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Home My WebLink About09-30-1995 III 1 i Ili 4 I Single Audit Report September 30, 1995 f 1 • S i r Deloitte Touche «p r is CITY OF DENTON, TEXAS Single Audk Reports for the Year Ended September 30, 1"S l'. I_ f 1 Di'IoltteTeucM Toi~gleu j Irtteagtioa~l :r. • • - L ; j CITY OF DENTON, TEXAS TABLE OF CONTENTS Page Independent Auditors' Report on the Supplementary Schedule of Federal and State Financial Assistance I Supplementary Schedule of Federal and State Financial Assistance 2-4 Notes to Supplementary Schedule of of Federal and State Financial Assistance 5.6 Independent Auditors' Report on Compliance Based on the Audit ofi Financial Statements 7 Independent Auditors' Report on the Internal Control Structure Based on the Audit of the Financial Statements 8-9 Independent Auditors' Report on Compliance With the General Requirements Applicable to Federal and State Financial Assistance 10-11 Independent Auditors' Report on Compliance With Specific Requirements Applicable to Major Federal and State Financial Assistance Programs 12-13 l Independent Auditors' Report on Compliance With Requirements Applicable to Nonmajor Federal and State Financial Assistance Program Transactions 14 Schedule of Findings and Questioned Costs is independent Auditors' Report on the Internal Control Structure Used in I Adminislerinp Federal and State Financial Assistance 16.18 f~ • 11 I I H# a.~ s r Deloitte & ftft «P City Center Tower n Telephone; (8171347.3300 f 1 Suite 2950 301 Commerce Street Fort Worth, Texas 70102 INDEPENDENT AUDITORS' REPORT ON THE SUPPLEMENTARY SCHEDULE OF FEDERAL AND STATE FINANCIAL ASSISTANCE The Honorable Mayor and Members of the City Council l City of Denton, Texas We have audited the general purpose financial statements of the City of Denton, Texas (the "City") as of and for the year ended September 30, 1995, and have issued our report thereon dated December 15, 1995. These general purpose financial statements are the responsibility of the management of the City. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United Stales. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion, our audit was made for the purpose of forming on opinion on the genera! purpose financial statements of the City taken as a whole. The accompanying Schedule of Federal and State Financial Assistance is presented for the purpose of additional analysis and is not a required part of the general purpose financial statements. This schedule is the responsibility of the management of the City. The I- information in that schedule has been subjected to the auditing procedures applied In the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects I when considered in rciation to the general purpose financial statements taken as a whole, t This report is intended for the information of the Cit) Council, management and appropriate federal and state agencies. However, this reliort is a matter of Public record and its distribution is not limited, December 15, 1995 v t ~ II' DeloittaTouche Tt>ftmatsu (I►ltltnttlon>d . I , I i • r till • i i ! i CITY OF DENTON, TEXAS SUPPLEMENTARY SCHEDULE OF FEDERAL AND STATE FINANCIAL ASSISTANCE YEAR ENDED SEPTEMBER 30, 1995 Federal Grantor/ Federal Pass-Through Grantor/ Grant CFDA Program Title I.D. Number Number Expenditures Departmerllplflf2t►SiIt~ i td it anDevel_,m_ent Community Development Block Grant (1) B-90-MC-48.0036 14.218 $ 15,496 ! Community Development Block Grant (1) B-91 -MC-48-0036 14.218 102,581 Community Development I Block Grant ( I) B-93-MC-48.0036 14.218 424,401 Community Development f Block Grant (1) B-94-MC-48-0036 14,218 593,084 i Community Development Block Grant (1) 13.95-MC-48.0036 14.218 6,077 Home Investment Partnership M-94-MC-48.0223 unknown 110,968 Passed Through State of Texas Department of Housing, and Community Affairs: Home Grant (1) $32082 unknown -308,176 Total U,S. Department of Housing and Urban Development 1.561.383 IL,S~Dearttll uftheInterior National Park Service I Texas Hislorical Commission 48.94-90065.006 unknown 24,837 f Texas Historical Commission 48-95.10013,008 unknown 690 ! l Total U. S. Department of the Interior --25-523 1 US. DeoartmauLaulansoortalion • Passed Through State Department t of Transportation: { Federal Transportation Grant (1) TX•90•X310 20.507 452,319 1 Federal Aviation Administration ' Runway Fxteusion (1) 3.48.0067.08.94 20.106 1,421,004 • Master Plan (1) 3.48-0067.6 20.106 10,730 f Land Acquisition 0; 20.106 346 1,432,080 (I) Major program i t .2. J l i r t. ♦..t<.s _d `we..~r. -t x. .n....-,r . . . . . ~ e l k CITY OF DENTON, TEXAS SUPPLEMENTARY SCHEDULE OF FEDERAL AND STATE FINANCIAL ASSISTANCE YEAR ENDED SEPTEMBER 30,1998 Federal Grantor! Federal Pass-Through Grantort Grant CFDA Program Thlo I.0. Number Number Expenditures Passed through Texas Department of Transportation, Selective Traffic Enforcement Project - Occupant Protection 583XXF6065 unknown $ 20,278 I National Maximum Speed Limit 583XXF6063 unknown 25,860 Congestion Mitigation Air Quality 918.46-910 unknown 6,233 Alternative Fuel Program 918.45.194 unknown -25.554 77,921 Total U. S. Department Transportation 1,9St2.d24 U. S. 3e a menu of Education Library Literacy R167A40189 unknown 29.555 It. C Department of tustice COPS Ahead 95CCWX031I unknown 48.825 l! S,_t2s{tartment of Aviculture Passed through State Department of Health and Human Services Food Services Grant 061-1002 NIA 3.2m Total Federal Programs 3,660,383 Texas Parks and Wildlife De a m ni South Lakes Park (1) 20.00488 N/A 613,899 Texas Natural Resauree Conservation I Commasdon • Demonstration Composting Project 4100000069 N/A 20,455 Recyclable Material 4100000144 NIA 8.583 29,040 l Passed Through North Central Texas Council of Governments, • I Household Used Oil Recycling 60405 N/A 2,328 Cable Swap 4100000050 NIA 6.245 to 8,573 r Total Texas Natural Resource f Conservation Commission 3L611 1 f i _3. h CITY Of DENTON, TEXAS SUPPLEMENTARY SCHEDULE OF FEDERAL AND STATE FINANCIAL ASSISTANCE YEAR ENDED SEPTEMBER 30, 1986 Federal Grantor/ Federal Pass-Through Grantor/ Grant CFDA LD. Number Number Expenditures Program Tide TeXas Qepamnent of TranspQrtal Traffic Light Synchronization 585TLF6010 N/A S 57,068 Traffic Light Synchronization 585TLF6010 N/A 53,995 111,061 762,575 'T'otal Stale Programs TOTAL FEDERAL AND SPATE FINANCIAL ASSISTANCF.£XPENDEU ~g.t22s5a l (1) Majorprogram I.; i I f I r f -4^ r t i ~WA • I I ~ CITY OF DENTON, TEXAS NOTES TO SUPPLEMENTARY SCHEDULE OF FEDERAL AND STATE FINANCIAL ASSISTANCE SEPTEMBER 30, 1995 1. BASIS OF ACCOUNTING I The iupplementary Schedule of Federal and Slate Financial Assistance is not prepared on the accrual basis of accounting. Expenditures are recognized when they become a demand on curent available financial resources, Encumbrances are used during the year for budgetary control purposes and lapse at fiscal year-end. Federal financial assistance provided to subreeipiems is treated as an expenditure when it is paid to the I subrecipient. { 2. REPORTING ENTITY The City of Denton, Texas, for purposes of the supplementary Schedule of Federal and State Financial Assistance includes all the funds of the primary government as defined by GASB Statement 14, The Financial Reporting Fnlity. The City of Denton administers certain federal financial assistance programs through subrecipients, Those subrecipients are also not considered part of the City of Denton morting entity. 3. PASS-THROUGH AWARDS The City of Denton receives certain federal financial assistance from pass-through awards of the State of Texas, The amounts received are commingled by the State of Texas with other funds and cannot be separately identified. I The total amount of such pass-through awards is included on the supplementary Schedule of Federal and State Financial Assistance. 4. SUPPLEMETAL INFORMATION REGARDING THE HOME GRANT PASSED THROUGH THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS ("TDHCA") Reconciliation of revenue amounts - TDHCA and the City of Denton: 532082 HOME Grant 3 i Revenue received from TDHCA (per TDHCA monthly report) $ 327,594 i i Less: Receivable from TDIICA at September 30, 1994 31,168 • Plus: Receivable from TDHCA at 9/30195 9,004 l Plus: Program income 3.346 NOME Grant Revenues - FY 1995 • 514&.271 II' • Amount equals FY 1995 HOME Grant expenditures f ' -5- i i C f Detail of HOME Grant FY 1995 expenditures by type: 1532082 j HOME Grant Administration $ 9,004 Program 299.772 Total HOMF, Grant Expenditures ,776 I' E! i 1 •6• I l i' Deloitte & ; Touche «p - I J Cay Canter Tower II Tetephone: (81 71 347-3300 Smdo 2850 t i 301 Commerce Street f Fait Woith, Texas 76102 t I., INDEPENDENT AUDITORS' REPORT ON COMPLIANCE BASED ON THE AUDIT OF FINANCIAL STATEMENTS The Honorable Mayor and Members of the City Council City of Denton, Texas: We have audited the general purpose financial statements of the City of Denton, Texas (the "City") as of September 30, 1995, and for the year then ended and have issued our report thereon dated December 15, 1995, We conducted our audit in accordance with generally accepted auditing standards and Government AurPring Stwidarils, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements ore free of material misstatement. Compliance with laws, regulations, contracts and grants applicable to the City is the responsibility of I the management of the City. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts and grants, However, the objective I of our audit was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests disclosed no instances of non.ompliance that are required to be reported herein under Governmental Auditing Standards, I This report is intended for the information of the City Council, management and appropriate federal and state agencies. 1-lowever, this report is a matter of public record and its distribution is not limited. A.L ip r t December IS, 1995 1) 3 DeloltteTowhe T*Mtw - 7. 10 nn W- 71M E Deloitte & Touche «P City Center Tower II TolephQoc+ Q31 A 3413300 Smto 2950 301 Commerce Street Fort Worth, Texas 16102 i INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL STRUCTURE BASED ON THE AUDIT OF THE FINANCIAL STATEMENTS The Honorable Mayor and Members of the City Council City of Denton, Texas: We have audited the general purpose financial statements of the City of Denion,'rexas (the "City") as f of and for the year ended Scplcmver 30, 1995, and have issued our report thereon dated December 15, 1995. We conducted our audit in accordance. with generally accepted auditing standards and Governnrenr Audiling Sranclarcls, issued by the Comptroller General of the United States. T`rose standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. The management of the City is responsible for establishing and maintaining the internal control structure. In fulfilling this responsibility, estimates and judgments by management arc required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. In planning and performing our audit of the general purpose financial statements of the City for the • year ended September 30, 1995, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to delerm!ne our auditing procedures for the purpose of expressing our opinion on the general purpose financial Aatemems and not to provide an opinion on the internal control structure. Accordingly, we do not cxpre;s such an opinion, Uel0ltteTDuaIte Tit htnatsu InternatIonal - g - i Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in i which the design or operation of one or more of the specific internal control structure elements does l not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be i detected within a timely period by employees In the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be mate, ie' weaknesses as defined above. i However, we have communicated other observations involving the internal control structure and its operation used to administer federal and state financial assistance programs which we reported to management of the City In a separate letter dated December 15, 1995. This report is intended for the information of the City Council, management and appropriate federal i and state agencies. However, this report is a matter of public record and its distribution is not limited. f ~tt~ a fwa f, L P i December 15, 1995 i_ is i.. is i s i r. i i i, i k Deloltte & Touch LLP City Center rower II Telephone: 181 7) 347.3300 ` Suite 2950 301 Commerce Street Fort Wath, l'exas 76102 j ~ I INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL AND STATE FINANCIAL ASSISTANCE The Honorable Mayor and Members of the City Council City of Denton, Texas: We have audited the general purpose financial statements of the City of Denton, Texas (the "City") as of and for the year ended September 30, 1995, and have issued our report thereon dated December 15, 1995. We have also audited the City's compliance applicable to requirements of ils major federal and state financial assistance programs and have issued our report thereon dated December 15, 1995. We have applied procedure,,, to test the City's compliance with 'the following requirements applicable to its federal and state financial assistance programs, which are identified in the Schedule of Federal and Stale Financial Assistance, for the year ended September 30, 1995: e Political activity (Hatch Act and Intergovernmental Personnel Act of 1970, as amended) i • Davis-Bacon Act • Civil rights f • Cash management • Federal and state financial reports a Allowable costslcost principles f • Drug-Free Workplace Act • Administrative requirements The requirements of relocation assistance and teal property acquisition are not applicable to the federal and state financial assistance programs, which are identified in the Schedule of Federal and State Financial Assistance, our procedures were limited to the applicable procedures described in Office of Management and j 0 Budget's C'onrplfance Supplement for Single Authis of Stale and Local Governments, Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on fi the City's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the City had not complied, in all material respects, with those requirements, J ~elolttoTouche Mutsu International 10- . . , • i a i I i { This report is intended for the information of the City Council, management and appropriate federal and state agencies. However, this report is a matter of public record and its distribution is not limited. Cw..= f r K. crw p i December 15, 1995 i° { I I i 1 i r f i , I' .II- r 71 . • r • i i I Deloitte & Touche LLP City Center Tower 71 Telephone' (817)347-3300 Suite 2950 301 Commerce Street Fort Worth, Texas 76102 I INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL AND STATE FINANCIAL ASSISTANCE PROGRAMS I The Honorable Mayor and Members of the City Council City of Denton, Texas, We have audited the general purpose financial statements of the City of Denton, Texas ((he "City") as of and for the year ended September 30, 1995, and have issued our report thereon dated December 15, 1995. 'Ale have audited the City's compliance with the requirements goveming types of services allowed or unallowed; eligibility; matching, level of effort or earmarking; reporting; special tests and provisions; monitoring subrecipients related to the Community Development Block Grain; the Home Grans; the Federal Transportation Grant; the Federal Aviation Grant; and the Texas Parks and Wildlife Grant for the South Lakes Park Program; and claims for advances and reimbursements; and amounts claimed or I used for matching that are applicable to each of its major federal and state financial assistance programs, which are identified in the accompanying Schedule of Federal and State Financial I Assistance, for the year ended September 30, 1995. The management of the City is responsible for the City's compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit. l We conducted our audit of compliance with these requirements in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget ("OMB") Circular A-128, Rndits of State awl Loch! Governments, 'those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred, An audit includes examining, on a test basis, evidence about the City's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion. I • In our opinion, the City complied, in all material respects, with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort or earmarking; reporting; special tests and provisions; monitoring subrecipients related to the Community Development Block Grant; the Home Grant; the Federal Transportation Grant; the Federal Aviation Grant; and the Texas Parks i and Wildlife Grant for the South Lakes Park Program; and claims for advances and reimbursements; • ` and amounts claimed or used for matching that are applicable to each of its major federal and state • • Financial assistance programs for the year ended September 30, 1995. i~ I D6101HOTaueha Tuhmatsu f I Irrternatlan~ , l2 , ' 7 7 77 7 7 -1 • r • r This report is intended for the information of the City Council, management and appropriate federal and state agencies. However, this report is a matter of public record and its distribution is not limited. { December 15, 1995 V l'. I. I: I~ I is t J I ~ 13 - • + ; s 77 . . W1 MWWAI a'aKynr, ula 4 ~ .rtL L1 ~-el i } 1 Deloitte & Touche LLP CdyCemerTower 11 Telephone: 0171347-3300 Suite 2950 301 Commerce Street Fort worth, ?exas 76102 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL AND STATE FINANCIAL ASSISTANCE i PROGRAM TRANSACTIONS The Honorable Mayor and Members of the City Council the City of Denton, Texas: We have audited the general purpose financial statements of the City of Denton, Texas (the "City") as of and for the year ended September 30, 1995, and have issued our report thereon dated December 15, j 1995. We have also audited the City's compliance applicable to requirements of its major federal and ! state financial assistance programs and applied procedures to lest compliance with general requirements applicable to federal and state financial assistance programs and have issued our reports thereon dated December 15,1995. In connection with our audit of the 1995 general purpose financial statements of the City and with our consideration of the City's control structure used to administer federal and state financial assistance programs, as required by Office of Management and Budget Circular A•128, Atalits of State and Local Governments, we did not select for testing any transactions applicable to nonmajor federal and state financial assistance programs for the year ended September 10, 1995, Nothing came to our attention during our audit that caused us to believe that the City had not complied, in all material respects, with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort or earmarking; reporting; and special tests and provisions related to transactions applicable to nonmajor federal and state financial assistance programs. I This report is intended for the information of the City Council, management and appropriate federal and state agencies. However, this report is a matter of public record and its distribution Is not limited. ' r,.iaa, L L 1° Ir f! l December 15, 1995 ~l ( ~f l DelollteTotic~t+ Ttllxnatsu Intumtiom 14 . 4wol A i` CITY OF DENTON, TEXAS i SCHEDULE OF FINDINGS AND QUESTIONED COSTS i YEAR ENDED SEPTEMBER 30,1995 tauestlonsd Program Finding/Noncom plianee costs CURRENT YEAR COMMENTS Federal Transportation Grant 01gsIIation: The quarterly progress i reports for the second and third quarters of the grant fiscal year were not filed by the City on a timely basis. Recommendation: Quarterly reports should be filed on a timely basis in order to comply with the general requirements applicable to federal financial assistance, Further, the filing of untimely quarterly reports may cause the grantor agency to delay or cease grant funding, Rte. STATUS OF PRIOR YEAR COMMENTS None •l I • Deloitte & Touche «P CitvCenler Tov:er 11 TWenhone 181'047.3300 Sole 2950 301 Commerce Slree; Fo l1Nolth. Texas 70102 i INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL AND STATE FINANCIAL ASSISTANCE The Honorable Mayor and Members of the City Council City of Denton, Texas: We have audited the general purpose financial statements of the City o1'Denlon, Texas (the "City") as of and for the year ended September 30, 1995, and have issued our report thereon dated December 15, 1995. We have also audited the City's compliance with requirements applicable to its major federal and state financial assistance program and have issued our report thereon dated December 15, 1995. We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget ("OMB") Circular A-128, Audits of gate and Local Governments. Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of mated%l misstatement and about whether the City complied with laws and regulations, noncompliance with.yhich would be material to its major federal and state financial assistance programs, In planning and performing our audits for the year ended September 30, 1995, we considered the City's internal control structure and assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinions on the City's general purpose financial statements and on its compliance with requirements applicable to major programs, and to report on the internal control structure in accordance with OMB Circular A•128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to federal and state financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated December 15, 1995. The management of the City is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control m rilcturs are to provide management with reasonabl-;, but not absolute, assurance I that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation 0 of general purpose financial statements in accordance with generally accepted accounting principles, and that federal and state financial assistance programs are managed in compliance with applicable laws and i regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any Deloliltebuche blimatsu Internatlonal , t f evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering federal and state financial assistance programs in the following categories: Accounting Applications • Billings • Receivables • Cash receipts • Purchasing and receiving • Accounts payable • Cash disbursements f • Payroll k • Inventory control • Property and equipment • General ledger { Controls used in Administering Federal and State Programs General Requirements + Political activity (hatch Act and Intergovernmental Personnel Act of 1970, as amended) • Davis-Bacon Act • Civil rights • Cash management • Federal and state financial reports f • Allowable costs/cost principles • Drug Free Workplace Act • Administrative requirements Specific Requirements • Types of services allowed or unallowed • Eligibility • Matching, level of effort or earmarking • Reporting • Monitoring subrecipients • Special tests or provisions i Claims for advances and reimbursements i l Amounts claimed or used for matching f For all of the internal control structure categories listed above, we obtained an understanding of the • design of relevant policies and procedures and determined whether they have been placed in operation, i O b E and we assessed control risk. f i -17• ~ E i • During the year ended September 30, 1995, the City expended 91 percent of its total federal financial assistance under major federal financial assistance programs and 81 percent of its total state financial assistance under major state financial assistance programs. We performed tests of controls, as requited by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with specific requirements, general requirements, and 1 requirements governing claims for advances and reimbursements and amounts claimed or used for matching that are applicable to each of the City's major federal and state financial assistance programs, l which are identified in the accompanying Schedule of federal and State Financial Assistance. Our i procedures were less in scope than would be necessary to render an opinion on these intemal control structure policies and procedures, Accordingly, we do not express such an opinion. { Our consideration of the internal control structure policies and procedures used in administering federal and state financial assistance would not necessarily disclose All matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness Is a condition In which the design or operations of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a federal financial assistance program may occur and not be detected within a timely period by emptoyees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure used in 1 administering federal and state financial assistance programs and its operations that we consider to be I material weaknesses as defined above. We also noted matters involving the inlcmal control structure and its operation based on our audit of the general purpose financial statements that we reported to management of the City in a report dated December 15, 1995. I We have also communicated other observations Involving the Internal control structure and its operation to the management of the City in a separate letter dated December 15, 1995. lm This report Is intended solely for the Information of the City Council, management, and appropriate federal and state agencies. However, (his report is a matter of public record and its distribution is not limited. December 15, 1995 :II 1.. i F~ I i Is. r f ; • w • ~ ~`3^r+;...~ ftr ii4t t i . i n n E OFP L n \ 1 1 r y