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HomeMy Public PortalAboutBrewster 2012 - Auditor's Report as Required by OMB Circular A-133 June 30 2012 TOWN OF BREWSTER, MASSACHUSETTS INDEPENDENT AUDITORS’ REPORT AS REQUIRED BY OMB CIRCULAR A-133 AND GOVERNMENT AUDITING STANDARDS AND RELATED INFORMATION FOR THE YEAR ENDED JUNE 30, 2012 TOWN OF BREWSTER, MASSACHUSETTS INDEPENDENT AUDITORS’ REPORT AS REQUIRED BY OMB CIRCULAR A-133 AND GOVERNMENT AUDITING STANDARDS AND RELATED INFORMATION FOR THE YEAR ENDED JUNE 30, 2012 INDEX PAGE Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 1 – 2 Schedule of Expenditures of Federal Awards 3 Notes to Schedule of Expenditures of Federal Awards 4 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 5 – 6 Schedule of Findings and Questioned Costs 7 R. E. BROWN & COMPANY CERTIFIED PUBLIC ACCOUNTANTS 25 CEMETERY STREET – P.O. Box 230 Mendon, Massachusetts 01756 Phone: (508) 478-3941 Fax: (508) 478-1779 REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Honorable Board of Selectmen Town of Brewster, Massachusetts Compliance We have audited the Town of Brewster, Massachusetts’ 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 Town of Brewster, Massachusetts’ major federal programs for the year ended June 30, 2012. The Town of Brewster, Massachusetts’ major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the Town of Brewster, Massachusetts’ management. Our responsibility is to express an opinion on the Town of Brewster, Massachusetts’ compliance based on our audit. 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 Town of Brewster, Massachusetts’ compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the Town of Brewster, Massachusetts’ compliance with those requirements. In our opinion, the Town of Brewster, Massachusetts complied, in all material respects, with the 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, 2012. Internal Control Over Compliance Management of the Town of Brewster, Massachusetts is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the Town of Brewster, Massachusetts’ internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance 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 Town of Brewster, Massachusetts’ 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. 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 deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. Schedule of Expenditures of Federal Awards 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 of Brewster, Massachusetts as of and for the year ended June 30, 2012, and have issued our report thereon dated March 21, 2013, which contained an unqualified opinion on those financial statements. Our audit was conducted for the purpose of forming our opinions on the financial statements that collectively comprise the Town of Brewster, Massachusetts’ 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 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 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 financial statements or to the 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 financial statements as a whole. This report is intended solely for the information and use of management, the Board of Selectmen, others within the entity, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. R. E. Brown & Company March 21, 2013 - 2 - TOWN OF BREWSTER, MASSACHUSETTS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2012 GRANTOR/ PASS-THROUGH FEDERAL ENTITY PROGRAM GRANTOR/PASS-THOUGH GRANTOR/PROGRAM OR CFDA IDENTIFYING FEDERAL CLUSTER TITLE NUMBER NUMBER EXPENDITURES U.S. DEPARTMENT OF EDUCATION PASS-THROUGH PROGRAMS FROM: MASSACHUSETTS EXECUTIVE OFFICE OF EDUCATION - DEPARTMENT OF ELEMENTARY AND SECONDARY EDUCATION CIRCUIT BREAKER SUPPLEMENTAL 84.027A 694$ CIRCUIT BREAKER 2ND SUPPLEMENTAL 84.027A 116 ARRA - SPECIAL EDUCATION GRANTS TO STATES: FY 2011 84.391 760-294-1-0041-L 7,272 ARRA - STATE FISCAL STABILIZATION FUNDS, EDUCATION STATE GRANTS: FY 2011 84.394 780-366-1-0041-L 1,160 ARRA - STATE FISCAL STABILIZATION FUNDS, RACE-TO-THE-TOP INCENTIVE GRANTS: FY 2011 84.395 201-333-1-0041-L 495 ARRA - STATE FISCAL STABILIZATION FUNDS, RACE-TO-THE-TOP INCENTIVE GRANTS: FY 2012 84.395 201-004-2-0041-M 4,165 EDUCATION JOBS FUND: FY 2011 84.410 206-182-1-0041-L 9,065 EDUCATION JOBS FUND: FY 2012 84.410 206-292-2-0041-M 1,418 TOTAL U.S DEPARTMENT OF EDUCATION 24,385 U.S. DEPARTMENT OF AGRICULTURE DIRECT PROGRAMS: WATERSHED PROTECTION & FLOOD PREVENTION - FREEMAN'S POND 10.904 BR-SM-4 13,215 WATERSHED PROTECTION & FLOOD PREVENTION - SAINT'S LANDING 10.904 BR-SW-2010-1 4,492 WATERSHED PROTECTION & FLOOD PREVENTION - PAINE'S CREEK 10.904 BR-SW-2010-2 27,588 TOTAL DIRECT PROGRAMS:45,295 PASS-THROUGH PROGRAMS FROM: MASSACHUSETTS EXECUTIVE OFFICE OF EDUCATION - DEPARTMENT OF ELEMENTARY AND SECONDARY EDUCATION: BUREAU OF NUTRITION SCHOOL BREAKFAST PROGRAM 10.553 01-141 5,051 NATIONAL SCHOOL LUNCH PROGRAM 10.555 01-141 53,616 TOTAL PASS-THROUGH PROGRAMS FROM: MASSACHUSETTS EXECUTIVE OFFICE OF EDUCATION DEPARTMENT OF ELEMENTARY AND SECONDARY EDUCATION: BUREAU OF NUTRITION 58,667 TOTAL U.S. DEPARTMENT OF AGRICULTURE 103,962 U.S. DEPARTMENT OF COMMERCE DIRECT PROGRAM - NATIONAL OCEANIC & ATMOSPHERIC ADMINISTRATION ARRA - HABITAT CONSERVATION 11.463 NA09NMF4630301 138,525 TOTAL U.S. DEPARTMENT OF COMMERCE 138,525 U.S. DEPARTMENT OF HOMELAND SECURITY DIRECT PROGRAM FROM: FEDERAL EMERGENCY MANAGEMENT AGENCY ASSISTANCE TO FIREFIGHTERS GRANT 97.044 348,736 TOTAL DIRECT PROGRAM FROM: FEDERAL EMERGENCY MANAGEMENT AGENCY 348,736 PASS-THROUGH PROGRAMS FROM: MASSACHUSETTS EMERGENCY MANAGEMENT AGENCY DISASTER GRANT - PUBLIC ASSISTANCE 97.036 38,572 TOTAL PASS-THROUGH PROGRAM FROM: MASSACHUSETTS EMERGENCY MANAGEMENT AGENCY 38,572 TOTAL U.S DEPARTMENT OF HOMELAND SECURITY 387,308 TOTAL EXPENDITURES OF FEDERAL AWARDS 654,180$ SEE ACCOMPANYING NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS - 3 - TOWN OF BREWSTER, MASSACHUSETTS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2012 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting policies and financial reporting practices permitted for municipalities in Massachusetts are prescribed by the Uniform Municipal Accounting System (UMAS) promulgated by the Commonwealth of Massachusetts Department of Revenue. The significant accounting policies followed by the Town are as follows: A. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes the Federal grant transactions of the Town. The receipts and proceeds from Federal grants are recorded on the modified accrual basis whereby revenue is recognized when it becomes available and measurable. Disbursements of Federal grant funds are recorded on the accrual basis. II. SCOPE OF AUDIT The Town of Brewster, Massachusetts (the Town) is a governmental agency established by the laws of the Commonwealth of Massachusetts. All operations related to the Town's Federal grant programs, (the Department of Agriculture, Department of Education, Department of Homeland Security, and Department of Commerce), are included in the scope of the OMB Circular A-133 Audit Requirements for audits of state and local governments (the Single Audit). The U.S. Department of Homeland Security has been designated as the Town's oversight agency for the Single Audit. III. PERIOD AUDITED Single audit testing procedures were performed for Town Federal grant transactions during the year ended June 30, 2012. IV. SCHOOL LUNCH PROGRAM The Town accounts for local, state and federal expenditures of the National School Lunch and School Breakfast programs in one combined fund. Program expenditures in the accompanying Schedule of Expenditures of Federal Awards represent federal reimbursements for meals provided during fiscal 2012. Non-cash contributions of commodities under the Food Distribution program are received under a State distribution formula and are valued at federally published wholesale prices for purposes of this schedule. V. SUBRECIPIENTS The Town of Brewster, Massachusetts passed no federal awards through to sub-recipients during the period under audit. - 4 - R. E. BROWN & COMPANY CERTIFIED PUBLIC ACCOUNTANTS 25 CEMETERY STREET – P.O. Box 230 Mendon, Massachusetts 01756 Phone: (508) 478-3941 Fax: (508) 478-1779 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 To the Honorable Board of Selectmen Town of Brewster, Massachusetts 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 of Brewster, Massachusetts, as of and for the year ended June 30, 2012, which collectively comprise the Town of Brewster, Massachusetts’ basic financial statements and have issued our report thereon dated March 21, 2013. We conducted our audit in accordance with 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. Internal Control Over Financial Reporting Management of the Town of Brewster, Massachusetts is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Town of Brewster, Massachusetts’ internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of Brewster, Massachusetts’ internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Town of Brewster, Massachusetts’ internal control over financial reporting. 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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Town of Brewster, Massachusetts’ financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting 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 financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. - 5 - Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town of Brewster, Massachusetts’ financial statements are free of 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. This report is intended solely for the information and use of management, the Board of Selectmen, others within the entity, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. R. E. Brown & Company March 21, 2013 - 6 - TOWN OF BREWSTER, MASSACHUSETTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2012 A. SUMMARY OF AUDITOR’S RESULTS 1. The auditor’s report expresses an unqualified opinion on the basic financial statements of the Town of Brewster, Massachusetts. 2. No significant deficiencies relating to the audit of the basic financial statements are reported in the report on the basic financial statements. 3. No instances of noncompliance material to the basic financial statements of the Town of Brewster, Massachusetts were disclosed during the audit. 4. No significant deficiencies relating to the audit of major federal award programs are reported in the report on compliance with requirements applicable to each major program and on internal control over compliance in accordance with OMB Circular A-133. 5. The auditor’s report on compliance for the major federal award programs for the Town of Brewster, Massachusetts expresses an unqualified opinion on all major federal programs. 6. There are no audit findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-133 reported in this Schedule. 7. The program, tested as a major program included: Name CFDA No. Assistance to Firefighers Grant 97.044 8. The threshold used for distinguishing between Type A and B programs was $300,000. 9. The Town of Brewster, Massachusetts did not qualify as a low-risk auditee. B. FINDINGS – BASIC FINANCIAL STATEMENT AUDIT – NONE. C. FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAMS AUDIT – NONE. D. PRIOR YEAR FINDINGS & QUESTIONED COSTS – NONE - 7 -