Ernst & Young LLP Suite 1700 390 North Orange Avenue Orlando, FL 32801-1671 Tel: +1 407 872 6600 Fax: +1 407 872 6626 www.ey.com Report of Independent Certified Public Accountants on Compliance With Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance With OMB Circular A-133, Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General Honorable Mayor and Members of City Council City of Orlando Compliance We have audited the City of Orlando s (the City) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement, and the Executive Office of the Governor s State compliance supplement that could have a direct and material effect on each of its major federal and state programs for the year ended September 30, 2010. The City s major federal and state programs are identified in the summary of auditor s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal and state programs is the responsibility of the City s management. Our responsibility is to express an opinion on the City s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, OMB Circular A-133, Section 215.97, Florida Statutes and Chapter 10.550, Rules of the Auditor General. Those standards, OMB Circular A-133, Section 215.97 and Chapter 10.550, 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 state 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. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the City s compliance with those requirements. In our opinion, the City complied, in all material respects, with the requirements referred to above that could have a direct and material effect on each of its major federal and state programs for the year ended September 30, 2010. Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal and state programs. In planning and performing our audit, we considered the City s internal control over compliance with the requirements that could have a direct and material effect on a major federal or state program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General, 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. 1102-1231508 253
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 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 or state program will not be prevented, or detected and corrected, on a timely basis. 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 that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, Mayor and Members of the City Council, applicable federal and state awarding agencies and pass-through entities and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. March 2, 2011 ey 1102-1231508 254
Ernst & Young LLP Suite 1700 390 North Orange Avenue Orlando, FL 32801-1671 Tel: +1 407 872 6600 Fax: +1 407 872 6626 www.ey.com Report of Independent Certified Public Accountants 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 Honorable Mayor and Members of the City Council City of Orlando We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, each pension fund and the aggregate remaining fund information of the City of Orlando (the City) as listed in the table of contents as of and for the year ended September 30, 2010, which collectively comprise the City s basic financial statements, and have issued our report thereon dated March 2, 2011 We have also audited the Firefighters Pension Fund, the Police Pension Fund and the General Employees Pension Fund included in the accompanying combining statements for the year ended September 30, 2010, as listed in the table of contents. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal control over financial reporting In planning and performing our audit, we considered the City s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City s internal control over financial reporting. 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 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. Our consideration of internal control over financial reporting 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 deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and other matters As part of obtaining reasonable assurance about whether the City s financial statements are free of 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. 1102-1231508 255
This report is intended solely for the information and use of management, Mayor and Members of the City Council, applicable federal and state grantor and pass-through agencies, and the Auditor General, State of Florida and is not intended to be and should not be used by anyone other than these specified parties. March 2, 2011 ey 1102-1231508 256
Schedule of Expenditures of Federal Awards and State Financial Assistance Year Ended September 30, 2010 FEDERAL AWARDS Grantor/Federal Program Title/Pass-Through Grantor/ Identification CFDA Federal Expenditures Executive Office of the President: High Intensity Drug Trafficking Program (HIDTA) FY2009 G09CF0012A 07.000 $ 100,718 FY2010 G10CF0012A 07.000 66,588 167,306 U.S. Department of Agriculture: Summer Food Service Program for Children Passed through Florida Department of Education FY10 04-0875 10.559 172,210 U.S. Department of Housing and Urban Development: Community Development Block Grants/Entitlement Grants Cluster (Amount paid to subrecipients $1,758,767) FY02/03 B-02MC-12-0015 14.218 68,614 FY06/07 B-06MC-12-0015 14.218 687,865 FY07/08 B-07-MC-12-0015 14.218 71,335 FY08/09 B-08-MC-12-0015 14.218 218,882 FY09/10 Administrative B-09-MC-12-0015 14.218 317,444 FY09/10 Rental Rehab B-09-MC-12-0015 14.218 373,330 FY09/10 B-09-MC-12-0015 14.218 920,900 2,658,370 Neighborhood Stabilization Program FY08/09 B-08-MN-12-0020 14.218 4,833,049 American Recovery and Reinvestment Act: Community Development Block Grants/Entitlement Grants (Amount paid to subrecipients $519,546) FY09/10 14.253 542,066 B-09-MY-12-0015 Community Development Block Grants/Entitlement Grants Cluster Total 8,033,485 Emergency Shelter Grants Program FY09/10 S-09-MC-12-0008 14.231 98,804 HOME Investment Partnerships Program FY05/06 M-05-MC-12-0214 14.239 180,000 FY07/08 M-07-MC-12-0214 14.239 247,322 FY08/09 M-08-MC-12-0214 14.239 343,148 FY09/10 Administrative M-09-MC-12-0214 14.239 105,895 FY09/10 M-09-MC-12-0214 14.239 149,200 1,025,565 Housing Opportunities for Persons with AIDS (Amount paid to subrecipients $3,672,650) FY04/05 FL-H0-4-F0-02 14.241 10,000 FY05/06 FL-H0-5-F0-02 14.241 40,696 FY06/07 FL-H0-6-F0-02 14.241 323,410 FY09/10 Administrative FL-H0-9-F0-02 14.241 106,155 FY09/10 FL-H0-9-F0-02 14.241 3,298,544 3,778,805 1102-1231508 257
Schedule of Expenditures of Federal Awards and State Financial Assistance (continued) FEDERAL AWARDS Grantor/Federal Program Title/Pass-Through Grantor/ Identification CFDA Federal Expenditures U.S. Department of Housing and Urban Development (Cont.): Community Development Block Grants/Brownfields Economic Development Initiative FY07/08 Redevopment Parramore B-08-SP-FL0548 14.246 $ 276,889 Economic Development Initiative - Special Project, Neighborhood Initiative and Miscellaneous Grants FY06/07 B-06-SP-FL-0237 14.251 186,585 FY08/09 Redevelopment Parramore B-09-SP-FL-0161 14.251 24,817 211,402 American Recovery and Reinvestment Act: Homelessness Prevention and Rapid Re-Housing Program(HPRP) (Amount paid to subrecipients $454,451) FY09/10 S09-MY-12-0008 14.257 476,646 Fair Housing Assistance Program - State and Local Cooperative Agreement Continuum 14.401 10,000 13,911,596 U.S. Department of Justice: Federal Equitable Sharing Agreement FY09 FY09 16.000 64,271 National Institute of Justice Research, Evaluation, and Development Project Grants FY08 NIJ Solving Cold Cases with DNA 2008-DN-BX-K310 16.560 69,246 FY09 NIJ Solving Cold Cases with DNA 2009-DN-BX-K005 16.560 11,127 80,373 American Recovery and Reinvestment Act: Violence Against Women Formula Grants Passed through Florida Department of Children and Family Services FY09 STOP Violence Against Women LN954 Passed through Florida Coalition Against Domestic Violence FY09 STOP Violence Against Women, Harbor House Training LN902 (3491) 16.588 111,950 16.588 11,972 123,922 1102-1231508 258
Schedule of Expenditures of Federal Awards and State Financial Assistance (continued) FEDERAL AWARDS Grantor/Federal Program Title/Pass-Through Grantor/ Identification CFDA Federal Expenditures U.S. Department of Justice (Cont.): Bulletproof Vest Partnership Program FY09 FY09 16.607 $ 21,289 American Recovery and Reinvestment Act: Public Safety Partnership and Community Policing Grants COPS Hiring Recovery Program (CHRP) 2009RJWX0031 16.710 1,082,554 Gang Resistance Education and Training (GREAT) FY08 2008-JV-FX-0086 16.737 50,348 Edward Byrne Memorial Justice Assistance Grant Program (JAG) FY07 2007-DJ-BX-1137 16.738 4,288 FY08 2008-DJ-BX-0574 16.738 18,919 23,207 Edward Byrne Memorial Justice Assistance Formula Grant- Countywide Passed through Orange County, Florida Sheriffs Office Ballistic Vests 2010-JAGC-ORAN-1-4X-026 16.738 21,410 IRIS 2010-JAGC-ORAN-2-4X-144 16.738 82,329 103,739 American Recovery and Reinvestment Act: FY 09 Recovery Act Edward Byrne Memorial Justice Assistance Grant (JAG) State Program Passed through Orange County, Florida Sheriffs Office Computer Forensic Lab Enhancement Drug Tips Squad Operations - OT FY09 OSCO JAG - Covert Audio/Video Surveillance Equipment Mug Shot System Quick ID Project Special Units Equipment Projects Technology Upgrade Projects 2010-ARRC-ORAN-7-W7-221 2010-ARRC-ORAN-9-W7-228 2010-ARRC-ORAN-11-W7-114 2010-ARRC-ORAN-6-W7-260 2010-ARRC-ORAN-8-W7-117 2010-ARRC-ORAN-13-W7-301 2010-ARRC-ORAN-12-W7-218 16.803 30,922 16.803 54,463 16.803 101,531 16.803 60,000 16.803 65,000 16.803 42,508 16.803 72,555 426,979 1102-1231508 259
Schedule of Expenditures of Federal Awards and State Financial Assistance (continued) FEDERAL AWARDS Grantor/Federal Program Title/Pass-Through Grantor/ Identification CFDA Federal Expenditures U.S. Department of Justice (Cont.): American Recovery and Reinvestment Act: FY 09 Recovery Act Edward Byrne Memorial Justice Assistance Grant (JAG) Local Program Tasers & Radios 2009-SB-B9-2474 16.804 $ 1,329,580 3,306,262 U.S. Department of Labor: WIA Pilots, Demonstrations, and Research Projects Passed through Orange County, Florida School District Memorandum of Understanding, Orlando Families Parks and Recreation FY08/09 17.261 50,082 Memorandum of Understanding, Orlando Police Department FY08/09 17.261 87,727 137,809 U.S. Department of Transportation: Highway Planning and Construction Passed through Florida Department of Transportation Orange County/Orlando Police Department 20.205 Collision Avoidance Training FY07/08 423072-1-14-01/AOX68 2,911 Conway Road (CR506) 241699-1-58-01/AOS19 20.205 689,657 Church Street Improvements, Design Phase 419774-1-38-01/AOL90 20.205 253,135 Church Street Improvements, Right of Way 419774-1-48-01/AOL90 20.205 108,582 Mills Avenue Congestion Management Design 408428-1-58 20.205 Project 415745-1-58 3,737,616 Dinky Line Trail Phase 2 415433-1-38-01 20.205 104,245 Dinky Line Trail Phase 2, Right of Way 415433-1-48-01 20.205 1,893,776 International Drive, Design Phase 417258-1-38-01 20.205 27,508 6,817,430 American Recovery and Reinvestment Act: Highway Planning and Construction Passed through Florida Department of Transportation Downtown Orlando ITS Project 426341-1-58-01 20.205 3,021,128 Safety Belt Performance Grants Passed through Florida Department of Transportation Occupant Protection Enforcement Program K4PT-10-21-23 20.609 19,882 9,858,440 1102-1231508 260
Schedule of Expenditures of Federal Awards and State Financial Assistance (continued) FEDERAL AWARDS Grantor/Federal Program Title/Pass-Through Grantor/ Identification CFDA Federal Expenditures U.S. Department of Treasury: State and Local Overtime Agreements (SCIRS-SS) Task Force FY10 2-09-59-2020 21.000 16,099 U.S. Equal Employment Opportunity Commission: Employment Discrimination - Title VII FY09/10 EECCN100093 30.002 21,000 U.S. Environmental Protection Agency: Capitalization Grants for Clean Water State Revolving Funds Passed through Florida Department of Environmental Protection ERRWDS Ph. II Trans.-Cont. 1B, 1C WW650040 (140131) 66.458 2,572,667 Inline Booster Pump Station WW650040 (140131) 66.458 1,197,622 3,770,289 U.S. Department of Energy: Energy Efficiency and Renewable Energy Information Dissemination, Outreach, Training and Technical Analysis/ Assistance Metro Orlando's Green Future Alliance-Bringing Solar to Central Florida DE-FC36-08GO18090 81.117 92,444 American Recovery and Reinvestment Act: Energy Efficiency and Conservation Block Grant Program (EECBG) Various Energy Efficiency & Conservation Strategies DE-EE000779/000 81.128 511,397 603,841 U.S. Department of Homeland Security: Homeland Security Grant Program Passed through Orange County, Florida Sheriffs Office FY07 Urban Area Security Initiative Grant, Cash reimbursements, OFD/OEM 08-DS-62-06-58-02-268 97.067 19,002 FY07 Urban Area Security Initiative Grant, Non-cash assistance, receipt of equipment, OFD/OEM, OPD 08-DS-62-06-58-02-268 97.067 516,442 SHS, Issue 806A, Orlando SWAT 2009-SHSP-ORAN-4-V3-054 97.067 20,354 555,798 Staffing for Adequate Fire and Emergency Response (SAFER)FY10 EMW-2009-FH-00144 97.083 702,931 1,258,729 Total Expenditures of Federal Awards $ 33,223,581 1102-1231508 261
Schedule of Expenditures of Federal Awards and State Financial Assistance (continued) STATE FINANCIAL ASSISTANCE Grantor/State Project Title/Pass-Through Grantor / Identification CSFA State Expenditures Florida Department of Environmental Protection: Florida Recreation Development Assistance Program (FRDAP) Z.L. Riley Park A9215 37.017 $ 100,423 Statewide Surface Water Restoration and Wastewater Projects CBIR Grant for SOBT drainage LP6848 37.039 380,330 Matching Community Budget Issue Request (CBIR), Howell Branch Lakes Stormwater Retrofit Project LP8932 37.039 111,650 491,980 Water Protection and Sustainability Program Passed through St Johns River Water Management District Eastern Regional SJ37712 37.066 474,873 Special Recreation Assistance Projects Parramore Central Park L0807 37.071 108,922 1,176,198 Florida Housing Finance Corporation: State Housing Initiatives Partnership Program (SHIP) FY07/08 FY07/08 52.901 612,205 FY08/09 FY08/09 52.901 395,067 FY09/10 FY09/10 52.901 91,247 1,098,519 Florida Department of Transportation: Transportation Regional Incentive Program (TRIP) Conway Road (CR506) 241699-1-58-01/AOS19 55.026 1,219,502 Narcoossee Road Improvements 239266-2-58-01 55.026 1,518,190 2,737,692 Florida Department of Elder Affairs: Senior Center - Fixed Capital Outlay L. Claudia Allen Senior Center XQ907 65.013 38,552 Florida Department of Revenue: Facilities for New Professional Sports, Retained Professional Sports, or Retained Spring Training Franchise Passed through Florida Office of Tourism, Trade, and Economic Development Retained Orlando Magic FY09 73.016 2,000,004 Total Expenditures of State Assistance $ 7,050,965 See accompanying notes to Schedule of Expenditures of Federal Award and State Financial Assistance 1102-1231508 262
Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance September 30, 2010 1. Basis of Presentation This schedule summarizes the expenditures incurred under all federal programs and state projects by the City of Orlando, Florida (the City) for the fiscal year ended September 30, 2010. For purposes of this schedule, federal programs and state projects include all grants and contracts entered into directly between the City and agencies and departments of the federal or state government with expenditures during the fiscal year ended September 30, 2010. Federal programs and state projects passed through to other government agencies, if any, are also included in the schedule. Expenditures for federal programs and state projects are recognized on the modified accrual basis of accounting. 2. Payments to Sub-Recipients Amounts remitted to sub-recipients are shown parenthetically under the program title. 3. Contingency The grant revenue amounts received are subject to audit and adjustment. If any expenditures are disallowed by grantor agency as result of such an audit, any claim for reimbursement to the grantor agencies would become a liability of the City. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreements and applicable federal and state laws and regulations. 1102-1231508 263
Schedule of Findings and Questioned Costs For The Year Ended September 30, 2010 Part I Summary of auditor s results Financial statements section Type of auditor s report issued (unqualified, qualified, adverse or disclaimer): Unqualified Internal control over financial reporting: Material weakness(es) identified? Yes X No Significant deficiency(ies) identified? Yes X None Reported Noncompliance material to financial statements noted? Yes X No Federal awards and state financial assistance section Internal control over major programs: Material weakness(es) identified? Significant deficiency(ies) identified? Yes Yes X X No None Reported Type of auditor s report issued on compliance for major programs (unqualified, qualified, adverse or disclaimer): Unqualified Any audit findings disclosed that are required to be reported in accordance with section.510(a) of OMB Circular A-133 or Chapter 10.550? Yes X No 1102-1231508 264
Schedule of Findings and Questioned Costs (continued) Part I Summary of auditor s results (continued) Identification of major federal programs/state financial assistance projects CFDA numbers Federal Programs: 14.218/14.253 Name of federal program or cluster Community Development Block Grants/Entitlement Grants/Neighborhood Stabilization Program/ Community Block Grants/Entitlement Grants 16.710 : Public Safety Partnership and Community Policing Grants COPS Hiring Recovery Program 16.803 : FY09 Recovery Act Edward Byrne Memorial Justice Assistance Grant State Program 16.804 : FY09 Recovery Act Edward Byrne Memorial Justice Assistant Grant Local Program 20.205 Highway Planning and Construction/: Highway Planning And Construction 81.128 : Energy Efficiency and Conservation Block Identification of major federal programs/state financial assistance projects CSFA numbers State Programs: 37.039 Statewide Surface Water Restoration and Wastewater Projects 52.901 State Housing Initiatives Partnership Program 55.026 Transportation Regional Incentive Program Part I Summary of auditor s results (continued) Dollar threshold used to distinguish between Type A and Type B programs: Federal: $ 1,005,629 State: $ 300,000 Auditee qualified as low-risk auditee? X yes no 1102-1231508 265
Schedule of Findings and Questioned Costs (continued) Part II Financial statement findings section This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations of provisions of contracts and grant agreements, and abuse related to the financial statements for which Government Auditing Standards require reporting in a Circular A-133 audit. No matters were reported. Part III Federal award and state financial assistance findings and questioned costs section This section identifies the audit findings required to be reported by Circular A-133 section.510(a) and/or Chapter 10.550, Rules of the Auditor General (for example, material weaknesses, significant deficiencies and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards or state financial assistance projects that are material to a major program/project. No matters were reported. 1102-1231508 266
Summary Schedule of Prior Audit Findings For The Year Ended September 30, 2010 Prior Finding No. Program Description Status 2009-01 14.218 Community Development Block Grant 97.067 Homeland Security Grants 2009-02 97.067 Homeland Security Grants 2009-03 21.000 Federal Equitable Sharing Agreement Three quarterly reports were not submitted by the deadlines required by the grant agreements. The City did not verify that one covered transaction was not on the EPLS list. The City did not meet the certification deadline required by the grant agreement. The City continues to make every effort to ensure future issues with financial reporting for grants are eliminated. ecivis tracking and reporting software has been implemented for all grant agreements and includes reporting deadline reminders. This finding has been addressed. The City has communicated this requirement to the Grants Oversight Committee and Purchasing Division and of the importance of documenting compliance with the requirement. The City also holds contract review meetings with grant project managers at the time of the grant award to discuss all grant compliance requirements. This finding has been addressed. ecivis tracking and reporting software has been implemented for all grant agreements and includes reporting deadline reminders. The FY2010 Certification was submitted timely. This finding has been addressed. 1102-1231508 267