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HomeMy WebLinkAboutNorth Andover FY2010 SEFA Final TOWN OF NORTH ANDOVER, MASSACHUSETTS REPORTS ON FEDERAL AWARD PROGRAMS FISCAL YEAR ENDED JUNE 30, 2010 TOWN OF NORTH ANDOVER, MASSACHUSETTS REPORTS ON FEDERAL AWARD PROGRAMS FISCAL YEAR ENDED JUNE 30, 2010 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 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 3 Schedule of expenditures of federal awards 5 Notes to schedule of expenditures of federal awards 6 Schedule of findings and questioned costs 7 Powers &Sullivan � (lertified Publics Accountants � REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING 100 Quannapowitt Parkway AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT Suite 101 OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH Wakefield,MA 01880 GOVERNMENT AUDITING STANDARDS T.781-914-1700 F 781-914-1701 www.powersandsullivan.corn To the Honorable Board of Selectmen Town of North Andover, 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 North Andover, Massachusetts, as of and for the fiscal year ended June 30, 2010, which collectively comprise the Town of North Andover, Massachusetts' basic financial statements and have issued our report thereon dated January 26, 2011. 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 In planning and performing our audit, we considered the Town of North Andover, Massachusetts' 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 of North Andover, Massachusetts' internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Town of North Andover, 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 entity's financial statements will not be prevented, or detected and corrected in a timely basis, Our consideration of the internal control over financial reporting 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 deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town of North Andover, 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 Go vernment A uditing Standards. 1 We noted certain other matters that we reported to management of the Town of North Andover, Massachusetts in a separate letter dated January 26, 2011. This report is intended solely for the information and use of management, the Board of Selectmen, 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. January 26, 2011 2 Powers &Sullivan (:aerrtified Public Accountrintw REPORT ON COMPLIANCE WITH REQUIREMENTS THAT 100 Quannapowitt Parkway COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH Suite 101 MAJOR PROGRAM AND ON INTERNAL CONTROL OVER Wakefield,MA 01880 COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 T.781-914-1700 F.781-914-1701 www.powersandsullivan.corn To the Honorable Board of Selectmen Town of North Andover, Massachusetts Compliance We have audited the compliance of the Town of North Andover, Massachusetts, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-1 33 Compliance Supplement that could have a direct and material effect on each of the Town's major federal programs for the fiscal year ended June 30, 2010. The Town of North Andover, Massachusetts' 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 grants applicable to each of its major federal programs is the responsibility of the Town of North Andover, Massachusetts' management. Our responsibility is to express an opinion on the Town of North Andover, 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 North Andover, 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 North Andover, Massachusetts' compliance with those requirements. In our opinion, the Town of North Andover, Massachusetts, complied, in all material respects, with the requirements referred to above that could have a direct and material effect on each of its major federal programs for the fiscal year ended June 30, 2010. Internal Control Over Compliance Management of the Town of North Andover, 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 North Andover, Massachusetts' 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 of North Andover, Massachusetts' internal control over compliance. 3 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, 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 the 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 North Andover, Massachusetts as of and for the fiscal year ended June 30, 2010, and have issued our report thereon dated January 26, 2011. Our audit was performed for the purpose of forming our opinions on the financial statements that collectively comprise the Town of North Andover, Massachusetts', 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, the Board of Selectmen, 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. January 26, 2011 4 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Federal CFDA Federal Grantor/Program Title Number Expenditures U.S. DEPARTMENT OF AGRICULTURE: Passed through Massachusetts Department of Elementary and Secondary Education: Non-Cash Assistance(Commodities): National School Lunch Program 10.555 $ 66,297 Cash Assistance: School Breakfast Program 10.553 90,071 National School Lunch Program 10.555 358,488 TOTAL AGRICULTURE 514,856 U.S. DEPARTMENT OF ENERGY: Passed through Massachusetts Department of Energy Resources: Energy Efficiency and Conservation Block Grant Program 81.128 51,923 U.S. DEPARTMENT OF EDUCATION: Passed through Massachusetts Department of Elementary and Secondary Education: Title I Grants to Local Educational Agencies 84.010 284,621 Special Education Grants to States 84.027 1,030,983 Safe and Drug Free Schools and Communities State Grants(A) 84.186 9,028 Improving Teacher Quality State Grants 84.367 56,938 ARRA-Title I Grants to Local Educational Agencies, Recovery Act 84.389 44,567 ARRA-Special Education-Grants to States, Recovery Act 84.391 554,499 ARRA-State Fiscal Stabilization Fund-Education State Grants, Recovery Act 84.394 429,018 Passed through Massachusetts Department of Early Education and Care: Special Education- Preschool Grants 84.173 25,054 ARRA-Special Education- Preschool Grants, Recovery Act 84.392 23,043 TOTAL EDUCATION 2,457,751 SOCIAL SECURTIY ADMINISTRATION: Passed through Massachusetts Rehabilitation Commission: Social Security Disability Insurance 96.001 110 U.S. DEPARTMENT OF HOMELAND SECURITY: Passed through the State Office of Emergency Management: Public Assistance Grants 97.036 44,568 TOTAL $ 3,069,208 See notes to schedule of expenditures of federal awards. Town of North Andover,Massachusetts 5 Reports on Federal Award Programs Notes to Schedule of Expenditures of Federal Awards Fiscal Year Ended June 30, 2010 Note 1 -Definition of Reporting Entity The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the Town of North Andover, Massachusetts. All federal financial assistance received directly from federal agencies as well as federal financial assistance passed through other governmental agencies is included on the schedule. Note 2 -Significant Accounting Policies The accounting and reporting policies of the Town of North Andover, Massachusetts, are set forth below: (a) Basis of Presentation - The accompanying Schedule of Expenditures of Federal Awards is presented on the modified accrual basis of accounting. Accordingly, expenditures are recognized when the liability is incurred. (b) Cash Assistance - School Breakfast and Lunch Program- Program expenditures represent federal reimbursement for meals provided during the fiscal year. (c) Non-Cash Assistance (Commodities) —School Lunch Program— Program expenditures represent the value of donated foods received during the fiscal year. (d) Public Assistance Grants— Program expenditures represent federal reimbursement received during the fiscal year. Note 3— Program Clusters In accordance with Subpart A§_.105 of OMB Circular No. A-133, Audits of States, Local Governments and Non Profit Organizations, certain programs have been clustered in determining major programs. The following represents the clustered programs: CFDA Name of Cluster/Program Number Child Nutrition Cluster School Breakfast Program 10.553 National School Lunch Program 10.555 Title I Cluster Title I Grants to Local Educational Agencies 84.010 ARRA-Title I Grants to Local Educational Agencies, Recovery Act 84.389 Special Education Cluster Special Education Grants to States 84.027 Special Education Preschool Grants 84.173 ARRA- Special Education - Grants to States, Recovery Act 84.391 ARRA- Special Education - Preschool Grants, Recovery Act 84.392 Town of North Andover, Massachusetts 6 Reports on Federal Award Programs Schedule of Findings and Questioned Costs Fiscal Year Ended June 30, 2010 A. Summary of Auditors' Results 1. The auditors' report expresses an unqualified opinion on the financial statements of the Town of North Andover, Massachusetts. 2. No significant deficiencies relating to the audit of the financial statements are reported in the 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. 3. No instances of noncompliance material to the financial statements of the Town of North Andover, Massachusetts, were disclosed during the audit. 4. No significant deficiencies relating to the audit of the major federal award programs is reported in the 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. 5. The auditors' report on compliance for the major federal award programs for the Town of North Andover, Massachusetts, expresses an unqualified opinion. 6. No audit findings were required to be reported in accordance with Section 510(a) of OMB Circular A-133. 7. The programs tested as major programs include: CFDA Program Title Number Title I Grants to Local Educational Agencies 84.010 Special Education Grants to States 84.027 Special Education Preschool Grants 84.173 ARRA-Title I Grants to Local Educational Agencies, Recovery Act 84.389 ARRA- Special Education - Grants to States, Recovery Act 84.391 ARRA- Special Education - Preschool Grants, Recovery Act 84.392 ARRA- State Fiscal Stabilization Fund - Education State Grants, Recovery Act 84.394 8. The threshold for distinguishing Types A and B programs was $300,000. 9. The Town of North Andover, Massachusetts was determined to be a low-risk auditee. B. Findings-Financial Statements Audit None. C. Finding and Questioned Costs— Major Federal Award Programs None D. Prior Fiscal Year Audit Findings and Questioned Costs None Town of North Andover, Massachusetts 7 Reports on Federal Award Programs