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HomeMy WebLinkAboutFY 2023 Single Audit ReportCity of Euless, Texas Single Audit Report For the Fiscal Year Ended September 30, 2023 weaver? Assuranc • a eiX • Advisory CONTENTS Page Independent Auditor's 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 Independent Auditor's Report on Compliance for Each Major Federal Program and Report on Internal Control over Compliance in Accordance with the Uniform Guidance, and on the Schedule of Expenditures of Federal Awards 3 Schedule of Expenditures of Federal Awards 6 Notes to Schedule of Expenditures of Federal Awards 7 Schedule of Findings and Questioned Costs 8 weaver Assurance •Tax • Advisor; �. Assurance • Tax • Advisory Independent Auditor's 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 Mayor, City Council and City Manager City of Euless, Texas We have audited, in accordance with the 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, the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Euless, Texas (the City) as of and for the year ended September 30, 2023, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated February 23, 2024. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as a basis for designing procedures that are appropriate in the circumstances 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 City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City'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 City's financial statements will not be prevented or detected and corrected on a timely basis. A significant 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 limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements 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 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. Weaver and Tidwell, L.L.P. 2300 North Field Street, Suite 1000 I Dallas, Texas 75201 Main: 972.490.1970 CPAs AND ADVISORS I WEAVER.COM The Honorable Mayor, City Council and City Manager City of Euless, Texas 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 City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. &),fief. WEAVER AND TIDWELL, L.L.P. Dallas, Texas February 23, 2024 2 weaver ___ ,�x•Advisc.. �X . advisor , Independent Auditor's Report on Compliance for Each Major Federal Program and Report on Internal Control over Compliance in Accordance with the Uniform Guidance, and on the Schedule of Expenditures of Federal Awards To the Honorable Mayor, City Council and City Manager City of Euless, Texas Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program We have audited the City of Euless, Texas' (the City's) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of City's major federal programs for the year ended September 30, 2023. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. In our opinion, the City 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 September 30, 2023. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit 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). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City's compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City's federal programs. Weaver and Tidwell, L.L.P. 2300 North Field Street, Suite 1000 I Dallas, Texas 75201 Main: 972.490.1970 CPAs AND ADVISORS I WEAVER.COM The Honorable Mayor, City Council and City Manager City of Euless, Texas Auditor's Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City's compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the City's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances 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 the City's internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on 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 a 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. A significant deficiency in internal control over compliance is a deficiency, or a combination 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 The Honorable Mayor, City Council and City Manager City of Euless, Texas Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing 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 City as of and for the year ended September 30, 2023, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated February 23, 2024, 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 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 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 basic financial statements as a whole. WEAVER AND TIDWELL, L.L.P. Dallas, Texas February 23, 2024 5 City of Euless, Texas Schedule of Expenditures of Federal Awards For The Fiscal Year Ended September 30, 2023 Federal Grantor/ Assistance Pass -Through Pass -Through Grantor/ Listing Entity Identifying Federal Program Title Number Number Expenditures U.S. DEPARTMENT OF JUSTICE Direct Awards Bulletproof Vest Partnership Program 16.607 N/A $ 32,461 Total U.S. Department of Justice 32,461 NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION Passed through Texas Department of Transportation STEP Comprehensive 20.600 2022-Euless-S-1YG-00039 40,951 Click it or Ticket 20.600 2023 Euless-CIOT-RFR-00003 3,668 Operation: Slowdown 20.600 2023 Euless -OP SLOW-RFR-00003 3,918 Total Highway Safety Cluster 48,537 Total National Highway Traffic Safety Administration 48,537 U.S. DEPARTMENT OF TREASURY Direct Awards COVID-19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 N/A 1,962,219 Total U.S. Department of Treasury 1,962,219 ENVIRONMENTAL PROTECTION AGENCY Passed through Texas Water Development Board 2015 Drinking Water Loan 66.468 62647 15,050 2019 Drinking Water Loan 66.468 62647 386,574 Total Drinking Water State Revolving Fund Cluster 401,624 Total Environmental Protection Agency 401,624 U.S. DEPARTMENT OF HOMELAND SECURITY Passed through Texas Department of Public Safety Swift Water Boat Replacement 97.067 39662-01 70,707 Passed through Texas Depaitinent of Emergency Management FEMA - Winter Storm Uri Total U.S. Department of Homeland Security TOTAL EXPENDITURES OF FEDERAL AWARDS 97.036 EM2115 7,488 78,195 $ 2,523,036 The Notes to the Schedule of Expenditures of Federal Awards are an integral part of this statement. 6 City of Euless, Texas Notes to Schedule of Expenditures of Federal Awards Note 1— General The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of the federal award programs of the City of Euless, Texas (the City). The City's reporting entity is defined in Note 1 to its basic financial statements. The SEFA includes all federal awards received directly from federal agencies and federal awards passed -through other governmental agencies. In addition, the SEFA includes local, state and other expenditures matched along with the federal award expenditures. Note 2 — Basis of Presentation The accompanying schedule is presented using the modified accrual basis of accounting for program expenditures accounted for in the governmental funds and the accrual basis of accounting for program expenditures accounted for in the proprietary funds as described in Note 1 to the City's basic financial statements. For reimbursable grants, the City recognizes revenues commencing on the date of grant approval (provided all eligibility requirements are met) since this is when the City is eligible to claim expenditures for reimbursements. Pass -through entity identifying numbers are presented where available. The City has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Note 3 — Contingencies The City participates in several grant programs, which are governed by various rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit and adjustment by the grantor agencies. Therefore, to the extent that the City has not complied with the rules and regulations governing the grants, refunds of any money received may be required, and the collectability of any related receivable at September 30, 2023 may be impaired. In the opinion of management, there are no significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants. Note 4 — Outstanding Loans The City has outstanding loan commitments under the Drinking Water State Revolving Loan Fund from the Texas Water Development Board (TWDB) as a pass -through agency for the Environmental Protection Agency (Assistance Listing No. 66.468). As of September 30, 2023, the outstanding loan payable balances were TWDB Series 2015A $2,925,000 and TWDB Series 2019 $8,200,000. 7 City of Euless, Texas Schedule of Findings and Questioned Costs For the Fiscal Year Ended September 30, 2023 Section I — Summary of Auditors' Results Financial Statements An unmodified opinion was issued on the financial statements. Internal control over financial reporting: • Material weakness(es) identified? Yes • Significant deficiencies identified that are not considered to be material weakness(es)? Yes Noncompliance material to financial statements noted? Yes Federal Awards Internal control over major federal programs: • Material weakness(es) identified? Yes • Significant deficiencies identified that are not considered to be material weakness(es)? Yes An unmodified opinion was issued on compliance for major federal programs. Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Identification of major programs: X No X None reported X No X No X None reported Yes X No 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Dollar threshold used to distinguish between type A and type B programs? $750,000 Auditee qualified as low -risk auditee? X Yes No 8 City of Euless, Texas Schedule of Findings and Questioned Costs - Continued For the Fiscal Year Ended September 30, 2023 Section II — Financial Statement Findings None Section III — Federal Award Findings and Questioned Costs None Section IV — Prior Audit Findings None 9