EL DORADO COUNTY FIRE SAFE COUNCIL
GOVERNMENT REPORT (OMB CIRCULAR A-133)
FOR THE YEAR ENDED JUNE 30, 2010
INDEPENDENT AUDITOR'S REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Board of Directors El Dorado County Fire Safe Council Diamond Springs, CA
I have audited the cash basis financial statements
of the El Dorado County Fire Safe Council, as of
and for the year ended June 30, 2010 and have issued my report thereon dated January 11, 2011. I
conducted my audit in accordance with auditing standards generally accepted in the United States of
America, Government Auditing Standards, issued by the U.S. Comptroller General, and the
provisions of OMB Circular A-133.
My audit was made for the purpose of forming an
opinion on the Organization's financial statements
taken as a whole. The supplementary schedules of expenditures of federal awards and supplemental
schedules as listed in the table of contents are presented for the purpose of additional analysis as
required by OMB Circular A-133, and is not a required part of the basic financial statements. That
information has been subjected to the auditing procedures applied in the audit of the financial
statements and, in my opinion, is fairly presented, in all material respects, in relation to the financial
statements taken as a whole.
Jeanine J. Mays January 11, 2011
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
Board of Directors El Dorado County Fire Safe Council Diamond Springs, CA
I have audited the cash basis financial
statements of El Dorado County Fire Safe Council. as of and for the
year ended June 30, 2010 and have issued my report thereon dated January 11, 2011. I conducted my audit
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.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing my audit, I considered
El Dorado County Fire Safe Council's internal control
over financial reporting in order to determine my auditing procedures for the purpose of expressing my
opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness
of the Organization's internal control over financial reporting. Accordingly, I do not express an opinion on
the effectiveness of the Organization's internal control over financial reporting.
My consideration of internal control over financial
reporting was for the limited purpose described in the
preceding paragraph and would not necessarily identify all deficiencies in internal control over financial
reporting that might be significant deficiencies or material weaknesses. However, as discussed below, I
identified certain deficiencies in internal control over financial reporting that I consider to be significant
deficiencies.
A deficiency 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 misstatements on a timely
basis. A significant deficiency is a deficiency, or combination of deficiencies, that adversely affects the
Organization's ability to initiate, authorize, record, process, or report financial data reliably in accordance
with generally accepted accounting principles such that there is more than a remote likelihood that a
misstatement of the Organization's financial statements that is more than inconsequential will not be
prevented or detected by the Organization's internal control. I consider the deficiencies described in the
accompanying schedule of findings and questions costs to be significant deficiencies in internal control
over financial reporting. 2010-1 and 2010-2
A material weakness is a significant deficiency, or
a combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the
financial statements will not be prevented
or detected by the Organization's internal control.
My consideration of internal control over financial
reporting was for the limited purpose described in
the first paragraph of this section and would not necessarily identify all deficiencies in internal
control that might be significant deficiencies or material weaknesses. I did not identify any
deficiencies in internal control over financial reporting that I consider to be material weaknesses, as
defined above.
COMPLIANCE AND OTHER MATTERS
As a part of obtaining reasonable assurance about
whether El Dorado County Fire Safe Council's
financial statements are free of material misstatement, I 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 my
audit, and accordingly, I do not express such an opinion. The results of my tests disclosed instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards and which are described in the accompanying schedule of findings and questions costs as
item 2010-3.
El Dorado County Fire Safe Council's responses to the
findings identified in my audit are described
in the accompanying schedule of findings and questions costs. I did not audit El Dorado County Fire
Safe Council's responses and, accordingly, I express no opinion on the responses.
I noted certain matters that were reported to management
of El Dorado County Fire Safe Council in a
separate letter dated January 11, 2011.
This report is intended solely for the information and
use of the audit committee, management and
federal awarding agencies and pass-through entities and is not intended to be and should not be used
by anyone other than these specified parties.
Jeanine J. Mays January 11, 2011
REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PPROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
INDEPENDENT AUDITOR'S REPORT
Board of Directors El Dorado County Fire Safe Council Diamond Springs, CA
COMPLIANCE
I have audited El Dorado Fire Safe Council's compliance
with the types of compliance requirements
described in OMB Circular A-133 Compliance Supplement that could have a direct and material
effect on each of El Dorado County Fire Safe Council's major federal programs for the year ended
June 30, 2010. El Dorado Fire Safe Council's major federal programs are identified in the summary
of auditor's results section of the accompahying schedule of findings and questions costs.
Compliance with the requirement of laws, regulations, contracts and grants applicable to each of its
jafor federal programs is the responsibility of El Dorado Fire Safe Council's management. My
responsibility is to express an opinion on El Dorado Fire Safe Council's compliance based on my
audit.
I conducted my 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 OMB Circular
A-133, Audits of States, Local Governments and Non-Profit Organizations. Those standards and
OMB A-133 require that I plan and perform the audit to obtain reasonable assurance about whether
noncompliance with the types of compliance requirements referred to above that could have direct
and material effect on a major federal program occurred. An audit includes examining, on a test
basis, evidence about El Dorado County Fire Safe Council's compliance with those requirements and
performing such other procedures as I considered necessary in the circumstances. I believe that my
audit provides a reasonable basis for my opinion. My audit does not provide a legal determination on
El Dorado County Fire Safe Council's compliance with those requirements.
In my opinion, El Dorado County Fire Safe Council complied,
in all material respects, with the
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, 2010. However, the results of my auditing procedures
disclosed an instance of noncompliance with those requirements, which are 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 2010-3.
INTERNAL CONTROL OVER COMPLIANCE
Management of El Dorado County Fire Safe Council is responsible
for establishing and maintaining
effective internal control over compliance with requirements of laws, regulations, contracts and
grants applicable to federal programs. In planning and performing my audit, I considered El Dorado
County Fire Safe Council's internal control over compliance with requirements that could have a
direct and material effect on a major federal program in order to determine my auditing procedures
for the purpose of expressing my opinion on compliance 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, I do not express an
opinion on the effectiveness of the Organization's internal control over compliance.
A deficiency in an entity's internal control over compliance
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 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.
My consideration of internal control over compliance
was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in internal control
that might be significant deficiencies or material weaknesses. I did not identify any deficiencies in
internal control over compliance that I consider to be material weaknesses, as defined above.
El Dorado County Fire Safe Council's
responses to the findings identified in my audit are described
in the accompanying schedule of findings and questions costs. I did not audit El Dorado County Fire
Safe Council's responses and, accordingly, I express no opinion on the responses.
This report is solely intended for the information
and use of the audit committee, management and
federal awarding agencies and pass-through entities and its not intended to be and should not be used
by anyone other than these specified parties.
Jeanine J. Mays January 11, 2011
Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2010
Federal Grantor/pass Through
Grantor and Program Title |
Federal
CFDA# |
Pass Through
Grant
Number |
Current
Expenditures |
|
U.S. DEPARTMENT OF AGRICULTURE |
Pass through California Fire Safe Council-Cooperative Forestry Assistance |
|
Log Town Fuel Break |
10.664 |
09USFS-X0222 |
$ 412,601 |
2009 Senior and Disabled Defensible Space |
10.664 |
09USFS-X0249 |
76,348 |
Gold Hill Estates Shaded Fuel Break |
10.664 |
10USFS-ES538 |
4,581 |
2010 Residential Chipping |
10.664 |
10USFS-ES677 |
8,020 |
Grizzly Flat 6/7 Shaded Fuel Breaks |
10.664 |
10USFS-ES469 |
933 |
|
|
|
502,483 |
|
BUREAU OF LAND MANAGEMENT |
Pass through California Fire Safe Council-National Fire Plan |
|
Grizzly Flats Fuel Break #5 |
15.228 |
09BLM0223 |
336,693 |
2009 Residential Chipping Program |
15.228 |
09BLM0233 |
135,327 |
|
472,020 |
|
TOTAL FEDERAL EXPENDITURES |
$ 974,503 |
Notes to Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2010
- BASIS OF PRESENTATION
The accompanying schedules of expenditures
of federal awards include the federal grant activity of
El Dorado County Fire Safe Council is presented on a cash basis of accounting. The information in
this schedules is presented in accordance with the requirements of OMB Circular A-133, Audits of
States, Local Governments and Non-Profit Organizations. Therefore, some amounts presented in
these schedules may differ from amounts presented in, or used in the preparation of the financial
statements. Expenditures with multi-funding sources are allocated to funding source based on the
percentage of labor expended.
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures reported on the Schedule are
reported on the cash basis of accounting. Such
expenditures are recognized following the cost principles contained in OMB Circular A-122, Cost
Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or
are limited as to reimbursement.
Schedule of Findings and Questioned Costs For the Year Ended June 30, 2010
FINANCIAL STATEMENTS |
Type of auditor's report issued: |
Unqualified |
Internal control over financial reporting: |
|
Material weaknesses identified? |
No |
Significant deficiency(s) identified that
are not considered to be material weaknesses? |
Yes |
Noncompliance material to financial statements noted? |
No |
|
FEDERAL AWARDS |
Internal control over major programs: |
|
Material weaknesses identified? |
No |
Significant deficiency(s) identified that
are not considered to be material
weaknesses? |
Yes |
|
Type of Auditor's report on compliance for major program: |
Unqualified |
|
Any audit findings disclosed that are required to be reported
in accordance with section 510(a) of Circular A-133? |
Yes |
|
Identification of Major Programs: |
|
CFDA Number |
|
Name of Federal/State Program or Cluster |
|
10.664 |
|
Cooperative Forestry Assistance |
|
|
|
Dollar threshold used to distinguish between type A
and type B programs: |
$300,000 |
|
Auditee qualified as a low-risk auditee |
No |
Status of Prior Year's Findings For the Year Ended June 30, 2010
No prior year findings.
Current Year's Findings For the Year Ended June 30, 2010
U.S. DEPARTMENT OF AGRICULTURE |
|
2010-1 |
Cooperative Forestry Assistance passed through the California Fire Safe Council |
|
CFDA 10.664 |
Internal control significant deficiency June 30, 2010 |
|
|
Condition: |
The Organization is small with no employees and the operations manager gets and
opens mail, prepares checks for signature, makes deposits to the bank, codes
disbursements, approves subcontractor's billing statements, and manages programs. |
|
Criteria |
Ideal internal controls would have a separate person receiving mail and making
deposits. Also, the person preparing the checks would not be the person opening
the mail, receiving the bank statements and approving the invoices for payment. |
|
Effect: |
One person is involved in the custody, authorization and control procedure of cash
receipts and disbursements. |
|
Questioned costs: |
None. |
|
Recommendation: |
Expand the staff in charge of the administration of the Organization to implement a
broader separation of duties. |
|
Response: |
Normal segregation of duties is difficult to accomplish within a small organization.
The Board has expanded the duties of the outside accountant to maximize the
separation available without hiring staff. The Board of Directors is mindful that
the situation is not ideal, but considers that the cost of additional staff is better
spent within the program purposes. |
2010-2 |
Cooperative Forestry Assistance passed through the California Fire Safe Council |
|
CFDA 10.664 |
Internal control significant deficiency June 30, 2010 |
|
|
Condition: |
The operational manager, an independent contractor, works on all of the programs
for the organization. The costs billed to each grant are based on estimated time
spent with no supporting documentation. |
|
Criteria |
When services are billed to several grants a functional time record must be
maintained so the allocation of costs are based on actual time spent. |
|
Effect: |
The costs of administration of the organizational services billed to the various
grants are not supported costs because the allocation method is not approved or
reasonable. |
|
Questioned costs: |
Not material amount. |
|
Recommendation: |
Documentation to support allocation to multiple programs should be maintained. |
|
Response: |
A functional time record for those spending time on multiple programs will be
maintained in the future. The allocation will be based on the weighted average
method. |
2010-3 |
Cooperative Forestry Assistance passed through the California Fire Safe Council |
|
CFDA 10.664 |
Compliance significant deficiency
June 30, 2010 |
|
|
Condition: |
The organization sub-contracted services that were over the definition of a
major purchase of $25,000 with out documenting the procurement process. |
|
Criteria |
Organizations managing large purchases in a Federal grant program must follow
Federal procurement policies to promote fair and equal opportunity and
reasonable competition for minimizing the costs to the grant. |
|
Effect: |
It is unknown if a more reasonable price would have been available or if a
minority owned business did not have an opportunity to bid. |
|
Questioned costs: |
None. |
|
Recommendation: |
It is recommended that the organization make a written purchasing and
procurement policy that incorporated the Federal requirements. The contract
award process must be documented and maintained in the files. |
|
Response: |
A written policy will be developed and applied to all purchases of the
organization. The Board will document the contract award approval and have it
maintained in the files. |
|