HomeMy WebLinkAboutNantucket Single Audit FY2015
TOWN OF NANTUCKET, MASSACHUSETTS
SINGLE AUDIT REPORTS
PURSUANT TO
OMB CIRCULAR A-133
JUNE 30, 2015
TOWN OF NANTUCKET, 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 ........................................................................... 8-9
Corrective Action Plan .............................................................................................................. 10
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 Nantucket, 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, the discretely presented component units, each major fund, and the aggregate
remaining fund information of the Town of Nantucket, 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
Nantucket, Massachusetts’s basic financial statements and have issued our report thereon dated January 15,
2016.
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.
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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
January 15, 2016.
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
January 15, 2016
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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 Nantucket, Massachusetts
Report on Compliance for Each Major Federal Program
We have audited the Town of Nantucket, 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 Nantucket, Massachusetts’ major federal programs for the year
ended June 30, 2015. The Town of Nantucket, 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 Nantucket,
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 Nantucket, 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 Nantucket,
Massachusetts’ compliance.
Opinion on Each Major Federal Programs
In our opinion, the Town of Nantucket, 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.
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Report on Internal Control Over Compliance
Management of the Town of Nantucket, 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 Nantucket,
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
Nantucket, 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 and therefore, material
weaknesses or significant deficiencies may exist that were not identified. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
we identified certain deficiencies in internal control over compliance, as described in the accompanying
schedule of findings and questioned costs as item 2015-001 that we consider to be a significant
deficiency.
The Town of Nantucket, Massachusetts’ response to the internal control over compliance finding
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.
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.
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, the
discretely presented component units, each major fund, and the aggregate remaining fund information of
the Town of Nantucket, 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 Nantucket, Massachusetts’s basic
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financial statements. We have issued our report thereon dated January 15, 2016, 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
January 15, 2016
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TOWN OF NANTUCKET, MASSACHUSETTS
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2015
See notes to Schedule of Expenditures of Federal Awards
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 10-197 11,879$
National School Lunch Program:10.555 10-197
Cash Assistance 109,628
Non-Cash Assistance (Commodities)17,258
U.S. Department of Interior
Passed through the Commonwealth of Massachusetts -
Department of Fish and Game
Clean Vessel Act 15.616 5,105
U.S. Department of Transportation
Federal Aviation Administration
Passed through the Commonwealth of Massachusetts -
Department of Transportation/Division of Aeronautics
Airport Improvement Program * 20.106 AIP 3-25-0033-057-2013 998,836
AIP 3-25-0033-059-2014
AIP 3-25-0033-060-2014
Passed through the Commonwealth of Massachusetts -
Department of Transportation/Division of Highways
Highway Planning and Construction 20.205 INTF00X02010H0059646 229,772
U.S. Department of Education
Passed through the Commonwealth of Massachusetts -
Department of Elementary and Secondary Education
Title I 84.010 305-061121-2015-0197 113,225
305-018065-2014-0197
Special Education - Grants to States * 84.027 240-039-5-0197-P 346,213
274-013-5-0197-P
240-229-4-0197-O
Special Education - Preschool Grants * 84.173 298-448-5-0197-P 5,600
English Language Acquisition Grants 84.365 180-069-5-0197-P 32,028
184-011-5-0197-P
180-073-4-0197-O
Title II - Part A: Improving Teacher Quality State Grants 84.367 140-066111-2015-0197 18,561
140-032747-2014-0197
ARRA - Race to the Top 84.395 133-048-5-0197-P 4,722
Passed through the Commonwealth of Massachusetts -
Department of Early Education and Care
Special Education - Preschool Grants * 84.173 26215NantucketPublicsch 8,547
U.S. Department of Health & Human Services
Passed Through the Cpmmonwealth of Massachusetts -
Executive Office of Health and Human Services/
Department of Public Health
Community Transformation Grants 93.531 INTF4200P01W20612040 15,000
U.S. Department of Homeland Security
Direct Award
Law Enforcement Officer Reimbursement Agreement Program 97.090 90,820
TOTAL FEDERAL GRANT EXPENDITURES 2,007,194$
* Denotes Major Program
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TOWN OF NANTUCKET, MASSACHUSETTS
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2015
A. Scope of Audit
The Town of Nantucket, Massachusetts (the Town) is a governmental agency established by the
laws of the Commonwealth of Massachusetts. All operations related to the Town of Nantucket’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 Airport Improvement Program
(CFDA #20.106) and Special Education Cluster (CFDA #’s 84.027 & 84.173) 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, $17,258 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 $18,022.
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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 Nantucket.
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 Nantucket
which would be required to be reported in accordance with Government Auditing Standards
were disclosed during the audit.
4. One significant deficiency 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
Nantucket expresses an unmodified opinion.
6. There is one audit finding that is 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 Airport Improvement Program (CFDA
#20.106) and Special Education Cluster (CFDA #’s 84.027 & 84.173) programs.
8. The threshold for distinguishing Types A and B programs was $300,000.
9. The Town of Nantucket did qualify as a low risk auditee.
B. Schedule of Findings – Financial Statements Audit
None
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SCHEDULES OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015
(Continued)
C. Schedule of Findings and Questioned Costs – Major Federal Award Programs Audit
Finding
Questioned
Costs
2015-001. Significant Deficiency in Internal Control Over Compliance
– Program Not Audited as a Major Program - U.S. Department of
Agriculture
Passed through the Commonwealth of Massachusetts Department of
Elementary and Secondary Education
Child Nutrition Cluster (CFDA #’s 10.553 and 10.555)
Criteria: In order to receive monthly reimbursements for meals, the
School Department must submit claims for reimbursement forms that
contain the number of meals served by category and type which are
supported by accurate meals counts and records.
Statement of Condition: The School Department did not submit a claim
for reimbursement form for the month of September 2014.
Cause and Effect: The School Department contracts with a third party
vendor for its food service function. Turnover at the third party vendor
and a lack of monitoring over compliance activities by the School
Department led to missing an entire month claim for reimbursement.
Furthermore, on two separate occasions during the year multiple months’
claims for reimbursement were filed concurrently.
Current Year Status: The School Department should implement
procedures to monitor the timely filing of claims for reimbursements by
the third party vendor.
D. Schedule of Prior Year Findings and Questioned Costs
None
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TOWN OF NANTUCKET, MASSACHUSETTS
CORRECTIVE ACTION PLAN
YEAR ENDED JUNE 30, 2015
Findings – Major Federal Award Programs Audit
2015-001. Significant Deficiency in Internal Control Over Compliance – Program Not Audited as a
Major Program - U.S. Department of Agriculture
Child Nutrition Cluster (CFDA #’s 10.553 and 10.555)
Recommendation: The School Department should implement procedures to monitor the timely filing of
claims for reimbursements by the third party vendor.
Corrective Action Planned: The School Chief Financial Officer will work with the Food Service
Director and the District Manager at Chartwell’s to ensure he receives a copy of each month’s filing no
later than the end of the second week in the month following the reimbursement period that the filing
applies to – e.g. a copy should be forwarded to the Chief Financial Officer by October 15 at the latest for
a September filing. The Chief Financial Officer should verify at the DESE portal that the reimbursement
has indeed posted.
Anticipated Completion Date: June 30,2016
Contact: Martin Anguelov, Chief Financial Officer, Nantucket Public Schools
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