Canton, Massachusetts · Saved source text
FY15 Single Audit Report
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Source page 1
TOWN OF CANTON, MASSACHUSETTS
SINGLE AUDIT REPORTS
PURSUANT TO
OMB CIRCULAR A-133
JUNE 30, 2015Source page 2
TOWN OF CANTON, MASSACHUSETTS
TABLE OF CONTENTS
JUNE 30, 2015
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 ...................................... 1-2
Independent Auditor’s Report on Compliance for Each Major Program and on
Internal Control Over Compliance Required by OMB Circular A-133 ............................. 3-5
Schedule of Expenditures of Federal Awards ............................................................................ 6
Notes to Schedule of Expenditures of Federal Awards .............................................................. 7
Schedules of Findings and Questioned Costs .......................................................................... 8-10
Corrective Action Plan .............................................................................................................. 11Source page 3
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 Board of Selectmen
Town of Canton, Massachusetts
We have audited, 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, the financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the Town of
Canton, Massachusetts, as of and for the year ended June 30, 2015, and the related notes to the financial
statements, which collectively compromise the Town of Canton, Massachusetts’s basic financial statements
and have issued our report thereon dated November 4, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Town’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 opinions on the financial statements, but not for the purpose of expressing an opinion on
the effectiveness of the Town’s internal control. Accordingly, we do not express an opinion on the
effectiveness of the Town’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 entity’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.
Town of Canton, Massachusetts 1 of 11 OMB Circular A-133 Single Audit ReportSource page 4
Town of Canton, Massachusetts Page Two Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town’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. We noted certain other matters that we reported to management of the Town in a separate letter dated November 4, 2015. 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 entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Roselli, Clark and Associates Certified Public Accountants Woburn, Massachusetts November 4, 2015 Town of Canton, Massachusetts 2 of 11 OMB Circular A-133 Single Audit Report
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INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY
OMB CIRCULAR A-133
To the Honorable Board of Selectmen
Town of Canton, Massachusetts
Report on Compliance for Each Major Federal Program
We have audited the Town of Canton, Massachusetts’ compliance with the types of compliance
requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and
material effect on each of the Town of Canton, Massachusetts’ major federal programs for the year ended
June 30, 2015. The Town of Canton, Massachusetts’ 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 the requirements of laws, regulations, contracts, and
grants applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the Town of Canton, Massachusetts’
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 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 Canton, 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 on compliance for each major
federal program. However, our audit does not provide a legal determination of the Town of Canton,
Massachusetts’ compliance.
Opinion on Each Major Federal Programs
In our opinion, the Town of Canton, Massachusetts 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 June 30, 2015.
Town of Canton, Massachusetts 3 of 11 OMB Circular A-133 Single Audit ReportSource page 6
Town of Canton, Massachusetts Page Two Other Matters The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with OMB Circular A-133 and which is described in the accompanying schedule of findings and questioned costs as item 2015-001. Our opinion on each major federal program is not modified with respect to this matter. The Town of Canton, Massachusetts’ response to the noncompliance findings identified in our audit is described in the accompanying schedule of findings and questioned costs. The Town’s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of the Town of Canton, Massachusetts 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 Town of Canton, Massachusetts’ internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the 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 OMB Circular A-133, 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 Canton, Massachusetts’ 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 efficiencies. 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 internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Town of Canton, Massachusetts 4 of 11 OMB Circular A-133 Single Audit Report
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Town of Canton, Massachusetts Page Three Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 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 Canton, Massachusetts, as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively compromise the Town of Canton, Massachusetts’s basic financial statements. We have issued our report thereon dated November 4, 2015, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming our 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 OMB Circular A-133, 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. 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. Roselli, Clark & Associates Certified Public Accountants Woburn, Massachusetts November 4, 2015 Town of Canton, Massachusetts 5 of 11 OMB Circular A-133 Single Audit Report
Source page 8
TOWN OF CANTON, MASSACHUSETTS
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2015
Federal Grantor /
Pass-Through Grantor / CFDA Pass-Through Federal
Program Title Number Number Expenditures
U.S. Department of Agriculture
Passed through the Commonwealth of Massachusetts -
Department of Elementary and Secondary Education
School Breakfast Program 10.553 11-050 $ 43,973
National School Lunch Program: 10.555 11-050
Cash Assistance 275,036
Non-Cash Assistance (Commodities) 48,384
U.S. Department of Justice
Direct Award
Federal Equitable Sharing Grant 16.922 194,022
U.S. Department of Education
Passed through the Commonwealth of Massachusetts -
Department of Elementary and Secondary Education
Title I 84.010 305-050451-2015-0050 164,985
305-018956-2014-0050
Special Education - Grants to States * 84.027 240-112-5-0050-P 839,013
274-019-5-0050-P
240-184-4-0050-O
274-125-4-0050-O
Special Education - Preschool Grants * 84.173 298-492-5-0050-P 5,057
Title II - Part A: Improving Teacher Quality State Grants 84.367 140-048686-2015-0050 51,145
140-028858-2014-0050
Passed through the Commonwealth of Massachusetts -
Department of Early Education and Care
Special Education - Preschool Grants * 84.173 262Cantonpublicsch 29,629
U.S. Department of Health and Human Services
Passed Through the Cambridge Public Health Department
Department of Public Health - Region 4b
Public Health Emergency Preparedness 93.069 776
U.S. Department of Homeland Security
Federal Emergency Management Agency
Homeland Security Grant Program 97.067 3,325
Passed through the Commonwealth of Massachusetts -
Massachusetts Emergency Management Agency
Disaster Grants: Public Assistance (Presidentially Declared) 97.036 FEMA 4214 48,928
Emergency Management Performance Grants 97.042 FY15EMPG1314CANTON 10,034
FY14EMPG12CANTON
TOTAL FEDERAL GRANT EXPENDITURES $ 1,714,307
* Denotes Major Program
See notes to Schedule of Expenditures of Federal Awards
Town of Canton, Massachusetts 6 of 11 OMB Circular A-133 Single Audit ReportSource page 9
TOWN OF CANTON, MASSACHUSETTS
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2015
A. Scope of Audit
The Town of Canton, Massachusetts (the Town) is a governmental agency established by the
laws of the Commonwealth of Massachusetts. All operations related to the Town of Canton’s
federal grant programs are included in the scope of the OMB Circular A-133, Audits of States,
Local Governments, and Non-Profit Organizations.
Compliance testing of all requirements, as described in the Compliance Supplement was
performed. The grants determined to be major programs were the Special Education Cluster
(CFDA #’s 84.027 & 84.173) grant programs.
B. Period Audited
Single audit testing procedures were performed for federal grant transactions during the year
ended June 30, 2015.
C. Summary of Significant Accounting Policies
Accounting policies and financial reporting practices permitted for municipalities in
Massachusetts are prescribed by the Uniform Municipal Accounting System (UMAS)
promulgated by the Commonwealth of Massachusetts Department of Revenue. The significant
accounting principles followed by the Town are as follows:
Basis of Presentation –The accompanying Schedule of Expenditures of Federal Awards includes
the federal grant transactions of the Town, although some of these programs may be
supplemented with state and other revenue, only federal activity is shown. The receipts, proceeds
from federal grants, and disbursements are recorded on the modified accrual basis whereby
revenue is recognized when it becomes available and measurable, and expenditures are
recognized when the liability is incurred. The activities of these programs are reflected in the
basic financial statements in the Special Revenue Funds.
D. Non-Cash Commodities
The Town receives non-cash commodities from the U.S. Department of Agriculture as a part of
the School Lunch program. In fiscal year 2015, $48,384 was received; however, this amount is
not included in the financial statements.
E. Teacher Pension On-Behalf Payments
With regards to specific education grants awarded to the Town, the Massachusetts Department of
Elementary and Secondary Education and Department of Early Education and Care withhold
from the total grant awards 7.2% and 9.0% of the amounts shown on applicable wage budget
lines. The Commonwealth utilizes those funds as direct payments to the Massachusetts Teachers
Retirement Board made on-behalf of the Town. The amount of these payments from federal
grants in fiscal year 2015 was $4,794.
Town of Canton, Massachusetts 7 of 11 OMB Circular A-133 Single Audit ReportSource page 10
TOWN OF CANTON, MASSACHUSETTS
SCHEDULES OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015
A. Summary of Audit Results
1. The auditor’s report expresses an unmodified opinion on the financial statements of the Town
of Canton.
2. No significant deficiencies disclosed during the audit of the financial statements are reported
in the 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.
3. No instances of noncompliance material to the financial statements of the Town of Canton
which would be required to be reported in accordance with Government Auditing Standards
were disclosed during the audit.
4. No reportable conditions relating to the audit of the major federal award programs are
reported in the Independent Auditor’s Report on Compliance for Each Major Program and on
Internal Control Over Compliance Required By OMB Circular A-133.
5. The auditor’s report on compliance for the major federal award programs for the Town of
Canton expresses an unmodified opinion.
6. There are no audit findings that are required to be reported in accordance with Section 510(a)
of the OMB Circular A-133 in this Schedule.
7. The programs tested as major programs include the Special Education Cluster (CFDA #’s
84.027 & 84.173) grant programs.
8. The threshold for distinguishing Types A and B programs was $300,000.
9. The Town of Canton did qualify as a low risk auditee.
B. Schedule of Findings – Financial Statements Audit
None
Town of Canton, Massachusetts 8 of 11 OMB Circular A-133 Single Audit ReportSource page 11
TOWN OF CANTON, MASSACHUSETTS
SCHEDULES OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015
(Continued)
C. Schedule of Findings and Questioned Costs – Major Federal Award Programs Audit
Questioned
Finding Costs
2015-001. U.S. Department of Education
Passed through the Commonwealth of Massachusetts Department of
Elementary and Secondary Education
Special Education Cluster (CFDA #’s 84.027 & 84.173)
Criteria: OMB Circular A-87, Attachment B, paragraph 8.H.(3) requires
all employees paid in full from federal grant funds to furnish semi-
annual certifications that they have been engaged solely in activities
supported by the grant. These certifications must be signed by the
employee or supervisor with knowledge of the work performed. In
addition, OMB Circular A-87, Attachment B, paragraph 8.H.(4) requires
employers to document the portion of time worked on the grant and
portion of time worked in areas not related to the grant, if not solely
charged to the federal grant.
Statement of Condition: The required semi-annual time and effort
certifications were only maintained on an annual basis.
Cause and Effect: By not maintaining the proper payroll records, federal
grant program compliance could not be verified.
Recommendation: The individual grant administrators or school
principals have direct knowledge of the work performed by their staff
whose wages are paid utilizing federal grant funds. We suggest that the
grant administrators or school principals semi-annually compile a
documented list of such individuals solely paid through that date
utilizing federal grant funds and certify that their work related to
program activities under that specific grant. These certifications should
be filed and available for review as part of any compliance testing
performed by the pass-through agency or auditors. For employees that
are charged to multiple grants or funding sources, the grant
administrators should maintain and certify an accounting of the time the
employee spent on each grant or activity and maintain them with the
payroll certifications.
Town of Canton, Massachusetts 9 of 11 OMB Circular A-133 Single Audit ReportSource page 12
TOWN OF CANTON, MASSACHUSETTS
SCHEDULES OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015
(Continued)
D. Schedule of Prior Year Findings and Questioned Costs
Questioned
Finding Costs
2014-001. U.S. Department of Education
Passed through the Commonwealth of Massachusetts Department of
Elementary and Secondary Education
Special Education Cluster (CFDA #’s 84.027 & 84.173)
Criteria: OMB Circular A-87, Attachment B, paragraph 8.H.(3) requires
all employees paid in full from federal grant funds to furnish semi-
annual certifications that they have been engaged solely in activities
supported by the grant. These certifications must be signed by the
employee or supervisor with knowledge of the work performed. In
addition, OMB Circular A-87, Attachment B, paragraph 8.H.(4) requires
employers to document the portion of time worked on the grant and
portion of time worked in areas not related to the grant, if not solely
charged to the federal grant.
Statement of Condition: The required semi-annual time and effort
certifications were only maintained on an annual basis.
Cause and Effect: By not maintaining the proper payroll records, federal
grant program compliance could not be verified.
Current Year Status: This condition remains a finding in the current
year (see finding 2015-001).
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TOWN OF CANTON, MASSACHUSETTS
CORRECTIVE ACTION PLAN
YEAR ENDED JUNE 30, 2015
Findings – Major Federal Award Programs Audit
2015-001. U.S Department of Education
Special Education Cluster (CFDA#’s 84.027 & 84.173)
Recommendation: The individual grant administrators or school principals have direct knowledge of the
work performed by their staff whose wages are paid utilizing federal grant funds. We suggest that the
grant administrators or school principals semi-annually compile a documented list of such individuals
solely paid through that date utilizing federal grant funds and certify that their work related to program
activities under that specific grant. These certifications should be filed and available for review as part of
any compliance testing performed by the pass-through agency or auditors. For employees that are
charged to multiple grants or funding sources, the grant administrators should maintain and certify an
accounting of the time the employee spent on each grant or activity and maintain them with the payroll
certifications.
Corrective Action Planned: The District will track time and effort on a semi-annual basis in fiscal year
2016.
Anticipated Completion Date: Fiscal year 2016
Contact: Barry Nectow, School Business Administrator
Town of Canton, Massachusetts 11 of 11 OMB Circular A-133 Single Audit Report