Single Audit for year ended June 30, 2023CITY OF ENCINITAS
ENCINITAS, CALIFORNIA
SINGLE AUDIT REPORT ON EXPENDITURES
OF FEDERAL AWARDS
Year Ended June 30, 2023
CITY OF ENCINITAS
SINGLE AUDIT REPORT ON EXPENDITURES OF FEDERAL AWARDS
Year Ended June 30, 2023
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 8
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, 2023 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 December 15, 2023.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.
Report on 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) as a basis for designing 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 or significant deficiencies may exist that have
not been identified.
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Report on 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 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
December 15, 2023
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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
Opinion on 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 programs for the year ended June 30, 2023. The
City’s major federal programs are identified in the summary of auditor’s results section of the
accompanying schedule of findings and questioned costs.
In our opinion, the City complied, in all material respects, with the 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, 2023.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally
accepted in the United States of America (GAAS); the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of the United
States (Government Auditing Standards); and the audit 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). Our responsibilities under those
standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for
the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities,
in accordance with relevant ethical requirements relating to our audit. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion
on compliance for each major federal program. Our audit does not provide a legal
determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for
the design, implementation, and maintenance of effective internal control over compliance
with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant
agreements applicable to the City’s federal programs.
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Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance
with the compliance requirements referred to above occurred, whether due to fraud or error,
and express an opinion on the City’s compliance based on our audit. Reasonable assurance is
a high level of assurance but is not absolute assurance and therefore is not a guarantee that
an audit conducted in accordance with GAAS, Government Auditing Standards, and the
Uniform Guidance will always detect material noncompliance when it exists. The risk of not
detecting material noncompliance resulting from fraud is higher than for that resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control. Noncompliance with the compliance requirements referred to
above is considered material, if there is a substantial likelihood that, individually or in the
aggregate, it would influence the judgment made by a reasonable user of the report on
compliance about the City’s compliance with the requirements of each major federal program
as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the
Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material noncompliance, whether due to fraud or error,
and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding City’s compliance with the
compliance requirements referred to above and performing such other procedures as
we considered necessary in the circumstances.
Obtain an understanding of the City’s internal control over compliance relevant to the
audit in order to design audit procedures that are appropriate in the circumstances
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 the City’s internal control over compliance. Accordingly, no such
opinion is expressed.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and any significant deficiencies and
material weaknesses in internal control over compliance that we identified during the audit.
Report on 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 a 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.
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Our consideration of internal control over compliance was for the limited purpose described
in the Auditor’s Responsibilities for the Audit of Compliance section above and was not
designed to identify all deficiencies in internal control over compliance that might be material
weaknesses or significant deficiencies in internal control over compliance. Given these
limitations, during our audit we did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above. However, material
weaknesses or significant deficiencies in internal control over compliance may exist that were
not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of
internal control over compliance. Accordingly, no such opinion is expressed.
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 the Uniform
Guidance
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 City as of
and for the year ended June 30, 2023, and the related notes to the financial statements,
which collectively comprise the City’s basic financial statements. We issued our report
thereon, dated December 15, 2023, which contained unmodified opinions on those financial
statements. Our audit was conducted for the purpose of forming 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 the Uniform Guidance 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 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.
Irvine, California
March 4, 2024, except for the Schedule of Expenditures of Federal Awards, as to which the
date is December 15, 2023
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As sistance Grant Amount
Listing 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-23-MC-06-0574 111,075$ 248,944$
COVID-19 Community Development Block Grant 14.218 B-22-MC-06-0574 791 -
Community Development Block Grant 14.218 B-20-MW-06-0574 188,134 -
Subtotal CDBG Entitlement Grants Cluster 300,000 248,944
Housing Voucher Cluster:
Section 8 Housing Choice Vouchers 14.871 CA155VO 1,621,204 -
Subtotal Housing Voucher Cluster 1,621,204 -
Total U.S. Department of Housing and Urban Development 1,921,204 248,944
U.S. Department of Health and Human Services
Passed through the County of San Diego:
Aging Cluster:
Title III-B Transportation 93.044 561722 13,218 -
Title III-NSIP C1 Incentive 93.053 561722 3,660 -
Title III-C1 Congregate Meals 93.045 561722 30,297 -
Subtotal Aging Cluster 47,175 -
Total U.S. Department of Health and Human Services 47,175 -
U.S. Department of Homeland Security
Passed through the California Office of Emergency Services:
Homeland Security Grant Program (HSGP)97.067 073-00000 58,640 -
Total U.S. Department of Homeland Security 58,640 -
U.S. Department of Transportation
Passed through the State of California:
Highway Planning and Construction Cluster:
Highway Safety Improvement Program 20.205 HSIPL-5446(021-030)753,636 -
Active Transportation Program 20.205 ATPL-5446 (021)31,234 -
Subtotal Highway Planning and Construction Cluster 784,870 -
Total U.S. Department of Transportation 784,870 -
U.S. Department of the Treasury
Passed through the State of California:
COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 1505-0271 4,071,172 -
Total U.S. Department of the Treasury 4,071,172 -
Total Expenditures of Federal Awards 6,883,061$ 248,944$
Year Ended June 30, 2023
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, 2023
(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, 2023. 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 $248,944 for the Community Development Block
Grant for the fiscal year ended June 30, 2023.
Meals on Wheels $ 7,826
CRC Homeless Programs 22,821
McAlister ITE Inc.182,500
Fair Housing Services 17,971
Interfaith Community Services 17,826
Total $ 248,944
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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
21.027 COVID-19 Coronavirus State and Local
Fiscal Recovery
20.205 Highway Planning and Construction Cluster
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, 2023
Section I - Summary of Auditor's Results
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There were no financial statement findings for the year ended June 30, 2023.
There were no federal award findings or questioned costs for the year ended June 30, 2023.
CITY OF ENCINITAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended June 30, 2023
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, 2023
There were no audit findings noted in the Single Audit Report for the year ended June 30, 2022.
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