CITY OF JOLIET, ILLINOIS SINGLE AUDIT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014
CITY OF JOLIET, ILLINOIS Single Audit For the Fiscal Year Ended December 31, 2014 Table of Contents Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 1-2 Independent Auditor's Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 3-5 Schedule of Expenditures of Federal Awards 6-7 Notes to the Schedule of Expenditures of Federal Awards 8 Schedule of Findings and Questioned Costs 9-10 Summary Schedule of Prior Year Audit Findings 10 Corrective Action Plan 11 Page
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. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. June 16, 2015 2
Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2014. Other Matters The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as item 2014-001. Our opinion on each major federal program is not modified with respect to this matter. The City s response to the noncompliance 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. 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. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 4
Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the City s basic financial statements. We issued our report thereon dated June 16, 2015, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. 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. June 16, 2015 5
CITY OF JOLIET, ILLINOIS Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2014 Pass-Through Federal Entity CFDA Identifying Federal Federal Grantor/Program Title Number Number Expenditures U.S. Department of Housing and Urban Development Direct Award Neighborhood Stabilization Three 14.228 B11DN170001 $ 370,907 Neighborhood Stabilization Three (Project Expenses) 14.228 B11DN170001 95,029 Home Investment Partnership Program 14.239 M09MC170216 74,468 Home Investment Partnership Program 14.239 M10MC170216 129,395 Total U.S. Department of Housing and Urban Development 669,799 U.S. Department of Justice Pass-Through Cook County Sheriff's Department HIDTA Task Force Program 16.300 N/A 27,088 Direct Award FBI Task Force Program 16.300 N/A 12,103 OCDETF OT Grant 16.302 GL-ILN-735 4,793 J.A.G. Drawdown 16.738 2011-DJ-BX-2900 5,351 Equitable Sharing Program 16.922 N/A 16,524 Total U.S. Department of Justice 65,859 U.S. Department of Transportation Pass-Through Illinois Department of Transportation Highway Bridge Program Grant - Caton Farm Road 20.205 BRM-9003(656) 46,656 Highway Bridge Program Grant - Garnsey Avenue 20.205 BRM-9003(802) 1,724 Highway Bridge Program Grant - Washington Street 20.205 BRM-9003(531) 74,819 FFY 2014 elap Grant 20.600 AP140463 32,400 Independence Day and Labor Day Enforcement Campaign 20.616 ML140614 16,730 Memorial Day Enforcement Campaign 20.616 MM140532 12,320 Total U.S. Department of Transportation 184,649 U.S. Department of Health and Human Services Pass-Through Illinois Department of Human Sevices Title XX Social Services Block Grant 93.667 FCSSJ00096 47,379 Total U.S. Department of Health and Human Services 47,379 6
CITY OF JOLIET, ILLINOIS Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2014 Pass-Through Federal Entity CFDA Identifying Federal Federal Grantor/Program Title Number Number Expenditures U.S. Department of Homeland Security Pass-Through Illinois Emergency Management Public Assistance Grant 97.036 FEMA-4116-197-38570-00 $ 5,211 Emergency Management Performance Grant 97.042 14EMAJOLIE 24,318 Direct Award 2011 Staffing for Adequate Fire and Emergency Response Grant 97.044 EMW-2011-FH-00807 859,698 Pass-Through Illinois Law Enforcement Alarm System ILEAS Grant 97.074 N/A 74,443 Total U.S. Department of Homeland Security 963,670 Total Expenditures of Federal Awards $ 1,931,356 7
CITY OF JOLIET, ILLINOIS Notes to the Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2014 Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of Joliet, Illinois (City) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the City s financial statements. Federal Insurance and Loans The City did not have any federal insurance in effect during the year. Loans Payable - Illinois EPA Water The City s Water Fund had four loans payable to the Illinois Environmental Protection Agency (IEPA) as of December 31, 2014 for ongoing projects as follows: Loan Number Interest Rate Principal L17-4445 1.250% $ 1,364,054 L17-3148 1.250% 11,778,336 L17-4705 1.995% 1,175,778 L17-5070 1.995% $ 397,241 14,715,409 The loans were made from the IEPA Revolving Fund which has been funded with both federal and State of Illinois monies. Loan drawdowns in 2014 totaled $1,573,019, all of which was State of Illinois funded. Property The City will receive property in the form of road construction projects through the resources provided by the U.S. Department of Transportation. There are three construction projects; Caton Farm Road, Garnsey Avenue, and Washington Street, for which the City will record federal expenditures in the future for the construction performed by the State of Illinois with the use of federal funding. The City is the beneficiary of the construction projects upon completion. 8
Summary of Auditor s Results CITY OF JOLIET, ILLINOIS Schedule of Findings and Questioned Costs For the Year Ended December 31, 2014 1. The auditor s report expresses an unmodified opinion on the financial statements of the City of Joliet, Illinois. INTERNAL CONTROL OVER FINANCIAL REPORTING: 2. No material weaknesses were disclosed during the audit of the financial statements. 3. No significant deficiencies that were not considered to be material weaknesses were disclosed during the audit of the financial statements. 4. No instances of noncompliance material to the financial statements of the City, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. FEDERAL AWARDS 5. No material weaknesses were disclosed during the audit of compliance over major federal award programs. 6. No significant deficiencies that were not considered to be material weaknesses were disclosed during the audit of compliance over major federal award programs. 7. The auditor s report on compliance for the major federal award programs for the City expresses an unmodified opinion on each major federal program. 8. There was one finding relative to the major federal award programs for the City that was required to be reported in accordance with OMB Circular A-133,.510(a). 9. The following program was tested as a major program: Program Title CFDA Number U.S. Department Of Homeland Security 2011 Staffing for Adequate Fire and Emergency Response Grant 97.044 10. The threshold for distinguishing between Type A and B programs was $300,000. 11. The City was determined to be a low-risk auditee. 9
Financial Statement Findings CITY OF JOLIET, ILLINOIS Schedule of Findings and Questioned Costs For the Year Ended December 31, 2014 There were no financial statement findings reported for the fiscal year ended December 31, 2014. Federal Award Findings Finding 2014-001 Federal Program Name and CFDA #: 2011 Staffing for Adequate Fire and Emergency Response Grant, CFDA# 97.044 Federal Agency: U.S. Department of Homeland Security Criteria: Hiring performance reports for the 2011 Staffing for Adequate Fire and Emergency Response Grant are required to be reported to the U.S. Department of Homeland Security on a quarterly basis, 30 days following the grant period s quarter-end, and Federal Financial Report/SF-425 reports are required to be reported on a semi-annual basis, 30 days after June 30 th and 30 days after December 31 st. Condition: During the course of the audit, it was noted that the City did not always file the hiring performance reports or the Federal Financial Report/SF-425 within the stated time period for its 2011 Staffing for Adequate Fire and Emergency Response Grant program. Questioned Costs: None. Context: One quarterly hiring performance report for the 2011 Staffing for Adequate Fire and Emergency Response Grant program was filed past the 30 days following quarter-end time period. For the quarter ended 10/3/2014, the City filed the hiring performance report subsequent to 11/3/14. The semi-annual Federal Financial Report/SF-425 for December 31, 2014 was filed past the January 30, 2015 filing deadline. Effect: The City was not in compliance with the grant regulations over reporting. Cause: The City did not have procedures requiring a formal documented review of the City s compliance with reporting requirements. Recommendation: We recommend the City take steps to ensure expenditure reports are filed on a timely basis. City Response: Management concurs with the finding. The City s Fire Department will implement internal procedures to ensure required grant reports are filed on a timely basis. Prior Year Financial Statement Findings Summary Schedule of Prior Year Audit Findings For the Year Ended December 31, 2014 There were no financial statement findings reported for the fiscal year ended December 31, 2013. Prior Year Federal Award Findings There were no federal award findings reported for the fiscal year ended December 31, 2013. 10
CITY OF JOLIET, ILLINOIS Corrective Action Plan For the Year Ended December 31, 2014 Finding 2014-001 Condition: During the course of the audit, it was noted that the City did not always file the hiring performance reports or the Federal Financial Report/SF-425 within the stated time period for its 2011 Staffing for Adequate Fire and Emergency Response Grant program. Corrective Action Plan: The City s Finance Department has communicated to the Fire Department the importance of reporting all grant activity on a timely basis. The Fire department will implement internal procedures to ensure required grant reports are filed on a timely basis. Contact Person: Joe Formhals, Fire Chief Anticipated Completion Date: June 30, 2015 11
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