HomeMy WebLinkAboutFederal Financial Assistance 12/31/1994CITY OF LINO LAKES, MINNESOTA
FEDERAL FINANCIAL ASSISTANCE
FOR THE YEAR ENDED
DECEMBER 31, 1994
AND REPORTS OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
VIIIVIV
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page No.
Independent Auditors Report on the Internal Control Structure
in Accordance With Government Auditing Standards 1
Independent Auditor's Report on the Internal Control Structure
Used in Administering Federal Financial Assistance Programs 3
Independent Auditor's Report on Compliance With General
Requirements Applicable to Federal Financial Assistance Programs 6
Independent Auditor's Report on Supplementary
Schedule of Federal Financial Assistance
Schedule of Federal Financial Assistance
7
8
Compliance Report Based on an Audit of General Purpose
Financial Statements Performed in Accordance With
Government Auditing Standards 9
Schedule of Findings and Questioned Costs 14
TAUTGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditor's Report on the Internal Control Structure
in Accordance with Government Auditing Standards
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota, as
of and for the year ended December 31, 1994, and have issued our report thereon dated April 10,
1995.
We conducted our audit in accordance with generally accepted auditing standards and Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the general
purpose financial statements are free of material misstatement.
In planning and performing our audit of the general purpose financial statements of the City of
Lino Lakes, Minnesota, for the year ended December 31, 1994, we considered its internal control
structure in order to determine our auditing procedures for the purpose of expressing our opinion
on the general purpose financial statements and not to provide assurance on the internal control
structure.
The management of the City of Lino Lakes, Minnesota, is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments
by management are required to assess the expected benefits and related costs of internal control
structure policies and procedures. The objectives of an internal control structure are to provide
management with reasonable, but not absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition, and that transactions are executed in accordance with
management's authorization and recorded properly to permit the preparation of general purpose
financial statements in accordance with generally accepted accounting principles. Because of
inherent limitations in any internal control structure, errors or irregularities may nevertheless occur
and not be detected. Also, projections of any evaluation of the structure to future periods is subject
to the risk that procedures may become inadequate because of changes in conditions or that the
effectiveness of the design and operation of policies and procedures may deteriorate.
We obtained an understanding of the design of relevant policies and procedures and whether they
have been placed in operation, and we assessed control risk. We also performed tests of controls
to evaluate the effectiveness of the design and operation of internal control structure policies and
procedures that we considered relevant to preventing and detecting irregularities that are material to
the general purpose financial statements, and to preventing and detecting misstatements resulting
from illegal acts and other noncompliance matters that have a direct and material effect on the
general purpose financial statements. Our tests were less in scope than would be necessary to
render an opinion on internal control structure policy and procedures. Accordingly, we do not
express such an opinion.
4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International
Atom
We noted certain matters involving the internal control structure and its operation that we consider
to be reportable conditions under standards established by the American Institute of Certified
Public Accountants. Reportable conditions involve matters coming to our attention relating to
significant deficiencies in the design or operation of the internal control structure that, in our
judgment, could adversely affect the entity's ability to record, process, summarize, and report
financial data consistent with the assertions of management in the general purpose financial
statements.
The City does not maintain complete accounting controls over quantities and costs of property and
equipment in the General Fixed Asset Account Group. This affects the control and accountability
function of property and equipment of the City.
A material weakness is a reportable condition in which the design or operation of the specific
internal control structure elements does not reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation to the general purpose financial
statements being audited may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions.
Our consideration of the internal control structure would not necessarily disclose all matters in the
internal control structure that might be reportable conditions and, accordingly, would not
necessarily disclose all reportable conditions that are also considered to be material weaknesses as
defined above. However we believe none of the reportable conditions described above is a
material weakness.
This report is intended for the information of the City of Lino Lakes, Minnesota and the Federal
Cognizant Audit Agency. This restriction is not intended to limit the distribution of this report,
which is a matter of public record.
w/g
TAUTGES, REDPATH & CO., LTD.
Certified Public Accountants
April 10, 1995
OEM
Nor
WNW
s
TAUTGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditor's Report on the Internal Control
Structure Used in Administering Federal Financial Assistance Programs
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota, as
of and for the year ended December 31, 1994, and have issued our report thereon dated April 10,
1995.
We conducted our audit in accordance with generally accepted auditing standards; Government
Auditing Standards, issued by the Comptroller General of the United States; and Office of
Management and Budget Circular A -128, Audits of State and Local Governments. Those
standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable
assurance about whether the general purpose financial statements are free of material misstatement.
In planning and performing our audit for the year ended December 31, 1994, we considered the
City of Lino Lakes, Minnesota's internal control structure in order to determine our auditing
procedures for the purpose of expressing our opinion on the City of Lino Lakes, Minnesota's
general purpose financial statements, and to report on the internal control structure in accordance
with OMB Circular A -128. This report addresses our consideration of internal control structure
policies and procedures relevant to compliance with requirements applicable to federal financial
assistance programs. We have addressed internal control structure policies and procedures relevant
to our audit of the general purpose financial statements in a separate report dated April 10, 1995.
The management of the City of Lino Lakes, Minnesota is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments
by management are required to assess the expected benefits and related costs of internal control
structure policies and procedures. The objectives of an internal control structure are to provide
management with reasonable, but not absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition, that transactions are executed in accordance with
management's authorization and recorded properly to permit the preparation of general purpose
financial statements in accordance with generally accepted accounting principles, and that federal
financial assistance programs are managed in compliance with applicable laws and regulations.
Because of inherent limitations in any internal control structure, errors, irregularities, or instances
of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that procedures may become inadequate
because of changes in conditions or that the effectiveness of the design and operation of policies
and procedures may deteriorate.
-3-
4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International
For the purpose of this report, we have classified the significant internal control structure policies
and procedures used in administering federal financial assistance programs in the following
categories:
General Requirements:
Political Activity
Civil Rights
Cash Management
Federal Financial Reports
Allowable Costs /Cost Principles
Administrative Requirements
For all of the internal control structure categories listed above, we obtained an understanding of the
design of relevant policies and procedures and determined whether they have been placed in
operation, and we assessed control risk.
During the year ended December 31, 1994, the City of Lino Lakes, Minnesota had no major
federal financial assistance programs and expended 67.03% of its total federal financial assistance
under the Community Development Block Grant program.
We performed tests of controls, as required by OMB Circular A -128, to evaluate the effectiveness
of the design and operation of internal control structure policies and procedures that we considered
relevant to preventing or detecting material noncompliance with general requirements and
requirements governing claims for advances and reimbursements and amounts claimed or used for
matching that are applicable to the aforementioned nonmajor program. Our procedures were less in
scope than would be necessary to render an opinion on these internal control structure policies and
procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we consider
to be reportable conditions under standards established by the American Institute of Certified
Public Accountants. Reportable conditions involve matters coming to our attention relating to
significant deficiencies in the design or operation of the internal control structure that, in our
judgment, could adversely affect the Lino Lakes, Minnesota's ability to administer federal fmancial
assistance programs in accordance with applicable laws and regulations.
The City does not maintain complete accounting controls over quantities and costs of property and
equipment in the General Fixed Asset Account Group. This affects the control and accountability
function of property and equipment of the City. Additionally, the City had not maintained controls
over proper filing of reports to appropriate agencies for the Oak Wilt Cooperative Suppression
Program and Releaf Grant.
A material weakness is a reportable condition in which the design or operation of one or more of
the internal control structure elements does not reduce to a relatively low level the risk that
noncompliance with laws and regulations that would be material to a federal financial assistance
program may occur and not be detected within a timely period by employees in the normal course
of performing their assigned functions.
Our consideration of the internal control structure policy and procedures used in administering
federal financial assistance would not necessarily disclose all matters in the internal control
structure that might be reportable conditions and, accordingly, would not necessarily disclose all
reportable conditions that are also considered to be material weaknesses as defined above.
However, we believe none of the reportable conditions described above is a material weakness.
This report is intended for the information of the City of Lino Lakes, Minnesota and the Federal
Cognizant Audit Agency. This restriction is not intended to limit the distribution of this report,
which is a matter of public record.
7� G� !mod
i 7-
TAUTGES, REDPATH & CO., LTD.
Certified Public Accountants
April 10, 1995
TAUTGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditor's Report on Compliance
with General Requirements Applicable to Federal
Financial Assistance Programs
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota, as
of and for the year ended December 31, 1994, and have issued our report thereon dated April 10,
1995.
We have applied procedures to test the City of Lino Lakes, Minnesota's compliance with the
following requirements applicable to its federal financial assistance programs, which are identified
in the Schedule of Federal Financial Assistance, for the year ended December 31, 1994. The
general requirements tested were:
Political Activity Allowable Costs /Cost Principles
Civil Rights Administrative Requirements
Cash Management
Federal Financial Reports
Our procedures were limited to the applicable procedures described in the Office of Management
and Budget's Compliance Supplement for Single Audits of State and Local Governments. Our
procedures were substantially less in scope than an audit, the objective of which is the expression
of an opinion on the City of Lino Lakes, Minnesota's compliance with the requirements listed in
the preceding paragraph. Accordingly, we do not express such an opinion.
With respect to the items tested, the results of those procedures disclosed no material instances of
noncompliance with the requirements listed in the second paragraph of this report. With respect to
items not tested, nothing came to our attention that caused us to believe that the City of Lino Lakes,
Minnesota had not complied, in all material respects, with those requirements. However, the
results of our procedures disclosed immaterial instances of non - compliance with those
requirements, which are described in the accompanying Schedule of Findings and Questioned
Costs.
This report is intended for the information of the City of Lino Lakes, Minnesota and the Federal
Cognizant Audit Agency. However, this report is a matter of public record and its distribution is
not limited.
TAUTGES, REDPATH & CO., LTD.
Certified Public Accountants
April 10, 1995
-6-
4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International
TAUTGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditor's Report on Supplementary
Schedule of Federal Financial Assistance
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota, for
the year ended December 31, 1994, and have issued our report thereon dated April 10, 1995.
These general purpose financial statements are the responsibility of the City of Lino Lakes,
Minnesota's management. Our responsibility is to express an opinion on these general purpose
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government
Auditing Standards issued by the Comptroller General of the United States and the provisions of
Office of Management and Budget Circular A -128, Audits of State and Local Governments. Those
standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable
assurance about whether the general purpose financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the general purpose financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
Our audit was made for the purpose of forming an opinion on the general purpose financial
statements of the City of Lino Lakes, Minnesota, taken as a whole. The accompanying Schedule
of Federal Financial Assistance is presented for purposes of additional analysis and is not a
required part of the general purpose financial statements. The information in that Schedule has
been subjected to the auditing procedures applied in the audit of the general purpose financial
statements and, in our opinion, is fairly presented in all material respects in relation to the general
purpose financial statements taken as a whole.
TAUTGES, REDPATH & CO., LTD.
Certified Public Accountants
April 10, 1995
-7-
4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International
CITY OF LINO LAKES , MINNESOTA
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
For The Year Ended December 31, 1994
Accrued Accrued
Catalog # (Deferred) (Deferred)
Federal Funding Source/ Federal Revenue at Revenue at
Pass Through Agency / Domestic January 1, Revenue December 31,
Program Title Assistance 1994 Recognized Expenditures 1994
U.S. Departmant of Agriculture:
State of Minnesota
Oak Wilt Cooperative Suppression Program 10.664 ($1,932) $1,695 $1,695 ($3,380)
ReLeaf Grant
Total U.S. Department of Agriculture
Federal Emergency Management Agency:
State of Minnesota
Emergency Management Institute
Field Training
67.556 (13,000) 13,000 13,000
83.403
($14,932) 14,695 14 695 (3,380)
350 350
U.S. Department of Housing and
Urban Development:
Anoka County:
Community Development Block Grant -
Small Cities Program 14.219 13,648 29,872 29,872 7,638
Total Federal Assistance ($1,284) $44,917 $44,917 $4,258
TA UTGES, REDPATH & CO., LTD.
CERTIFIED PUBLIC ACCOUNTANTS
Compliance Report Based on an Audit of General
Purpose Financial Statements Performed in
Accordance with Government Auditing Standards
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota, as
— of and for the year ended December 31, 1994 and have issued our report thereon dated
April 10, 1995.
Ilwir We conducted our audit in accordance with generally accepted auditing standards; Government
Auditing Standards, issued by the Comptroller General of the United States; and the provisions of
the Minnesota Legal Compliance Audit Guide for Local Government promulgated by the Legal
Compliance Task Force pursuant to Minnesota Statutes Section 6.65. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the general purpose
financial statements are free of material misstatement.
— Compliance with laws, regulations, contracts, and grants applicable to the City of Lino Lakes,
Minnesota, is the responsibility of the City's management. As part of obtaining reasonable
assurance about whether the general purpose financial statements are free of material misstatement,
we performed tests of the City of Lino Lakes, Minnesota's compliance with certain provisions of
laws, regulations, contracts, and grants. However, the objective of our audit of the general
purpose financial statements was not to provide an opinion on overall compliance with such
provisions. Accordingly, we do not express such an opinion.
The Minnesota Legal Compliance Audit Guide for Local Government covers five main categories
of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest,
Ommt public indebtedness, and claims and disbursements. Our study included all of the above listed
categories.
Reportable noncompliance findings consist of irregularities and illegal acts that are not clearly
inconsequential and instances of other noncompliance that are material to the financial statements.
Irregularities are intentional misstatements or omissions of amounts or disclosures in financial
statements. Illegal acts are violations of laws and regulations. Instances of other noncompliance
— include failures to follow requirements or violations of prohibitions contained in contracts or grant
agreements that cause us to conclude that the aggregation of the misstatements resulting from those
failures or violations is material to the financial statements. The results of our tests of compliance
— are described in the Schedule of Findings and Questioned Costs.
We considered these reportable noncompliance findings in forming our opinion on whether the
City of Lino Lakes, Minnesota's 1994 general purpose financial statements are presented fairly, in
all material respects, in conformity with generally accepted accounting principles, and this report
does not affect our report dated April 10, 1995 on those general purpose financial statements.
Vamp
-9-
4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International
This report is intended for the information of the City of Lino Lakes, Minnesota, its management
and the Federal Cognizant Audit Agency. However, this report is a matter of public record and its
distribution is not limited.
Respectfully submitted,
ire Ae
TAUTGES, REDPATH & CO., L'ID.
Certified Public Accountants
April 10, 1995
FINDING: Deficiencies in Collateral for Deposits
CONDITION:
CRITERIA:
Ilmar
At July 31, 1994, the City had total deposits of $3,460,164.21 at Firstar Bank,
requiring collateral with a fair market value of $3,587,928.62. The fair market
value of the collateral pledged was $1,894,668.35, resulting in a deficiency of
$1,693,260.27.
Minnesota Statute 118 provides certain specific collateral requirements for
deposits as follows:
118.01 DEPOSITORY BONDS AND COLLATERAL.
Subd. 1. Any bank, trust company or thrift institution authorized to
do business in this state may, in lieu of the corporate or personal surety
bond required to be furnished to secure deposited funds, deposit with
the custodian of the funds as collateral security, notes secured by first
mortgages of future maturity, upon which interest is not past due, on
improved real estate free from delinquent taxes, within the county
wherein the depository is located, or within counties immediately
adjoining the county in the State of Minnesota, the obligations which are
legally authorized investments for debt service funds under section
475.66, subdivision 3, and qualified state or local government
obligations acceptable to the treasurer or chief financial officer.
Qualified obligations must be general obligations rated "A" or better by
Moody's Investors Service, Inc. or Standard & Poor's Corporation.
Subd. 2. Except for notes secured by first mortgages of future
maturity, the total in amount of the collateral computed at its market
value shall be at least ten percent more than the amount on deposit at the
close of the business day, in excess of any insured portion, which
would be permitted if a corporate or personal surety bond were
furnished. The total amount of collateral consisting of notes secured by
first mortgages of future maturity computed at its market value shall be
at least 40 percent more than the amount on deposit at the close of the
business day, in excess of any insured portion, which would be
permitted if a corporate or personal surety bond were furnished. The
depository may furnish both a bond and collateral aggregating the
required amount.
Subd. 3. Any collateral so deposited shall be accompanied by an
assignment thereof to the municipality from the depository. The
assignment shall recite that the depository shall pay over to the treasurer
or chief financial officer on demand, free of exchange or any other
charges, except for early withdrawal penalties on time deposits, all
money deposited therein at any time during the period the collateral shall
be so deposited and shall pay the interest thereon when due at the agreed
rate; and that, in case of any default upon the part of the depository, the
governing body of the municipality or the treasurer or chief financial
officer may sell the collateral, or as much thereof as may be necessary to
realize the full amount due the municipality and to pay over any surplus
to the depository or its assigns.
Subd. 4. A depository may make withdrawals of excess collateral
or substitute other collateral, as defined in subdivision 1, on receipt by
the municipality of written notice from the depository. Authority is
vested in the treasurer to return the collateral to the depository. All
interest on the collateral so deposited shall be paid to the depository so
long as it is not in default.
Subd. 5. The closing of a depository shall be deemed a default on
the part of the depository and no demand on the part of the municipality
shall be necessary to establish the default. If a depository closes, any
deposit placed therein shall immediately become due and payable.
Subd. 6. All collateral shall be deposited with the treasurer or chief
financial officer of the municipality or placed in safekeeping for the
municipality in a financial institution approved by the governing body of
the municipality or the treasurer or chief financial officer, if approval
authority is designated to the treasurer or chief financial officer. The
collateral shall not be redeposited in the bank, trust company or thrift
institution furnishing it.
RECOMMENDATION:
We recommend that the City implement procedures to ensure compliance with MS
118.01.
CITY'S RESPONSE:
In 1995, all excess deposits are transferred into repurchase agreements at the end
of each business day.
Vimar
FINDING:
CONDITION:
CRITERIA:
Lack of Declaration Form
To be in compliance with Minnesota Statute 471.391, the City policy is to have
the declaration form printed on the reverse side of their checks. During 1994, the
City ordered new checks and due to a printing error the declaration form was
inadvertently omitted from the reverse side.
Minnesota Statute 471.391 reads as follows:
471.391 DECLARATION FORM.
Subd. 1. The declaration provided for in section 471.38 is
sufficient if in the following form: "I declare under the penalties of law
that this account, claim or demand is just and correct and that no part of
it has been paid.
Signature of Claimant"
Subd. 2 The check or order -check by which the claim is paid may
have printed on its reverse side, above the space for endorsement
thereof by the payee, the following statement: "The undersigned payee,
in endorsing this check (or order - check) declares that the same is
received in payment of a just and correct claim against the county
(county board of education for unorganized territory, school district,
town or city), and that no part of it has heretofore been paid." When
endorsed by the payee named in the check or order - check, such
statement shall operate and shall be deemed sufficient as the required
declaration of the claim.
RECOMMENDATION:
We recommend the City have sufficient declaration form on all checks.
CITY'S RESPONSE:
The City intends to include the declaration on their next check order.
Schedule of Findings and Questioned Costs
Oak Wilt Cooperative Suppression Program CFDA #10.669
— FINDING: The City did not report the activity for the Oak Wilt Cooperative Suppression
Program grant to the State of Minnesota on a timely basis.
CONDITION: The Oak Wilt report was to be filed with the State by December 15, 1994.
However, the City filed the report on January 13, 1995.
CRITERIA: The City's subgrant agreement with the State of Minnesota reads in part as
follows:
C. Reports and Records:
1. Expenditure and Accomplishment Report
Subgrantee shall furnish grantor with a final accomplishment report upon
completion of the project, but no later that 15 December 1993 on a form provided
by the grantor. It shall contain appropriate certification that all completed work
conforms with the specifications contained in the subgrantee's Oak Wilt Control
Plan or as amended in writing. The subgrantee shall provide a map updated in
accordance with procedures outlined by the grantor as part of the subgrantee's
report. Subgrantee shall timely furnish grantor with any and all information
grantor requests for the purpose of preparing any performance reports required by
USDA under 7 CFR parts 3016.40 and 3016.41
— RECOMMENDATION:
We recommend the City file grant reports on a timely basis.
CITY'S RESPONSE:
The City of Lino Lakes will be implementing a policy that empowers the Finance
Department responsibility for the administration of all grant monies.
lamp
Schedule of Findings and Questioned Costs
Oak Wilt Cooperative Suppression Program CFDA #10.669
FINDING: The City did not report accurately the activity for the Oak Wilt Cooperative
Suppression Program to the State of Minnesota.
CRTI'ERIA: The City's subgrant agreement with the State of Minnesota reads in part as
follows:
C. Reports and Records:
2. Subgrantee shall keep an up -to -date work status record for work
undertaken to complete the project.
3. Subgrantee shall maintain complete, accurate, and separate financial
records for all work undertaken, which adequately identify the source and
application of funds provided by this Agreement. These records must contain
information pertaining to this Subgrant award and authorizations, obligations,
unobligated balances, assets, liabilities, outlays or expenditures, and income as
these terms are defined in 7 CFR part 3016. The records must provide
verification of any in -kind contributions counting toward satisfying a match and
show how the value of any third party contributions was derived. A written
narrative explanation shall describe all variations from estimated cost.
Allowability and valuation of costs, third party in -kind contributions, volunteer
services and other items qualifying towards Subgrantee's match or cost share are
determined by 7 CFR 3016.24. For accounting purposes, project costs shall be
subdivided into the following categories: personnel, fringe benefits, travel,
equipment, supplies, contractual, and indirect charges. The records shall show
whether the source of payment for each type of enumerated cost is federal,
Subgrantee, in -kind, or other. Except as provided in 7 CFR part 3016.24,
allowable costs shall be as determined in OMB Circular A -87.
RECOMMENDATION:
We recommend the City accurately report the activity of the program to the State.
CITY'S RESPONSE:
The City of Lino Lakes will be implementing a policy that empowers the Finance
Department responsibility for the administration of all grant monies.
QUESTIONED COST:
The City reported expenditures of $3,495, actual expenditures were $3,390.
Schedule of Findings and Questioned Costs
Releaf Grant CFDA #67.556
OMMIm
FINDING: The City did not report accurately the activity for the ReLeaf Grant to the State of
_ Minnesota.
— CRITERIA: The City's subgrant agreement with the State of Minnesota reads in part as
Ilimm
follows:
D. Reports and Records:
2. Subgrantee shall keep an up -to -date work status record for work
undertaken to complete the project.
3. Subgrantee shall maintain complete, accurate, and separate financial
records for all work undertaken, which adequately identify the source and
application of funds provided by this Agreement. These records must contain
information pertaining to this Subgrant award and authorizations, obligations,
unobligated balances, assets, liabilities, outlays or expenditures, and income as
these terms are defined in 7 CFR part 3016. The records must provide
verification of any in -kind contributions counting toward satisfying a match and
show how the value of any third party contributions was derived. A written
narrative explanation shall describe all variations from estimated cost.
Allowability and valuation of costs, third party in -kind contributions, volunteer
services and other items qualifying towards Subgrantee's match or cost share are
determined by 7 CFR 3016.24. For accounting purposes, project costs shall be
subdivided into the following categories: personnel, fringe benefits, travel,
equipment, supplies, contractual, and indirect charges. The records shall show
whether the source of payment for each type of enumerated cost is federal,
Subgrantee, in -kind, or other. Except as provided in 7 CFR part 3016.24,
allowable costs shall be as determined in OMB Circular A -87 if Subgrantee is a
unit of government or OMB Circular A -122 if Subgrantee is a private nonprofit
corporation.
RECOMMENDATION:
We recommend the City accurately report the activity of the grant to the State.
CITY'S RESPONSE:
The City of Lino Lakes will be implementing a policy that empowers the Finance
Department responsibility for the administration of all grant monies.
QUESTIONED COST:
The City reported expenditures of $41,656, actual expenditures were $31,466.
-16-