Single Audit Report, 2018-19

COUNTY OF SAN LUIS OBISPO SINGLE AUDIT REPORT YEAR ENDED JUNE 30, 2019 CLAconnect.com WEALTH ADVISORY OUTSOURCING AUDIT, TAX, AND CONSULTING COUNTY OF SAN LUIS OBISPO SINGLE AUDIT REPORT YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS Independent Auditors’ 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 Independent Auditors’ 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 Schedule of Expenditures of Federal Awards ................................................................................... 12 Summary Schedule of Findings and Questioned Costs .................................................................................. 13 Supplementary Schedules of the California Governor’s Office of Emergency Services and the Board of State and Community Corrections Grant Expenditures ..................................................... 15 Independent Auditors’ Report on Schedule of Passenger Facility Charge Revenues and Expenses ................................................................................................... 16 Independent Auditors’ Report on Compliance with Requirements Applicable to the Passenger Facility Charge Program and on Internal Control Over Compliance ................................................................................................................. 18 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Schedule of Passenger Facility Charge Revenues and Expenses Performed in Accordance with Government Auditing Standards ............ 20 Schedule of Passenger Facility Charge Revenues and Expenses ................................................................. 22 Schedule of Findings and Questioned Costs – Airport Passenger Facility Charge Program ........................ 23 CliftonLarsonAllen LLP CLAconnect.com INDEPENDENT AUDITORS’ 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 (the County), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements, and have issued our report thereon dated January 17, 2020. Our report includes a reference to other auditors who audited the financial statements of San Luis Obispo County Pension Trust (SLOCPT), a pension trust fund, as described in our report on the County’s financial statements. This report does not include the results of other auditors’ testing of internal controls 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 and therefore, material weaknesses or significant deficiencies may exist that have not been identified. We did identify certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs as items 2019-001 that we consider to be a material weakness. 1 Board of Supervisors County of San Luis Obispo 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. County’s Response to Findings The County’s response to the finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The County’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Roseville, California January 17, 2020 2 CliftonLarsonAllen LLP CLAconnect.com INDEPENDENT AUDITORS’ 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 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 (the County) compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) 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, 2019. The County’s major federal programs are identified in the summary of auditors’ 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 programs. Auditors’ 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 the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) 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 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, 2019. 3 Board of Supervisors County of San Luis Obispo 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 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 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 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. 4 Board of Supervisors County of San Luis Obispo 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, 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, 2019, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements. We have issued our report thereon dated January 17, 2020, which contained unmodified opinions on those financial statements. We did not audit the financial statements of San Luis Obispo County Pension Trust (SLOCPT), a pension trust fund. Those statements were audited by other auditors whose reports have been furnished to us, and in our opinion, insofar as it relates to the amounts included for SLOCPT, are based solely on the reports of other auditors. Our audit was conducted for the purpose of forming an opinion 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. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the 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 basic financial statements as a whole. Other Matters The supplementary schedules of the California Governor’s Office of Emergency Services and the Board of State and Community Corrections 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. CliftonLarsonAllen LLP Roseville, California January 17, 2020 5 COUNTY OF SAN LUIS OBISPO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2019 FEDERAL FEDERAL GRANTOR/PASS THROUGH GRANTOR/ CFDA PASS-THROUGH ENITY PASSED THROUGH FEDERAL PROGRAM OR CLUSTER TITLE NUMBER IDENTIFYING NUMBER/GRANT NUMBER TO SUBRECIPIENTS EXPENDITURES U. S. DEPARTMENT OF AGRICULTURE Direct Programs: USDA Community Food Project 10.225 2016-33800-25603 $ - $ 1,261.00 USDA Community Food Project- PY 10.225 2016-33800-25603 - 3,852 Subtotal CFDA 10.225 - 5,113 Passed through State Dept of Health Care Srvcs: Women Infant Children Nutrition Program 10.557 15-10074 - 1,311,748 Women Infant Children Nutrition Program -PrYrAdj 10.557 15-10074 - (1,430) Subtotal CFDA 10.557 - 1,310,318 Passed through State Dept of Food and Agriculture: ACP Bulk Citrus 10.025 18-0416-000-SA - 11,364 ACP Bulk Citrus (Prior Year) 10.025 18-0416-000-SA - 738 Glassy-Winged Sharpshooter 10.025 17-0453-029-SF - 351,118 Glassy-Winged Sharpshooter (Prior Year) 10.025 17-0453-029-SF - 77 Asian Citrus Psyllid Detection 10.025 16-0594-SF, 16-0594-SF Amd #1, 17-0428-005-SF - 186,550 European Grape Vine Moth 10.025 17-0549-009-SF, 18-0619-023-SF - 143,004 European Grape Vine Moth (Prior Year) 10.025 17-0549-009-SF, 18-0619-023-SF - 9 Light Brown Apple Moth Detection 10.025 18-0299-020-SF - 6,513 Light Brown Apple Moth Regulatory 10.025 18-0299-040-SF - 100,300 Phytophthora ramorum (SOD) 10.025 18-0295-015-SF - 3,179 Pest Detection Trapping 10.025 18-0227 - 176,539 Subtotal CFDA 10.025 - 979,391 Passed through State Department of Public Health: Supplementl Nutrition Asst Program Ed (SNAP-ED) 10.561 16-10157 - 291,078 Supplementl Nutri Asst Program Ed (SNAP-ED)-PY Adj 10.561 16-10157 - 216 CalFresh&CalFresh Employment Training 10.561 N/A - 5,569,097 CalFresh&CalFresh Employment Train.-Prior Yr Adj 10.561 N/A - 9,702 Subtotal CFDA 10.561 - 5,870,093 Total U.S. Department of Agriculture - 8,164,915 U.S. DEPARTMENT OF HOUSING & URBAN DEVELOPMENT Direct programs: Low Income Hsing Assist Comm Devel. Block Grnts Community Devel. Block Grants 14.218 B-14_UC-06-0508 - 14,027 Community Devel. Block Grants 14.218 B-10-UC-06-0508 - 36,052 Community Devel. Block Grants 14.218 B-12-UC-06-0508 - 11,500 Community Devel. Block Grants 14.218 B-15_UC-06-0508 - 268,026 Community Devel. Block Grants 14.218 B-16_UC-06-0508 - 438,610 Community Devel. Block Grants 14.218 B-17_UC-06-0508 - 188,819 Community Devel. Block Grants 14.218 B-18_UC-06-0508 - 1,371,087 Community Development Block Loans - 3rd Party 14.218 N/A - 2,441,874 Subtotal CFDA 14.218 - 4,769,995 Emergency Solutions Grant Program 14.231 17-ESG-11844 154,131 154,131 Emergency Solutions Grant Program 14.231 16-ESG-11120 49,535 49,535 Emergency Solutions Grant Program 14.231 E-18-UC-06-0508 227,238 227,238 Emergency Solutions Grant Program 14.231 E-17-UC-06-0508 107,298 107,298 Subtotal CFDA 14.231 538,202 538,202 Home Partnership Investment Program 14.239 M-14-UC-05-0545 43,295 43,295 Home Partnership Investment Program 14.239 M-16-UC-05-0545 15,702 15,702 Home Partnership Investment Program 14.239 M-17-UC-05-0545 221,278 221,278 Home Partnership Investment Program 14.239 M-18-UC-05-0545 105,184 105,184 Home Partnership Investment Programs - 3rd Party 14.239 N/A - 18,151,239 Subtotal CFDA 14.239 385,458 18,536,698 Continuum of Care Program 14.267 2016 Various 286,690 286,690 Continuum of Care Program 14.267 2017 Various 138,328 138,328 Continuum of Care (Homeless Grants) 14.267 N/A 632,523 632,523 Subtotal CFDA 14.267 1,057,541 1,057,541 Total U.S. Department of Housing & Urban Develop 1,981,201 24,902,436 6 See accompanying notes to the Schedule of Expenditures of Federal Awards COUNTY OF SAN LUIS OBISPO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2019 FEDERAL FEDERAL GRANTOR/PASS THROUGH GRANTOR/ CFDA PASS-THROUGH ENITY PASSED THROUGH FEDERAL PROGRAM OR CLUSTER TITLE NUMBER IDENTIFYING NUMBER/GRANT NUMBER TO SUBRECIPIENTS EXPENDITURES U.S. DEPARTMENT OF THE INTERIOR Passed through California Bureau of Land Management: Taylor Grazing Act 15.227 N/A - 4,155 Total U.S. Department of Interior - 4,155 U.S. DEPARTMENT OF JUSTICE Direct programs: Bureau of Immigration & Customs Enforcement 16.710 N/A - 52,800 State Criminal Alien Assistance Program 16.606 N/A - 146,893 Federal Asset Forfeiture 16.000 N/A - 68,258 2018 Office of Justic Programs JMHCP Project 16.745 2018-MO-BX-0019 - 17,209 DEA Domestic Cannabis Eradication &Suppression 16.111 2019-42 - 12,023 DEA Domestic Cannabis Eradication &Suppression 16.111 2018-41 - 26,159 DEA Domestic Cannabis Eradication &Suppression-PY 16.111 2018-41 - 10,018 Subtotal CFDA 16.111 - 48,200 Justice Assistance Grant 16.738 2017-H2496-CA-DJ - 22,670 Justice Assistance Grant - PY 16.738 2017-H2496-CA-DJ - (22,670) Subtotal CFDA 16.738 - - Passed through California Emergency Mgmt Agency: Victim Witness Assistance 16.575 VW18370400 - 440,368 County Victim Services (XC) Program 16.575 XC16010400 - 144,016 Unserved/Underserved Victim Advocacy and Outreach 16.575 XV15010400 - 157,581 Unserved/Underserved Victim Advocacy and Outreach 16.575 XV15A10400 - 152,001 Subtotal CFDA 16.575 - 893,966 Drug Court Discretionary Grant Program 16.585 2018-DC-BX-0013 - 32,576 Drug Court Discretionary Grant Program 16.585 2018-DC-BX-0026 - 52,326 Subtotal CFDA 16.585 - 84,902 Total U.S. Department of Justice - 1,312,228 U.S. DEPARTMENT OF LABOR Passed through CA Employment Development Dept: Workforce Investment Act-Adult 17.258 K7102073 & K8106685 500,509 500,509 Workforce Investment Act-Youth 17.259 K7102073 & K8106685 450,371 450,371 Workforce Invest Act-Disloc Workr&Rapid Resp 17.278 K7102073 & K8106685 549,035 549,035 Workforce Invest Act-Disloc Workr&Rapid Resp PY 17.278 K7102073 & K8106685 (10,678) (10,678) Subtotal WIOA Cluster 1,489,237 1,489,237 Total U.S. Department of Labor 1,489,237 1,489,237 U.S. DEPARTMENT OF TRANSPORTATION Direct programs: Airport Improvement Program 20.106 3-06-0228-045-2015 - 2,188,281 Airport Improvement Program-PY 20.106 3-06-0228-045-2015 - (25) Airport Improvement Program 20.106 3-06-0228-043-2015 - 839,786 Airport Improvement Program 20.106 3-06-0172-009-2018 - 203,541 Airport Improvement Program 20.106 3-06-0028-047-2019 - 111,046 Subtotal CFDA 20.106 - 3,342,629 Small Community Air Service Development- Pr Yr 20.930 N/A - (1,928) Passed through State Department of Transportation: Highway Planning and Construction 20.205 BPMPL-5949(151) - 69,948 Highway Planning and Construction 20.205 BHLS-5949(136) - 1,985,654 Highway Planning and Construction - PY Adj 20.205 BHLS-5949(136) - (101) Highway Planning and Construction 20.205 HSIPL-5949(168) - 90,520 Highway Planning and Construction 20.205 HSIPL-5949(167) - 87,892 Highway Planning and Construction 20.205 HSIPL-5949(169) - 32,454 Highway Planning and Construction 20.205 HSIPL-5949(170) - 79,956 Highway Planning and Construction 20.205 CML-5949(171) - 33,382 Highway Planning and Construction 20.205 HSIPL-5949(159) - 112,983 7 See accompanying notes to the Schedule of Expenditures of Federal Awards COUNTY OF SAN LUIS OBISPO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2019 FEDERAL FEDERAL GRANTOR/PASS THROUGH GRANTOR/ CFDA PASS-THROUGH ENITY PASSED THROUGH FEDERAL PROGRAM OR CLUSTER TITLE NUMBER IDENTIFYING NUMBER/GRANT NUMBER TO SUBRECIPIENTS EXPENDITURES Highway Planning and Construction 20.205 BRLS - 5949 (158) - 7,708 Highway Planning and Construction 20.205 BRLO-5949(116) - 84,013 Highway Planning and Construction - PY Adj 20.205 BRLO-5949(116) - (74,141) Highway Planning and Construction 20.205 BRLO-5949(120) - 202,514 Highway Planning and Construction 20.205 BRLO-5949(127) - 71,103 Highway Planning and Construction - PY Adj 20.205 BRLO-5949(127) - (62,334) Highway Planning and Construction 20.205 BRLO-5949(152) - 148,588 Highway Planning and Construction 20.205 BRLO-5949(156) - 131,977 Highway Planning and Construction 20.205 BRLO-5949(157) - 112,278 Highway Planning and Construction 20.205 BRLS-5949(129) - 2,478,967 Highway Planning and Construction 20.205 BRLS-5949(131) - 171,821 Highway Planning and Construction 20.205 BRLS-5949(135) - 101,195 Safe Acctble,Flex,Effic Transp Eq Act(SAFETEA-LU) 20.205 HPLU-5949 (132) - 235,852 Federal Transportation Improvement Program 20.205 RPSTPLE-5949 (140) - 40,705 Highway Planning and Construction 20.205 BRLS-5949(137) - 75,048 Highway Planning and Construction 20.205 CMFERPL16-5949(161) - 194,833 Highway Planning and Construction 20.205 BHLO-5949(164) - 114,861 Highway Planning and Construction 20.205 RPLCML-5949(074) - 3,600 Highway Planning and Construction 20.205 BPMPL-5949(162) - 10,067 Highway Planning and Construction 20.205 ER-32LO(110) - 13,281 Subtotal Pass-Through 20.205 - 6,554,624 Office Of Traffic Safety 20.600 PS19029 - 111,668 Office Of Traffic Safety 20.600 AL1728 - 53,649 Office Of Traffic Safety 20.600 PS18028 - 28,944 Office Of Traffic Safety - PrYrAdj 20.600 PS18028 - (31) Office Of Traffic Safety 20.616 OP19015 - 44,718 Office Of Traffic Safety 20.616 OP18016 - 9,421 Office Of Traffic Safety - PrYrAdj 20.616 OP18016 - (54) Subtotal CFDA 20.616 - 248,315 Total U.S. Department of Transportation - 10,143,640 INSTITUTE OF MUSEUM AND LIBRARY SERVICES Direct programs: Library Srvices & Technology Act 45.310 40-8913 - 3,149 Total Institute of Museum and Library Services - 3,149 U.S. DEPARTMENT OF EDUCATION Passed through State Department of Education State Vocational Rehabilitation Services 84.126A N/A - 4,908 State Vocational Rehabilitation Services -PY 84.126A N/A - 3,506 Subtotal CFDA 84.126 - 8,414 Total U.S. Department of Education - 8,414 U.S. DEPARTMENT OF HEALTH & HUMAN SERVICES Direct programs: Drug Free Community 101 Friday Night Live - PY 93.276 5H79SP020904-08 - 252 Drug Free Community 101 Friday Night Live 93.276 5H79SP020904-08 - 124,118 Subtotal CFDA 93.276 - 124,370 SLO Health Integration Partnership (SAMHSA) 93.243 1H79SM062377-01 - 299,098 SAMHSA CATS learning 93.243 6H79SM080609-01M002 - 138,612 MAT Learning Collaborative 93.243 N/A - 25,000 Behavioral Health Treatment Court Collaborative 93.243 5H79SM061698-02 - 87,036 Subtotal CFDA 93.243 - 549,746 Passed through State Dept of Alcohol&Drug Progms: Substnce Abuse Prev&Trtmt Block Grnt-Discret Funds 93.959 14-90098 - 1,098,727 Substnce Abuse Prev&Trtmt Block -Discret Funds PY 93.959 14-90098 - 43,247 Substnce Abue Prev&Trtmt Blck-Friday Night/Club 93.959 14-90098 - 30,000 Substnce Abuse Prev&Trtmt Blck Grnt-PrevSet-aside 93.959 14-90098 - 313,072 Substance Abuse Prev&Trtmt Blck Grnt-Adl&Youth 93.959 14-90098 - 177,123 Substnce Abse Prev&Trtmt Blck-Perinatal 93.959 14-90098 - 72,569 Subtotal CFDA 93.959 - 1,734,738 8 See accompanying notes to the Schedule of Expenditures of Federal Awards COUNTY OF SAN LUIS OBISPO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2019 FEDERAL FEDERAL GRANTOR/PASS THROUGH GRANTOR/ CFDA PASS-THROUGH ENITY PASSED THROUGH FEDERAL PROGRAM OR CLUSTER TITLE NUMBER IDENTIFYING NUMBER/GRANT NUMBER TO SUBRECIPIENTS EXPENDITURES Passed through State Dept of Child Support Svcs: Child Support Enforcement: Federal aid for Child Support EDP 93.563 N/A - 55,676 Child Support Admin & EDP 93.563 N/A - 2,570,031 Subtotal CDFA 93.563 - 2,625,707 Passed Through CA Family Health Council: Title X 2019 93.217 N/A - 131,379 Title X 2018 93.217 N/A - 7,066 Title X 2018 - PY 93.217 N/A - 23 Subtotal CDFA 93.217 - 138,468 Health Resources Services Administration HPP 93.074 17-10191 - 173,577 Health Resources Services Admin-Prior year adj 93.074 17-10191 - 17 CDC-BASE PH EMERGENCY PREPAREDNESS (PHEP) 93.074 17-10191 - 230,381 CDC-BASE PH EMERGENCY PREPAREDNESS (PHEP) - PY 93.074 17-10191 - (767) CDC Base PH Emergency Preparedness 93.074 17-10191 - 318,017 CDC Base PH Emergency Preparedness-Prior Year Adj 93.074 17-10191 - (12) Subtotal CFDA 93.074 - 721,213 TB Control branch/Real Time Allotment 93.116 1840R-TA01 - 21,804 Maternal Child Health - Title V 93.994 201840 - 122,057 Maternal Child Health - Title V - PY 93.994 201840 - 28 Subtotal CFDA 93.994 - 122,085 Passed through State Department of Health Care Services: Medi-Cal Renewal Assistance Grant - PY 93.778 N/A - (1) Local Dental Pilot Project (LDPP) 93.778 16-93575 - 508,336 Local Dental Pilot Project (LDPP) - PY 93.778 16-93575 - (2,088) Medi-Cal Admin (MAA) 93.778 14-90041 - 379,399 Medi-Cal Administration - Prior Year Adjustment 93.778 14-90041 - 38,129 First Five Medi-Cal 93.778 14-90041 - 77,539 School Based Medi-Cal Administration 93.778 17-94052 - 934,307 Maternal Child Health - Title XIX 93.778 201840 - 296,522 Maternal Child Health - Title XIX Prior Year Adj 93.778 201840 - 1,586 Medi-Cal Admin -Targeted Case Management 93.778 40-1318A - 336,951 CA CHILDRENS SERVICES (CCS) Title XIX 93.778 18-05 - 282,753 CA CHILDRENS SERVICES (CCS) Title XIX - PY 93.778 18-05 - (390) Health Care for Fostercare (Caseload Relief) 93.778 18-03 - 57,737 Foster Care (HCPCFC) 93.778 18-03 - 123,327 Foster Care (HCPCFC) PY 93.778 18-03 - 21,441 Foster Care (PMMO) 93.778 18-03 - 31,687 Foster Care (PMMO) - PY 93.778 18-03 - (80) Lead Program 93.778 17-10261 - 15,567 Child Hlth & Disability Prevention 93.778 18-02 - 154,651 IHSS, Public Authority & Medi-Cal-PY 93.778 N/A - (30,266) IHSS, Public Authority & Medi-Cal 93.778 N/A - 8,272,993 Medi-Cal Administration 93.778 N/A - 73,922 Medi-Cal Administration - Prior Year Adjustment 93.778 N/A - 5,056 Subtotal Medicaid Cluster - 11,579,078 Targeted Case Management (TCM) 93.779 N/A - 85,000 Targeted Case Management (TCM) - PY 93.779 N/A - (71,136) Subtotal CDFA 93.779 - 13,864 Mental Health-Substance Abuse (SAMHSA) 93.958 N/A - 385,188 Mental Health Services Block Grant (MHBG) 93.958 N/A - 199,740 Subtotal CDFA 93.958 - 584,928 Passed through State Dept of Social Services: KinGap -Kingship Guardian Assistance Program 93.090 N/A - 421,858 Promoting Safe and Stable Families 93.556 N/A - 144,298 Refugee Cash Assistance 93.566 N/A - 1,775 9 See accompanying notes to the Schedule of Expenditures of Federal Awards COUNTY OF SAN LUIS OBISPO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2019 FEDERAL FEDERAL GRANTOR/PASS THROUGH GRANTOR/ CFDA PASS-THROUGH ENITY PASSED THROUGH FEDERAL PROGRAM OR CLUSTER TITLE NUMBER IDENTIFYING NUMBER/GRANT NUMBER TO SUBRECIPIENTS EXPENDITURES Temporary Assistance for Needy Families: Assistance : CALWORKS 93.558 N/A - 1,503,177 Administration: CalWORKS, SAWS-CalWIN, TANF 93.558 N/A - 12,398,002 CALWORKS HOME VISITING INITIATIVE (HVI) 93.558 16-10604 - 10,917 Administration: CalWORKS,SAWS-CalWIN,TANF-PrYrAdj 93.558 N/A - (429,753) Subtotal CFDA 93.558 - 13,482,344 Adoptions Incentive 93.603 N/A - 128,760 Adoptions Incentive - PY 93.603 N/A - 149 Subtotal CFDA 93.603 - 128,909 Foster Care - Title IV-E: Administration: Probation-Title IV E 93.658 N/A - 83,538 Administration: Probation-Title IV E - PY 93.658 N/A - 11,024 Foster Care Assistance 93.658 - 2,364,378 Child Welfare Services - Title IV E - PY 93.658 N/A - (12,788) Child Welfare Services - Title IV E 93.658 N/A - 4,449,424 Subtotal CFDA 93.658 - 6,895,576 Child Welfare Services Title IV-B 93.645 N/A - 178,429 Child Welfare Services Title IV-B - PrYrAdj 93.645 N/A - 64 Subtotal CFDA 93.645 - 178,493 Adoption Assistance - Prior Year 93.659 N/A - 1,049 Adoption Assistance 93.659 N/A - 693,038 Assistance: Adoption 93.659 N/A - 4,441,333 Subtotal CFDA 93.659 - 5,135,420 Child Welfare Service - Title XX 93.667 N/A - 351,408 Foster Care Assitance - Title XX 93.667 N/A - 213,244 Child Welfare Service - Title XX - PY 93.667 N/A - 263,556 Subtotal CFDA 93.667 - 828,208 Independent Living Program 93.674 N/A - 101,104 Independent Living Program-Prior Year Adjustment 93.674 N/A - 1,814 Subtotal CFDA 93.674 - 102,918 CA Childrens Services and TLIP Title XXI 93.767 18-05 - 104,417 Passed through State Department of Health Care Services: Immunization Local Assistance Grant 93.268 17-10346 - 107,283 Passed through State Department of Mental Health: Mntl Hlth-McKinney Assist in Transitn from Hmeless 93.150 N/A - 29,638 Total U.S Department of Health & Human Services - 45,777,138 DEPARTMENT OF HOMELAND SECURITY Direct Programs: Disaster Grants - Public Assistance 97.036 FEMA-4308-DR-CA - 20,776 Public Assistance - Disaster Grants - Prior Year 97.039 FEMA-1952-DR-CA - 10,921 SLO County Hazard Mitigation Planning & Mapping 97.039 5GA18235 - 1,445 Subtotal CFDA 97.039 - 12,366 Passed through CA Emergency Management Agency: Hazard Mitigation Grant Program 2018 97.042 DR4308-PL0001 - 58,959 State Homeland Security Grant 2017 97.042 2018-0008 - 3,314 Emergency Management Performance 2017 97.042 2018-0008 - 165,933 Subtotal CFDA 97.042 - 228,206 10 See accompanying notes to the Schedule of Expenditures of Federal Awards COUNTY OF SAN LUIS OBISPO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2019 FEDERAL FEDERAL GRANTOR/PASS THROUGH GRANTOR/ CFDA PASS-THROUGH ENITY PASSED THROUGH FEDERAL PROGRAM OR CLUSTER TITLE NUMBER IDENTIFYING NUMBER/GRANT NUMBER TO SUBRECIPIENTS EXPENDITURES 2016 Stonegarden Grant 97.067 Stonegarden Grant 2016-0102 - 9,549 2017 Stonegarden Grant 97.067 Stonegarden Grant 2017-0083 - 127,231 2017 Homeland Security 97.067 2017-0083 - 74,605 Homeland Security - PY 97.067 2017-0083 - 5,994 Homeland Security 97.067 2018-0054 - 2,371 Homeland Security - PY 97.067 2016-0102 - (203) Homeland Security 97.067 2016-0102 - 1,357 Homeland Security 97.067 2017-0083 - 1,786 Homeland Security 97.067 2018-0054 - 48,471 Homeland Security - PY 97.067 2017-0083 - (1) 2015 Homeland Security- PY 97.067 2015-0049 - 54,589 State Homeland Security Grant 2016 97.067 079-00000 2016-002 - 39,293 State Homeland Security Grant 2017 97.067 079-00000 2016-002 - 61,279 State Homeland Security Grant 2015 - PY 97.067 079-00000 2015-0078 - (828) Subtotal CFDA 97.067 - 425,493 Total Department of Homeland Security - 686,841 TOTAL EXPENDITURES OF FEDERAL AWARDS $ 3,470,438 $ 92,492,152 11 See accompanying notes to the Schedule of Expenditures of Federal Awards COUNTY OF SAN LUIS OBISPO NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2019 NOTE 1: REPORTING ENTITY The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award 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. Federal awards received directly from federal agencies, as well as federal awards passed through other government agencies, are included in the schedule. The information in this Schedule is presented in accordance with the requirements of 2 CFR 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 County, it is not intended to and does not present the financial position, changes in net position, or cash flows of the County. NOTE 2: BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards is presented using the modified accrual basis of accounting and the accrual basis of accounting for program expenditures accounted for in governmental funds and proprietary funds, respectively, as described in Note 1 of the County’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. NOTE 3: CATALOG OF FEDERAL DOMESTIC (CFDA) NUMBERS The program titles and CFDA numbers were obtained from the federal or pass-through grantor or the 2019 Catalog of Federal Domestic Assistance. NOTE 4: INDIRECT COST RATE The County did not elect to use the 10% de minimis indirect cost rate as covered in 2 CFR §200.414. Uniform Guidance, §200.510(6), requires the County to disclose whether or not it elected to use the 10 percent de minimis cost rate that §200.414(f) allows for nonfederal entities that have never received a negotiated indirect cost rate. NOTE 5: PASS-THROUGH ENTITIES’ IDENTIFYING NUMBER When federal awards were received from a pass-through entity, the Schedule of Expenditures of Federal Awards 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 6: LOANS WITH CONTINUING COMPLIANCE REQUIREMENTS Outstanding federally-funded program loans, with continuing compliance requirements, carried balances as of June 30, 2019 as follows: Federal SEFA FY 18-19 County Balance CFDA # Program June 30, 2019 Activity June 30, 2019 14.218 Community Development Block Grants/Entitlement Grants $ 2,441,874 $ (35,000) $ 2,406,874 14.239 HOME Investment Partnerships Program 18,151,239 (29,850) 18,121,389 12 COUNTY OF SAN LUIS OBISPO SUMMARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2019 Section I – Summary of Auditors’ Results Financial Statements 1. Type of auditors’ report issued: Unmodified 2. Internal control over financial reporting: Material weakness(es) identified? x yes no Significant deficiency(ies) identified? yes x none reported 3. Noncompliance material to financial statements noted? yes x no Federal Awards 1. Internal control over major federal programs: Material weakness(es) identified? yes x no Significant deficiency(ies) identified? yes x none reported 2. Type of auditors’ report issued on compliance for major federal programs: Unmodified 3. Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? yes x no Identification of Major Federal Programs CFDA Number(s) Name of Federal Program or Cluster 10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (SNAP) 14.218 Community Development Block Grants 20.106 Airport Improvement Program 93.558 Temporary Assistance for Need Families Dollar threshold used to distinguish between Type A and Type B programs: $ 2,774,765 Auditee qualified as low-risk auditee? x yes no 13 COUNTY OF SAN LUIS OBISPO SUMMARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2019 Section II – Financial Statement Findings 2019 – 001 Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition: The County recorded a prior period adjustment of $1.6 million to reflect a wastewater transmission facility that was contributed during the prior year. Criteria or specific requirement: Donated capital assets should be recorded at the acquisition value at the time of transfer. Context: The amount of the adjustment was material to the Los Osos Wastewater fund, a major fund of the County. Effect: The omission of the donated capital assets resulted in the Fund's capital assets and net position to be understated by $1.6 million. Cause: The omission of the contributed capital resulted in net position being understated by $1.6 million resulting in a prior period adjustment to the current year financial statements. Repeat Finding: Not a repeat finding. Recommendation: We recommend management, during the year-end closing procedures, provide guidance in reporting contributed assets during the fiscal year. We further recommend management to provide training to the departments in recognizing and reporting capital asset additions during the fiscal year. Views of responsible officials and planned corrective actions: During year-end closing procedures management will provide guidance in reporting contributed assets. Management will provide guidance to departments in how to recognize and report contributed capital assets. Section III – Findings and Questioned Costs – Major Federal Programs Our audit did not disclose any matters required to be reported in accordance with 2 CFR 200.516(a). 14 SUPPLEMENTARY SCHEDULES OF THE CALIFORNIA GOVERNOR’S OFFICE OF EMERGENCY SERVICES COUNTY OF SAN LUIS OBISPO SUPPLEMENTARY SCHEDULES OF THE CALIFORNIA GOVERNOR’S OFFICE OF EMERGENCY SERVICES AND THE BOARD OF STATE AND COMMUNITY CORRECTIONS GRANT EXPENDITURES (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2019 Share of Expenditures Expenditures Claimed Current Year For the Period For the Year Cumulative Through Ended As of Federal State County Program June 30, 2018 June 30, 2019 June 30, 2019 Share Share Share CVWD-XV;XV15A10400 Personal services $ 185,044 $ 1 65,640 $ 350,684 $ 1 28,260 $ 37,380 Operating expenses 48,394 23,740 $ 72,134 23,740 Totals $ 233,438 $ 1 89,381 $ 422,818 $ 1 52,001 $ - - $ 37,380 ELDER-XV;XV15010400 Personal services $ 196,920 $ 2 05,190 $ 402,110 $ 1 57,581 $ - - $ 47,609 Operating expenses 36,420 4,682 $ 41,102 -- - - 4,682 Totals $ 233,340 $ 2 09,872 $ 443,212 $ 1 57,581 $ - - $ 52,291 VICTIM,VW18370400 Personal services $ 364,752 $ 4 16,589 $ 781,341 $ 3 46,826 $ 34,270 $ 35,493 Operating expenses 41,845 87,207 129,052 62,538 13,746 10,923 Totals $ 406,597 $ 5 03,796 $ 910,392 $ 4 09,363 $ 48,016 $ 46,416 XC, XC16010400 Personal services $ 36,424 $ 4 7,826 $ 84,250 $ 1 8,744 $ - - $ 29,081 Operating expenses 271,810 122,511 394,322 122,105 - - 406 Totals $ 308,235 $ 1 70,337 $ 478,572 $ 1 40,850 $ - - $ 29,487 2016 Stonegardent Grant 2016-0102 Personal services $ 164,251 $ 4 ,570 $ 168,821 $ -- $ - - $ -- Operating expenses 6,200 5,084 11,284 -- - - - - Equipment -- -- -- -- - - - - Totals $ 170,451 $ 9 ,654 $ 180,105 $ -- $ - - $ -- 2017 Stonegardent Grant 2017-0083 Personal services $ 13,035 $ 1 02,753 $ 115,788 $ -- $ - - $ -- Operating expenses 1,142 8,401 9,543 -- - - -- Equipment -- 16,077 16,077 -- - - -- Totals $ 14,177 $ 1 27,231 $ 141,408 $ -- $ - - $ -- 15 AVIATION PASSENGER FACILITY CHARGE PROGRAM CliftonLarsonAllen LLP CLAconnect.com INDEPENDENT AUDITORS’ REPORT ON SCHEDULE OF PASSENGER FACILITY CHARGES Board of Supervisors County of San Luis Obispo San Luis Obispo, California Report on the Schedule 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 year ended June 30, 2019, and the related notes. Management’s Responsibility Management is responsible for the preparation and fair presentation of this schedule in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the schedule that is free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on the schedule based on our audit. We conducted our audit 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 requirements described in the Passenger Facility Charge Audit Guide for Public Agencies (Guide) issued by the Federal Aviation Administration. Those standards and the Guide require that we plan and perform the audit to obtain reasonable assurance about whether the schedule is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the schedule. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the schedule, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the County’s preparation and fair presentation of the schedule in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Airport’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the schedule. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 16 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, 2018 to June 30, 2019, as defined by the Federal Aviation Administration of the U.S. Department of Transportation. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 17, 2020 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 grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering County’s internal control over financial reporting and compliance. CliftonLarsonAllen LLP Roseville, California January 17, 2020 17 CliftonLarsonAllen LLP CLAconnect.com INDEPENDENT AUDITORS’ 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 Report on Compliance for Passenger Facility Charges 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 (Guide), issued by the Federal Aviation Administration, for its Passenger Facility Charge program for the period from July 1, 2018 to June 30, 2019. Management’s Responsibility Management is responsible for compliance with the requirements of laws and regulations applicable to its passenger facility charge program. Auditors’ Responsibility 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 the 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. Opinion on Compliance In our opinion, the County of San Luis Obispo complied, in all material respects, with the compliance requirements referred to above that are applicable to its passenger facility charge program for the year ended June 30, 2019. Internal Control Over Compliance 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 referred to above. 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. 18 Internal Control Over Compliance (Continued) 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. 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. 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 the passenger facility charge 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 that might be deficiencies, significant deficiencies or material weaknesses in internal control over compliance. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses may exist that have not been identified. Purpose of this Report 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 Guide. Accordingly, this report is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. CliftonLarsonAllen LLP Roseville, California January 17, 2020 19 CliftonLarsonAllen LLP CLAconnect.com INDEPENDENT AUDITORS’ 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, EXPENSES AND FUND BALANCE 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, Expenses and Fund Balance (Schedule) of the County of San Luis Obispo (County), as of and for the year ended June 30, 2019, and the related notes to the financial Schedule, which collectively comprise the Passenger Facility Charges, financial schedules, and have issued our report thereon dated January 17, 2020. Internal Control Over Financial Reporting In planning and performing our audit of the financial schedule, 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 schedule, 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 schedule 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. 20 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 Schedule 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. CliftonLarsonAllen LLP Roseville, California January 17, 2020 21 COUNTY OF SAN LUIS OBISPO SCHEDULE OF PASSENGER FACILITY CHARGE REVENUES AND EXPENSES FOR THE YEAR ENDED JUNE 30, 2019 Current Year Project to Date Approved Receipts Receipts Unliquidated Approved Federal Application Number/ Project or Revenues Interest or Revenues Interest Balance Project Description Allocation Recognized Earned Expenditures Recognized Earned Expenditures PFC Trust 2007-08-C Revenues - - - - 1,692,375 16,115 - 1,708,490 Expenditures: - - - - - - - - Approved Application #8: $2,028,190 2,028,190 - - - - - 1,328,771 (1,328,771) Total 8: 2007-08-C 2,028,190 - - - 1,692,375 16,115 1,328,771 379,719 2018-09-C Revenues - 979,089 17,822 - 979,089 17,822 - 996,911 Expenditures: - - - - - - - - Approved Application #9: $4,081,071 Terminal development and construction and debt service and financing 4,081,071 - - - - - - - Total 9: 2018-09-C 4,081,071 979,089 17,822 - 979,089 17,822 - 996,911 $ 12,930,091 $ 979,089 $ 17,822 $ - $ 9,042,303 $ 483,928 $ 8,149,601 $ 1,376,630 22 COUNTY OF SAN LUIS OBISPO SCHEDULE OF FINDINGS AND QUESTIONED COSTS AIRPORT PASSENGER FACILITY CHARGE PROGRAM FOR THE YEAR ENDED JUNE 30, 2019 Current Year: There were no findings in the year ending June 30, 2019 that require reporting in accordance with Government Auditing Standards related to the Airport Passenger Facility Charge Program. Prior Year: No findings noted in the prior year. 23