Single Audit Report, 2012-13

COUNTY OF SAN LUIS OBISPO SINGLE AUDIT REPORT YEAR ENDED JUNE 30, 2013 THIS PAGE INTENTIONALLY LEFT BLANK COUNTY OF SAN LUIS OBISPO Single Audit Report For the Year Ended June 30, 2013 Table of Contents 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 Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 ................................................ 3-5 Schedule of Expenditures of Federal Awards .................................................................................... 7-13 Notes to Schedule of Expenditures of Federal Awards ..................................................................... 15-16 Schedule of Findings and Questioned Costs ..................................................................................... 17-18 Summary Schedule of Prior Audit Findings ....................................................................................... 19 Supplementary Schedule of Grant Expenditures ............................................................................... 21 Aviation Passenger Facilities Charges Independent Auditor’s Report on Schedule of Passenger Facility Charges, Revenues, and Expenses .................................................................................... 23 Report on Compliance with Requirements Applicable to the Passenger Facility Charges Program on Internal Control Over Compliance ..................................................... 25-26 Report on Compliance and on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Schedule of Passenger Facility Charges, Revenues, and Expenses Performed in Accordance with Government Auditing Standards .......................................................................... 27-28 Schedule of Passenger Facility Charges (PFC), Revenues, and Expenses……………………………………………………………………………………………………. 29 THIS PAGE INTENTIONALLY LEFT BLANK 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 Board of Supervisors County of San Luis Obispo San Luis Obispo, 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, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of San Luis Obispo (County), as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements, and have issued our report thereon dated December 20, 2013. Our report includes a reference to other auditors who audited the financial statements of the San Luis Obispo County Pension Trust Fund and the First 5 San Luis Obispo County, a discretely presented component unit, as described in our report on the County’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 County’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 County’s internal control. Accordingly, we do not express an opinion on the effectiveness of the County’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. 1 925 Highland Pointe Drive, Suite 450, Roseville, CA 95678-5418 tel: 916.784.7800 fax: 916.784.7850 www.gallina.com Board of Supervisors County of San Luis Obispo San Luis Obispo, California Compliance and Other Matters As part of obtaining reasonable assurance about whether the County’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 County'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. Roseville, California December 20, 2013 2 INDEPENDENT AUDITOR’S 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 OMB CIRCULAR A-133 Board of Supervisors County of San Luis Obispo San Luis Obispo, California Report on Compliance for Each Major Federal Program We have audited the County of San Luis Obispo’s (County) 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 County’s major federal programs for the year ended June 30, 2013. The County’s 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 County’s 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 County’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 each major federal program. However, our audit does not provide a legal determination of the County’s compliance. Opinion on Each Major Federal Program In our opinion, the County 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, 2013. 3 925 Highland Pointe Drive, Suite 450, Roseville, CA 95678-5418 tel: 916.784.7800 fax: 916.784.7850 www.gallina.com Board of Supervisors County of San Luis Obispo San Luis Obispo, California Report on Internal Control Over Compliance Management of the County 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 County’s 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 County’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 OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. 4 Board of Supervisors County of San Luis Obispo San Luis Obispo, California 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 unit, each major fund, and the aggregate remaining fund information of the County, as of and for the year ended June 30, 2013, and have issued our report thereon dated December 20, 2013, which contained an unmodified opinion on those financial statements. We did not audit the financial statements of the San Luis Obispo County Pension Trust Fund and the First 5 San Luis Obispo County, a discretely presented component unit. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinions, insofar as it relates to the amounts included in the Pension Trust Fund and the discretely presented component unit is based on the reports of the other auditors. 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 OMB Circular A-133 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. 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. The Supplementary Schedule of Grant Expenditures have not been subjected to auditing procedures applied in the audit of the basic financial statements, and accordingly, we express no opinion on them. Roseville, California December 20, 2013 5 THIS PAGE INTENTIONALLY LEFT BLANK 6 COUNTY OF SAN LUIS OBISPO, CALIFORNIA Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2013 Federal 2012-2013 CFDA Revenue 2012-2013 Federal Grantor/Pass-Through Grantor/Program Title Number Pass-Through Grantor's Number Recognized Expenditures U. S. DEPARTMENT OF AGRICULTURE Direct programs: Federal Forest Reserve 10.665 -- $ 5 ,978 $ 5 ,978 Water and Waste Disposal Program-Grant 10.760 -- 2 94,012 2 94,012 ARRA Water and Waste Disposal Program 10.781 -- 2 9,754,794 3 5,336,254 ARRA Water and Waste Disposal Program - Prior Year Adjustment 10.781 -- 9 21,884 9 21,884 Subtotal Direct 3 0,976,668 3 6,558,128 Passed through State Department of Social Services: Food Stamp Administration (SNAP) 10.561 -- 3 ,532,459 3 ,535,642 Food Stamp Administration (SNAP) - Prior Year Adjustment 10.561 -- 8 4,113 8 4,113 Subtotal Pass-through 3 ,616,572 3 ,619,755 Passed through State Department of Health Care Services: Women Infant Children Nutrition Program 10.557 11-10453 2 90,455 2 90,455 Women Infant Children Nutrition Program -Prior year adjustment 10.557 11-10453 2 ,342 2 ,342 Women Infant Children Nutrition Program 10.557 11-10453 9 62,862 9 62,862 Subtotal Pass-through 1 ,255,659 1 ,255,659 Passed through California Fire Safe Council: Cooperative Forestry Assistance 10.664 11USFS-ES0203 (8,424) - Subtotal Pass-through (8,424) - Passed through State Department of Food and Agriculture: Pest Detection Trapping 10.025 12-0134 1 77,237 1 77,237 Sudden Oak Death 10.025 12-0338-SF 1 7,014 1 7,014 Glassy-Winged Sharpshooter 10.025 12-0100-SF 3 63,663 3 63,663 Glassy-Winged Sharpshooter - Prior year adjustment 10.025 10-0349 5 67 5 67 Asian Citrus Psyllid Detection 10.025 11-0537-SF, 12-0509-SF 2 47,262 2 47,262 European Grape Vine Moth 10.025 11-0553-SF 6 2,859 6 2,859 Light Brown Apple Moth Regulatory 10.025 11-0564-SF/12-0532-SF 5 4,592 5 4,592 Light Brown Apple Moth Regulatory - Prior Year Adjustment 10.025 11-0371-SF, 11-0427-SF, 11-0564 (5) (5) Light Brown Apple Moth Detection 10.025 11-0510-SF, 12-0430-SF 1 6,290 1 6,290 Subtotal Pass-through 9 39,479 9 39,479 Passed through State Department of Public Health: Supplemental Nutrition Assistance Program Education (SNAP-ED) 10.561 11-10762 5 9,113 5 9,113 Supplemental Nutrition Assistance Program Education (SNAP-ED) - Prior Year Adjustment 10.561 11-10762 1 99 1 99 Supplemental Nutrition Assistance Program Education(SNAP-ED) 10.561 12-10212 1 93,401 1 93,401 Subtotal Pass-through 2 52,713 2 52,713 Total Department of Agriculture $ 3 7,032,667 $ 4 2,625,734 U.S. DEPARTMENT OF DEFENSE Direct program: Community Economic Adjustment Planning Assistance for Joint Land Use Studies 12.610 HQ00051110021 2 8,910 2 8,910 Total Department of Defense $ 2 8,910 $ 2 8,910 U. S. DEPARTMENT OF HOUSING & URBAN DEVELOPMENT Direct programs: Community Devel. Block Grants 14.218 B-04-UC-06-0508 5 7,549 5 7,549 Community Devel. Block Grants 14.218 B-08-UC-06-0508 1 25,957 1 25,957 Community Devel. Block Grants 14.218 B-09-UC-06-0508 1 9,060 1 9,060 Community Devel. Block Grants 14.218 B-10-UC-06-0508 1 17,082 1 15,413 Community Devel. Block Grants 14.218 B-10-UC-06-0508 - 1 ,669 Community Devel. Block Grants 14.218 B-11-UC-06-0508 3 26,791 2 25,080 Community Devel. Block Grants 14.218 B-11-UC-06-0508 - 1 01,711 Community Devel. Block Grants 14.218 B-12-UC-06-0508 6 55,861 6 30,952 Community Devel. Block Grants 14.218 B-12-UC-06-0508 - 2 4,908 Community Devel. Block Grants - 3rd Party Loans 14.218 2 ,469,117 Emergency Solutions Grant Program 14.231 E-12-UC-06-0508 9 3,062 9 3,062 Supportive HousingProgram 14.235 Various 1 99,073 1 99,073 Supportive HousingProgram 14.235 Various 7 69,057 7 69,057 Home Partnership Investment Program 14.239 M-09-UC-06-0545 4 11,923 4 11,923 See accompanying notes to the Schedule of Expenditures of Federal Awards. 7 COUNTY OF SAN LUIS OBISPO, CALIFORNIA Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2013 Federal 2012-2013 CFDA Revenue 2012-2013 Federal Grantor/Pass-Through Grantor/Program Title Number Pass-Through Grantor's Number Recognized Expenditures U. S. DEPARTMENT OF HOUSING & URBAN DEVELOPMENT (continued) Direct programs (continued): Home Partnership Investment Program 14.239 M-10-UC-06-0545 $ 7 84,840 $ 7 84,840 Home Partnership Investment Program 14.239 M-11-UC-06-0545 5 10,825 5 10,825 Home Partnership Investment Program 14.239 M-12-UC-06-0545 9 6,160 9 6,160 Home Partnership Investment Program-3rd Party Loans 14.239 -- 1 4,221,119 ARRA Community Development Block Grants 14.253 B-09-UY-06-0508 1 8,359 1 8,359 ARRA Homelessness Prevention and Rapid Rehousing (2009) 14.257 S-09-UY-06-0545 4 0,242 4 0,242 Subtotal Direct 4 ,225,841 2 0,916,076 Total Department of Housing & Urban Development $ 4 ,225,841 $ 2 0,916,076 U. S. DEPARTMENT OF THE INTERIOR Direct programs: Coastal Impact Assistance Program 15.668 -- 1 10,735 1 09,274 Payments In-Lieu of Taxes 15.226 -- 1 ,045,095 1 ,045,095 Coastal Impact Assistance Program 15.668 6,70278,70233 - 1 ,461 Subtotal Direct 1 ,155,830 1 ,155,830 Passed through Department of Fish & Game: Cooperative Endangered Species Conservation Fund 15.615 P1182017, P1182018 3 57,508 3 57,508 Cooperative Endangered Species Conservation Fund - Prior Year Adjustment 15.615 P1182017, P1182018 4 4,645 4 4,645 Subtotal Pass-through Fish & Game 4 02,153 4 02,153 Passed through California Bureau of Land Management: Taylor Grazing Act 15.227 -- - 1 ,750 Taylor Grazing Act 15.227 -- 5 ,116 - Subtotal Pass-through Bureau of Land Management 5 ,116 1 ,750 Passed through California State Department of Parks & Recs: Outdoor Recreation Acquisition - Los Osos Playground 15.916 06-01704 1 6,170 1 6,170 Subtotal Pass-through California State Department of Parks & Recs 1 6,170 1 6,170 Total Department of Interior $ 1 ,579,269 $ 1 ,575,903 U. S. DEPARTMENT OF JUSTICE Direct programs: SS Awards 16.710 -- 5 9,400 5 9,400 State Criminal Alien Assistance Program 16.606 -- 2 25,001 2 25,001 Southwest Border Prosecution Initiative 16.607 -- 2 1,540 2 1,540 Southwest Border Prosecution Initiative-Prior Year adjustment 16.607 -- (1,808) (1,808) COPS Technology Program 16.710 2008CKWX0267 1 70,000 1 70,000 Federal Asset Forfeiture 16.000 -- 1 23,969 1 23,969 Justice Assistance Grant 16.738 2012-DJ-BX-0990 1 5,042 1 5,042 Coverdell Forensic Science Improvement Grant 16.742 2011-91301-CA-CD 3 4,376 3 5,681 Subtotal Direct 6 47,520 6 48,825 Passed through California Emergency Management Agency: Victim Witness Assistance 16.575 VW12310400 7 6,404 7 6,404 Unserved/Underserved Victim Advocacy and Outreach 16.582 UV12030400 1 17,779 1 17,779 ARRA Aftercare Treatment Services 16.593 AF11 01 0400 9 0,586 9 0,586 ARRA Department of Justice-Comprehensive Drug Court Initiative (JAG) 16.593 D1 10 01 0400 3 0,072 3 0,072 ARRA Evidence Based Practices Supervision 16.803 ZP09010400 1 4,736 1 4,736 ARRA Evidence Based Practices Supervision - Prior Year Adjustment 16.803 ZP09010400 (10,924) (10,924) Subtotal Pass-through 3 18,653 3 18,653 Passed through State Department of Corrections & Rehabilitation: Justice Assistance Grant - Anti-Drug Abuse Enforcement Team Program 16.738 BSCC 626-12 1 26,411 1 26,411 Subtotal Pass-through 1 26,411 1 26,411 Total Department of Justice $ 1 ,092,584 $ 1 ,093,889 See accompanying notes to the Schedule of Expenditures of Federal Awards. 8 COUNTY OF SAN LUIS OBISPO, CALIFORNIA Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2013 Federal 2012-2013 CFDA Revenue 2012-2013 Federal Grantor/Pass-Through Grantor/Program Title Number Pass-Through Grantor's Number Recognized Expenditures U. S. DEPARTMENT OF LABOR Passed through California EmploymentDevelopment Department: Workforce Investment Act-Adult 17.258 K282503,K386330 $ 6 36,431 $ 6 36,431 Workforce Investment Act-Youth 17.259 K282503,386330 7 99,923 7 99,923 Workforce Investment Act-National Emergency Grants 17.277 -- 5 2,237 5 2,237 Workforce Investment Act-Dislocated Worker & Rapid Response 17.278 K178693, K282503 8 68,145 8 68,145 Subtotal Pass-through 2 ,356,736 2 ,356,736 Total Department of Labor $ 2 ,356,736 $ 2 ,356,736 U. S. DEPARTMENT OF TRANSPORTATION Direct programs: Airport Improvement Program 20.106 HSTS02-12-R-SLR349 1 21,762 1 21,762 Airport Improvement Program 20.106 3-06-0228-39 5 69 5 69 Airport Improvement Program 20.106 3-06-0228-38 5 45,340 5 45,340 Airport Improvement Program 20.106 3-06-0172-006 2 5,384 2 5,384 Subtotal Direct 6 93,055 6 93,055 Passed through State Department of Transportation: Public Ways and Facilities 20.205 BHLS-5949(062) 1 ,210,568 1 ,210,568 Public Ways and Facilities 20.205 BHLS-5949(063) 1 ,293,331 1 ,293,331 Public Ways and Facilities 20.205 BHLS-5949(136) 1 12,352 1 12,352 Public Ways and Facilities 20.205 BHLS-5949(137) 1 28,412 1 28,412 Public Ways and Facilities 20.205 HSIPL-5949(149) 2 9,538 2 9,538 Public Ways and Facilities 20.205 HSIPL-5949(149) 3 8,914 3 8,914 Public Ways and Facilities 20.205 BRLO-5949(019) 5 ,140 5 ,140 Public Ways and Facilities 20.205 BRLO-5949(009) 8 ,358 8 ,358 Public Ways and Facilities 20.205 BRLO-5949(065) 1 21,434 1 21,434 Public Ways and Facilities -Prior year adjustment 20.205 BRLO-5949(065) (38,279) (38,279) Public Ways and Facilities 20.205 BRLO-5949(116) 2 14,729 2 14,729 Public Ways and Facilities 20.205 BRLO-5949(119) 2 6,684 2 6,684 Public Ways and Facilities 20.205 BRLO-5949(120) 5 3,509 5 3,509 Public Ways and Facilities 20.205 BRLO-5949(127) 1 10,922 1 10,922 Public Ways and Facilities 20.205 BRLS-5949(129) 2 2,473 2 2,473 Public Ways and Facilities 20.205 BRLS-5949(131) 4 3,721 4 3,721 Public Ways and Facilities 20.205 BRLS-5949(135) 1 26,195 1 26,195 Public Ways and Facilities 20.205 HP21L-5949(126) 3 67,195 3 67,195 Public Ways and Facilities -Prior Year Adjustment 20.205 HP21L-5949(126) (249) (249) Safe Accountable, Flexible, Efficient Transportation Equity Act (SAFETEA-LU) 20.205 HPLU-5949 (132) 3 ,837 3 ,837 Highway Planning and Construction 20.205 HRRRL-5949(111) 1 30,496 1 30,496 Public Ways and Facilities 20.205 STPL-5949(139) 4 6,134 4 6,134 Public Ways and Facilities- Prior Year Adjustment 20.205 STPL-5949(139) 1 4 1 4 Public Ways and Facilities 20.205 RPSTPL-5949(144) 3 ,360 3 ,360 Public Ways and Facilities 20.205 Q101(189) 2 ,275,831 2 ,275,831 Public Ways and Facilities 20.205 BPMPL 5949 (113) 3 2,859 3 2,859 Public Ways and Facilities 20.205 BPMPL 5949 (124) 2 3,951 2 3,951 Public Ways and Facilities 20.205 BPMPL 5949 (130) 1 ,054 1 ,054 Public Ways and Facilities-Prior year adjustment 20.205 BPMPL 5949 (130) 2 ,772 2 ,772 Office Of Traffic Safety 20.600 OP1307 9 3,542 9 3,973 Office Of Traffic Safety 20.613 OP1307 1 0,291 1 0,288 Subtotal Pass-through 6 ,499,088 6 ,499,516 Total Department of Transportation $ 7 ,192,143 $ 7 ,192,571 INSTITUTE OF MUSEUM AND LIBRARY SERVICES Passed through California State Library: Library Services & Technology Act 45.310 40-8118 5 ,956 5 ,956 Library Services & Technology Act 45.310 40-7942 1 6,421 1 6,421 Subtotal Pass-through 2 2,377 2 2,377 Total Institute of Museum and Library Services $ 2 2,377 $ 2 2,377 See accompanying notes to the Schedule of Expenditures of Federal Awards. 9 COUNTY OF SAN LUIS OBISPO, CALIFORNIA Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2013 Federal 2012-2013 CFDA Revenue 2012-2013 Federal Grantor/Pass-Through Grantor/Program Title Number Pass-Through Grantor's Number Recognized Expenditures ENVIRONMENTAL PROTECTION AGENCY Passed through State Water Resource Control Board: Public Beach Safety Grant 66.472 12-046-250 $ 2 4,000 $ 2 4,000 Subtotal Pass-through 2 4,000 2 4,000 Total Enviromental Protection Agency $ 2 4,000 $ 2 4,000 U.S. DEPARTMENT OF ENERGY Direct programs: ARRA Energy Efficiency and Conservation Block Grant Program 81.128 DE-EE0000903 4 9,842 4 9,842 ARRA nergy Efficiency and Conservation Block Grant Program - Prior Year Adjustment 81.128 DE-EE0000903 2 5,519 2 5,519 ARRA Energy Efficiency and Conservation Block Grant Program 81.128 DE-EE0000903 8 0,656 8 0,656 Subtotal Direct 1 56,017 1 56,017 Total U.S. Department of Energy $ 1 56,017 $ 1 56,017 U. S. DEPARTMENT OF HEALTH & HUMAN SERVICES Direct programs: Health Resources Services Administration - University of the Pacific Oral Health 93.236 T12HP19362 2 4,203 2 4,203 Adult Treatment Drug Court 93.243 1H79TI021865-01 8 5,297 8 5,297 Adult Treatment Drug Court Collaborative 93.243 1H79TI023740-01 5 66,881 5 66,881 Family Drug Court 93.243 1H79T1024206-01 4 6,925 4 6,925 Treatment for Children Affected by Methamphetamine 93.243 1H79TI023367-01 3 88,650 3 88,650 SLO Sober Truth on Preventing Underage Drinking 93.243 5H79SP015477-04 1 8,215 1 8,215 Drug Free Communities Support Program - Drug Free Campus Cal Poly 93.276 H9SP15668A 1 42,600 1 42,600 Health Resources Services Administration 93.887 09-163 1 2,584 1 2,584 Subtotal Direct 1 ,285,355 1 ,285,355 Passed through State Department of Alcohol and Drug Programs: Substance Abuse Prevention & Treatment Block Grant-Discretionary Funds 93.959 -- 1 ,087,614 1 ,087,614 Substance Abuse Prevention & Treatment Block Grant-HIV Set-aside Funds 93.959 -- 2 5,584 2 5,584 Substance Abuse Prevention & Treatment Block Grant-Prevention Set-aside Funds 93.959 -- 2 09,295 2 09,295 Substance Abuse Prevention & Treatment Block Grant-Adolescent and Youth TX Discretionary Treatment 93.959 -- 1 17,959 1 17,959 Substance Abuse Prevention & Treatment Block Grant-Friday Night Live and Club Live 93.959 -- 2 0,000 2 0,000 Substance Abuse Prevention & Treatment Block Grant-Perinatal Set-aside Funds 93.959 -- 6 8,591 6 8,591 Subtotal Pass-through 1 ,529,043 1 ,529,043 Passed through State Department of Child Support Services: Child Support Enforcement: Child Support Administration 93.563 -- 2 ,717,768 2 ,717,768 Child Support EDP 93.563 -- 1 60,123 1 60,123 Incentive Program 93.563 -- 6 2,546 6 2,546 Subtotal Pass-through 2 ,940,437 2 ,940,437 Passed Through National Association of County and City Health Officials Medical Reserve Corps Small Grant Program 93.008 MRC 13-1633 4 ,000 4 ,000 Subtotal Pass-through 4 ,000 4 ,000 Passed through State Department of Public Health: CDC Base PH Emergency Preparedness - Prior Year Adjustment 93.069 EPO-11-40 5 ,624 5 ,624 CDC Base PH Emergency Preparedness 93.069 EPO-12-40 5 54,797 5 54,797 Subtotal CFDA 93.069 5 60,421 5 60,421 TB Control branch/Real Time Allotment 93.116 5U52PS900515-30 6 ,586 6 ,586 Subtotal CFDA 93.116 6 ,586 6 ,586 Lead Program 93.197 11-10624 3 4,466 3 4,466 Lead Program - Prior Year Adjustment 93.197 11-10624 2 ,400 2 ,400 Subtotal CFDA 93.197 3 6,866 3 6,866 Immunization Action Plan 93.268 11-10599 9 3,430 9 3,430 Subtotal CFDA 93.268 9 3,430 9 3,430 Health Resources Services Administration-Prior year adjustment 93.889 EPO 09-40 1 9,639 1 9,639 Health Resources Services Administration HPP 93.889 EPO 12-40 1 79,294 1 79,294 Subtotal CFDA 93.889 1 98,933 1 98,933 See accompanying notes to the Schedule of Expenditures of Federal Awards. 10 COUNTY OF SAN LUIS OBISPO, CALIFORNIA Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2013 Federal 2012-2013 CFDA Revenue 2012-2013 Federal Grantor/Pass-Through Grantor/Program Title Number Pass-Through Grantor's Number Recognized Expenditures U. S. DEPARTMENT OF HEALTH & HUMAN SERVICES (continued) Passed through State Department of Public Health (continued): HIV Care-Single Allocation Model / Ryan White Care 93.917 10-95288 $ 9 4,169 $ 9 4,169 HIV/AIDS Surveillance Program 93.917 10-95288 3 1,720 3 1,720 Subtotal CFDA 93.917 1 25,889 1 25,889 Sexually Transmitted Diseases Control Branch Sexually Transmitted Diseases Community Intervention Program 93.977 11-10058 1 00 1 00 Sexually Transmitted Diseases Community Intervention Program - Prior Year Adjustment 93.977 11-10058 1 5 1 5 Subtotal CFDA 93.977 1 15 1 15 Maternal Child Health (MCH) 93.994 2012-40 3 73,555 3 73,555 Maternal Child Health (MCH) - Prior year adjustment 93.994 2012-40 4 ,030 4 ,030 Subtotal CFDA 93.994 3 77,585 3 77,585 Subtotal Pass-through State Department of Public Health 1 ,399,825 1 ,399,825 Medical Assistance Program: Medi-Cal Administration 93.778 09-86011-A01 4 45,462 4 45,462 Medi-Cal Administration -Targeted Case Management 93.778 40-173A2 5 28,099 5 28,099 Medi-Cal Administration -Targeted Case Management - Prior Year Adjustment 93.778 40-173A2 1 16,710 1 16,710 Administration: Medi-Cal 93.778 09-86011 A01 5 1,378 5 1,378 Administration: Medi-Cal 93.778 09-86011 A01 1 20,774 - Administration: Medi-Cal-Prior year adjustment 93.778 09-86011 A01 1 60,593 1 60,593 Administration: Medi-Cal School Based 93.778 08-85113-A01 3 22,422 3 22,422 Foster Care 93.778 SLO 40 1 33,751 1 33,751 Foster Care - Prior Year Adjustment 93.778 SLO 40 1 ,376 1 ,376 Child Hlth & Disability Prevention 93.778 SLO 40 3 12,877 3 12,877 Child Hlth & Disability Prevention-Prior year adjustment 93.778 SLO 40 1 2,677 1 2,677 Children Services 93.778 SLOCO/MTP 1 ,444,147 1 ,444,147 Children Services-Prior year adjustment 93.778 SLOCO/MTP 8 4,855 8 4,855 Administration: Medi-Cal-Public Authority for IHSS 93.778 -- 5 ,740,800 5 ,740,800 ARRA Administration: Medi-Cal-Public Authority for IHSS - Prior Year Adjustment 93.778 -- 6 6 6 6 Medi-Cal Administration - Prior Year Adjustment 93.778 -- 1 94,580 1 94,580 Subtotal CFDA 93.778 9 ,670,567 9 ,549,793 Mental Health-Substance Abuse (SAMHSA) 93.958 -- 3 51,443 3 51,443 Mental Health-Substance Abuse (SAMHSA) 93.958 -- 1 11,945 1 11,945 Subtotal CFDA 93.958 4 63,388 4 63,388 SubtotalPass-through State Department of Health Care Services 1 0,133,955 1 0,013,181 Passed through State Department of Mental Health: Mental Health-McKinney Projects for Assistance in Transition from Homlessness 93.150 -- 4 9,922 4 9,922 SubtotalPass-through State Department of Mental Health 4 9,922 4 9,922 Passed through State Department of Social Services: KinGap IV-E Admin 93.090 -- 2 ,253 2 ,253 Subtotal CFDA 93.090 2 ,253 2 ,253 Promoting Safe and Stable Families 93.556 -- 1 41,572 1 41,572 Promoting Safe and Stable Families -Prior Year Adjustment 93.556 -- (17,104) (17,104) Refugee Cash Assistance 93.566 -- 1 ,073 1 ,073 Refugee Cash Assistance-Prior Year Adjustment 93.566 -- (732) (732) Subtotal CFDA 93.556 1 24,809 1 24,809 Temporary Assistance for Needy Families: Assistance : CALWORKS 93.558 -- 3 ,688,835 3 ,688,835 Assistance : CALWORKS - Prior Year Adjustment 93.558 -- (287) (287) Administration: CalWORKS, SAWS-CalWIN, TANF 93.558 -- 9 ,241,769 9 ,241,769 Administration: CalWORKS, SAWS-CalWIN, TANF - Prior Year Adjustment 93.558 -- 2 46,817 2 46,817 Subtotal CFDA 93.558 1 3,177,134 1 3,177,134 See accompanying notes to the Schedule of Expenditures of Federal Awards. 11 COUNTY OF SAN LUIS OBISPO, CALIFORNIA Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2013 Federal 2012-2013 CFDA Revenue 2012-2013 Federal Grantor/Pass-Through Grantor/Program Title Number Pass-Through Grantor's Number Recognized Expenditures U. S. DEPARTMENT OF HEALTH & HUMAN SERVICES (continued) Passed through State Department of Social Services (continued): Foster Care - Title IV-E Administration: Probation - Title IV E 93.658 -- $ 9 78,744 $ 9 78,744 Administration: Probation - Title IVE-Prior year adjustment 93.658 -- 1 6,190 1 6,190 Child Welfare Services - Title IV E 93.658 -- 3 ,628,587 3 ,628,587 Child Welfare Services - Title IV E - Prior Year Adjustment 93.658 -- 1 ,021 1 ,021 Assistance: Foster Care 93.658 -- 2 ,404,891 2 ,404,891 Assistance: Foster Care-Prior Year Adjustment 93.658 -- 2 ,744 2 ,744 Subtotal CFDA 93.658 7 ,032,177 7 ,032,177 Child Welfare Services Title IV-B 93.645 -- 1 86,307 1 86,307 Child Welfare Services Title IV-B - Prior Year Adjustment 93.645 -- (446,604) (446,604) Administration: Adoption 93.659 -- 8 53,443 8 53,443 Administration: Adoption - Prior Year Adjustment 93.659 -- (59,533) (59,533) Assistance: Adoption 93.659 -- 2 ,905,546 2 ,905,546 Assistance: Adoption - Prior Year Adjustment 93.659 -- 3 3 Foster Care Assistance -Title XX 93.667 -- 2 10,469 2 10,469 Child Welfare Services-Title XX 93.667 -- 1 75,704 1 75,704 Child Welfare Services-Title XX-Prior Year Adjustment 93.667 -- 2 86,018 2 86,018 Independent Living Program 93.674 -- 1 25,452 1 25,452 Independent Living Program-Prior Year Adjustment 93.674 -- (39,030) (39,030) Subtotal 4 ,197,775 4 ,197,775 Subtotal Pass-through State Department of Social Services 2 4,534,148 2 4,534,148 Subtotal Pass-through programs 4 0,591,330 4 0,470,556 Total Department of Health & Human Services $ 4 1,876,685 $ 4 1,755,911 DEPARTMENT OF HOMELAND SECURITY Passed throght California Dept of Boating & Waterways: Non Motorized Boating Access Development Grant 97.012 11-204-780 7 2,056 7 2,056 Non Motorized Boating Access Development Grant 97.012 10-108-803 1 22,581 1 22,581 Subtotal Passed through California Department of Boating & Waterways 1 94,637 1 94,637 Passed throght California Emergency Management Agency: Disaster Grants - Public Assistance - Prior Year Adjustment 97.036 FEMA-1628-DR-CA 3 79,458 3 79,458 Subtotal CFDA 97.036 3 79,458 3 79,458 Hazard Mitigation Grants: FY 11 Pre-Disaster Mitigation Grant Program 97.047 2011-0002 5 ,187 5 ,187 Subtotal CFDA 97.047 5 ,187 5 ,187 Emergency Management Performance Grants: Emergency Management Program Grant 97.042 2012-0027 8 8,082 8 8,082 Emergency Management Program Grant - Prior year adjustment 97.042 2012-0027 (50) (50) Emergency Management Performance 2011 97.042 2011-0048 5 0,000 5 0,000 Emergency Management Performance 2011 - Prior Year Adjustment 97.042 2011-0048 (2,244) (2,244) Subtotal CFDA 97.042 1 35,788 1 35,788 Homeland Security 97.067 2010-0085 8 ,497 8 ,497 Homeland Security - Prior Year Adjustment 97.067 2010-0085 1 ,888 1 ,888 Homeland Security 97.067 2010-0085 3 0,000 3 0,000 Homeland Security 97.067 2010-0085 2 4,597 2 4,597 Homeland Security 97.067 2010-0085 1 1,474 1 1,474 Homeland Security - Prior Year Adjustment 97.067 2010-0085 1 2,526 1 2,526 Homeland Security 97.067 2010-0085 1 54,103 1 54,103 Homeland Security 97.067 2010-0085 7 0,479 7 0,479 Homeland Security 97.067 2010-0085 1 91,840 1 91,453 Homeland Security 97.067 2011-0048 5 9,528 5 9,528 Homeland Security - Prior Year Adjustment 97.067 2011-0048 (4,154) (4,154) Homeland Security 97.067 2011-0077 6 5,991 6 6,975 Subtotal CFDA 97.067 6 26,769 6 27,366 See accompanying notes to the Schedule of Expenditures of Federal Awards. 12 COUNTY OF SAN LUIS OBISPO, CALIFORNIA Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2013 Federal 2012-2013 CFDA Revenue 2012-2013 Federal Grantor/Pass-Through Grantor/Program Title Number Pass-Through Grantor's Number Recognized Expenditures DEPARTMENT OF HOMELAND SECURITY (continued) Passed throght California Emergency Management Agency (continued): Bufferzone Protection Program 97.078 2009-0026 $ 2 ,851 $ 2 ,851 Subtotal CFDA 97.078 2 ,851 2 ,851 Subtotal Passed-through California Emergency Management Agency 1 ,150,053 1 ,150,650 Subtotal Pass-throughs 1 ,344,690 1 ,345,287 Total Department of Homeland Security $ 1 ,344,690 $ 1 ,345,287 TOTAL EXPENDITURE OF FEDERAL AWARDS $ 9 6,931,919 $ 119,093,411 See accompanying notes to the Schedule of Expenditures of Federal Awards. 13 THIS PAGE INTENTIONALLY LEFT BLANK 14 COUNTY OF SAN LUIS OBISPO Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2013 NOTE 1: REPORTING ENTITY The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal awards programs of the County of San Luis Obispo (County). The County’s reporting entity is defined in Note 1 to the County’s basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included in the schedule. Expenditures funded by the American Recovery and Reinvestment Act of 2009 are denoted by the prefix “ARRA” in the federal program title. NOTE 2: BASIS OF ACCOUNTING The accompanying SEFA is presented using the modified accrual basis of accounting for program expenditures accounted for in governmental funds and the accrual basis of accounting for expenditures accounted for in proprietary funds, as described in Note 1 of the County’s basic financial statements. NOTE 3: RELATIONSHIP TO FINANCIAL STATEMENTS The amounts reported in the accompanying SEFA agree, in all material respects, to amounts reported within the County’s financial statements. Federal award revenues are reported principally in the County’s financial statements as intergovernmental revenues in the General and Special Revenue funds. NOTE 4: SUBRECIPIENTS Of the federal expenditures presented in the SEFA, the County provided federal awards to subrecipients as follows: Federal CFDA Program Title Amount 14.218 Community Development Block Grant $ 1,025,820 14.253 Community Development Block Grant ARRA 18,359 14.239 Home Investment Partnership 1,728,176 14.231 Hearth Emergency Solutions Grant 86,935 14.257 Homeless Prevention and Rapid Rehousing 40,242 14.235 Supportive Housing Program 895,995 15.668 Coastal Impact Assistance Program 110,735 17.258 Workforce Investment Act - Adult 416,188 17.259 Workforce Investment Act - Youth 730,558 17.277 Workforce Investment Act - National Emergency Grant 41,378 17.278 Workforce Investmetn Act - Dislocated Worker/Rapid Response 507,883 93.778 School Based MAA - Lucia Mar 131,831 93.778 School Based MAA - San Luis Obispo Coastal 163,790 93.778 MAA - Children and Families Commission 26,801 $ 5,924,691 15 COUNTY OF SAN LUIS OBISPO Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2013 NOTE 5: LOANS WITH CONTINUING COMPLIANCE REQUIREMENT Outstanding federally-funded program loans with a continuing compliance requirement had the following balances during the year: Federal Amount Outstanding CFDA Program Title July 1, 2012 June 30, 2013 14.218 Community Development Block Grants/Entitlement Grants $ 2,493,886 $ 2,469,117 14.239 HOME Investment Partnerships Program 14,289,892 14,221,119 NOTE 6: PASS-THROUGH ENTITIES’ IDENTIFYING NUMBER When federal awards are received from a pass-through entity, the SEFA shows, if available, the identifying number assigned by the pass-through entity. When no identifying number is shown, the County determined that no identifying number is assigned for the program or the County was unable to obtain an identifying number from the pass-through entity. NOTE 7: TOTAL FEDERAL AWARDS EXPENDED BY CFDA NUMBER When there is more than one program under a single CFDA number, the SEFA totals all programs under the one CFDA number. Occasionally, however, this total could not be conveniently displayed because all programs under one CFDA number were not contiguous. When this occurred, this total is not shown in the Schedule, but instead is provided below: Total Federal Total Federal CFDA No Expenditures CFDA No Expenditures 10.760 $ 294,012 17.259 $ 799,923 10.781 36,258,138 20.106 571,293 14.218 3,771,416 20.205 6,395,255 14.235 968,130 93.116 6 ,586 14.239 16,024,867 93.243 1,105,968 14.257 4 0,242 93.276 142,600 15.668 1 ,461 93.566 3 41 16.582 117,779 93.645 (260,297) 16.593 120,658 93.659 3,699,459 16.607 1 9,732 93.667 672,191 16.710 229,400 93.674 8 6,422 16.803 3 ,812 93.887 1 2,584 17.258 636,431 97.090 121,762 16 COUNTY OF SAN LUIS OBISPO Schedule of Findings and Questioned Costs For the Year Ended June 30, 2013 Section 1 Financial Statements Summary of Auditor’s Results 1. Type of auditor’s report issued: Unmodified 2. Internal controls over financial reporting: a. Material weaknesses identified? No b. Significant deficiencies identified not considered to be material weaknesses? None Reported 3. Noncompliance material to financial statements noted? No Federal Awards 1. Internal control over major programs: a. Material weaknesses identified? No b. Significant deficiencies identified not considered to be material weaknesses? 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 Circular OMB A-133, Section 510(a)? No 4. Identification of major programs: CFDA Number Name of Federal Program 10.561 State Administrative Matching Grants For the Supplemental Nutrition Assistance Program 10.760, 10.781 Water and Waste Program Cluster 93.558 Temporary Assistance for Needy Families 93.778 Medical Assistance Program 17 COUNTY OF SAN LUIS OBISPO Schedule of Findings and Questioned Costs For the Year Ended June 30, 2013 Section 1 (continued) Federal Awards (continued) 5. Dollar Threshold used to distinguish between Type A and Type B programs? $ 3,000,000 6. Auditee qualified as a low-risk auditee under OMB Circular A-133, Section 530? No Section 2 Financial Statement Findings None Reported Section 3 Federal Award Findings and Questioned Costs None Reported 18 COUNTY OF SAN LUIS OBISPO Summary Schedule of Prior Audit Findings Federal Awards For the Year Ended June 30, 2013 There were no prior year audit findings. 19 THIS PAGE INTENTIONALLY LEFT BLANK 20 SUPPLEMENTARY SCHEDULE OF GRANT EXPENDITURES THIS PAGE INTENTIONALLY LEFT BLANK COUNTY OF SAN LUIS OBISPO Schedule of the California Emergency Management Agency Grant Expenditures For the Year Ended June 30, 2013 Share of Expenditures Expenditures Claimed Current Year For the Period For the Year Cumulative Through Ended As of Federal State County Program June 30, 2012 June 30, 2013 June 30, 2013 Share Share Share Victim/Witness Assistance - VW11300400 - VW1310400 Personal services $ 383,332 $ 261,296 $ 644,628 $ 76,404 $ 104,546 $ 80,346 Totals $ 383,332 $ 261,296 $ 644,628 $ 76,404 $ 104,546 $ 80,346 Unserved/Underserved Victim Advocacy and Outreach - UV100200400 - UV12030400 Personal services $ 286,160 $ 151,903 $ 438,063 $ 117,779 $ -- $ 34,124 Totals $ 286,160 $ 151,903 $ 438,063 $117,779 $ -- $ 34,124 Aftercare Treatment Services - AF11010400 Personal services $ -- $ 249,891 $ 249,891 $ 90,586 $ -- $ 159,305 Totals $ -- $ 249,891 $ 249,891 $ 90,586 $ -- $159,305 Department of Justice-Comprehensive Drug Court Initiative - DI10010400 Personal services $ 133,408 $ 18,513 $ 151,921 $ 18,513 $ -- $ -- Operating expenses 4,674 19,706 24,380 11,559 8,147 -- Totals $ 138,082 $ 38,219 $ 176,301 $ 30,072 $ 8,147 $ -- ARRA - Justice Assistance Grant: Evidence Based Practices Supervision - ZP09010400 Personal services $ 357,046 $ 195,449 $ 552,495 $ 14,736 $ -- $ 180,713 Operating expenses 48,310 -- 48,310 -- -- -- Totals $ 405,356 $ 195,449 $ 600,805 $ 14,736 $ -- $180,713 NOTE: Grant UV12030400 calendar year is 10/1/12-9/30/13 21 THIS PAGE INTENTIONALLY LEFT BLANK 22 AVIATION PASSENGER FACILITIES CHARGES THIS PAGE INTENTIONALLY LEFT BLANK INDEPENDENT AUDITOR’S REPORT ON SCHEDULE OF PASSENGER FACILITY CHARGES, REVENUES, AND EXPENSES Board of Supervisors County of San Luis Obispo San Luis Obispo, California Report on Schedule for Each Quarterly Period We have audited the accompanying Schedule of Passenger Facility Charges (PFC), Revenues, and Expenses (Schedule) of the County of San Luis Obispo (County), for the annual period and each quarterly period from July 1, 2012 to June 30, 2013. Management’s Responsibility The Schedule is the responsibility of the County’s management. Our responsibility is to express an opinion the Schedule based on our audit. Auditor’s Responsibility We conducted our 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Schedule is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Schedule. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Schedule. We believe that our audit provides a reasonable basis for our opinion. Opinion on Schedule of Passenger Facility Charges In our opinion, the Schedule referred to above presents fairly, in all material respects, the passenger facility charges received, held, and used by the County for the period and each quarter during the period from July 1, 2012 to June 30, 2013, as defined by the Federal Aviation Administration of the U.S. Department of Transportation. Report on Internal Control Over Compliance In accordance with Government Auditing Standards we have also issued our report dated {DATE} on our consideration of the County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Roseville, California December 20, 2013 23 925 Highland Pointe Drive, Suite 450, Roseville, CA 95678-5418 tel: 916.784.7800 fax: 916.784.7850 www.gallina.com THIS PAGE INTENTIONALLY LEFT BLANK 24 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO THE PASSENGER FACILITY CHARGES PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE Board of Supervisors County of San Luis Obispo San Luis Obispo, California Compliance We have audited the compliance of the County of San Luis Obispo (County) with the compliance requirements described in the Passenger Facility Charge Audit Guide for Public Agencies, issued by the Federal Aviation Administration (Guide), for its Passenger Facility Charge program for the period and each quarter during the period from July 1, 2012 to June 30, 2013. Compliance with the requirements of laws and regulations applicable to its Passenger Facility Charge program is the responsibility of the County’s management. Our responsibility is to express an opinion on the County’s compliance based on our audit. 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 Guide. Those standards and the Guide require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the compliance requirements referred to above that could have a direct and material effect on the passenger facility charge program occurred. An audit includes examining, on a test basis, evidence about the County'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. Our audit does not provide a legal determination of the County's compliance with those requirements. In our opinion, the County complied, in all material respects, with the requirements referred to above that are applicable to its Passenger Facility Charge program for the period and each quarter during the period from July 1, 2012 to June 30, 2013. Internal Control Over Compliance The management of the County is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws and regulations applicable to the Passenger Facility Charge program. In planning and performing our audit, we considered the County’s internal control over compliance with requirements that could have a direct and material effect on the Passenger Facility Charge program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance 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 County’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 the passenger facility charge program on a timely basis. 25 925 Highland Pointe Drive, Suite 450, Roseville, CA 95678-5418 tel: 916.784.7800 fax: 916.784.7850 www.gallina.com Board of Supervisors County of San Luis Obispo San Luis Obispo, California 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 a material noncompliance with a type of compliance requirement of the passenger facility charge program will not be prevented or detected and corrected on a timely basis. Our 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. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. The information has been subjected to the auditing procedures applied in the audit of 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 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 information is fairly stated in all material respects in relation to the basic financial statements as a whole. This report is intended solely for the information of management, the Board of Supervisors, the U.S. Federal Aviation Administration, and the airline parties operating at the Airport and it is not intended to be and should not be used by anyone other than these specified parties. Roseville, California December 20, 2013 26 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE SCHEDULE OF PASSENGER FACILITY CHARGES, REVENUES AND EXPENSES PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Supervisors County of San Luis Obispo San Luis Obispo, 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 Schedule of Passenger Facility Charges, Revenues and Expenses (Schedule) of the County of San Luis Obispo (County), as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements, and have issued our report thereon dated December 20, 2013. Our report includes a reference to other auditors who audited the financial statements of the San Luis Obispo County Pension Trust Fund and the First 5 San Luis Obispo County, a discretely presented component unit, as described in our report on the County’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 County’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 County’s internal control. Accordingly, we do not express an opinion on the effectiveness of the County’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. 27 925 Highland Pointe Drive, Suite 450, Roseville, CA 95678-5418 tel: 916.784.7800 fax: 916.784.7850 www.gallina.com Board of Supervisors County of San Luis Obispo San Luis Obispo, California Compliance and Other Matters As part of obtaining reasonable assurance about whether the Schedule is 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 County'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. Roseville, California December 20, 2013 28 COUNTY OF SAN LUIS OBISPO, CALIFORNIA Schedule of Passenger Facility Charges Collected and Expended For the Year Ended June 30, 2013 Current Year Project to Date Approved Receipts Receipts Unliquidated Approved Federal Application Number/ Project or Revenues Interest or Revenues Interest Balance in Project Description Allocation Recognized Earned Expenditures Recognized Earned Expenditures PFC Trust AWP-97-04-I-00-SBP, 99-06-C-00-SBP Revenues $ - $ 361,758 $ 2,239 $ - $ 3,831,355 $ 155,840 $ - $ - Expenditures: - - - - - - - - Terminal development and construction 6,820,830 - - 84,025 - - 3,124,574 - Airport staff and administration - - - 3,000 - - 102,286 - Transfers (to) from other PFCs - - - - - - - - Total passenger facility charges - PFC 04 and 06 6,820,830 361,758 2,239 87,025 3,831,355 155,840 3,226,860 760,335 AWP-95-05-C-00-SBP Revenues - - - - 1,032,729 24,947 - - Expenditures: SLO Master Plan, Environ. Impact Report 2 78,422 - - - - - 278,422 - Land Acquisition 7 79,254 - - - - - 768,107 - Airport staff and administration - - - - - - 11,147 - Transfers (to) from other PFCs - - - - - - - - Total passenger facility charges - PFC 05 1,057,676 - - - 1,032,729 24,947 1,057,676 - AWP-02-07-C-00-SBP Revenues - - - - 1,652,880 77,392 - - Expenditures: Runway extension 814,222 - - - - - 722,723 - Taxiway construction 376,499 - - - - - 468,864 - Airfield improvements 214,940 - - - - - 27,190 - Acquisition runway sweeping equipment 22,000 - - - - - - - Airfield lighting improvements 27,500 - - - - - - - Relocate threshold runway 25 82,500 - - - - - 168,772 - Construction ARFF facilities 154,660 - - - - - 154,661 - Airport master plan 37,950 - - - - - 79,247 - Airport staff and administration - - - - - - 108,815 - Transfers to other PFCs - - - - - - - - Total passenger facility charges - PFC 07 1,730,271 - - - 1,652,880 77,392 1,730,272 - AWP-07-08-C-00-SBP Revenues - - - - 1,427,539 45,537 - - Expenditures: Environmental assessment 110,000 - - - - - 110,000 - Runway extension 908,025 - - - - 21,011 475,663 - Property acquisition 287,028 - - - - - 30,387 - EMAS 605,262 - - - - - 602,120 - Update layout plan 2,875 - - - - - - - ARFF mass casualty vehicle 115,000 - - - - - 107,726 - Transfers to other PFCs - - - - - - - - Total passenger facility charges - PFC 08 2,028,190 - - - 1,427,539 66,548 1,325,896 168,191 Total passenger facility charges $ 11,636,967 $ 361,758 $ 2,239 $ 87,025 $ 7,944,503 $ 324,727 $ 7,340,704 $ 928,526 29