Single Audit 2020CITY OF ENCINITAS
ENCINITAS, CALIFORNIA
SINGLE AUDIT REPORT ON EXPENDITURES
OF FEDERAL AWARDS
Year Ended June 30, 2020
CITY OF ENCINITAS
SINGLE AUDIT REPORT ON EXPENDITURES OF FEDERAL AWARDS
Year Ended June 30, 2020
TABLE OF CONTENTS
Page
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
Report on Compliance for Each Major Federal Program; Report on Internal Control
over Compliance; and Report on the Schedule of Expenditures of Federal
Awards Required by the Uniform Guidance 3
Schedule of Expenditures of Federal Awards 6
Notes to the Schedule of Expenditures of Federal Awards 7
Summary of Findings and Questioned Costs 9
Status of Prior Audit Findings 10
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
Independent Auditor’s Report
City Council
City of Encinitas
Encinitas, California
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 Encinitas, California (City), as of and
for the year ended June 30, 2020 and the related notes to the financial statements, which
collectively comprise the City of Encinitas’ basic financial statements, and have issued our
report thereon dated November 23, 2020.Our report includes a reference to other auditors
who audited the financial statements of R.E. Badger Joint Powers Authority, R.E. Badger
Financing Authority, San Elijo Joint Powers Authority,and Encina Wastewater Authority, as
described in our report on the City’s financial statements.This report does not include the
results of the other auditors’ testing of internal control over financial reporting or compliance
and other matters that are reported on separately by those auditors.
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 opinions 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
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.
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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.
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 of
Encinitas’ internal control and compliance. Accordingly, this communication is not suitable for
any other purpose.
Irvine, California
November 23, 2020
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Report on Compliance for Each Major Federal Program;Report on Internal Control
Over Compliance;and Report on the Schedule of Expenditures of Federal Awards
Required by the Uniform Guidance
Independent Auditor’s Report
City Council
City of Encinitas
Encinitas, California
Report on Compliance for Each Major Federal Program
We have audited the City of Encinitas’(City)compliance with the types of compliance
requirements described in the OMB Compliance Supplement that could have a direct and
material effect on the City’s major federal program for the year ended June 30, 2020. The
City’s major federal program is 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 program.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for the City’s major federal program
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
requirement of Title 2 U.S. Code of Federal Regulations 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 the
major federal program. However, our audit does not provide a legal determination of the
City’s compliance.
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Opinion on Each Major Federal Program
In our opinion, the City of Encinitas complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on its
major federal program for the year ended June 30, 2020.
Report on Internal Control Over Compliance
Management of the City of Encinitas 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 the major federal program to determine the auditing procedures that are appropriate in
the circumstances for the purpose of expressing an opinion on compliance for the 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 Uniform
Guidance
We have audited the financial statements of the City of Encinitas as of and for the year ended
June 30, 2020, and have issued our report thereon dated November 23, 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 as a whole. The accompanying
schedule of expenditures of federal awards is presented for purposes of additional analysis as
required by the Uniform Guidance and is not a required part of the 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 financial statements.
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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
financial statements or to the 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 expenditure of federal awards is fairly stated in all
material respects in relation to the financial statements as a whole.
Irvine, California
March 10, 2021, except for the Schedule of Expenditures of Federal Awards, as to which the
date is November 23, 2020
Federal Grant Amount
CFDA Identification Federal Provided to
Number Number Expenditures Subrecipients
U.S. Department of Housing and Urban Development
Direct Programs:
CDBG Cluster:
Community Development Block Grant 14.218 B-20-MC-06-0574 188,966$ 121,713$
14.218 B-19-MC-06-0574 28,000 -
14.218 B-18-MC-06-0574 114,380 -
Subtotal CDBG Cluster 331,346 121,713
Housing Voucher Cluster:
Section 8 Housing Choice Vouchers 14.871 CA155VO 1,396,058 -
COVID-19 Section 8 Housing Choice Vouchers 14.871 CA155VO 21,394 -
Subtotal Housing Voucher Cluster 1,417,452 -
Total U.S. Department of Housing and Urban Development 1,748,798 121,713
U.S. Department of Health and Human Services
Passed through the County of San Diego:
Aging Cluster:
Title III-B Transportation 93.044 547764 13,651 -
Title III-NSIP C1 Incentive 93.053 547764 7,253 -
Title III-C1 Congregate Meals 93.045 547764 46,723 -
COVID-19 Title III-C1 Congregate Meals 93.045 547764 17,082 -
Subtotal Aging Cluster 84,709 -
Total U.S. Department of Health and Human Services 84,709 -
U.S. Department of Homeland Security
Passed through the California Office of Emergency Services:
Homeland Security Grant Program (HSGP)97.067 073-00000 64,209 -
Urban Area Security Initiative (UASI)97.067 073-66000 1,598 -
Total U.S. Department of Homeland Security 65,807 -
U.S. Department of Transportation
Passed through the State of California:
Highway Planning and Construction Cluster:
Highway 101 Emergency Repairs 20.205 ER 32L0(334)8,235 -
Hazard Elimination Safety 20.205 HSIP-5446(018-20)188,122 -
Subtotal Highway Planning and Construction Cluster 196,357 -
Total U.S. Department of Transportation 196,357 -
U.S. Department of the Treasury
Passed through the County of San Diego:
COVID-19 Coronavirus Relief Fund 21.019 05192020-14-6 641,237 -
Total U.S. Department of the Treasury 641,237 -
Total Expenditures of Federal Awards 2,736,908$ 121,713$
Year Ended June 30, 2020
CITY OF ENCINITAS
Schedule of Expenditures of Federal Awards
Federal Grantor/Pass - Through
Grantor/Program Title
See accompanying Notes to the Schedule of Expenditures of Federal Awards.
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CITY OF ENCINITAS
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year ended June 30, 2020
(1)Summary of Significant Accounting Policies Applicable to the Schedule of
Expenditures of Federal Awards
a)Scope of Presentation
The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”)
includes the federal grant activity of the City of Encinitas under programs of the federal
government for the year ended June 30, 2020. The information in this schedule is
presented in accordance with the requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (“Uniform Guidance”). Because the Schedule
presents only a selected portion of the operations of the City of Encinitas, it is not
intended to and does not present the financial position, changes in net position or
cash flows of the City of Encinitas.The City did not use the 10% de minimis indirect
cost rate as covered in section 200.414 of the Uniform Guidance.
b)Basis of Accounting
Expenditures reported on the Schedule are reported on the accrual basis of
accounting. Such expenditures are recognized following the cost principles contained
in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards wherein certain types of expenditures are not allowable or are limited
as to reimbursement.
c)Subrecipient Expenditures
Payments to subrecipients totaled $121,713 for the Community Development Block
Grant for the fiscal year ended June 30, 2020.
Meals on Wheels $ 9,607
San Dieguito for a Drug Free Youth 6,607
CRC Homeless Programs 13,607
Quality Children Services 28,000
Community Resource Center 25,718
Legal Aid Society of San Diego 18,120
Interfaith Community Services 20,054
Total $ 121,713
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Financial Statements
1. Type of auditor's report issued on whether the financial
statements audited were prepared in accordance with GAAP:Unmodified
2. Internal control over financial reporting:
a. Material weakness(es) identified?No
b. Significant deficiency(ies) identified?None Reported
3. Noncompliance material to the financial statements noted?No
Federal Awards
1. Internal control over major programs:
a. Material weakness(es) identified?No
b. Significant deficiency(ies) identified?None Reported
2.Type of auditor's report issued on compliance for major
programs:Unmodified
3.Any audit findings disclosed that are required to be reported
in accordance with 2 CFR 200.516 (a)?No
4. Identification of major programs:
CFDA Number Name of Federal Program or Cluster
21.019 COVID-19 Coronavirus Relief Fund
5. Dollar threshold used to distinguish between Type A and Type
B programs: $750,000
6. Auditee qualified as a low-risk auditee?Yes
CITY OF ENCINITAS
Schedule of Findings and Questioned Costs
Year Ended June 30, 2020
Section I - Summary of Auditor's Results
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There were no financial statement findings for the year ended June 30, 2020.
There were no federal award findings or questioned costs for the year ended June 30, 2020.
CITY OF ENCINITAS
Schedule of Findings and Questioned Costs
Year Ended June 30, 2020
Section II - Financial Statement Findings
Section III - Federal Award Findings and Questioned Costs
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CITY OF ENCINITAS
STATUS OF PRIOR YEAR AUDIT FINDINGS
Year Ended June 30, 2020
There was one audit finding noted in the Single Audit Report for the year ended June 30, 2019.
The status of the finding is as follows:
(2019-001) Material Audit Adjustments
Auditing standards require the auditors to include an internal control recommendation when
material audit adjustments are detected during the audit process. For fiscal year ended June 30,
2019, we noted errors in recording grant receivables for allowable expenditures incurred through
June 30, 2019. As these expenditures were incurred, the City had earned the revenue and thus
should have a receivable recorded.
We also noted the City had certain projects classified as construction in progress that should have
been moved to depreciable classifications as they were substantially complete or already in
service.
Status
The finding has been resolved.
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