REPORT TO COUNCIL
SUBJECT
Title
Action on the Single Audit Report for Fiscal Year 2017/18
Report
BACKGROUND
The City’s annual financial statement audit also includes the federally mandated “Single Audit” which is designed to meet the special reporting requirements of federal granting agencies, specifically Office of Management and Budget (OMB) Uniform Guidance 2.CFR.200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (formerly OMB A-133). The standards governing Single Audit engagements require that agencies expending more than $750,000 in federal monies in a fiscal year have an independent audit not only on the fair presentation of the financial statements, but also on internal controls for compliance with the administrative requirements of federal awards. The Single Audit was performed by the City’s financial statement auditor, Maze & Associates.
City staff and Maze & Associates met with the City Council Audit Committee on February 25, 2019. Present were Committee members Gillmor, Watanabe and Mahan. During the Committee meeting, Maze & Associates gave a presentation about the audit process and scope of work, as well as the auditor’s opinion. Staff answered various questions with regards to the Single Audit. The Audit Committee unanimously accepted the Single Audit Report presented at the Committee meeting and recommended that the City Council note and file the reports at the March 26, 2019 Council meeting. After the Council meeting, the Single Audit Report will be published on the City’s website.
DISCUSSION
Based on their audit, Maze & Associates issued an unmodified opinion with regard to the fair presentation of the financial statements and that the City is in compliance with internal control over financial reporting. However, as part of the audit, one finding was reported in the Assistance to Firefighters Grant related to inventory requirements when purchasing equipment with federal funds. The City received a monitoring visit from FEMA in July 2018 which determined that the City was out of compliance with the inventory requirement. The City provided a corrective action to FEMA and the area of non-compliance was resolved and closed by FEMA in November 2018. However, since this finding was contained in the original monitoring visit report, Maze and Associates is required to present the finding in the Single Audit Report. The City is confident that existing procedures are in compliance with the equipment inventory guidelines and that this finding will not occur in the future.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
FISCAL IMPACT
The staff and the external auditor costs associated with the audit and financial reports production are included in the FY 2018/19 Adopted Budget.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Note and file the City of Santa Clara Single Audit Report for the year ended June 30, 2018, as recommended by the Council Audit Committee.
Staff
Reviewed by: Angela Kraetsch, Director of Finance
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Single Audit Report June 30, 2018