SINGLE AUDIT SECTION

CITY OF DES MOINES, IOWA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2014 FEDERAL TOTAL FEDERAL GRANTOR, PROGRAM TITLE, PROGRAM EXPENDITURES PROJECT/GRANT NUMBER, AND PROGRAM YEAR NUMBER (7/1/13-6/30/14) Community Services Block Grant: U.S. Department of Health and Human Services (Passed through the Iowa Department of Human Rights) Program Year: 2013 Contract Number: CSBG-13-07-CJ October 1, 2012 - September 30, 2013 93.569 $ 142,122 Program Year: 2014 Contract Number: CSBG-14-07-CJ October 1, 2013 - September 30, 2014 93.569 301,090 Low-income Home Energy Assistance Block Grant: (Passed through the Iowa Department of Human Rights) Program Year: 2013 Contract Number: 2206-13J October 1, 2012 - September 30, 2013 93.568 72,410 Program Year: 2014 Contract Number: 2206-14J October 1, 2013 - September 30, 2014 93.568 3,242,584 Total U.S. Department of Health and Human Services $ 3,758,206 U.S. Department of Housing and Urban Development Community Development Block Grant Program Entitlement: Entitlement Years: 2013-2014 14.218 $ 2,833,668 Fair Housing Assistance Program Cooperative Agreement 14.401 204,092 (Passed through the Iowa Economic Development Authority) Rehab Assistance #2 Grant # 08-DRH-209 14.228 4,721,281 Disaster Recovery Grant # 08-DRH-009 14.228 264,586 Neighborhood Stabilization Program Grant #08-NSP-023 14.228 21,058 Infrastructure Assistance Grant #08-DRI-033 14.228 258,294 Infrastructure Assistance Grant #08-DRIEF-258 14.228 1,808,475 Flood Relief Contract #08-DRMH-2134 14.228 1,313,402 NSP Contract #11-NSP-023 14.264 310,950 (Continued) 207

CITY OF DES MOINES, IOWA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) For the Year Ended June 30, 2014 FEDERAL TOTAL FEDERAL GRANTOR, PROGRAM TITLE, PROGRAM EXPENDITURES PROJECT/GRANT NUMBER, AND PROGRAM YEAR NUMBER (7/1/13-6/30/14) U.S. Department of Housing and Urban Development (continued) Supportive Housing Program: West Des Moines Human Services #IA0043B7D021103 August 1, 2012 - July 31, 2013 14.235 2,794 Primary Health Care Enhancement #IA0036B7D021104 July 1, 2012 - June 30, 2013 14.235 499 Buchanan Transitional Living Center #IA0039B7D021103 December 1, 2012 - November 30, 2013 14.235 40,084 HMIS #IA0041B7D021104 November 1, 2012 - October 31, 2013 14.235 36,681 West Des Moines Transitional Hsg 2 #IA0032B7D021102 December 21, 2012 - December 20, 2013 14.235 12,630 Anawim Permanent Supportive Hsg #IA0067B7D021100 May 1, 2013 - October 31, 2014 14.235 124,159 Shelter Plus Care - Anawim Housing #IA0057C7D021000 December 12, 2011 - December 11, 2016 14.238 38,520 Shelter Plus Care - Anawim Housing #IA0058C7D01000 December 12, 2011 - December 11, 2016 14.238 54,403 Shelter Plus Care - YMCA #IA0050C7D020900 April 25, 2011 - April 24, 2016 14.238 39,244 Shelter Plus Care - YMCA #IA0068C7D021100 April 1, 2013 - March 31, 2018 14.238 42,204 Continuum of Care Program: Primary Health Care Street Outreach #IA0042L7D021205 July 1, 2013 - June 30, 2014 14.267 86,619 West Des Moines Human Services #IA0043L7D021204 August 1, 2013 - July 31, 2014 14.267 74,176 Primary Health Care Enhancement #IA0036L7D021205 July 1, 2013 - June 30, 2014 14.267 248,820 Buchanan Transitional Living Center #IA0039L7D021204 December 1, 2013 - November 30, 2014 14.267 57,385 Lighthouse Host Home #IA0040L7D021205 March 1, 2013 - February 28, 2014 14.267 179,531 Lighthouse Host Home #IA0040L7D021306 March 1, 2014 - February 28, 2015 14.267 92,328 House of Mercy #IA0038L7D021205 May 1, 2013 - April 30, 2014 14.267 239,040 House of Mercy #IA0038L7D021306 May 1, 2014 - April 30, 2015 14.267 45,877 House of Mercy - Capitol Park #IA0037L7D021205 March 1, 2013 - February 28, 2014 14.267 152,753 House of Mercy - Capitol Park #IA0037L7D021306 March 1, 2014 - February 28, 2015 14.267 73,944 HMIS #IA0041L7D021205 November 1, 2013 - October 31, 2014 14.267 84,757 West Des Moines Transitional Hsg 2 #IA0032L7D021203 December 21, 2013 - December 20, 2014 14.267 15,855 Anawim Housing #IA0034L7D021205 April 20, 2013 - April 19, 2014 14.267 683,298 Anawim Housing #IA0034L7D021306 April 20, 2014 - April 19, 2015 14.267 134,133 (Continued) 208

CITY OF DES MOINES, IOWA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) For the Year Ended June 30, 2014 FEDERAL TOTAL FEDERAL GRANTOR, PROGRAM TITLE, PROGRAM EXPENDITURES PROJECT/GRANT NUMBER, AND PROGRAM YEAR NUMBER (7/1/13-6/30/14) U.S. Department of Housing and Urban Development (continued) Anawim Housing #IA0035L7D021205 April 5, 2013 - April 4, 2014 14.267 204,239 Anawim Housing #IA0035L7D021306 April 5, 2014 - April 4, 2015 14.267 39,056 YMCA #IA0071L7D021200 April 1, 2014 - March 31, 2017 14.267 2,689 Emergency Shelter Grant Program: Program Year: 2012 Contract Number: S-12-MC-19-0001 January 1, 2012 - December 31, 2012 14.231 142,138 Program Year: 2013 Contract Number: S-13-MC-19-0001 January 1, 2013 - December 31, 2013 14.231 57,906 Home Investment in Affordable Housing: Program Year: 2010 Contract Number: M-10-MC-19-0201 March 31, 2010 - March 31, 2015 14.239 11,172 Program Year: 2011 Contract Number: M-11-MC-19-0201 March 31, 2011 - March 31, 2016 14.239 97,364 Program Year: 2012 Contract Number: M-12-MC-19-0201 March 31, 2012 - March 31, 2017 14.239 61,518 Program Year: 2013 Contract Number: M-13-MC-19-0201 March 31, 2013 - March 31, 2018 14.239 21,432 Program Year: 2014 Contract Number: M-14-MC-19-0201 March 31, 2014 - March 31, 2019 14.239 8,283 (Passed through Iowa Community Action Association) Tenant Based Rental Assistance 14.239 14,856 Total U.S. Department of Housing and Urban Development $ 14,956,193 U.S. Department of Justice Public Safety and Community Policing Grants: Edward Byrne Memorial Justice Assistance Grant Grant #2010DJBX1150 16.738 $ 20,013 Edward Byrne Memorial Justice Assistance Grant Grant #2011DJBX2322 16.738 24,762 Edward Byrne Memorial Justice Assistance Grant Grant #2012DJBX0497 16.738 58,502 Edward Byrne Memorial Justice Assistance Grant Grant #2013DJBX0243 16.738 104,097 Cops Meth Hotspots Grant Grant #10-HotSpots/Interdiction-1 16.710 29,553 ARRA - COPS Hiring Recover Program Grant #2009RJWX0041 16.710 149,219 (Continued) 209

CITY OF DES MOINES, IOWA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) For the Year Ended June 30, 2014 FEDERAL TOTAL FEDERAL GRANTOR, PROGRAM TITLE, PROGRAM EXPENDITURES PROJECT/GRANT NUMBER, AND PROGRAM YEAR NUMBER (7/1/13-6/30/14) U.S. Department of Justice (continued) State and Community Highway Safety Program: Community Prosecution and Project Safe Neighborhoods Anti-Gang Initiative #11PSN-SD07 16.609 12,891 Total U.S. Department of Justice $ 399,037 U.S. Department of Transportation Governor's Traffic Safety Program: (Passed through the Iowa Department of Public Safety) Governor's Traffic Safety Program Contract Number: PAP 13-410 October 1, 2012 - September 30, 2013 20.600 $ 46,594 Governor's Traffic Safety Program Contract Number: PAP 14-410 October 1, 2013 - September 30, 2014 20.600 59,555 Highway Research, Planning, and Construction: (Passed through the Iowa Department of Transportation) 2008 Enhanced School Crossings @ Signalized Intersections STRS-U-1945(733)--8U-77 20.205 12,891 E Indianola Ave Widening - SE 16th Ct to E McKinley Ave STP-U-1945(745)--70-77 20.205 476,561 SE Connector - SE 6th to SE 14th Construction Supp 5 & 7 NHSX-U-1945(254)--8S-77 20.205 388,276 SE Connector - DSM River Bridge NHSX-U-1945(405)- - 8S-77 20.205 113,545 SE Connector - ROW Acquisition SE 9th -SE 15th NHSX-U-1945(304)--8S-77 20.205 22,406 Municipal Service Center Phase I NHSX-U-1945(305)--8S-77 20.205 3,853,455 SE Connector Paving - SE 9th to SE 15th NHSX-U-1945(408)--8S-77 20.205 3,595,167 E. Indianola Widening E Porter Ave to E. McKinley Ave STP-U-1945(746)--70-77 20.205 708,935 Beaver Avenue Streetscape from Beaver Crest to Fagen Drive STP-E-1945(804)--8V-77 20.205 131,015 S.E. Connector - SE 15th to SE 30th NHS-U-1945(409)--8G-77 20.205 10,705,287 SW 9th Street Widening from Titus Ave to Kenyon Ave HSIP-1945(789)--8X-77 20.205 52,474 Downtown Bicycle Plan Implementation Phase 1 STP-A-1945(802)--86-77 20.205 229,860 Airport Improvement Program: Taxiway D Reconstruction AIP Number: 3-19-0027-53 20.106 2,560 Total U.S. Department of Transportation $ 20,398,581 (Continued) 210

City of Des Moines, Iowa Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2014 Note 1. Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of the City of Des Moines, Iowa for the year ended June 30, 2014. The accompanying schedule of expenditures of federal awards does not include any awards pertaining to the Municipal Housing Agency, an enterprise fund of the City, which is reported under separate cover. All other federal financial assistance received directly from federal agencies as well as federal financial assistance passed through other government agencies expended during the year is included in the schedule. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments and Nonprofit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Note 2. Significant Accounting Policies Revenue from federal awards is recognized when the City has done everything necessary to establish its right to revenue and in addition for government funds when the revenue is available. Expenditures of federal awards are recognized in the accounting period when the liability is incurred and the eligibility requirements have been met. Such expenses are recognized following the cost principles contained in OMB Circular A-87, wherein certain types of expenses are not allowable or are limited as to reimbursement. Note 3. Subrecipients Of the federal expenditures presented in the schedule, the City provided federal awards to subrecipients as follows: Program Title Federal CFDA Number Amount Provided to Subrecipients Emergency Shelter Grant Program 14.231 $ 167,156 Supportive Housing Program 14.235 159,942 Shelter Plus Care 14.238 174,371 Edward Byrne Memorial Justice Assistance Grant 16.738 20,013 Airport Improvement Program 20.106 2,560 Homeland Security Grant Program 97.067 12,354 Continuum of Care 14.267 2,414,500 212

City of Des Moines, Iowa Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2014 Note 4. Restatement The accompanying schedule of expenditures of federal awards was restated to report the expenditures of the Continuum of Care under the correct CFDA No. 14.267. This program was previously reported under CFDA Nos. 14.235 and 14.238. Original Amended Amount Amount Program Title CFDA No. Reported Reported Supportive Housing Program 14.235 $ 1,567,932 $ 216,847 Shelter Plus Care 14.238 1,237,786 174,371 Continuum of Care 14.267-2,414,500 The restatement resulted in one additional major program, Continuum of Care, CFDA No. 14.267 being tested for the June 30, 2014 Single Audit. 213

City of Des Moines, Iowa Summary Schedule of Prior Audit Findings Year Ended June 30, 2014 Comment Corrective Action or Number Comment Status Other Explanation Federal Awards: 2013-1 The City submitted a required annual Corrected progress report one month after the 90-day deadline following the end of the grant's operating year. Statutory Reporting: IV-A-13 Expenditures exceeded budget in public Partially Corrected See IV-A-14 finding works, culture and recreation and debt service functions. 214

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditor s Report To the Honorable Mayor and Members of the City Council City of Des Moines, Iowa Des Moines, Iowa 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, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Des Moines, Iowa (the City), as of and for the 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 December 5, 2014. The City s June 30, 2014 financial statements have been restated due to the implementation of GASB 66, Technical Corrections 2012. Our report includes reference to other auditors who audited the financial statements of the Des Moines Airport Authority and the Des Moines Public Library Foundation, which are discretely presented component units, as described in our report on the City s financial statements. This report does not include the results of the other auditor s testing of internal control over financial reporting or compliance and other matters that are reported on separately by the Des Moines Airport Authority auditors. The financial statements of the Des Moines Public Library Foundation were not audited in accordance with Government Auditing Standards. The City s basic financial statements include the Municipal Housing Agency, a major enterprise fund. Our report below does not extend to the Municipal Housing Agency because it is reported in separately issued financial and compliance report of the Municipal Housing Agency. 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. 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. 215

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'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. However, we noted certain immaterial instances of noncompliance or other matters that are described in Part IV of the accompanying schedule of findings and questioned costs. Comments involving statutory or other legal matters about the City s operations for the year ended June 30, 2014, are based exclusively on knowledge obtained from procedures performed during our audit of the financial statements of the City. Since our audit was based on tests and samples, not all transactions that might have had an impact on the comments were necessarily audited. The comments involving statutory or other legal matters are not intended to constitute legal interpretations of those statutes. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Des Moines, Iowa December 5, 2014, except for the amended SEFA and notes to the SEFA, for which the date is March 13, 2017 216

Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance To the Honorable Mayor and Members of the City Council City of Des Moines, Iowa Des Moines, Iowa Independent Auditor s Report Report on Compliance for Each Major Federal Program We have audited the City of Des Moines, Iowa s (the 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 year ended June 30, 2014. 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 financial statements of the Des Moines Airport Authority and the Des Moines Public Library Foundation which were audited by other auditors. The financial statements of the Des Moines Airport Authority is not included in the City s schedule of federal awards during the year ended June 30, 2014. Our audit, as described below, did not include this Organization because it is reported in a separately issued financial and compliance report audited by other auditors. The financial statements of the Des Moines Public Library Foundation were not audited in accordance with the Government Auditing Standards issued by the Comptroller General of the United States or the OMB Circular A-133, Audits of States, Local Governments and Nonprofit Organizations. Accordingly, our audit, described below, does not extend to this discretely presented component unit. The City s basic financial statements include the operations of the Municipal Housing Agency, an enterprise fund, which is not included in the City s schedule of federal awards during the year ended June 30, 2014. Our audit, described below, did not extend to the operations of the Municipal Housing Agency because it is reported in a separately issued financial and compliance report of the Municipal Housing Agency. 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 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, Audits of States, Local Governments, and Non-Profit Organizations. 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. 217

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 program for the year ended June 30, 2014. Other Matters The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with the OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as items 2014-002 and 2014-003. Our opinion on each major federal program is not modified with respect to these matters. The City s responses to the noncompliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City 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 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. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified a deficiency in internal control over compliance as described in the accompanying schedule of findings and questioned costs as item 2014-001 that we consider to be a material weakness. The City s responses to the internal control over compliance finding 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 compliance, and, accordingly, we express no opinion on the response. 218

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. Des Moines, Iowa March 13, 2017 219

City of Des Moines, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2014 I. Summary of Auditor's Results Financial Statements Type of auditor's report issued: Unmodified Internal control over financial reporting: Material weakness(es) identified? Yes No Significant deficiencies identified? Yes None Reported Noncompliance material to financial statements noted? Yes No Federal Awards Internal control over major programs: Material weakness(es) identified? Yes No Significant deficiencies? Yes 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 510(a) of Circular A-133? Yes No Identification of major programs: CFDA Number Name of Federal Program or Cluster 20.205 Highway Planning and Construction Cluster 14.267 Continuum of Care Dollar threshold used to distinguish between type A and type B programs: $1,258,099 Auditee qualified as low-risk auditee? Yes No (Continued) 220

City of Des Moines, Iowa Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2014 II. III. Findings Related to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards A. Internal Controls None reported B. Compliance Findings None reported Findings and Questioned Costs for Federal Awards A. Internal Controls 2014-001 U.S. Department of Housing and Urban Development Continuum of Care Program (CFDA No. 14.267) Supportive Housing Program (CFDA No. 14.235) Shelter Plus Care (CFDA No. 14. 238) Federal Year: 2014 Finding: The City s procedures did not identify a change of CFDA number for the Continuum of Care program on a timely basis. Criteria: Under A-133 Guidance, an auditee shall prepare a complete and accurate schedule of expenditures of federal awards for the period covered by the auditee s financial statements. Condition: Subsequent to the issuance of the City s single audit reporting package for the year ended June 30, 2014, the City discovered the CFDA number for the Continuum of Care program had changed. The amount originally recorded using the incorrect CFDA number was material, resulting in a restatement of the schedule of expenditures of federal awards, determination of the program as a major program, testing of an additional major program and resubmissions of the reporting package and data collection form. Context: The Continuum of Care Program, Supportive Housing Program and Shelter Plus Care Program. Effect: Recall and reissue of the 2014 Single Audit and CAFR. Cause: The grant administrators did not communicate the CFDA number change to the accounting department in a timely manner. Recommendation: We recommend the grant administrators provide changes to grants including CFDA numbers to the accounting department. Response and corrective action plan: The City will communicate any changes to the accounting department in a timely manner and have discussions with the granting agencies about changing conditions. 221

City of Des Moines, Iowa Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2014 B. Compliance Findings 2014-002 U.S. Department of Housing and Urban Development Continuum of Care Program (CFDA No. 14.267) Federal Year: 2014 Finding: The City did not communicate the correct CFDA number to the program subrecipients. Criteria: Under A-133 Guidance, a pass-through entity should identify appropriate federal award information, including the CFDA number, to the subrecipient of the award. Condition: The City was not aware the CFDA number for the Continuum of Care Program had changed when making awards to subrecipients. As a result, those subrecipients were not told the correct CFDA number for the award received. Context: The Continuum of Care Program subrecipients. Effect: Subrecipient agencies may not have been aware of the proper CFDA number for the federal awards they received from the City. Cause: The grand administrators did not communicate the CFDA number change to the accounting department in a timely manner. Recommendation: We recommend the grant administrators provide CFDA numbers to subrecipients in the grant agreements. Response and corrective action plan: The City will provide written notice to all sub recipients when the City becomes aware of a change in a CFDA number. 2014-003 U.S. Department of Housing and Urban Development Continuum of Care Program (CFDA No. 14.267) Supportive Housing Program (CFDA No. 14.235) Shelter Plus Care (CFDA No. 14.238) Federal Year 2014 Finding: The City did not identify a change in CFDA number for the Continuum of Care program during 2014, which resulted in the submission of an incorrect single audit reporting package and data collection form and a major program not being tested. 222

City of Des Moines, Iowa Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2014 Criteria: Under A-133 Guidance, an auditee shall prepare a complete and accurate schedule of expenditures of federal awards for the period covered by the auditee s financial statements. This schedule of expenditures of federal awards is then used by the auditor to determine the major programs based on the criteria provided in the A-133 guidance to be audited. Once the Single Audit including major program testing is completed the auditee shall submit a data collection form and reporting package to the Federal Clearing House. Condition: Subsequent to the issuance of the City s single audit reporting package for the year ended June 30, 2014, the City discovered the CFDA number for the Continuum of Care Program had changed and was reported incorrectly on the original data collection form and reporting package. The amount originally recorded using the incorrect CFDA number was material, resulting in a restatement of the schedule of expenditures of federal awards, determination of the program as a major program, testing of an additional major program and resubmissions of the reporting package and data collection form. Context: Continuum of Care Program, Supportive Housing Program and Shelter Plans Care. Effect: Recall and reissue of the 2014 Single Audit, data collection form and reporting package. There was also an additional major program required to be tested. Cause: The grant administrators did not communicate the CFDA number change to the accounting department in a timely manner. Recommendation: We recommend the grant administrators provide changes to grants included CFDA numbers to the accounting department. Response and corrective action plan: The City will communicate any changes to the accounting department in a timely manner and have discussions with the granting agencies about changing conditions. IV. Other Findings Related to Required Statutory Reporting IV-A-14 Certified budget: Expenditures for the year ended June 30, 2014 exceeded the community and economic development and transfers out budgeted amounts. Chapter 384.20 of the Code of Iowa states in part that public monies may not be expended or encumbered except under an accrual or continuing appropriation. Recommendation: The budget should have been amended in accordance with Chapter 384.18 of the Code of Iowa before expenditures were allowed to exceed budget. Response and corrective action plan: The City will work to eliminate any overages in the budget. The community and economic development budget was over because economic development grants and other economic development expenditures had been budgeted as part of the capital outlay budget, but as these expenditures did not belong in capital outlay by their nature, they were reported in the community and economic development expenditure function. In fiscal 2015, these economic development projects will be reclassified and put into the community and economic development function. 223

City of Des Moines, Iowa Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2014 IV-B-14 Questionable expenditures: We noted no expenditures for parties, banquets or other entertainment for employees that we believe may constitute an unlawful expenditure from public funds as this is defined in the Attorney General s opinion dated April 25, 1979. IV-C-14 Travel expense: No expenditures of City money for travel expenses of spouses of City officials or employees were noted. IV-D-14 Business transactions: The City represents there are no business transactions between the City and City officials or employees in accordance with Chapter 362.5(10) of the Code of Iowa and none were noted in performing the audit. IV-E-14 Bond coverage: Surety bond coverage of City officials and employees is in accordance with statutory provisions. The amount of coverage should be reviewed annually to ensure the coverage is adequate for current operations. IV-F-14 Council minutes: No transactions were found that we believe should have been approved in the Council minutes but were not. IV-G-14 Deposits and investments: No instances of noncompliance with the deposit and investments provisions of Chapters 12B and 12C of the Code of Iowa and the City s investment policy were noted. IV-H-14 Revenue notes: No instances of noncompliance with the City s revenue bond provisions were noted. IV-I-14 Urban renewal annual report: The urban renewal annual report was properly approved and certified to the Iowa Department of Management on or before December 1. 224

City of Des Moines, Iowa Corrective Action Plan Year Ended June 30, 2014 Anticipated Comment Date of Number Comment Corrective Action Plan Contact Person Completion Findings and Questioned Costs for Federal Awards Material Weakness 2014-001 The City's schedule of See response and Finance Director June 30, 2016 expenditures of federal corrective action plan awards incorrectly reported at 2014-001. the Continuum of Care Program as CFDA No. 14.238 or CFDA No. 14.235 instead of the correct CFDA No. 14.267. Compliance Finding 2014-002 The City did not communicate See response and Finance Director June 30, 2017 the correct CFDA number to corrective action plan the program's subrecipients. at 2014-002. 2014-003 The City did not identify a See response and Finance Director June 30, 2016 change in CFDA number for corrective action plan the Continuum of Care program at 2014-003. during 2014, which resulted in the submission of an incorrect single audit reporting package and the data collection form and a major program not being tested. Statutory Reporting IV-A-14 Expenditures exceeded See response and Finance Director June 30, 2015 budget in community and corrective action plan economic development and at IV-A-14. transfers out functions. 225