guidance or the State Single Audit Guidelines and which are described in the accompanying schedule of findings and questioned costs as items through Our opinion on each major federal and major state program is not modified with respect to these matters. City of Racine's Response to Findings The City of Racine's responses to the noncompliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City of Racine's responses were not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the responses. Report on Internal Control Over Compliance Management of the City of Racine 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 Racine's internal control over compliance with the types of requirements that could have a direct and material effect on a major federal or major state 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 and major state program and to test and report on internal control over compliance in accordance with the Uniform Guidance and the State Single Audit Guidelines, 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 Racine's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal or state 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 reasonable possibility that material noncompliance with a type of compliance requirement of a federal or state 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 or state program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as item , that we consider to be a significant deficiency. Page4 Reporting Package Page 6

7 City of Racine's Response to the Finding The City of Racine's response to the internal control over compliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The City of Racine's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Purpose of this Report 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 and the State Single Audit Guidelines. Accordingly, this report is not suitable for any other purpose. Report on Schedules of Expenditures of Federal and State Awards Required by the Uniform Guidance and the State Single Audit Guidelines and Schedule of Settlement of DHS Cost Reimbursement Awards We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Racine, Wisconsin as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the City of Racine's basic financial statements. We issued our report thereon dated July 22, 2016, 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. Our report includes a reference to other auditors who audited the financial statements of Racine Water and Wastewater Utilities, and the Downtown Racine Business Improvement District #1, as described in our report on the City of Racine's financial statements. The accompanying schedules of expenditures of federal and state awards and schedule of settlement of DHS cost reimbursement awards are presented for purposes of additional analysis as required by the Uniform Guidance and the State Single Audit Guidelines and are 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 schedules of expenditure of federal and state awards and schedule of settlement of DHS cost reimbursement awards are fairly stated in all material respects in relation to the basic financial statements as a whole. Milwaukee, Wisconsin September 12, 2016, except for our report on the schedules of expenditures of federal and state awards and the schedule of settlement of DHS cost reimbursement awards, for which the date is July 22, Page 5 Reporting Package Page 7

8 Schedule of Expenditures of Federal Awards Follows Reporting Package Page 8

9 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, Revenues (Accrued} Accrued Federal Deferred (Deferred) CFDA Revenue Grantor Revenue Local Total Exeenditures Subrecipient Federal Grantor/Pass Through Grantor/Program Title Number 12/31/2014 Receiets 12/31/2015 Revenue Revenues Grantor Local Total Expenditures U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Community Development Block Grants/Entitlement Grants Award $ 645,326 89, , , , , Award (155,749) 369,841 9, , , ,987 33, Award (98,921) 676,042 3, , , ,448 Passed through State of Wisconsi n Department of Admmstralion Neighborhood Stab11izat1on Program (92,756) 92, , , , ,641 Neighborhood Stab11izat1on Program 14_218 (70,104) 70,104 82,629 82,629 82,629 82,629 Total Community Development Block Grant (417,530) 1,691, , ,270 1,770,183 1,538, ,270 1,770, ,368 HOME Investment Partnership Program (181,99 1) 271,217 8, , ,179 98, , ,179 Emergency Solutions Grants Program Award (3,057) 11,536 8,479 8,479 8, Award (76,644) 133,757 1,925 59,038 59,038 59, , Award ,939 54,091 54,091 54,091 54,091 U.S. DEPARTMENT OF THE INTERIOR-NATIONAL PARKS SERVICE Passed through State of Wisconsin Historical Society Historic Preservation Fund Grants-In-Aid (19, 000) 23,000. 4,000 4,000 4,000 U.S. DEPARTMENT OF JUSTICE 2013 Edward Byrne Memorial Justice Assistance Grant (14,123) 45,775 31,652 31,652 31, Edward Byrne Memorial Justice Assistance Grant ,835 22,058 43,893 43, ,893 Total JAG Program Cluster (1 4, 123) 67,610 22, , Second Chance Act Pnsoner Rentry Initiative-Demonstration (23,1 69) 242,425 30, , , , , , ,188 See accompanymg notes to Schedules of Expenditures of Federal and State Awards. Page 6 Reporting Package Page 9

10 CITY OF RACI NE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS -- Revenues (Accrued) Accrued Federal Deferred (Deferred) CFDA Revenue Grantor Revenue Local Total Exeenditures Subreciplent Federal Grantor/Pass Th rough Grantor/Prog ram T1tle Number 12/31/2014 Rece1ets 12/31/2015 Reven ue Revenues Grantor Local Total ~enditures U.S. DEPARTMENT OF TRANSPORTATION Urban Mass Transportation Administration Federal Transit - Formula Grant " $ 1,900, ,392 2,628,392 2,628,392 2,628,392 Total Federal Transit Cluster. 1,900, ,392. 2,628,392 2, 628,392. ~3 9 2 Congesti on Mitigation & Air Quality (20,625) 20, 625 Congestion Mitigation & Air Quality , , , , , ,753 Passed through State of W isconsin Department of T ransportatlon Highway Safety Cluster Pedestnan Safety ,000 4,000 4,000 4,000 Alcohol Enforcement (4,405) 17,091 12,686 12,686 12,686 Alcohol Enforcement ,243 6,243 6,243 6, 243 Enforcement Zone (EZ) Grant ,706. 3,706 3,706. 3,706 Enforcement Zone (EZ) Grant (14,206) 13, ,085 14,688 14,688 14,688 Passed through the Village of Mt. Pleasant Speedwave ,005 9,005 9,005 9,005 Total Highway Safety Cluster (18,611 ) 34,900 34,039 50,328 50,328 50,328 U.S. ENVIRONMENTAL PROTECTION AGENCY Brownfields Cleanup Revolving Loan Fund ' (1 49,128) 76, ,628 52, , ,919 Brownf1elds Cleanup Revolving Loa n Fund ' 18,830 18,830 18,830 18,830 Brownfields Cleanup Revolving Loan Fund ' (3, 065) 5,263 2,198 2, 198 2,198 Site Assessment Grant ' (87, 814) 302,880 44, , , ,067 Area Wide Planning Grant ,248 12,248 12,248 12,248 Passed th rough the Wisconsin Department of Health Services Radon Outreach ,185 1,3 15 2,500 2,500 2,500 Passed through Umvers1ty of Wisconsin-Oshkosh Great Lakes Restoration lnitiative (128,742) 133, ,1 44 5,144. 5,1 44 Great Lakes Restoration lnitiative (89,364) 121,593 32,229 32,229 32,229 Great Lakes Program - Pershing Meyers (17,250) 250,000 71, , ,750 71, , 950 Passed through the Wisconsi n Department of Natural Resources BEACH Act Program ,000 7,691 31,835 31,835 31,835 U.S. DEPARTMENT OF ENERGY Energy Efficiency and Conservation Block Grant- ARRA , 029 (38,524) 4,505 4,505 4,505 See accompany1ng notes to Schedules of Expenditures of Federal and State Awards. Page 7 Reporting Package Page 10

11 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS - Revenues (Accrued) Accrued Federal Deferred (Deferred) CFDA Revenue Grantor Revenue Local Total Ex~enditures Subrecipient Federal Grantor/Pass Through Grantor/Program Title Number 12/31/2014 Recei~ts 12/31/2015 Revenue Revenues Grantor Local Total ~enditures U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES IDA-Assets for Independence Program $ 17,000 (10,000) 7,000 7,000 7,000 Passed through State of Wiscons1n Department of Health Services Bio Terro-CDC Focus ,974 31,634 47,608 47,608 47,608 Bio Terror Additional ,539 6,539 6,539 6,539 Bio Terro-CDC Focus ( ) 43,709 29,196 29,196 29,196 Bio Terror Additional ,711 4,711 4,711 4,711 Cities Readiness lnitiative ,543 14, ,400 21,400 21,400 Cities Readiness lnltiative (19,736) 19,736 PHEP-Ebola ,784 10,000 15,784 15,784 15,784 Immunization Grant Immunization Grant (17,469) 35,926 18,027 36,484 36,484 36,484 Total Immunization Grant (17,469) 35,926 18,027 36,484 36,484 36,484 Maternal and Child Health Grant (1,162) 21,277 28,454 48,569 48,569 48,569 Partner Referral (HIV) Services (7,674) 19, ,000 13,000 13,000 Preventitive Health & Health Services ,611 9,611 9,611 9,611 Maternal and Child Health Grant (15,557) 15,557 U.S. DEPARTMENT OF HOMELAND SECURITY Assistance to Firefighters Grant Program (114,794) 189,450 18,768 93,424 74,656 18,768 93,424 Passed through the City of Milwaukee Port Secunty Grant Program (42,750) 42,750 TOTAL FEDERAL AWARDS!_j1,423,595) $ 5,776,616 $ 1,841,713 $ 912,029 $ 7,106,763 $ 6,194,734 $ 912,029 $ 7,106,763 $ 593,437. Represents a major federal program. See accompanying notes to Schedules of Expenditures of Federal and State Awards. Page 8 Reporting Package Page 11

12 Schedule of Expenditures of State Awards Follows Reporting Package Page 12

13 SCHEDULE OF EXPENDITURES OF STATE AWARDS - Revenues (Accrued) Accrued State Deferred (Deferred) ID Revenue Grantor Revenue Local Total ExEend1tures Subrecipient State Agency/Program Title Number 12/31/2014 ReceiEtS 12/31/2015 Revenue Revenues Grantor Local Total ~enditures WISCONSIN DEPARTMENT OF AGRICULTURE, TRADE, AND CONSUMER PROTECTION Prescription Drug Program $ (5,900) 5,900 4,510 4,510 4,510 4,510 WISCONSIN DEPARTMENT OF NATURAL RESOURCES Urban Non-Point Source Grant USP-SE A (970) 970 Recreational Boating Facilities RBF , , , , , ,514 Recreational Boating Facilities RBF ,580 14,580 29,160 14,580 14,580 29,160 Urban Non-Point Source Grant USP-SE (149,112) 149,112 Urban Forestry Grant UF ,000 28,090 53,090 25,000 28,090 53,090 Knowles-Nelson Stewardship UGS , , , , , ,384 Recycling Grants to Responsible Un1ts * 295, , , ,526 Recycling Consolidation Grants * 20,474 20,474 20,474 20,474 WISCONSIN DEPARTMENT OF TRANSPORATION Transit Operating Aids * 2013 Award Year (205,771) 205, Award Year (201,306) 201, Award Year 1,867, ,497 2,074,972 2,074,972 2,074, Award Year-Chapter ,736 79,736 79,736 79,736 Passed Through Rac1ne County 2014 Award Year -Chapter (20,000) Award Year -Chapter ,000 20,000 20, ,000 WISCONSIN DEPARTMENT OF HEALTH SERVICES Infant Mortality , , , , , ,088 Infant Mortality ,675 56, , , , ,214 Consolidated Contract-WWWP CDC * 27,688 11, ,068 39,068 39,068 Consolidated Contract-WWWP CDC * 36, ,353 36, ,353 Consolidated Contract-WWWP-Screening * 1,385 1,384 2,769 2,769 2,769 Consolidated Contract-Childhood Lead * (1,564) 13,743 12,678 24,857 24,857 24,857 Maternal and Child Health Grant (1,162) 1,162 WISCONSIN DEPARTMENT OF JUSTICE Justice Leadership Program , ,698 16,698 WISCONSIN ECONOMIC DEVELOPMENT CORPORATION Site Assessment Grant BF-SAG FY (120,891) 99,424 37,645 6,367 22,545 16,178 6,367 22,545 Site Assessment Grant BF-SAG FY ,585 33,331 80,916 47,585 33,331 80,916 Idle lndustnal Site Redevelopment Grant ISR FY Site Assessment Grant SAG FY (43,720) 43, See accompanying notes to Schedules of Expenditures of Federal and State Awards Page 9 Reporting Package Page 13

14 CITY OF RACI NE State Agency/Program Title WISCONSIN DEPARTMENT OF ADMINISTRATION Passed through the City of Kenosha Coastal Management Program Coastal Management Program Youth Gang Divers1on Program Grant 2014 Award Yea r 2015 Award Year Uniform Beat Patrol Off1cers Grant SCHEDULE OF EXPENDITURES OF STATE AWARDS - Revenues (Accrued) Accrued State Deferred (Deferred) ID Revenue Grantor Revenue Local Number 12/31/2014 Receipts 12/31/2015 Revenue AD $ (46, 178) 48,838 25,489 AD _27 38, (40,226) 81,900 9,324 19, ,434 89,004 Total Exf>enditures Subrecip1ent Revenues Grantor Local Total ~enditures 28,149 28, ,149 38,413 38,413 38, ,674 41,674 41,674 41,674 28,473 28,473 28,473 28, , ,434 89, ,438 TOTAL STATE AWARDS $ (831,878) $ 3,154,831 $ 1,179,523 $ 462,824 $ 3,965,300 $ 3,502,476 s 462,824 $ 3,965,300 $ 345,449 * Represents a major state program. See accompanying notes to Schedules of Expenditures of Federal and State Awards. Page 10 Reporting Package Page 14

15 NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AND STATE AWARDS NOTE 1- BASIS OF PRESENTATION The accompanying schedules of expenditures of federal and state awards (the "schedules") includes the federal and state grant activity of the City of Racine under programs of the federal and state government for the year ended December 31, The information in these schedules 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) and the State Single Audit Guidelines. Because the schedules presents only a selected portion of the operations of the City of Racine they are not intended to and do not present the financial position, changes in net position or cash flows of the City of Racine. NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the schedules are reported on the accrual or modified accrual basis of accounting. 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. Negative amounts shown on the schedules represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. The underlying accounting records for some grant programs are maintained on the modified accrual basis of accounting. Under the modified accrual basis, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the liability is incurred. The accounting records for other grant programs are maintained on the accrual basis, i.e., when the revenue has been earned and the liability is incurred. NOTE 3 - PRIOR YEAR FINDINGS Findings from 2014 reported as and are still valid in 2015 and have been repeated as findings No and The findings reported as to and to were resolved. NOTE 4 -INDIRECT COST RATE The City of Racine has not elected to use the 10% de minimis indirect cost rate of the Uniform Guidance. Page 11 Reporting Package Page 15

16 NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AND STATE AWARDS NOTE 5- LOAN PROGRAM Loans issued under the U.S. Department of Housing and Urban Development Community Development Block Grant loan program were $107,852 during the year ended December 31, The balance of loans outstanding under the Community Development Block Grant loan program was $4,808,539 at December 31, No loans were issued under the U.S. Environmental Protection Agency Brownfield Assessment and Cleanup Cooperative Agreements revolving loan program during the year ended December 31, The balance of loans outstanding under the Brownfield Assessment and Cleanup Cooperative Agreements revolving loan program was $150,000 at December 31, Page 12 Reporting Package Page 16

17 SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2015 Section 1: Summary of Auditors' Results Financial Statements Type of auditor's report issued Internal control over financial reporting: Material weakness(es) identified? Significant deficiency(ies) identified? Unmodified yes yes X no ----;X:;-- none reported Noncompliance material to financial statements noted? yes :_X.:.. no Federal or State Awards Internal control over major programs: Material weakness(es) identified? Significant deficiency(ies) identified? X yes yes :X_: none reported none reported Type of auditor's report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with section 516(a) of the Uniform Guidance? X yes no Dollar threshold used to distinguish between Type A and Type B programs: Federal programs State programs $ 750,000 $ 250,000 Auditee qualified as low-risk auditee? Federal programs State programs yes yes ----;X,.;-- no ----'X-'-- no Identification of major federal programs: CFDA NUMBER Name of Federal Program or Cluster Federal Transit Cluster Brownsfields Cleanup Revolving Loan Fund Identification of major state programs: STATE 10 NUMBERISl I Name of State Program Transit Operating Aids Consolidated Contract- Well Women and Childhood Lead Recycling Grants to Responsible Units and Recycling Consolidation Grants Page 13 Reporting Package Page 17

18 SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION II: FINANCIAL STATEMENT FINDINGS REQUIRED TO BE REPORTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS There were no findings required to be reported in accordance with Auditing Standards Generally Accepted in the United States of America. SECTION Ill- FEDERAL AWARDS AND STATE AWARDS FINDINGS AND QUESTIONED COSTS Programs: Federal Transit Cluster Criteria: The City should maintain supporting documentation that quarterly reports are reviewed by an individual other than the original preparer before they are submitted to the granting agency. Condition: The assistant finance director prepared a quarterly report but was unable to provide documentation of the finance director's review. Questioned Costs: Unknown. Context: Population: 4 Sample size: 2; sample statistically valid. Effect: Reports could be submitted that contain errors. Repeat Finding: not applicable. Recommendation: We recommend that the City maintain supporting documentation of review of quarterly reports. Management's Response: The City has a specific procedural documents associated with the fiscal administration of federal grants. These procedural documents have been reviewed by the responsible staff members and are understood. All reports and draws prepared must be approved by a manager prior to submission. All reports and draws must include an appropriate level of supporting documentation Program: Brownfields Cleanup Revolving Loan Fund Criteria: Cash draws should be reviewed and approved by someone other than the original preparer. Condition: An accountant prepares cash draws, but there is no review of cash draws prior to its submission. Questioned Costs: Unknown. Context: Population: 3 Sample size: 2; sample statistically valid. Effect: Inadequate review of cash draws could lead to an improper amount of expenses claimed on the report. Page 14 Reporting Package Page 18

19 SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION Ill- FEDERAL AWARDS AND STATE AWARDS FINDINGS AND QUESTIONED COSTS (cont.) Program: Brownfields Cleanup Revolving Loan Fund (continued) Repeat Finding: Recommendation: We recommend that the City properly approve cash draws prior to being submitted. Management's Response: The City has a specific procedural documents associated with the fiscal administration of federal grants. These procedural documents have been reviewed by the responsible staff members and are understood. All reports and draws prepared must be approved by a manager prior to submission. All reports and draws must include an appropriate level of supporting documentation Program: Brownfields Cleanup Revolving Loan Fund Criteria: Reports should be reviewed and approved by someone other than the original preparer who is a City employee. MBEIWBE reports are required to be submitted within 30 days of the end of the semi-annual reporting periods. Condition: Performance and progress reports are prepared and submitted by Racine County Economic Development Corporation, but there is no review of one of the reports by the City prior to submission. MBEIWBE reports are due annually 30 days after year end. One report was not submitted timely. Questioned Costs: Unknown. Context: Population: 11 Sample size: 8; sample statistically valid. Effect: There could be errors in the amounts reported. Repeat Finding: Recommendation: We recommend that a City employee review and approve all reports prior to submission to the EPA. The City should have a process in place to verify reports are being submitted timely. Management's Response: The City has implemented specific procedures associated with the review and approval of reporting documents prepared by outside agencies. Reporting documents will be sent to the Finance Department and the Department of City Development at least 5 days prior to the due date. City Development will review and approve the "program" portion of the document, while the finance department will review and approve the "fiscal" portion of the document. Once approved by both departments, the reports may be submitted. Both departments have regular meetings to review the status of these grants to ensure reporting and spend down timelines are being met. Page 15 Reporting Package Page 19

20 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section IV: Other Issues 1. Does the auditor's report or the notes to the financial statements include disclosure with regard to substantial doubt as to the auditee's ability to continue as a going concern? yes X no N/A 2. Does the audit report show audit issues (i.e., material non-compliance, non-material noncompliance, questioned costs, material weakness, significant deficiency, management letter comment, excess revenue or excess reserve) related to grants/contracts with funding agencies that require audits to be in accordance with the State Single Audit Guidelines : Department of Health Services yes X no N/A Department of Transportation yes X no N/A Department of Justice yes X no N/A Economic Development Corporation yes X no N/A Department of Natural Resources yes X no N/A Department of Administration yes X no N/A Department of Agriculture, Trade & Consumer Protection yes X no N/A 3. Was a Management Letter or other document conveying audit comments issued as a result ~ ~ of this audit? X yes no N/A 4. Name and signature of partner ~ ~L _...-./ 5. Date of report September 12, 2016 Page 16 Reporting Package Page 20

21 Org: Project #20025 PrOJect #20005 Agency Type 560 Infant Radon BT OHS IdentifiCatiOn Number CARS P rof~ e # Award amount $ 445,400 $ 2,500 $ 64,991 Award period 07/01/ / /15-12/31/15 07/01/14-06/30/15 Period of award within aucht penod 01/01/15-06/30/15 01/01/15-12/ /01/15-06/30/15 City of Racine Schedule of Settlement of DHS Cost Reimbursement Awards For the Year Ended December 31,2015 Org: ProJect #20026 ProJect #20022 Org: Immunization BT CRI HIV $ 36,484 $ 7,505 $ 26,748 s 13,000 01/01/15-12/31/15 07/01/14-06/30/15 07/01/14-06/30/ /31/15 01/01/15-12/31/15 01/01/15-06/30/15 01/01/15-06/30/15 01/01/15-12/31/15 Org: Org: Org; Org ~ WWWP Lead PHHS MCH Total $ 36,353 $ 24,857 $ 9,61 1 $ 48,569 s 716,018 01/01/15-12/31/15 01/01/15-12/31/15 10/01/13-09/ /01/15-12/ /01/15-12/31/15 01/01/15-12/31/15 01/01/15-12/31/15 01/01/15-12/31/15 A Expendjtures reported to DHS for payment $ 163,088 $ 2,500 $ 29,1 96 $ 36,484 l 7,500 $ - $ 13,000 $ 36,353 $ 24,857 $ 9,61 1 $ 48,569 $ 371,158 B Actual Allowable cost of award Program Expenses 2 Supplies, etc $ 168,088 $ ' 840 $ Employee salartes & wages 1,660 28,729 8 Employee Pension plan contnbutions 9 Employee Hlth.Disabiity,Ltfe Ins benefrts Tota l ProQ ram EXPenses $ 168,088 $ 2,500 $ 29,196 C Less program revenue & other offsets - to costs (identify in notes) F Total allowabkl costs s 168,088 $ 2,500 $ 29,196 $ 3,272 $ 7,500 $ - $ 10, ,184 $ $ 7,500 $ $ $ 36,484 $ 7,500 $ s 13,000 $ 751 $ 3,498 $ $ $ 212,074 35,602 21,359 9,611 31, ,084 $ 36,353 $ 24,857 $ 9,61 1 $ 48,569 $ 376,158 $ 36,353 $ 24,857 $ 9,61 1 s 48,569 $ 376,158 - _! Org: Project: PrOject: Agency Type 660 Ebola Limited Screening OHS IdentificatiOn Number CARS Profile # Award amount $ 21,377 $ 1,888 $ 5,538 Award period 04/01/15-09/30/16 07/01/15-06/30/16 07/01/15-06/30/16 Period of award wrth1n audrt penod 04/01/15-12/31/15 07/01/15-12/31/15 07/01/15-12/31/15 ProJect: Project: Project BT CRI WWWP $ 63,897 $ 26,171 $ 110,750 07/01/15-06/30/16 07/01/15-06/30/16 07/01/15-06/30/16 07/01/15-12/31/15 07/01/15-12/31/15 07/01/15-12/31/15 Total $ 229,621 A Expendjtures r.ported to OHS for payment $ 15,784 $ $ 2,769 $ 53,604 s 21,400 $ 29,618 $ 123,175 B Actual Allowable cost of award Program Expenses 2 Supplies, etc $ 15,784 $ 2,769 7 Employee salanes & wages 8 Employee Pension plan contributions 9 Employee Hlth,Oisabiity,Ufe Ins benefits $ 37,799 $ 21,400 $ 74 15,805 29,544 - $ 77,826 45,349 Total Proqram Ewenses $ 15,784 $ $ C Less program revenue & other offsets to costs (identify in notes) F Total allowable coats $ 15,784 $ $ 2,769 ProJeCt: Agency Type 760 Infant DHS kienlifteahon Number CARS Profile # Award amount $ Award period 07/01/15-06/30/17 Period of award wrlhrn audrt pertod 07/01/15-12/31/15 A Expenditures reported to DHS for payment $ 112,214 $. $ 53,604 $ 21,400 $ $ - $ 53,604 $ 21,400 $ 29,618 $ $ $ $ $ $ - $ $ - $ $. $ 123,175. Total $ 445, 400 $ 11 2, Actual Allowable cost of award Prog ram Expenses 2 Supplies, etc $ 11 2,21 4 $ 7 Employee salanes & wages - 8 Employee Pension plan contnbutions 9 Employee Hlth,Oisabiity.L1fe Ins benefrts Tota l Prooram Ewenses $ 11 2,21 4 $ C Less program re venue & other offsets to costs (identify In notes) $ $ $ -. $ 112,214! $ $ $ $ $ 112,21 4 I - F Total allowable costa $ 112,21 4 $ $ $ $ $ - $ $ $ 112,21 4 Page 17 Reporting Package Page 21