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HomeMy WebLinkAboutMINUTES - 04122005 - C.68 YA• ■ffs . I 17�i.Iww�w ww:''• TO: BOARD OF SUPERVISORSContra r- { FROM: JOHN SWEETEN, County Administrator Costa o; DATE: APRIL 41 2005 •�•:. -- ..=' �S�A_ County SUBJECT: SINGLE AUDIT REPORTS FOR FISCAL YEAR ENDED JUNE 30, 2004 SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION: RECEIVE single audit reports prepared by Caporicci & Larson, CPA, for the fiscal year ended June 30, 2004 and REFER them to the Board's Finance Committee and the County Administrator for review and follow-up. BACKGROUND: Under federal law, programs administered by Contra Costa County that are fully or partially funded with federal funds are subject to an annual review called the single audit. The purpose of the single audit is to review and determine compliance and integrity of federally funded programs. Caporicci & Larson, an independent certified public accounting firm, conducted the audit and has submitted it to the County. CONTINUED ON ATTACHMENT: L".-- ES SIGNATURE: y-"RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMEND I NOF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ' ACTION OF BOA 0L4"�� APPROVE AS RECOMMENDEDVOOOOOOF OT ER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN UNANIMOUS(ABSENT AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE AYES: NOES: SHOWN. ABSENT: ABSTAIN: ATTESTED: APRIL 12,2005 CONTACT: JULIE ENEA(925)335-1077 JOHN SWEETEN,CLERK OF THE BOARD OF CC: COUNTY ADMINISTRATOR SUPERVISORS AND COUNTY ADMINISTRATOR AUDITOR-CONTROLLER LISA DRISCOLL,STAFF,FINANCE COMMITTEE A A BY ,DEPUTY I w • 2004 Single Audit Reports April 4, 2005 Page 2 In November 1999, the Board of Supervisors established a policy and procedure for addressing the annual findings and recommendations of the County's external auditors. The policy directs that all letters from the County's independent audit firm addressed to the Board be referred to the Board's Finance Committee, accompanied by a copy of the prior year's audit findings and recommendations. When the Finance Committee schedules the audit report for Board consideration, it will be accompanied by a report from the County Administrator that identifies what corrective action has been taken or is planned to be taken on each audit recommendation. COUNTY OF CONTRA COSTA PUBLIC FACILITIES CORPORATION (A component unit of the County of Contra Costa,California) Basic Financial Statements, Independent Auditors' Report and Management's Discussion and Analysis Year Ended June 30, 2004 r COUNTY OF CONTRA COSTA PUBLIC FACILITIES CORPORATION Year Ended June 30, 2004 TABLE OF CONTENTS Page(s) Independent Auditors' Report ............................................................................................1 -2 Management's Discuss-ion and Analysis (R.equired Supplementary Information) 4 Basic Financial Statements: Statement of Net Assets Statement of Revenues.,Expenses and Changes in Net Assets .............................................6 Statementof Cash Flows ......................................................................................................7 Notes to the Basic Financial Statements ........................................................................9 - 14 Supplementary Information: Combining Schedule of Net Assets by Bond Program .............................................................15 Combining Schedule of Revenues, Expenses and Changes in Net Assets by Bond Program ......................................................................16 Combining Schedule of Cash Flows by Bond Program ...........................................................17 C L Caporicci&larson Certified Public Accountants INDEPENDENT AUDITORS'REPORT Board of Directors of the Contra Costa County Pubic Facilities Corporation Martinez,California -type activities of the County of We have audited the accompanying financial statements of the business Contra Costa Public Facilities Corporation (Corporation), a component unit of the County of Contra Costa, California, as of and for the year ended June 30, 2004, which collectively comprise the Corporation's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance withgenerally accepted auditing standards in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the business-type activities of the Corporation as of June 30, 2004, and the respective changes in financial position for the year then ended in conformity with generally accepted accounting principles in the United States. The accompanying Required Supplementary Information, such as management's discussion and analysis, as listed in the table of contents is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures,which consisted principally of inquires of management regarding the methods of measurement andpresentation of the Required Supplementary Information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming an opinion on the basic financial statements. The accompanying supplementary information is presented for purpose of additional analysis and is not a required part of the basic financial statements. The supplementary information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Oakland,California November 12,2004 goo' 'Voll Free Ph:(877)862-2200 Tall Free Fax:(866)436-0927 Oakland Orange County Sacramento San Diego 180 Grand Ave.,Suite 1365 3184-D Airway Avenue 777 Campus Commons Rd.,Suite 200 604"B"Street,Suite 1900 Oakland,California 94612 Costa Mesa,California 92626 Sacramento,California 95825 San Diego,California 92101 COUNTY OF CONTRA COSTA PUBLIC FACILITIES CORPORATION Management's Discussion and Analysis i Z Year Ended June 30,2004 The following discussion and analysis of the County of Contra Costa Public Facilities Corporation ("Corporation") financial performance provides an overview of its financial activities for the year ended June 30, 2004. The Contra Costa County ("County") Auditor-Controller's Office prepared this discussion and analysis. Please read it in conjunction with the accompanying basic financial statements of the Corporation. r7 Financial Highlights • The assets of the Corporation exceeded its liabilities by$11,329,782 at June 30,2004. • Net assets declined by$25,050 during the year ended June 30, 2004. ry Basic Financial Statements The basic financial statements consist of the Corporation's Enterprise Fund, which is more fully described in the notes to the basic financial statements. The Enterprise Fund is used to account for the financing of public capital improvements provided by the Corporation to the County's governmental and proprietary operations. The financial statementsprovide both long- and short-term financial information and information about cash flows. Under Governmental Accounting Standards Board Statement No. 34, the Corporation's financial statements are presented as follows: • Statement of net assets; Statement of revenues, expenses and change in net assets; and Statement of cash flows. Over time, net assets may serve as a useful indicator of whether a government's yl financial condition is improving or deteriorating. The following table presents the Corporation's net assets as of June 30, 2004 and 2003 (amounts in thousands): June 30, June 30, Change Change 2004 2003 (0/0) Current assets $16,805 $16)587 $ 218 1.3% Non-current assets 123,020 127,310 (4,290) 3.4 Total assets 139,825 143,897 (4,072) 2.7 Current liabilities 5,429 5,232 197 3.8 Noncurrent liabilities 123,020 127,310 (4,290) 3.4 Total liabilities 128,449 132,542 (4,093 3.1 Net assets restricted for debt service $11.375 $1135 $ 20 20 The decrease in non-current assets is the reduction of the Corporation's net investment in leases resulting from lease payments received from the County and the Board of Education. The decrease in non-current liabilities is due to the payment of certificates of participation principal. 3 COUNTY OF CONTRA COSTA PUBLIC FACILITIES CORPORATION Management's Discussion and Analysis(Continued) Year Ended June 3012004 The following table presents the Corporation's change in net assets for the year ended June 3 01 2004 (amounts 'in thousands): June 30, June 30, Change Change 2004 2003 ($) (YO) Operating revenue $61436 $71256 $ (820) (11.3)% Operating expense - (86) 45 41 Operating income 6,350 7211 861 11.9 Non-operating revenues(expenses): Investment income 705 685 (20) (2.9) Interest expense (71,035) (71,256) (221) (3.0) Contributions to Contra Costa County (1,2 (1,232) (100.0) Net non-operating expenses 6_,330)) (L803) (1,473) 18.9 Change in net assets 20 (592) 612 103.4 Net assets,beginning of year 11,355 (5921 (5.0) Net assets,end of year $11s,375 $111,355 $ 20 .2% The decrease in operating revenue is due primarily to the reduction in the County's required lease payment by approximately $597,000 because of the availability of investment earnings in the revenue account. Interest expense decreased in fiscal year 2004 because of a partial defeasance of 1992 Board of Education certificates of participation in 2003. Request for Information This financial report is designed to provide our citizens, taxpayers, customers,, investors and creditors with a general overview of the Corporation's finances and to demonstrate the Corporation's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the County of Contra Costa, Auditor-Controller's Office, 625 Court Street,Martinez, California, 94553. CONTRA COSTA COUNTY PUBLIC FACILITIES CORPORATION Statement of Net Assets 4 June 30,2004 s t ASSETS V� Current Assets: �i Restricted Cash and Cash Equivalents $ 6295700 Restricted Investments 1056455690 Interest Receivable-Investments 1003011 Interest Receivable 13393,308 Net Investment in Leases-Current Portion 452905000 Total.Current Assets 1658041,709 Non-current Assets- s Net Investments in Leases-Non-current 12350205000 Total Assets 139,82430709 LIABILITIES Current Liabilities: Interest Payable 13395308 Long-term Debt-Due Within One Year 41)290,000 Total Current Liabilities 5,4295308 Long-term Debt-Due in More Than One Year 123,020,000 Total Liabilities 1285449,308 NET ASSETS -Restricted for Debt Service 111,375,401 • esp See nates to basic financial statements. 5 CONTRA COSTA COUNTY PUBLIC FACILITIES CORPORATION Statement of Revenues,Expenses and Changes in Net Assets Year Ended June 30,2004 OPERATING REVENUE Interest Earned on Leases $ 61435,3885 OPERATING EXPENSES Administration Fee 21603 Other 823,777 Total Operating Expenses 85,381 Operating Income 6,3505504 NON-OPERATING REVENUES (EXPENSES) Interest Expense (7,035,408) Investment Income 7051472 Net Non-operating Expenses (65329,936) Increase in Net Assets 203569 NET ASSETS,July 1,2003 1133543832 NET ASSETS,June 30, 2004 $ 11,3 75,401 .� See notes to basic financial statements. 6 CONTRA COSTA COUNTY PUBLIC FACILITIES CORPORATION Statement of Cash Flows Year Ended June 30,2004 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from lessee,principal 4)0703,000 Receipts from lessee,interest 64583,813 Payments for administrative fees and other (85,381) Net cash provided by operating activities 101443,432 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES* Payments for debt principal (41070,1000) Payments for debt interest (71058,336) Net cash used in capital and related financing activities (11,128,336) CASH FLOWS FROM INVESTING ACTIVITY- Receipts from earnings on investments and cash equivalents 664,427 NET DECREASE IN CASH AND CASH EQUIVALENTS (20,477) CASH AND CASH EQUIVALENTS,July 1,2003 650,177 CASH AND CASH EQUIVALENTS,June 30,2004 629,700 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income 6,3501,504 Adjustments to reconcile operating income to net cash provided by operating activities: Decrease in net investment in leases 4,070,000 Decrease in interest receivable-investment in leases 221,928 Net cash provided by operating activities 1014433,432 MON. See notes to basic financial statements. 7 COUNTY OF CONTRA COSTA PUBLIC FACILITIES CORPORATION Notes to Basic Financial Statements Year Ended June 30,2004 NOTE 1 -REPORTING ENTITY The County of Contra Costa Public Facilities Corporation ("Corporation") is a joint powers Corporation, organized in November 1981 as a non-profit, public benefit corporation. Its purpose is to provide financial assistance to the County of Contra Costa C"County"), California and the Contra Costa County Board of Education by financing the acquisition, construction,, improvement and remodeling of public buildings and facilities. The Corporation is exempt from federal and state taxation. The basic financial statements present only the Corporation and are not intended to present the financial position and changes in financial position and cash flows of the County. The board of directors of the Corporation is composed off five individuals who serve until resignation, removal or death; vacancies are filled by vote of the remaining board members. The Corporation is an integral part of the County, and accordingly, the accompanying basic financial statements are blended as a component unit within the basic financial statements prepared by the County. Administrative expenses incurred in the day-to-day operations of the Corporation, such as personnel costs, office expenses and management, are provided by the County and are not included in the accompanying basic financial statements. Such expenses are considered insignificant to the Corporation's operations. The Corporation obtains financing for the County-sponsored projects using lease agreements signed by the County as collateral. The agreements provide sufficient resources to repay the debt incurred by the Corporation to finance projects. NOTE 2-SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Accounting All activities of the Corporation are accounted for within a single enterprise fiend. The County's lease payments to the Corporation secure the debt issued by the Corporation. The accounting and financial reporting treatment applied to the Corporation is determined by its measurement focus. The transactions of the Corporation are accounted for using the flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operations are included on the statement of net assets. Enterprise fiends distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with the fund's principal ongoing going operations. The principal operating revenue of the Corporation is the collection of lease interest revenue from the County. Operating expenses for the Corporation include the cost of administering the services. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. 9 Al COUNTY OF CONTRA COSTA PUBLIC FACILITIES CORPORATION Notes to Basic Financial Statements (Continued) Year Ended June 30, 2004 NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES (Continued) Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in the proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The Corporation has elected not to follow subsequent private-sector guidance. Cash and Cash Equivalents Cash and cash equivalents include money market mutual funds and all highly liquid investments with original purchase maturities of three months or less. Investment Valuation Investments in nonparticipating interest earning contracts (including guaranteed investment contracts) are reported at cost, and all other investments are reported at fair value. Fair value is defined as the amount that the Corporation could reasonably expect to receive in a current sale between a willing buyer and seller and is generally measured by quoted market prices. Investment transactions are recorded on the trade date. Net Investment in Leases As detailed in Note 4, debt service on the outstanding lease revenue bonds are funded with lease payments made by the County and the Redevelopment Agency to the Corporation for the use of equipment and facilities acquired or constructed with bond proceeds issued by the Corporation. In the lease agreements relating to the bonds, the County and the Redevelopment Agency have covenanted to make rental payments in amounts corresponding to the Corporation's debt service requirements and related costs. Net investment in leases reflects the present value of remaining future lease payments due from the County and the Redevelopment Agency. To the extent that funds are unexpended upon completion of all projects, such funds will be used to retire outsfanding debt; rental payments required from the County and the Redevelopment Agency will be reduced accordingly. Net Assets Net assets comprise various net earnings from operating and nonoperating revenues and expenses. Net assets are classified as restricted for debt service. 10 COUNTY OF CONTRA COSTA PUBLIC FACILITIES CORPORATION Notes to Basic Financial Statements(Continued) Year Ended June 30, 2004 NOTE 2-SIGNIFICANT ACCOUNTING POLICIES (Continued) Estimates The preparation of basic financial statements in conformity with generally accepted z accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. NOTE 3,-CASH AND INVESTMENTS The following table summarizes the fair value of the Corporation's cash and investments at June 30,2004 Commercial Paper $10,4+655690 Mutual funds 629,700 Total cash and investments $1112751,390 The commercial paper is insured or registered,or the securities are held by the Corporation or its agent in the Corporation's name. Provisions of the Corporation's bond trust agreements require that certain trust accounts be established. These accounts are held by trustees and fiscal agents for debt service payments, reserves and capital improvement projects. The funds in these trust accounts have been -j invested only as permitted by specific state statutes governing their investment or applicable Corporation resolution or bond indenture. Investments have been classified as restricted on the statement of net assets because their use is limited by bond covenants. Information is not available on whether the various mutual funds in which the Corporation has invested used, held or wrote derivative financial products during the year ended June 30, 2004. .L snob- 11 COUNTY OF CONTRA COSTA PUBLIC FACILITIES CORPORATION Notes to Basic Financial Statements(Continued) Year Ended June 301 2004 NOTE 4-NET INVESTMENT IN LEASES The Corporation leases buildings currently in use to the County and the Board of Education under lease agreements. Lease terms are for six to thirty years and lease payments to the Corporation are structured so as to be sufficient in amount and timing to repay the related debt when due. During the year ended June 30, 2004, the Corporation received$9,848,809 in lease payments from the County and the Board of Education. The Corporation's net investment in leases at June 30, 2004 is as follows: Year ending June 30: 2005 $11)125,843 2006 11,116,093 2007 111,097,139 2008 111,0819964 2009 11,105,661 2010-2014 52,9613,211 2015 -2019 44,0341,313 2020-2023 31,481,525 Total future minimum lease payments to be received 1843,0035749 Less unearned interest income (56,693,749) Net investment in lease 127,310,000 Less current portion (4,2901,000) Long-term portion $123,0201000 NOTE 5 - LONG-TERM DEBT Following is a summary of the Corporation's changes in long-term debt during the year ended June 3 0, 2004: Current Balance Balance Portion July 1,2003 Retirements June 30;2004 June 30,2004 Certificates of Participation 1997 Merrithew Hospital Replacement $ 128,980,000 $3,730,000 $ 125,2501000 $319253,000 1992 Board of Education 2,4003,000 3401000 21,060,000 3652000 Total $ 131,3801000 $4,070,000 $ 12723103000 $4,290,000 12 COUNTY OF CONTRA COSTA PUBLIC FACILITIES CORPORATION Notes to Basic Financial Statements(Continued) Year Ended June 30,2004 NOTE 5-LONG-TERM DEBT(Continued) t , Long-term debt at June 30, 2004 consisted of the following: Annual Principal Original Interest Installments Issue Maturity Rates (in thousands) Amount Certificates of Participation 1997 Merrithew Hospital Replacement 2022 5.1-6.0% $32730- 10,185 $ 14523402000 1992 Board of Education 2008 6.1-6.3 340-470 4,950,000 Future debt service requirements for the outstanding certificates of participation, including f sinking fiend payments, are as follows: 1992 Board of Education 1997 Merrithew Hospital Replacement Principal Interest Principal Interest Year ending June 30: 2005 $ 365,000 $ 1175964 $ 329252000 $ 62717,880 2006 3853000 942658 410130,000 615063,436 2007 410,000 69,615 423502000 61267,523 2008 4302000 43,155 4,610,000 5,998,724 2009 470,000 14,805 43,8851,000 55735,856 2010-2014 283,5451,000 241416,208 2015-2019 37,140,000 157603,378 2020-2023 3705,000 4,281,614 Total Requirement $22060,000 $340,197 $ 1251,250,000 $751,5275619 NOTE 6-RISK MANAGEMENT The Corporation is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The Corporation is included as part of the County's self-insurance program for public liability. As such, the Corporation is obligated to reimburse the County for the unfavorable outcome of any claims paid on behalf of the Corporation. At June 30, 2004, there are no significant claims outstanding in the self-insurance program for which the Corporation is obligated. There have been no claims during the past three fiscal years that have exceeded excess insurance coverage. NOTE 7--MAGEE PARD In May 1987, the County and the Town of Danville each purchased an undivided one-half interest in Magee Park under a joint powers agreement in the amount of$1,140,000. Upon the close of escrow, title to the property was passed to the Corporation contingent on its ability to obtain financing to purchase the property. The property will be reflected in the financial statements of the Corporation when financing is obtained. 13 COUNTY OF CONTRA COSTA PUBLIC FACILITIES CORPORATION Notes to Basic Financial Statements(Continued) Year Ended June 3 0, 2004 NOTE 8—ADVANCE RENDING OF DEBT Inprior years, the Corporation defeased certificates of participation by placing a portion.of the proceeds of new debt issuance into irrevocable trusts to provide for all future debt service payments on the certificates. Accordingly, the trust account assets and the liability for the defeased debt are not included in the financial statements of the Corporation. On June 30, 2004, the following outstanding certificates of participation are considered defeased: 1992 Consolidated Capital Facilities Project Certificates of Participation $25,365,000 1994 Certificates of Participation 203,035,1000 14 CONTRA COSTA COUNTY PUBLIC FACILITIES CORPORATION Combining Schedule of Net Assets June 30,2004 1997 1992 Refunding Certificates of Certificates of Participation Participation Total ti ASSETS Current Assets: Restricted Cash and Cash Equivalents 494,898 1345802 629,700 Restricted Investments 101,6451,690 10,6453,690 Interest Receivable-Investments 100,0011 1003,011 Interest Receivable-Investment in Leases 193,661 1,119,647 1,139,308 Net Investment in Leases-Current Portion 365,000 31925,000 43,290,1000 Total Current Assets 879,559 15,925,150 16,804,709 Non-current Assets: Net Investments in Leases-Non-current 15695,1000 121,325,000 123,020,000_ Total Assets 2,35743559 137,2505150_ 139,824,709 LIABILITIES Current Liabilities: Interest Payable 19,661 13119,1647 1,139,308 Long-term Debt-Due Within One Year 365,000 310925,000 4,290,000 Total Current Liabilities 384,661 55044,647 5,4295308 -term Debt-Due in More Than One Year 116955000 121,325,000 12350205000 Long Total Liabilities 23,0795661 126,369,647 128,449,308 NET ASSETS-Restricted for Debt Service 494,898 105880,503 111,375,401 15 CONTRA COSTA COUNTY PUBLIC FACILITIES CORPORATION Combining Schedule of Revenues,Expenses and Changes in Net Assets Year Ended June 30,2004 1997 1992 Refunding Certificates of Certificates of Participation Participation Total OPERATING REVENUE Interest Earned on Leases $ 1289,049 $ 6,3073,836 $ 6,435,885 OPERATING EXPENSES Administration Fee 213603 21603 Other 41,656 78,121 82,777 Total Operating Expenses 43,656 80,725 85,381 Operating Income 123,393 6122730111 65350,504 NON-OPERATING REVENUES(EXPENSES) Interest Expense (128,050) (6,907,358) (710351,408) Investment Income 25338 703,134 7053472 Net Non-operating Expenses (1251,712) (6,2043,224). (6103295,936), Change in Net Assets (2,319) 221,888 205569 NET ASSETS,July 1, 2003 4971,217 10,8573,615 1153549832 NET ASSETS,June 30, 2004 $ 494,898 $ 1011880,503 $ 115375,401 16 CONTRA COSTA COUNTY PUBLIC FACILITIES CORPORATION Combining Schedule of Revenues,Expenses and Changes in Net Assets Year Ended June 30,2004 1997 1992 Refunding Certificates of Cern licates Participation of Participation Total CASH FLOWS FROM OPERATING ACTIVITIES: .s Receipts from lessee,principal 340,000 $ 3,7305000 $ 4ffl0,000 Receipts from lessee,interest 139,511 61319,302 6,458,813 Payments for administrative fees and other (4fi56) (802725) (851,381) Net cash provided by operating activities 474,855 91,9689577 . 101443,432 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Payments for debt principal (3401,000) (32730,000) (42070$000) Payments for debt interest (139,512) (6,19189824) (71058,336) Net gash used in capital and related financing activities (4793,512) (10fi481824) (11,128$336) CASH FLOWS FROM INVESTING ACTIVITY- Receipts from earnings on investments and cash equivalents 2)338 662,089 664$427 NET DECREASE IN CASH AND CASH EQUIVALENTS (2,319) (189158) (20$477) CASH AND CASH EQUIVALENTS,July 1,2003 497,217 152,960 650,177 CASH AND CASH EQUIVALENTS,June 30,2004 $ 494,898 134,802 $ 629,700 f. RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income $ 123,3393 6,2275111 $ 613501,504 Adjustments to reconcile operating income to net cash provided by operating activities: Decrease in net investment in leases 340,000 31730,000 4ffl0,000 Decrease in interest receivable-investment in leases 11,462 11,466 22,928 Net cash provided by operating activities $ 474$855 $ 91,968,577 $101443,432 y. low- 17 County of Contra Costa Martinez, California Single Audit Reports For the year ended June 30, 2004 C`�L�rsonr Certifted PublAccountants County of Contra Costa Table of Contents Page Independent Auditors Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards...........................................................................................................1 Independent Auditors' Report on Compliance with Requirements Applicable to each Major Program,Internal Control over Compliance and the Schedule of Expenditures of Federal Awards in accordance with OMB Circular A-133 and Supplemental Schedules of Revenue and Expenditures Prepared by the Contra Costa County Community Services Department........................................................................3 Schedule of Expenditures of Federal Awards..................................................................................................5 Notes to the Schedule of Expenditures of Federal Awards.........................................................................11 Schedule of Findings and Questioned Costs..................................................................................................15 Summary Schedules of Prior Audit Findings................................................................................................18 Supplemental Schedules: Supplemental Schedules of Revenues and Expenditures Prepared by the Contra Costa Community Services Department...................... C L Caporicci&Larson Certyled Public Accountants INDEPENDENT AUDITORS'REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS To the Board of Supervisors County of Contra Costa,California Martinez,California We have audited the basic financial statements of the County of Contra Costa, California (County), as of and for the year ended June 30,2004, and have issued our report thereon dated November 12,2004. We conducted our audit in accordance with generally accepted auditing standards in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the County's basic financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, 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 that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the County's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements on amounts that would be material in relation to the financial statements being audited may occur and not be'detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving internal control over financial reporting and its operation that we consider to be material weaknesses. However, we noted other matters involving the internal control over financial reporting,which we have reported to management of the County in a separate letter dated December 12, 2004. This report is intended solely for the information and use of the Board of Supervisors, County management, and federal awarding agencies and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties. Oakland,California November 12,2004 Toll Free Ph:(877)862-2200 Toll Free Fax:(866)436-0927 Oakland Orange County Sacramento San Diego 180 Grand Ave.,Suite 1365 3184-D Airway Avenue 777 Campus Coffunons Rd-,Suite 200 4858 Mercury,Suite 105 Oakland,California 94612 Costa Mesa,California 92626 Sacramento,California 95825 San Diego,California 92111 C L Caporicci&Larson Certified Public Accountants INDEPENDENT AUDITORS'REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM,INTERNAL CONTROL OVER COMPLIANCE AND THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS IN ACCORDANCE WITH OMB CIRCULAR A-133 AND SUPPLEMENTAL SCHEDULES OF REVENUE AND EXPENDITURES PREPARED BY THE CONTRA COSTA COUNTY COMMUNITY SERVICES DEPARTMENT y To the Board of Supervisors County of Contra Costa,California Martinez,California Compliance We have audited the compliance of the County of Contra Costa, California (County), with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended.June 30,2004. The County's major federal programs are identified in the summary of auditor's results section of the accompanying schedules of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the County's management. Our responsibility is to express an opinion on the County's compliance based on our audit. The County's basic financial statements include the operations of the County of Contra Costa Housing Authority (Authority) that reported expenditures of federal awards of $90,348,171, which are not included in the accompanying schedule of expenditures of federal awards during the year ended June 30, 2004. our audit, described below, did not include the operations of the Authority because they engaged other auditors to perform an audit in accordance with OMB Circular A-133, Audits of States, Local Governments,and Non-Profit Organizations(OMB Circular A-133). We conducted our audit of compliance in accordance with generally accepted auditing standards in the United States; 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. 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. our audit does not provide a legal determination on 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 each of its major federal programs for the year ended June 30, 2004. However, the results of our auditing procedures disclosed instances of noncompliance with those requirements,which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as item 04-1. Toll Free Ph:(877)862-2200 Toll Free Fax:(866)436-0927 Oakland Orange County Sacramento San Diego 180 Grand Ave.,Suite 1365 3184-D Airway Avenue 777 Campus Commons Rd.,Suite 200 4858 Mercury,Suite 105 Oakland,California 94612 Costa Mesa,California 92626 Sacramento,California 95825 San Diego,California 92111 To the Board of Supervisors County of Contra Costa,California Martinez,California Page 2 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, regulations, contracts and grants applicable to federal programs. 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 a major federal program in order to determined our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in accordance with OMB Circular A-133. We noted a matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgment, could adversely affect the County's ability to administer a major federal program in accordance with the applicable requirements of laws, regulations, contracts,, and grants. The reportable condition is described in the accompanying schedule of findings and questioned costs as item 04-1. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with the applicable requirements of laws,regulations,contracts,,and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions that are also considered to be material weaknesses. However,we believe that the reportable condition described above is not a material weakness. 1 10 a Schedule of Expenditures of Federal Awards and lemental Schedules of Revenue and ditures We have audited the basic financial statements of the County of Contra Costa,California (County), as of and for theyear ended June 30,2004,and have issued our report thereon dated November 12,2004. Our audit was performed for the purpose of forming opinions on the financial statements,which collectively comprise the basic financial statements of the County. The accompanying Sc"hedule of Expenditures of Federal Awards and Supplemental Schedules of Revenues and Expenditures prepared by the County's Community Services Department are presented for purposes of additional analysis as required by OMB Circular A-133 and the State Department of Community Services and Development, respectively, and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated,in all material respects,in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the Board of Supervisors, County management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other then these specified parties. eew Oakland,California November 12,2004 4 County of Contra Costa Single Audit Reports Schedule of Expenditures of Federal Awards For the year ended June 30,2004 Catalog of federal Amount of Domestic Expenditures Assistance Federal Provided to Federal Grantor/Pass-Through Grantor/Program Title Number(CFDA) Expenditures Subrecipients U.S.DEPARTMENT OF AGRICULTURE Pass-Through State Department of Education: Food Donation 10.550* $ 315,006 $ Pass-Through State Department of Social Services: Food Stamp Cluster: _ State Administrative Matching Grants for Food Stamp 10.561 6,874,196 Sub-total Food Stamp Cluster 61874,196 Pass-Through State Department of Agriculture: Special Supplemental Nutrition Program for Women,Infants and Children(WIC) 10.557* 21280,462 - Sub-total Pass-Through Programs 9,4691664 - Total U.S.Department of Agriculture $ 9,469,664 $ U.S.DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Direct Programs: Community Development Block Grants/Entitlement Grants 14.218 $ 71306,346 $ 51347,461 Emergency Shelter Grants Program 14.231 1391969 43,239 Homeless Program Multi Service Centers 14.235 298,547 291,439 HOME Investment Partnerships Program 14.239 2,291,643 11866,474 Housing Opportunities for Persons with AIDS 14.241 849,226 738,968 Opportunities for Youth-Youthbuild Program 14.243 96,028 961028 Sub-total Direct Programs 10,981,759 s 8,3831609 Pass-Through State Department of Housing and Community: Emergency Shelter Grants Program 14.231 113,127 113,127 Sub-total Pass-Through Programs 113,127 113,127 Total U.S.Department of Housing and Urban Development $. 11,094,886 $ 8,4961736 U.S.DEPARTMENT OF JUSTICE Direct Programs: Creating a Culture of Integrity 16.000 $ 75,000 $ - juvenile justice and Delinquency Prevention-Special Emp 16.541 94,831 - Local Law Enforcement Block Grant 16.592 155,940 - Drug Court Discretionary Grant Program 16.585 78,835 78,835 Grants to Encourage Arrest Policies and Enforcement of Protection Orders 16.590 50,860 - Weed and Seed 16.595 175,834 - State Criminal Alien Assistance Program 16.606* 442,143 - Planning Strategies in Community Prosecution 16.609* 19,214 - Public Safety Partnership and Community Oriented Policing Grants 16.710* 115,803 - Sub-total Direct Programs 1,208,460 78,835 Pass-Through State Department of Corrections: Violent Offenders Incarceration Program 16.586* 4,802,427 - Sub-total 4,802,427 - See Notes to the Schedule of Expenditures of Federal Awards. *Denotes Major Program 5 County of Contra Costa Single Audit Reports Schedule of Expenditures of Federal Awards,Continued For the year ended June 30,2004 Catalog of Federal Amount of Domestic Expenditures Assistance Federal Provided to Federal Grantor/Pass-Through Grantor/Program Title Number(CFDA) Expenditures Subrecipients U.S.DEPARTMENT OF JUSTICE,Continued Sub-total from previous page $ 4,8021427 $ Pass-Through State Office of Criminal Justice Planning: Juvenile Accountability Incentive Block Grants 16.523* 139,364 38,364 Local Forensic Lab Improvement Program 16.560* 20,684 - Victim Witness Assistance Program 16.575* 225,438 - Byrne Formula Grant Program 16.579* 189,776 - Violence Against Women Formula Grants 16.588* 89,061 - Sub-total Pass-Through Programs 5,466,750 38,364 Total U.S.Department of justice $ 6,675,210 $ 117.199 U.S.DEPARTMENT OF LABOR Pass-Through State Department of Aging: 17.235 $ 74,373 $ - Senior Community Services Employment Program Pass-Through State Employment Development Department(EDD): Workforce Investment Act(WIA)Cluster: 17.258 1r335,225 - WIA Adult Program 17.259 11133,406 - WIA Youth Activities WIA Dislocated Worker 17.260 1,200,205 - Sub-total WIA Cluster 31668,836 - Total U.S.Department of Labor $ 3,7431209 $ - U.S.DEPARTMENT OF TRANSPORTATION Pass-Through State Department of Transportation. 20.205* $ 11789,787 $ - Highway Planning and Construction Pass-Through State Office of Traffic Safety: State and Community Highway Safety 20.601 7.653 4,459 Total U.S.Department of Transportation $ 1r797,440 $ 4,459 U.S.DEPARTMENT OF ENERGY Pass-Through State Department of Community Services and Development: 81.042 $ 106,081 $ - Weatherization Assistance for Low-Income Persons Total U.S.Department of Energy $ 106,081 $ FEDERAL EMERGENCY MANAGEMENT AGENCY Direct Programs: 83.523 $ 60,000 $ 60,000 Emergency Food and Shelter National Board Program Sub-total Direct Programs 60,000 60,000 Pass-Through State Office of Emergency Services: 83.544 50,769 - Public Assistance Grants Sub-total Pass-Through Programs 50,769 - Total Federal Emergency Management Agency $ 110,769 $ 60,000_ See Notes to the Schedule of Expenditures of Federal Awards. Denotes Major Program 6 County of Contra Costa Single Audit Reports Schedule of Expenditures of Federal Awards,Continued For the year ended June 30,2004 Catalog of federal Amount of Domestic Expenditures Assistance Federal Provided to Federal Grantor/Pass-Through Grantor/Program Title Number(CFDA) Expenditures Subrecipients U.S.DEPARTMENT OF EDUCATION Pass-Through State Department of Alcohol and Drug Programs: Safe and Drug-Free Schools and Communities-State Grants 84.186 $ 365,560 $ 270,638. Total U.S.Department of Education $ 365,560 $ 270,638. ENVIRONMENTAL PROTECTION AGENCY Direct Programs: Brownfields Assessment and Cleanup Cooperative Agreements 66.818 $ 59,836� $ Total Environmental Protection Agency 59,836 - U.S.DEPARTMENT OF HEALTH AND HUMAN SERVICES Direct Programs: HRSA Chronic Homelessness 92.224 $ 209,650 $ 201,648 National Family Caregiver Support 93.052 337,219 - Health Center Grants for Homeless Populations 93.224 289f008 - Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease 93.918* 378,847 44,066 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances(SED) 93.104 11171,790 646,186 Hansen's Disease National Ambulatory Care Program 93.215 358,409 - Consolidated Knowledge Development and Application Program 93.230 848,750 790t665 SYNERGY Program 93.243 572,207 547,177 Transitional Living Program for Homeless Youth 93.550 107,136 107,136 Head Start 93.600 21,1931023 2,028.100 Basic Center Grant 93.623 102,245 102,245 Sub-total Direct Programs 25,568,284 4,467,223 Pass-Through State Department of Aging: Special Programs for the Aging-Title VII,Chapter 3-Programs for Prevention of Elder Abuse,Neglect,and Exploitation 93.041* 13,965 13,965 Special Programs for the Aging-Title VII,Chapter 2-Long Term Care Ombudsman Service for Older Individuals 93.042* 49,546 46,546 Special Programs for Aging-Title 111,Part D-Disease Prevention and Health Promotion Services 93.043* 53,828 18,714 National Family Caregiver Support 93.052 381,136 381,136 Nutrition Services Incentive Program(NSIP)Formally CFDA#10.570 under USDA 93.053* 251,223 251,223 Medical Assistance Program(Medicaid;title XIX MSSP) 93.778* 738,408 181.1754 Centers for Medicare and MedicAid Svcs-Research Demonstrations and Evaluations(HICAP) 93.779* 19,900 - Sub-total 11508,006 893,338 See Notes to the Schedule of Expenditures of Federal Awards. Denotes Major Program 7 County of Contra Costa Single Audit Reports _ Schedule of Expenditures of Federal Awards,Continued For the year ended June 30,2004 Catalog of Federal Amount of Domestic Expenditures Assistance Federal Provided to Federal Grantor/Pass-Through Grantor/Program Title. Number(CFDA) Expenditures Subrecipients U.S.DEPARTMENT OF HEALTH AND HUMAN SERVICES,Continued Sub-total from previous page $ 1,508,006 $ 893,338 Aging Cluster: Special Programs for Aging-Title III,Part B-Grants for Supportive Services and Senior Centers 93.044* 999,966 376,594 Special Programs for the Aging-Title III,Part C-Nutrition Services 93.045* 11175,906 11175,906 Sub-total Aging Cluster 2,1751872 11552,500 Pass-Through State Department of Alcohol and Drug Programs: Block Grants for Community Mental Health Services 93.958 1,576,376 300,000 Block Grants for Prevention and Treatment of Substance A 93.959 6,502,743 41533,742 Pass-Through State Department of Community Services and Development: Low-Income Home Energy Assistance 93.568 785,068 - Community Services Block Grant 93.569* 736,061 73,414 Pass-Through State Department of Education: Child Care Mandatory and Matching Funds of the Child Care and Development Fund 93.596* 790,364 - Child Care and Development Block Grant 93.575* 41662,031 - Pass-Through State Department of Health&Human Services: Project Grants and Cooperative Agreements for Tuberculosis Control Programs 93.116 205,765 - Projects for Assistance in Transition from Homelessness 93.150 110,573 110,573 Disabilities Prevention 93.184 1,977,852 4 - Community Access Program 93.252 449,101 - Immunization Grants 93.268 208,145 - Bioterrorism Preparedness 93.283 11438,118 173,279 HIV Emergency Relief Projects Grants 93.915* 1,500,545 11018,263 HIV Care Formula Grants 93.917' 174,593 - HIV Prevention Activities-Health Department Based 93.940' 195,000 101,660 HIV/AIDS Surveillance 93.944* 40,000 - Maternal and Child Health Services Block Grant to the State 93.994 1,947,257 437,042 Pass-Through State Department of Social Services: Promoting Safe and Stable Families 93.556* 1,3931650 - Temporary Assistance to Needy Families 93.558* 94,239,163 - Education and Training Vouchers 93.559 91224' - Child Support Enforcement 93.563 131134,876 - Refugee and Entrant Assistance-State Administered Program 93.566 165,689 - Adoption Incentive Payments 93.603 146,384 - Child Welfare Services-State Grants 93.645* 742,371 - Foster Care-Title IV-C 93.658* 30,865,593 - Adoption Assistance 93.659* 61775,490 - Social Services Block Grant 93.667` 494,563 - Independent Living 93.674* 481,299 - Medical Assistance Program 93.778* 41476,136 - Sub-total Pass-Through Programs 179,907,908 9,193,811 Total U.S.Department of Health and Human Services $ 205,476,192 $ 13,661,034 See Notes to the Schedule of Expenditures of Federal Awards. *Denotes Major Program 8 County of Contra Costa Single Audit Reports Schedule of Expenditures of Federal Awards,Continued For the year ended June 30,2004 Catalog of Federal Amount of Domestic Expenditures Assistance Federal Provided to Federal Grantor/Pass-Through Grantor/Program Title Number(CFDA) Expenditures Subrecipients U.S.DEPARTMENT OF HOMELAND SECURITY Direct Programs: Respiratory Protection Program 97.044 $ 113,553 $ Sub-total Direct Programs 113,553 Pass-Through State Office of Emergency Services: State Domestic Preparedness 97.004 2.,796.,492 1,673,116 Sub-total Pass-Through Programs 2,796,492 1,673,116 Total U.S.Department of Homeland Security $ 2,910,045 $ 11673,116 OFFICE OF THE PRESIDENT Pass-Through San Mateo County Sheriff: High Intensity Drug Trafficking Area 99.999 $ 11,902 $ - Total Office of the President $ 11,902 $ - TOTAL EXPENDITURES OF FEDERAL AWARDS $ 241,820,794 $ 24,283,182 See Notes to the Schedule of Expenditures of Federal Awards. Denotes Major Program 9 County of Contra Costa Single Audit Reports Notes to the Schedule of Expenditures of Federal Awards For the year ended June 30,2004 1. GENERAL The Schedule of Expenditures of Federal Awards (Schedule) presents the activity of all federal awards programs of the County of Contra Costa, California (County), except for the awards related to the County of Contra Costa Housing Authority (Authority) that conducted a separate single audit in accordance with OMB A-133. The County's reporting entity is defined in Note 1A of the County's basic financial statements. Federal awards received directly from federal agencies, as well as federal awards passed through to the County from other governmental agencies,are included on the Schedule. 2. BASIS OF ACCOUNTING The Schedule is presented using the modified accrual basis of accounting for governmental funds and full accrual basis of accounting for proprietary funds, which are described in Note 1 of the County's basic financial statements. 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS The majority of the federal award expenditures are reported in the County's basic financial statements in the general fund and special revenue funds. Revenues and expenditures related to the value of food stamps issued under the Food Stamps program are not reported in the County's basic financial statements as they are non-cash awards. Expenditures related to the Food Donation Program are not reflected in the County's basic financial statements as these represent aid-in-kind. 4. LOAN PROGRAMS The County has provided loans under several U.S. Department of Housing and Urban Development programs. These loans are made to carry out activities for affordable housing and economic development. The programs are administered both internally and by servicing and trust arrangements with financial institutions to collect loan repayments. The funds will be returned to the County programs upon repayment of the principal and interest,and will be recorded as program income at that time. The following is a summary of the loan programs maintained by the County along with the outstanding loan receivable balances at June 30,2004: CFDA Amount Program Title Number outstanding Community Development Block Grant 14.218 $ 15,355,794 HOME Investment Partnerships Program 14.239 18,501,494 Housing Opportunities for Persons with AIDS 14.241 2,913,210 $ 36,770,,498 County of Contra Costa Single Audit Reports Notes to the Schedule of Expenditures of Federal Awards,Continued For the year ended June 30,2004 5. PROGRAMS FUNDED THROUGH THE STATE DEPARTMENT OF COMMUNITY SERVICES AND DEVELOPMENT The following table,requested by the State,is a summary of expenditures for selected programs funded through the State Department of Community Services and Development for the year ended June 30, 2004: Federal CFDA Program Title Number Amount Weatherization Assistance for low-Income Person 81.042 $ 106,081 Low-Income Home Energy Assistance 93.568 $ 785,068 Community Services Block Grants 93.569 $ 736,061 The detail of these programs, by contracts., is included in the Supplemental Schedules section of this report. The amounts reported in the Supplemental Schedules are on the cash basis. 6. SUMMARY OF FEDERAL EXPEND RES OF THE AUTHORITY The Authority's expenditures are excluded from the accompanying Schedule because they are separately audited. The programs of the Authority for the year ended March 31,2004 were as follows: CFDA Federal Program Title Number Expenditures U.S.Department of Housing and Urban Development Low Income Housing Assistance Program Section 8 Moderate Rehabilitation 14.856 $ 254,689 Section 8 Housing Choice Voucher 14.871 82f251f232 Public Housing Drug Elimination Program 14.854 249,121 Resident Opportunity and Supportive Services(ROSS) 14.870 295 Shelter Plus Care 14.238 2..130,.995 Public and Indian Housing 14.850 3,628J41 Public Housing Capital Fund 14.872 1f855f446 Rental Rehabilitation N/A 78,252 Total U.S.Department of Housing and Urban Development $ 90,348,1171 12 County of Contra Costa Single Audit Reports Notes to the Schedule of Expenditures of Federal Awards, Continued .Iqm For the year ended June 30,2004 7. PROGRAMS FUNDED THROUGH THE STATE OFFICE OFCRIMINAL JUSTICE PLANNING (OCJP) A. The following represents federal expenditures for the year ended June 30,2004,for programs passed through the Office of Criminal Justice Planning(OCJP): 1. Coverdell 2003 Training Program Grant(CQ03020070)CFDA#16.560 Actual Match Budget Expenditures Expenditures Total Variance Personal services $ - $ - $ $ - $ - Operating expenses 20,196 4,798 4,798 15,398 Equipment - - Total $ 20,196 $ 4,798 $ $ 4,798 $ 15,398 2. Local Forensic Laboratory Improvement Program(LF00010070)CFDA#16.560 Actual State Match Budget Expenditures Expenditures Total Variance Personal services $ - $ - $ - $ - $ - Operating expenses 850,013 15,886 103,396 119,282 730,731 Equipment 11332,910 - 86,685 86,685 11246,225 Total $ 21182,923 $ 15,886 $ 190,081 $ 205,967 $ 1,9761956 3. Victim Witness Assistance Center(VW033Q0070&VW03220070) CFDA#16.575 Actual State Match Budget Expenditures Expenditures Total Variance Personal services $ 468,613 $ 225,438 $ 252,219 $ 477.,657 $ (9,044) Operating expenses 19,885 9,825 9,825 10,060 Equipment - - - Total $ 488,498 $ 225,438 $ 262,044 $ 487,482 $ 1,016 4. Juvenile Accountability(IP02010070)CFDA#16.523 Actual Hard Match Budget Expenditures Expenditures Total Variance Personal services $ 124,735 $ 104,584 $ 11,622 $ 116,205 $ 8,530 Operating expenses 38,645 34,781 3,865 38,645 - Equipment - - - - - Total $ 163,380 $ 139.364 $ 15,486 $ 154,850 $ 8,530 13 County of Contra Costa Single Audit Reports Notes to the Schedule of Expenditures of Federal Awards,Continued For the year ended June 30,2004 7. PROGRAMS FUNDED THROUGH THE STATE OFFICE OF CRIMINAL JUSTICE PLANNING (OCJP),Continued A. The following represents federal expenditures for the year ended June 30,2004,for programs passed through the Office of Criminal Justice Planning(OCJP),continued: 5. Violence Against Women(PU02010070)CFDA#16.588 Actual State Match Budget Expenditures Expenditures Total Variance Personal services $ 131,383 $ 87,936 $ 29.,311 $ 117,247 $ 14,136 Operating expenses 1,850 1,125 375 1,500 350 Equipment - - - - - Total $ 133,233 $ 89,061 $ 29,686 $ 118,747 $ 14,486 B. The following represents state expenditures for the year ended June 30, 2004, for programs sponsored by the Office of Criminal Justice Planning (OCJP) and are included as required by the OCJP Grantee Handbook: 1. Vertical Prosecution Program(VB03010070) Actual Match Budget Expenditures Expenditures Total Variance Personal services $ 234,978 $ 234,978 $ $ 234,978 , $ Operating expenses 2,374 2,374 2,374 Equipment - - - Totals $ 237,352 $ 237,352 $ $ 237.352 $ 2. Elder Abuse Vertical Prosecution(EB02010070) Actual Match Budget Expenditures Expenditures Total Variance Personal services $ 153,450 $ 110,683 $ $ 110,683 $ 42,767 Operating expenses 1,550 1,550 1,550 - Equipment - - - - Totals $ 155,000 $ 112,233 $ $ 112,233 $ 42.,767 3. Crimes Against Peace Officers(VG03010070) Actual Match Budget Expenditures Expenditures Total Variance Personal services $ 198, $ 113,239 $ $ 113,239 $ 84,761 Operating expenses 2,000 2,000 2,000 Equipment - - - - Totals $ 200,000 $ 115,239 $ $ 115,239 $ 84,761 14 County of Contra Costa Single Audit Reports Schedule of Findings and Questioned Costs low For the year ended June 30,2004 A. SUMMARY OF AUDIT RESULTS 1. The auditors' report expresses an unqualified opinion on the basic financial statements of the County of Contra Costa(County). 2. No reportable conditions relating to the audit of the financial statements are reported in the basic financial statements. 3. No instances of noncompliance material to the financial statements of the County were disclosed during the audit. 4. No reportable conditions relating to the audit of the major federal award programs is reported in the basic financial statements. 5. The auditors' report on compliance for the major federal award programs for the County expresses an unqualified opinion. 6. Audit findings relative to the major federal award programs for the County are reported in Part C of this Schedule below. The finding related to functional timesheets. 7. Theprograms tested as major programs include: Major Program Expenditures Food Donation $ 315,006 Women,Infants and Children(WIC) 2,280,462 Violent Offenders Incarceration Program 41802,427 Juvenile Accountability Incentive Block Grants 139,364 Local Forensic Lab Improvement Program 20,684 Victim Witness Assistance Program 225,438 Byrne Formula Grant Program 189,776 Violence Against Women Formula Grants 89,061 State Criminal Alien Assistance Program 442,143 Planning Strategies in Community Prosecution 19,214 Public Safety Partnership and Community Oriented Policing Grants 115,803 Highway Planning and Construction 11789,787 Special Programs for the Aging-Title VII,Chapter 3-Programs for Prevention of Elder Abuse,Neglect,and Exploitation 13,965 Special Programs for the Aging-Title VII,Chapter 2-Long Term Care Ombudsman Service for Older Individuals 49,546 Special Programs for Aging-Title 111,Part D-Disease Prevention and Health Promotion Services 53,828 Nutrition Services Incentive Program(NSIP)iFormly CFDA#10.570 under USDA 251,223 Medical Assistance Program 41476,136 Centers for Medicare and MedicAid Svcs-Research,Demonstrations and Evaluations(HICAP) 19,900 Sub-total: 15,293,763 15 County of Contra Costa Single Audit Reports Schedule of Findings and Questioned Costs,Continued For the year ended June 30,2004 A. SUMMARY OF AUDIT RESULTS,Continued 7. The programs tested as major programs include,continued: Major Program Expenditures Sub-total from previous page $ 15,293,763 Aging Cluster: Special Programs for Aging-Title III,Part B-Grants for Supportive Services and Senior Centers 999,966 Special Programs for the Aging-Title III,Part C-Nutrition Services 11175,906 Promoting Safe and Stable Families 11393,650 Temporary Assistance to Needy Families 941239,163 Community Services Block Grant 736,061 Child Care Mandatory and Matching Funds of the Child Care and Development Fund 790,364 Child Care and Development Block Grant 41662,031 Child Welfare Services-State Grants 742,371 Foster Care-Title IV-C 30,865,593 Adoption Assistance 61775,490 Social Services Block Grant 494,563 Independent Living 481,299 Medical Assistance Program(Medicaid;title XIX MSSP) 738,408 HIV Emergency Relief Projects Grants 11500,545 HIV Care Formula Grants 174,593 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease 378,847 HIV Prevention Activities-Health Department Based 19500 HIV/AIDS Surveillance 40,000 State Domestic Preparedness 21796,492 Total Major Program Expenditures $ 164,474,105 Total Federal Award Expenditures $ 241,8201794 Percent of Total Federal Award Expenditures 68.01% 8. The threshold for distinguishing Types A and B programs was$3,000,000. 9. The County was determined to be a high risk auditee. B. FINDINGS-FINANCIAL STATEMENTS AUDIT No matters were reported. 16 County of Contra Costa Single Audit Reports Schedule of Findings and Questioned Costs,Continued "OW For the year ended June 30,2004 C. FINDINGS AND QUESTIONED COSTS-MAJOR FEDERAL AWARD PROGRAM AUDIT 04-1 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Community Service Block Grant, (CFDA Number 93.569)-Eligibility Passed through the State of California, Department of Comr aunty Services and Development Administered by the County's Community Services Department Criteria In accordance with OMB Circular A-133, grantees are required to abide by the eligibility requirements in the individual grant agreements of the respective programs. The Community Service Block Grant agreement requires that functional timesheets be maintained for individuals who are charging time to the program to support the eligibility of their salaries for reimbursement. Condition During the performance of our audit, we noted that the salaries of the advocates for 37 fa es charged to the program were not supported by functional timesheets. Their time charged to the program was estimated and a journal entry was prepared to charge the program for a portion of their salaries. Context and Effect By ensuring that functional timesheets are maintained, it serves to document the actual time which the advocates performed services for the program. This will also help ensure that claims for salary reimbursements are accurate. Recorrunendation We recommended that the County strengthen its controls' by providing periodic review of functional timesheets to ensure that they are prepared correctly and in a timely manner. Management's Response On a monthly basis the fiscal unit of the Community Services Department will review the family advocates' timesheets to make sure. that the hours worked are appropriately charged to the correct program and that the timesheets are submitted in a timely manner. 17 County of Contra Costa Single Audit Report Summary Schedules of Prior Audit Findings For the year ended June 30,2004 C. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAI AWARD PROGRAM AUDIT, Continued The following is the status of audit findings reported in the prior year's schedule of findings and questioned costs: 03-1 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Foster Care-Title IV-E, (CFDA Number 93.658)-Eligibility Passed through the State of California,Department of Social Services Administered by the County's Employment and Human Services Department Criteria In accordance with OMB Circular A-133, grantees are required to abide by the eligibility requirements as documented in the individual grant agreements of the respective programs. For the Foster Care program, eligibility requires that a re- determination be performed every six months on participants to ensure that they still qualify for the federal program benefits. Condition During the performance of our audit, we noted that for eight out of the ten case files selected for testing, the periodic six-month eligibility re-determination (form FC2) was performed after the six-month requirement. Previously, the form FC2 was not performed. Context and Effect By ensuring that periodic re-determinations are performed timely, changes in income and property for the child's foster care case are reviewed to ensure that Foster Care assistance is being issued in the correct amount. Recommendation We recommended that the County strengthen its controls governing the periodic eligibility re-determination process to ensure that it is performed in a timely manner. Management's Response In response to the 2002 finding, the department reassigned responsibility for initiating the reinvestigations from Children's Services Program to the Foster Care Program, which is directly accountable for ensuring that the investigations occur timely. To facilitate the timely initiation of reinvestigations, the Case Data System that is used for Foster Care Eligibility is being used to identify reinvestigations that are due 30, 60, and 90 days in advance. The Eligibility Worker in Foster Care can then prompt the Clerical Specialist to generate the reinvestigation form and forward it to the Social Worker for review and processing. Eligibility Staff track to assure the forms are returned and the Reinvestigation is completed and recorded by the Eligibility Worker. Additionally, recognizing that the previous decentralization of Clerical Specialists who support the reinvestigation process may have been contributing to the reinvestigation backlog, the department added a new Clerical Supervisor position under the Foster Care Program to provide central supervision of the Clerical Specialists. With a more concentrated focus on the reinvestigation backlog,the department is now monitoring not only the completion of investigations, but also the initiation of new investigations. 18 County of Contra Costa Single Audit Report Summary Schedules of Prior Audit Findings,Continued For the year ended June 30,2004 C. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT, Continued The following is the status of audit findings reported in the prior year's schedule of findings and questioned costs,continued: Management's Response, Continued These- corrective actions have significantly reduced the backlog of eligibility reinvestigations. For example, from September 2002 to December 2003, the backlog of reinvestigations was reduced from 1300 to 29. The auditor's 2003 finding, though still cause for concern and ongoing diligence, actually recognized that all ten test files had current completed reinvestigations and FC2 forms on file. The fact that eight of ten reinvestigations were not conducted timely for the audit report period is indicative of the backlog of overdue reinvestigations that have been addressed and completed. As the backlog has been substantially cleared and with the implementation of the corrective actions described above, it is expected that the periodic six-month eligibility redetermination will be,henceforth,performed timely. Status Implemented. 19 SUPPLEMENTAL SCHEDULES 21 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures Summary Schedule For the year ended June 30,2004 Catalog of Federal Domestic Assistance Total DCSD Contract No. Number(CFDA) Expenditures 03C-1459 Weatherization 81.042 $ 83,799 04C-1509 Weatherization 81.042 22,282 Total $ 106,081 03B-5210.ECIP 93.568 $ 47,085 03B-5210 Assurance 16 93.568 61,201 03B-5210 HEAP-Outreach 93.568 25,029 03B-5210 Weatherization 93.568 270,918 04B-5260 ECIP 93.568 58,607 04B-5260 Assurance 16 93.568 39,329 04B-5260 HEAP-Outreach 93.568 18,607 04B-5260 ECIP and HEAP Intake Costs 93.568 13,728 04B-5260 ECIP and HEAP Administrative Costs 93.568 15,702 04B-5260 Weatherization 93.568 234,862 Total $ 785,068 03F-4308 Community Services Block Grant 93.569 $ 547,231 04F-4433 Community Services Block Grant 93.569 188,830 Total $ 736,061 22 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures DCSD Contract No.03C-1459 Weatherization {CFIDA#81.042) For the year ended June 30,2004 Total Reported Total Budgeted Amount Amount Amount REVENUE: Grant revenue $ 121,210 $ 121,210 $ 121,210 Total revenue $ 121,210 $ 121,210 $ 121,210 EXPENDITURES: Administrative: Salaries&wages $ 247 $ 247 $ 925 Fringe benefits 228 228 444 Facilities - - 414 Telephone-communication 17 17 126 Accounting 3,265 3,265 3,597 Office supplies 350 350 309 Miscellaneous - - 245 Total administrative 4,107 4,107 6,060 Other Program: Training and technical assistance 149 149 3,310 Health and safety 1,600 1,600 25f000 Total other program 1,749 1,749 28,310 Program operations: Measures 69,909 69,909 77,592 Outreach 4,033 4,033 4,128 Intake 1,026 1,026 1,730 Client education 2,975 2,975 3,390 Total program operations 77,943 77;943 86,840 Total expenditures 83,799 $ 83,799 121,210 23 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures DCSD Contract No. 04C-1509 Weatherization (CFDA#81.042) For the year ended June 30,2004 Total Reported Total Budgeted Amount Amount Amount REVENUE: Grant revenue $ - $ - $ - Total revenue $ - $ - $ - EXPENDITURES: Administrative: Salaries&wages $ - $ - $ - Fringe benefits - - - Facilities - - - Telephone-communication - - - Accounting 544 544 6,170 Office supplies - - - Miscellaneous - - - Total administrative 544 544 61170 Other Program: Training and technical assistance - - 31419 Health and safety - - 51000 Total other program - - 81419 Program operations: Measures 18,894 18,894 100,645 Outreach 2,068 21068 41102 Intake 776 776 11044 Client education - - 31024 Total program operations 21,738 21,738 108,815 Total expenditures $ 22,282 $ 22,282 $ 1231404 24 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures DCSD Contract No.03B-5210 ECIP(CFDA#93.568) For the year ended June 30,2004 Total Reported Total Budgeted Amount Amount Amount REVENUE.- Grant revenue $ 140,690 $ 140,690 $ 150,340 Total revenue $ 140,690 $ 140,690 $ 150,340 EXPENDITURES: Administrative: Salaries&wages 9,601 $ 9,601 $ 19,991 Fringe benefits 3,312 3,312 9,332 Facilities - - 1,500 Travel in-state - - 1,000 Tel./communication 27 27 540 Accounting 5,980 5,980 9,877 Office supplies 27 27 1,343 Miscellaneous 6,050 6,050 1,162 Intake 6,891 6,891 9,645 Total administrative 31,888 31,888 541390� Program: Outreach cost(5%max.) 14,972 14,972 19,989 Furnace repair and replacement 225 225 75,961. Total program 15,197 15,197 95,950 Total expenditures $ 47,085 47,085 150,340 25 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures DCSD Contract No. 03B-5210 Assurance 16 (CFDA#93.568) For the year ended June 30,2004 Total Reported Total Budgeted Amount Amount Amount REVENUE: Grant revenue 87,295 87,295 $ 9Ot751 Total revenue 87,295 87,295 $ 90,1751 EXPENDITURES: Program: Assurance 16 activities $ 61,201 $ 61,201 $ 90,751 Total expenditures $ 61,201 $ 61,201 $ 90f751 26 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures DCSD Contract No. 03B-5210 HEAP-Outreach (CFDA ##93.568) For the year ended June 30,2004 Total Reported Total Budgeted Amount Amount Amount REVENUE: Grant revenue $ 35,708 $ 35,708 $ 35,983 Total revenue $ 35,708 $ 35,708 $ 35,983 EXPENDITURES: Program: HEAP Outreach $ 25,029 $ 25,029 $ 35,983 Total expenditures $ 25,029 $ 25,029 $ 35,983 27 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures DCSD Contract No. 03B-5210 Weatherization{CFDA#93.568) For the year ended June 30,2004 Total Reported Total Budgeted Amount Amount Amount REVENUE: Grant revenue $ 394,200 $ 394,200 $ 454,511 Total revenue $ 394,200 $ 394,200 $ 454,511 EXPENDITURES: Administrative: Salaries&wages 891 $ 891 2,113 Fringe benefits 776 776 1,070 Facilities - - 2,041 Accounting 18,924 18,924 22,931 Office supplies 1,131 1,131 1,516 Miscellaneous 1,154 1,154 2,152 Intake 4,870 4,870 4,538 Total administrative 27,746 27,746 36,361 Program: Training 596 596 1,158 Outreach 14,996 14,996 22,818 Dwelling assessment 14,205 14,205 32,676 Equipment 19,398 19,398 27,000 Weatherization materials 136,979 136,979 212,017 Labor 43,607 43,607 94,458 Storage - - 5,000 Maintenance-repair 8,525 8,525 13,463 Miscellaneous 4,866 4,866 9,560 Total program 243,172 243,172 418,150 Total expenditures $ 270,918 $ 270,918 454,511 28 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures DCSD Contract No. 04B-5260 LIHEAP ASSURANCE 16,INTAKE,ECIP and HEAP(CFDA#93.568) For the year ended June 30,2004 Total Reported Total Budgeted Amount Amount Amount REVENUE: Grant revenue $ 74,027 $ 74,027 $ 294,989 Total revenue $ 74,027 $ 74,027 $ 294,989 EXPENDITURES: Administrative: Section 3-Administrative Costs $ 15,702 $ 15,702 55,575 Total administrative 15,702 15,702 55,5750 Program: Section 1-Assurance 16 Program Costs 39,329 39,329 87,340 Section 2-Intake Program Costs for HEAP and ECIP (eligibility determination) 13,728 13,728 22,211 Section 4-ECIP Program Costs Outreach(5%of total ECIP allocation) 17,584 17,584 18,771 Furnace Repairs and Replacements 41,023 41,023 77,304 Subtotal Section 4 58,607 58,607 96t075 Section 5-HEAP Outreach and WPO Program Costs Outreach(5%of total HEAP allocation) 18,607 18,607 33,788 Subtotal Section 4 18,607 18r607 33,788 Total expenditures $ 145,973 145,973 294,989 29 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures DCSD Contract No. 048-5260 Weatherization.(CFDA#93.568) For the year ended June 30,2004 Total Reported Total Budgeted Amount Amount Amount REVENUE: Grant revenue $ 97,007 $ 97,007 $ 457,786 Total revenue $ 97f007 $ 97,007 $ 457,786 EXPENDITURES: Administrative: Administrative Costs $ 18,431 $ 18,431 $ 36,550 Intake 4,481 4,481 8,727 Total administrative 22,912 22,912 45,277 . Program: Program Costs 202,213 202,213 381,963 Other Program Costs Outreach 9,737 9,737 21,819 Training - - 81727 Total program 211,950 211,950 412t509 Total expenditures 234,862 234,862 457..786 rt 30 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures DCSD Contract No. 03F4308 CSB G (CFDA#93.569) For the year ended June 30,2004 Total Reported Total Budgeted Amount Amount Amount REVENUE: Grant revenue $ 495,141 $ 495,141 $ 714,581 Total revenue $ 495,141 $ 495,141 $ 7141581 EXPENDITURES: Administrative: Salaries&wages $ 53,588 $ 53,588 $ 96,727 Fringe benefits 20,568 20,568 46,758 Travel 19,448 19,448 33,000 Space(rent/lease) 16,396 161396 18,000 Consumable supplies 5,118 5,118 5,000 Equipment lease/purchase 19,653 19,653 27,000 Consultant,Services - - 6,200 Other costs 48,186 48,186 74,931 Total administrative 182,957 182,957 307,616 Program: Salaries&wages 119,020 119,020 119,396 Fringe benefits 58,318 58,318 57,716 Equipment Lease/Purchase 95,042 95,042 95,000 Contract services 18,480 18,480 18,500 Subcontractors 73,414 73,414 116,353 Total program 364,274 364,274 406,965 Total expenditures $ 547,231 $. 547,231 $ 714,581 31 County of Contra Costa Community Services Department Supplemental Schedule of Revenues and Expenditures DCSD Contract No. 04F-4433 CSBG (CFDA#93.569) For the year ended June 30,2004 Total Reported Total Budgeted Amount Amount Amount REVENUE: Grant revenue $ 220,104 $ 220,104 $ 641,225 Total revenue $ 220,104 $ 220,104 $ 641,225 EXPENDITURES: Administrative: Salaries&wages 61,507 $ 61,507 149,137 Fringe benefits 27,546 27,546 72,406 Travel 6,833 6,833 22,600 Space(rent/lease) 52 52 30f000 Consumable supplies 3,064 3,064 5,096 Equipment lease/purchase - - 20,000 Other costs 28,077 28,077 66,044 Total administrative 127f079 127,079 365,283 Program: Salaries&wages 42,010 42,010 161,926 Fringe benefits 19,741 19,741 78,616 Contract services - - 5,400 Subcontractors - - 30,000 Total program 61,751 61,751 . 275,942 Total expenditures 188,830 188,830 641,225 32