The URL can be used to link to this page

Home My Public Portal AboutFY2009 Single Audit Report TOWN OF WATERTOWN, MASSACHUSETTS Independent Auditors' Reports Pursuant to Governmental Auditing Standards and The Single Audit Act Amendments of 1996 For the Year Ended June 30, 2009 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 WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORD- ANCE WITH OMB CIRCULAR A-133 3 Schedule of Expenditures of Federal Awards 6 Schedule of Findings and Questioned Costs 7 10 Neu Englund lluemo, ('entel I hne • Gnte I0; .Andma, ,MA 01 S 10.1096 197S174y000i • Fun ON 7490006 II it ,rnn 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 Town Manager and Town Council Town of Watertown, 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 Watertown, Massachusetts, as of and for the year ended June 30, 2009, which collectively comprise the Town's basic financial statements and have issued our report thereon dated November 8, 2010. 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 Reoortina In planning and performing our audit, we considered the Town's internal control over financial reporting as a basis for designing our auditing procedures 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 over finan- cial reporting. Accordingly, we do not express an opinion on the effectiveness of the Town's internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned func- tions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Town's ability to initiate, authorize, record, process, or report financial data relia- bly in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Town's financial state- ments that is more than inconsequential will not be prevented or detected by the Town's internal control. Ciim,::dt,:Ml - S:, u:,i, `.II • \1, VI A material weakness is a significant deficiency, or combination of significant defi- ciencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Town's internal control. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of the section and would not necessarily identify all deficiencies in internal control that might be 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. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town's financial state- ments are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompli- ance 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 noncom- pliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the Town of Watertown, in a separate letter dated November 8, 2010. This report is intended solely for the information and use of management, Town Council, others within the entity, and 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. Andover, Massachusetts (j November 8, 2010 2 I O N,it Lat0a i,1 I;inm,w ( 'tnre) I)mn tmw 107 .- mlm,�, ,\4 \ 01,S'10 1000 iyiSl iq,)OJJ? • 1", 1 ;_ti) i I0000o tntIt 0116ni.onh,u06,mn REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Town Manager and Town Council Town of Watertown, Massachusetts Compliance We have audited the compliance of the Town of Watertown, Massachusetts, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2009. The Town's major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grant agreements applicable to each of its major federal programs is the responsibility of the Town's management. Our responsibility is to express an opinion on the Town's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards gener- ally 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's 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's compliance with those requirements. As described in items 09-1 and 09-2 in the accompanying schedule of findings and questioned costs, the Town did not comply with certain requirements that are appli- cable to its Title I and Special Education Cluster grants. Compliance with such A Hit., „I()fr... 3 tnrrnprLI,,MA • EI6,nntl,,ME • i\'nJuu..NH • U.,..I,a, MI requirements is necessary, in our opinion, for the Town to comply with requirements applicable to those programs. In our opinion, except for the noncompliance described in the preceding paragraph, the Town complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2009. Internal Control Over Compliance The management of the Town is responsible for establishing and maintaining effec- tive internal control over compliance with the requirements of laws, regulations, contracts, and grant agreements applicable to federal programs. In planning and performing our audit, we considered the Town's internal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, 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 control deficiency in a Town's internal control over compliance 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 noncom- pliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control defi- ciencies, that adversely affects the Town's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the Town's internal control. A material weakness is a significant deficiency, or combination of significant defi- ciencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the Town's internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weak- nesses. 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 Watertown as of and for the year ended June 30, 2009, 4 and have issued our report thereon dated November 8, 2010. Our audit was performed for the purpose of forming our opinions on the financial statements that collectively comprise the Town's 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 has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of management, Town Council, others within the entity, and 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. Andover, Massachusetts November 8, 2010 5 TOWN OF WATERTOWN, MASSACHUSETTS Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2009 Federal Grantor/ Federal Pass-Through Grantor/ Catalogue Prooram Name Number Expenditures U.S. Department of Agriculture Passed Through the Massachusetts Department of Elementary and Secondary Education School Lunch Program 10.555 $ 266,492 Total Department of Agriculture 266,492 U.S. Deoartment of Housina and Urban Development Passed Through Massachusetts Department of Housing and Community Development CDBG -Small Cities 14.228 2,993 Total Department of Housing and Urban Development 2,993 U.S. Department of Education Passed Through the Massachusetts Department of Elementary and Secondary Education Title I ECIA, P.L. 97-35 84.010 392,251 Instructional Personnel -Title VIB 84.027 756,728 Access- Professional Development 84.027 17,185 Special Education Corrective Action 84.027 6,000 Occupational Education -Vocational Skills 84.048 47,820 LEP Support 84.048 52,127 Title V 84.151 1,544 Governors Alliance Against Drugs 84.186 12,683 Teaching American History 84.215 6,110 21 st Century Community Learning 84.287 40,789 Title II -Teacher Quality 84.318 130.895 Enhanced Education Through Technology 84,318 2,700 ARRA State Stabilization Funds 84.394 366,634 Passed Through Massachusetts Department of Early Education and Care P.L. 99-457 Early Childhood 84.173 49,078 Total Department of Education 1,882,544 U.S. Department of Homeland Security Fire Emergency Preparedness 97,044 1,789 Total Department of Homeland Security 1,789 Grand Total $ 2,153,818 See Auditors' report on Schedule of Federal Awards. This schedule is prepared on the modified accrual basis of accounting. State identifying numbers were not available for the pass-through grants listed above. 6 TOWN OF WATERTOWN, MASSACHUSETTS Schedule of Findings and Questioned Costs For the Year Ended June 30, 2009 SECTION I -SUMMARY OF AUDITORS' RESULTS Financial Statements Type of auditors' report issued: Unqualified Internal control over financial reporting: • Material weaknesses identified? _yes ✓ no • Significant deficiencies identified that are not considered to be material weakness(es)? —yes ✓ none reported Noncompliance material to financial state- ments noted? _yes ✓ no Federal Awards Internal control over major programs: • Material weakness(es) identified? _yes ✓ no • Significant deficiencies identified that are not considered to be material weaknesses? —yes ✓ none reported Type of auditors'report issued on compliance for major programs: Title I and Special Education Cluster Grants Qualified ARRA State Stabilization Funds Unqualified Any audit findings disclosed that are required to be reported in accordance with Section 510(a)of Circular A-133? ✓ yes _no Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster 84.010 Title 1 84.027/84.173 Special Education Cluster Grants 84.394 ARRA State Stabilization Funds Dollar threshold used to distinguish between type A and type B programs: $300,000 Auditee qualified as low-risk auditee? _yes ✓ no 7 SECTION II -FINANCIAL STATEMENT FINDINGS None. SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Questioned Finding# Program Find ina/Noncompliance Cost 09-1 Special Maintain Time and Effort Distribution $83,323 Education Records (Compliance Findina) Cluster Grants Criteria: 84.027/84.173 OMB CircularA-87,Attach. B, paragraph 8.h.3 requires all employees paid in full from Title I federal grant funds to furnish semi-annual $ 143,505 84.010 certifications that they have been engaged solely in activities supported by the grant. These certifications must be signed by the employee or supervisor with knowledge of the work performed. In addition, OMB Circular A-87, Attach. B, Paragraph 8.h.4 requires employees to document the portion of time worked on the grant and the portion of time worked in areas not related to the grant. Circular A-87 also requires that these time and effort distribution records must (1) be done after the fact(not estimated or budgeted), (2)account for the total activities for which the employee is paid, (3)be pre- pared at least monthly and coincide with one or more pay periods, and (4) be signed by the employee. Condition: We tested a sample of 7 payroll disburse- ments funded by Title I in order to determine if adequate time and effort records were maintained. As a result of our testing, it was determined that 5 of the employees tested did not maintain adequate time and effort documentation. Specifically,three employees did not document time on the Title I program, and two did not sign their time and effort certification. (continued) 8 (continued) Questioned Finding# Program Finding/Noncompliance Cost We tested a sample of 7 payroll disburse- ments for the SPED cluster grants. Our audit found that while the School Depart- ment maintained certain time and effort documentation, it was done for the entire year and should have been semi-annually or monthly. Also,one employee completed time and effort; however,the documentation did not denote percentage of time spent on SPED grants. In addition,time and effort documentation could not be located for one employee. Effect: Certain time and effort documentation did not meet Federal requirements. Recommendation: We recommend the School Department maintain the required certifications for all employees who are charged to federal grant programs. This will ensure the Town's compliance with the documentation of time and effort requirements of OMB Circular A-87. Town's Response: The Watertown Public School Department has implemented the following procedure in its personnel/payroll activities. This is done twice each school year; once in January and once in June. Employees paid in full from federal grant funds sign a statement acknowledging that they have been engaged solely in activities supported by the grant. Employees paid partially from a grant maintain a record of the portion of times worked on the grant and the portion of time worked in areas not related to the grant. This record is signed by the employee and submitted after the last pay period each month. (continued) 9 (continued) Questioned Finding# Program Find ina/Noncompllance Cost 09-2 Special Ensure Final Financial Reports are Filed N/A Education when Required Cluster Grants Criteria: 84.027/84.173 The MA Department of Elementary and Secondary Education requires Final Title I Financial Reports (FR-1)to be completed 84.010 and submitted within 60 days of the end of the grant. Condition: During our audit of the Final Financial Reports(FR-1)for the Title I and Special Education Cluster grants,we determined that these reports were not completed and submitted within 60 days of the grant year end. The grant year end was August 31, 2009, and therefore, the FR-1 reports should have been submitted no later than October31, 2009. Watertown Public School Department submitted the Title I and Special Education Cluster FR-1 reports in December 2009. Effect: Certain State report filing deadline require- ments were not met. No questioned cost was raised, since this was an administrative issue. Recommendation: We recommend Watertown Public School Department establish procedures to ensure that Final Financial Reports are completed and submitted to the Department of Elementary and Secondary Education within the required time frame. Town's Response: The Watertown Public School Department instituted a procedure to stop purchasing on grants 60 days before the grant ends in order to make sure that all obligations have been paid in a timely fashion. All FY10 reports were filed in a timely manner. 10 SECTION IV-SCHEDULE OF PRIOR YEAR FINDINGS Finding# Program Findina/Noncompliance 08-1 Title I Reauest Funds Based on Actual Expenditures and 84.010 Immediate Needs (Significant Deficiencv) Finding 08-1 was resolved in the current year. 08-2 Special Maintain Emelovees Time and Effort Records Education Cluster Finding 08-2 was not resolved in the current year and is Grants repeated as item 09-1. 84.027/84.173 08-3 Special Ensure Final Financial Reoorts are Filed when Required Education Cluster Finding 08-3 was not resolved in the current year and is Grants repeated as item 09-2. 84.027184.173 Title 1 84.010 11