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