Loading...
HomeMy Public PortalAbout2019-03-26 Single Audit Report TOWN OF WATERTOWN, MASSACHUSETTS Independent Auditors' Reports Pursuant to Governmental Auditing Standards and Uniform Guidance For the Year Ended June 30, 2018 TABLE OF CONTENTS PAGE 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 REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER COMPLIANCE, AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERALAWARDS REQUIRED BY THE UNIFORM GUIDANCE 3 Schedule of Expenditures of Federal Awards 6 Notes to Schedule of Expenditures of Federal Awards 7 Schedule of Findings and Questioned Costs 8 MELANSON ACCOUNTANTS•AUDITORS 10 New England Business Center Dr.•Suite 107 Andover,MA 01810 (978)749-000S melansonheath.com Additional Offices: Nashua,NH Manchester,NH Greenfield,MA Ellsworth,ME REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Independent Auditors' Report To the Town Manager and Town Council Town of Watertown, Massachusetts We have audited, in. accordance with the auditing standards generally accepted in the States of America and the standards applicable to financial audits contained in United St pp he Comptroller General of the United States Government Auditing Standards issued by t p , the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Watertown, Massachusetts as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the Town's basic financial statements, and have issued our report thereon dated February 7, 2019. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Town'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 Town's internal control.Accordingly,we do not express an opinion on the effectiveness of the Town'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 sig- nificant 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. 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 limi- tations, 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 Town's financial state- ments 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 state- ment 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 con- sidering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. February 7, 2019 2 MELANSON ACCOUNTANTS•AUDITORS 10 New England Business Center Dr.•Suite 107 Andover,MA 01810 (978)749-0005 melansonheath.com Additional Offices: Nashua,NH Manchester,NH Greenfield,MA Ellsworth,ME 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 THE UNIFORM GUIDANCE Independent Auditors' Report To the Board of Selectmen Town of Watertown, Massachusetts Report on Compliance for Each Major Federal Program We have audited the Town of Watertown, Massachusetts' compliance with the types of compliance requirements described in the OMB Compliance Supplementthat could have a direct and material effect on each of Town's major federal programs for the year ended June 30, 2018. The Town's major,federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditors' Responsibility Our responsibility is to express an opinion on compliance for each of the Town'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 3 of the United States; and the audit requirements of Title 2 U.S. Code of Federal Reg- ulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards(Uniform Guidance).Those standards and the Uniform Guidance 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 Town's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. I 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 determi- nation of the Town's compliance. Opinion on Each Major Federal Program In our opinion, the Town of Watertown, Massachusetts 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 June 30, 2018. Report on Internal Control Over Compliance Management of the Town 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 Town'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 the Uniform Guidance, 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 Town'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, non- compliance 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 com- bination of deficiencies, in internal control over compliance, such that there is a reason- able 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 combi- nation 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. 4 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 weak- nesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope over compliance and the results of that testing of our testing of internal control p g g based on-the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the Town as of and for the year ended June 30, 2018, and the related notes to the financial statements,which collectively comprise the Town's basic financial statements.We issued our report thereon dated February 7, 2019, 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 the Uniform Guidance 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 pro- cedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditure of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. February 7, 2019 5 TOWN OF WATERTOWN,MASSACHUSETTS Schedule of Expenditures of Federal Awards For the Year Ended June 30,2018 e Federal Aoencv Cluster Federal Pass Through Pass-through Agency CFDA Identifying Federal Program Title Number Number Expenditures U.S.Department of Aoriculture Child.Nutrition Cluster Passed Through Massachusetts Department of Elementary and Secondary Education School Breakfast Program 10.553 DOENUT2017 $ 70,015 National School Lunch Program-Cash Assistance 10.555 DOENUT2017 338,194 National School Lunch Program-Non-cash Assistance 10.555 DOENUT2017 61,683 Total Child Nutrition Cluster 469,892 Total U.S.Department of Agriculture 469,892 U.S.Department of Housino and Urban Development Passed Through Massachusetts Department of Housing and Community Development Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 Unknown 396 Total U.S.Department of Housing and Urban Development 396 U.S.Department of Justice Passed Through Massachusetts Office for Victim Assistance Antiterrorism Emergency Reserve 16.321 2017AEAPWPS 20,465 Total U.S.Department of Justice 20,465 Special Education Cluster Passed Through Massachusetts Department of Elementary and Secondary Education Special Education Grants to States-Title VIB 84.027 240-120138-2017-0314 822,613 Special Education Grants to States-Professional Development 84,027 274-267-7-0314 9,758 Passed Through Massachusetts Department of Early Education and Care Special Education Preschool Grants 84.173 26217WATERTOWNPUPAY 40,799 Total Special Education Cluster 873,170 Passed Through Massachusetts Department of Elementary and Secondary Education Title I Grants to Local Educational Agencies 84.010 305-081204-2017-0314 377,138 Title I State Agency Program for Neglected and Delinquent Children and Youth 84.013 400-027-7-0314 24,151 Supporting Effective Instruction State Grants 84.367 140-0903785-2016-0314 84,985 English Language Acquisition State Grants 84.365 180-133457-2014-0314 61,859 Student Support and Academic Enrichment Program 84.424 309-164194-2018-0314-1.0 1,000 Total U.S.Department of Education 1,422,303 Total Federal Expenditures $ 1,913,056 The accompanying notes are an integral part of this schedule. " 6 TOWN OF WATERTOWN, MASSACHUSETTS Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2018 Note 1. Basis of Presentation The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of the Town of Watertown, Massachusetts under programs of the federal government for the year ended June 30, 2018. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Town,'it is not intended to and does not present the financial position, changes in net position, or cash flows of the Town. Note 2. Summary of Significant Accounting Policies ed accrual basis • Expenditures reported on the Schedule are reported on the modified p p p of accounting. Such expenditures are recognized following the cost principles con- tained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited to reimbursement. • The amounts reported for the National School Lunch Program — Non-Cash Assistance(Commodities) represent the fair value of commodities provided by the Commonwealth. • The Town has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Note 3. Subrecipients Of the federal expenditures presented in the Schedule, the Town did not provide federal awards to subrecipients. 7 TOWN OF WATERTOWN, MASSACHUSETTS Schedule of Findings and Questioned Costs For the Year Ended June 30, 2018 SECTION I -SUMMARY OF AUDITORS' RESULTS Financial Statements Type of auditors' report issued: Unmodified Internal control over financial reporting: • Material weaknesses identified? _yes ✓ no • Significant deficiencies identified? _yes ✓ none reported Noncompliance material to financial state- ments noted? _yes ✓ no Federal Awards Internal control over major programs: • Material weaknesses identified? _yes ✓ no • Significant deficiencies identified? —yes ✓ none reported Type of auditors' report issued on compliance for major programs: Child Nutrition Cluster Unmodified Title I Grants to Local Agencies Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? _yes ✓ no Identification of major programs: CFDA Number(s) Name of Federal Proaram or Cluster 10.553/10.555 Child Nutrition Cluster 84.0-10 Title I Grants to Local Agencies Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? _yes ✓ no 8 SECTION II - FINANCIAL STATEMENT FINDINGS None. SECTION III -FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS None. SECTION IV-SCHEDULE OF PRIOR YEAR FINDINGS Current Year Findina # Program Finding/Noncompliance Resolution 2017-001 All Federal Document Policies and Procedures Resolved Programs Over Federal Awards 9