HomeMy WebLinkAboutCity of Euless Single Audit Report FY2019City of Euless, Texas
Single Audit Report
Year Ended September 30, 2019
C O N T E N T S
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
Austin | Conroe | Dallas | Fort Worth | Houston Los Angeles | Midland | New York City | San Antonio
Weaver and Tidwell, L.L.P.
2300 North Field Street, Suite 1000 | Dallas, Texas 75201
Main: 972.490.1970 | Fax: 972.702.8321
CPAs AND ADVISORS | WEAVER.COM
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, 2019, 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 19, 2020.
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) to determine the audit 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 may exist that have not been identified.
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.
The Honorable Mayor, City Council and City Manager
City of Euless, Texas
2
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.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
February 19, 2020
Austin | Conroe | Dallas | Fort Worth | Houston Los Angeles | Midland | New York City | San Antonio
Weaver and Tidwell, L.L.P.
2300 North Field Street, Suite 1000 | Dallas, Texas 75201
Main: 972.490.1970 | Fax: 972.702.8321
CPAs AND ADVISORS | WEAVER.COM
3
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
We have audited the City of Euless, Texas’ (the City) compliance with the types of compliance
requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement
that could have a direct and material effect on each of the City’s major federal programs for the year
ended September 30, 2019. 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.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and
conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the City’s major federal programs
based on our audit of the types of compliance requirements referred to above. 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 the audit requirements of Title 2 U.S. Code of Federal
Regulation (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance
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
City’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 on compliance for each major
federal program. However, our audit does not provide a legal determination of the City’s compliance.
Opinion on Each Major Federal Program
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, 2019.
The Honorable Mayor, City Council and City Manager
City of Euless, Texas
4
Report on Internal Control over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing
our audit of compliance, we considered the City’s internal control over compliance with the types of
requirements that could have a direct and material effect on each major federal program as a basis for
designing auditing procedures that are appropriate in the circumstances for the purpose of expressing an
opinion on compliance for each major federal program 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 internal control over compliance. Accordingly, we do not express an opinion on
the effectiveness of the City’s 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. 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.
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 material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
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 September 30, 2019,
and the related notes to the financial statements, which collectively comprise the City’s basic statements.
We issued our report thereon dated February 19, 2020, which contained an unmodified opinion on those
financial statements. Our audit was conducted for the purpose of forming an opinion on the financial
statements. The accompanying schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by the audit requirements of Title 2 U.S. Code of Federal Regulations
(CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (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
The Honorable Mayor, City Council and City Manager
City of Euless, Texas
5
underlying accounting and other records used to prepare the basic 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 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 19, 2020
City of Euless, Texas
Schedule of Expenditures of Federal Awards
For The Fiscal Year Ended September 30, 2019
6
Federal Pass-Through
CFDA Entity Identifying Federal
Number Number Expenditures
U.S. DEPARTMENT OF JUSTICE
Direct Awards
Bulletproof Vest Partnership Program 16.607 N/A 7,863$
Total U.S. Department of Justice 7,863
NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION
Passed through Texas Department of Transportation
STEP Comprehensive 20.600 2017-Euless-S-1YG-0047 63,028
Total National Highway Traffic Safety Administration 63,028
ENVIRONMENTAL PROTECTION AGENCY
Passed through Texas Water Development Board
2015 Clean Water Loan 66.458 62647 130,275
2018 Clean Water Loan 66.458 62647 2,414,955
2,545,230
2019 Drinking Water Loan 66.468 62647 195,215
Total Environmental Protection Agency 2,740,445
INSTITUTE OF MUSEUM AND LIBRARY SERVICES
Passed through Texas State Library and Archives Commission
Family Place Grant 45.310 LS-00-18-0044-18 6,000
Library Grant 45.310 LS-00-16-0044-16 1,715
Library Grant 45.310 25,908
Total Institute of Museum and Library Services 33,623
U.S. DEPARTMENT OF HOMELAND SECURITY
Passed through Texas Department of Public Safety
TEEX 97.03 10,448
TEEX 97.03 10,082
State Homeland Security Program 97.067 GR1806 52,718
Total U.S. Department of Homeland Security 73,248
TOTAL EXPENDITURES OF FEDERAL AWARDS 2,918,207$
Federal Grantor/
Pass-Through Grantor/
Program Title
City of Euless, Texas
Notes to Schedule of Expenditures of Federal Awards
7
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, 2019 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 Clean Water State Revolving Loan Fund from the
Texas Water Development Board (TWDB) as a pass-through agency for the Environmental Protection
Agency (CFDA No. 66.458). As of September 30, 2019, the outstanding loan payable balances were:
TWDB Series 2015B $2,020,000 and TWDB Series 2018 $2,660,000.
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 (CFDA No. 66.468). As of September 30, 2019, the outstanding loan payable
balance was: TWDB Series 2019 $9,275,000.
City of Euless, Texas
Schedule of Findings and Questioned Costs
For the Fiscal Year Ended September 30, 2019
8
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 X No
• Significant deficiencies identified that are not considered
to be material weakness(es)? Yes X None reported
Noncompliance material to financial statements noted? Yes X No
Federal Awards
Internal control over major federal programs:
• Material weakness(es) identified? Yes X No
• Significant deficiencies identified that are not considered
to be material weakness(es)? Yes X None reported
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)? Yes X No
Identification of major programs:
66.458 Capitalization Grants for Clean
Water State Revolving Funds
Dollar threshold used to distinguish between type A and type B
programs? $750,000
Auditee qualified as low-risk auditee? X Yes No
City of Euless, Texas
Schedule of Prior Audit Findings
For the Fiscal Year Ended September 30, 2019
9
Section II – Financial Statement Findings
None
Section III – Federal Award Findings and Questioned Costs
None
Section IV – Prior Audit Findings
None