HomeMy WebLinkAboutBack-Up DocumentsCity of Miami, Florida
Single Audit Reports in Accordance with
OMB Circular A-133 and Chapter 10.550, Rules of the
Florida Auditor General
Year Ended September 30, 2015
Table of Contents
Independent Auditor's Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance With
Government Auditing Standards
Independent Auditor's Report on Compliance for Each Major
Federal Program and State Project; Report on Internal Control
Over Compliance; and Report on the Schedule of Expenditures of
Federal Awards and State Financial Assistance Required By
OMB Circular A-133 and Chapter 10.550, Rules of the Florida Auditor General
1-2
3-5
Schedule of Expenditures of Federal Awards and State Financial Assistance 6 — 10
Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance 11
Schedule of Findings and Questioned Costs 12 — 25
Summary Schedule of Prior Years' Audit Findings 26
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance With
Government Auditing Standards
Independent Auditor's Report
To the Honorable Mayor
and Members of the City Commission
City of Miami, Florida
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 aggregate discretely presented component units, each major fund, and the aggregate
remaining fund information of the City of Miami, Florida (the City), as of and for the year ended
September 30, 2015, and the related notes to the financial statements, which collectively comprise the
City's basic financial statements, and have issued our report thereon dated March 31, 2016. Our report
includes a reference to other auditors who audited the following component units and funds, as described
in our report on the City's financial statements:
Component Units / Funds Classification
• Southeast Overtown Park West Redevelopment Agency
• Omni Redevelopment Agency
• Midtown Community Redevelopment Agency
• Virginia Key Beach Park Trust
• Liberty City Community Revitalization District Trusts
• Firefighters' and Police Officers' Retirement Trust
• General Employees' and Sanitation Employees'
Retirement Trust and Other Managed Trusts
• Miami Sports and Exhibition Authority
• Downtown Development Authority
• Bayfront Park
• Civil Investigative Panel
• Coconut Grove Business Improvement District
• Wynwood Business Improvement District
nonmajor special revenue fund
nonmajor special revenue fund
nonmajor special revenue fund
nonmajor special revenue fund
nonmajor special revenue fund
aggregate remaining fund information
aggregate remaining fund information
discretely presented component unit
discretely presented component unit
discretely presented component unit
discretely presented component unit
discretely presented component unit
discretely presented component unit
Thisreport does not -include :the results of the other auditors' testing of internal control over financial
reporting or compliance and other matters that are reported on separately by those auditors. Our report
also includes an, emphasis -•of matter paragraph relating to the City's adoption' °of Governmental
Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for
Pensions, an Amendment of GASB Statement No. 27 and Statement No. 71, Pension Transition for
,-, Contributions Made -Subsequent to -the Measurement Date, an amendment of GASB Statement No. 68,
effective October 1, 2014.
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Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do
not express an opinion on the effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal
control or on compliance. This report is an integral partof 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.
Miami, Florida
March 31, 2016
2
Report on Compliance for Each Major
Federal Program and State Project; Report on Internal Control
Over Compliance; and Report on the Schedule of Expenditures of
Federal Awards and State Financial Assistance Required By
OMB Circular A-133 and Chapter 10.550, Rules of the Florida Auditor General
Independent Auditor's Report
To the Honorable Mayor
and Members of the City Commission
City of Miami, Florida
Report on Compliance for Each Major Federal Program and State Project
We have audited City of Miami, Florida's (the City) compliance with the types of compliance requirements
described in the OMB Circular A-133 Compliance Supplement and the requirements described in the
Florida Department of Financial Services State Projects Compliance Supplement, that could have a direct
and material effect on each of the City's major federal programs and state project for the year ended
September 30, 2015, The City's major federal programs and state project are identified in the summary
of auditor's results section of the accompanying schedule of findings and questioned costs.
Management's Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and
grants applicable to its federal programs and state projects.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the City's major federal programs
and state project 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; OMB Circular A-133, Audits of States,
Local Governments, and Non -Profit Organizations, and Chapter 10.550, Rules of the Florida Auditor
General. Those standards and OMB Circular A-133 and Chapter 10.550, Rules of the Florida Auditor
General, 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 or state project occurred. An audit includes examining,: on a
test basis,' evidence about the City's compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major
federal program and state project. However, our audit does not provide legal determination ofthe City's
compliance.
THE P 'a ER F BIG UNDERSTOOD
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AUDIT I TAX I CONSULTING
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Opinion on Each Major Federal Program and State Project
In our opinion, the City 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 and
state project for the year ended September 30, 2015.
Other Matters
The results of our auditing procedures disclosed instances of noncompliance, 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 items CF 2015-01, CF 2015-02, CF 2015-03, CF 2015-04, CF 2015-
05, CF 2015-06, CF 2015-07, and CF 2015-08. Our opinion on each major federal program and state
project is not modified with respect to these matters.
The City's response to the noncompliance findings identified in our audit is described in the
accompanying schedule of findings and questioned costs. The City's response was not subjected to the
auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the
response.
Report on Internal Control Over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our
audit of compliance, we considered the City's internal control over compliance with the types of
requirements that could have a direct and material effect on each major federal program and state project
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 state project, and to test and
report on internal control over compliance in accordance with OMB Circular A-133 and Chapter 10.550,
Rules of the Florida Auditor General, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of the City's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program or state project 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 or state project 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 or state
project 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 and therefore, material
weaknesses or significant deficiencies may exist that were not identified. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
we identified deficiencies in internal control over compliance, as described in the accompanying schedule
of findings and,gdesti'oned costs as items IC 2015-01, IC 2015-02, IC 2015-03,IC 201.5-04, IC 2015-05,
IC 2015-06 _IC 2015-07, and IC 2015-08 that we consider to be significant deficiencies.
The City's response'to.the internal control over compliance findings identified in our audit is described in
the accompanying schedule of findings and questioned costs. The City's response was not subjected to
the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the
response.
The purpose•ofrthisiireport ominternal control over compliance is solely to describe the scope of our
testing of irternal-control over compliance and the results ofthattesting based on the requirements of
OMB Circular A-133-and Chapter;10.550, Rules of the Florida Auditor General. Accordingly, this report is
not suitable for any other purpose.
4
Report on the Schedule of Expenditures of Federal Awards and State Financial Assistance
Required by OMB Circular A-133 and Chapter 10.550, Rules of the Florida Auditor General
We have audited the financial statements of the City as of and for the year ended September 30, 2015,
and have issued our report thereon dated March 31, 2016, which contained unmodified opinions on those
financial statements, and included a reference to other auditors and an emphasis of matter paragraph for
the adoption of GASB Statement Nos. 68 and 71. Our audit was conducted for the purpose of forming
opinions on the financial statements that collectively comprise the basic financial statements. The
accompanying schedule of expenditures of federal awards and state financial assistance is presented for
purposes of additional analysis as required by OMB Circular A-133 and Chapter 10.550, Rules of the
Florida Auditor General, and is not a required part of the financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying accounting and
other records used to prepare the 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 basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the schedule of expenditure of federal awards and state financial
assistance is fairly stated in all material respects in relation to the basic financial statements as a whole.
Miami, Florida
April 29, 2016, except for the Schedule of Expenditures of Federal Awards
and State Financial Assistance for which the date is March 31, 2016
5
City of Miami, Florida
Schedule of Expenditures of Federal Awards and State Financial Assistance
Year Ended September 30, 2015
CFDA Federal
Federal Grantor/Pass-through Grantor/Program Title Number Grant/Contract Number Expenditures
U.S. Department of Agriculture
Child and Adult Care Food Program
10.558 A-2384 $ 169,054
S-576 38,604
207,658
Federal Pass -Through Miami -Dade County, Florida
State Administrative Matching Grants for the Supplemental
Nutrition Assistance Program 10.561 WS-CC-PY'14-15-00 89,279
Total U.S. Department of Agriculture 296,937
U.S Department of Housing and Urban Development
Community Development Block Grants/Entitlement Grants 14.218
Emergency Solutions Grant Program 14.231
Federal Pass -Through Miami -Dade County, Florida
Supportive Housing Program
B-05-MC-120013 257,819
B-07-MC-120013 91,494
B-08-MC-120013 162,625
B-09-MC-120013 2,163
B-10-MC-120013 360,633
B-11-MC-120013 14,063
B-12-MC-120013 317
B-13-MC-120013 193,239
8-14-MC-120013 2,304,348
B-15-MC-120013 1,592,932
B-08-MN-12-0016 343,321
5,322,954
E-12-MC-120002 106,009
E-13-MC-120002 10,736
E-14-MC-120002 251,191
E-15-MC-120002 139,588
507,524
14.235 FL0189L4D001205 97,487
FL0190L4D001205 92,982
FL0211L4D001205 164,031
6
354,500
City of Miami, Florida
Schedule of Expenditures of Federal Awards and State Financial Assistance
Year Ended September 30, 2015
Federal Grantor/Pass-through Grantor/Program Title
Home Investment Partnerships Program
Housing Opportunities for Persons with AIDS
Lower Income Housing Assistance Program —Section 8
Moderate Rehabilitation
CFDA Federal
Number Grant/Contract Number. Expenditures
14.239 M-05-MC-120211 1,098,798
M-06-MC-120211 77,947
M-07-MC-120011 129,515
M-08-MC-120011 386,850
M-09-MC-120011 729,023
M-10-MC-120011 1,559,186
M-11-MC-120011 125,192
M-12-MC-120011 714,836
M-14-MC-120011 988,189
M-15-MC-120011 214,758
6,024,294
14.241 F-LH-10-F005 423,148
F-LH-11-F005 85,687
F-LH-14-F005 6,649,469
F-LH-15-F005 3,794,560
10,952,864
14.856 FL145MR0001 1,817,854
FL145MR0002 571,051
2,388,905
Section 8 Housing Choice Vouchers 14.871 FL145V00001 1,768,615
Total U.S Department of Housing and Urban Development 27,319,656
U:B'Department of the Interior Fish and Wildlife Service
Federal Pass -Through florida Department of Environmental Protection
Clean Vessel Act Program 15.616 MV113 20,584
Total U.S Department of the Interior Fish and Wildlife Service 20,584
U.S. Department of Justice
Equitable Sharing Program 16.922
not applicable
not applicable
Pass -through Office of the Attorney General
Crime Victim Assistance 16.575 V003-14185
V13185
Public Safety Partnership and Community Policing Grants 16.710 2009RJWX0026 (ARRA)
Recovery
Edward Byrne Memorial Justice Assistance Grant Program 16.738
Pass -through Miami -Dade County, Florida
Edward Byrne Memorial Justice Assistance Grant Program 16.738 2015-JAGC-DADE-26-R3-209
2015-JAGC-DADE-26-R3-210
310,807
191,533
502,340
26,721
698
27,419
263,669
2009-CKWX 0330 78,573
2011 ULWX0010 1,966,494
2013ULWX0011 606,341
2014ULWX0043 516,688
3,431,765
2011-DJ-BX-2712 180,135
2012-DJ-BX-0159 1,215
2013-DJ-BX-0448 23,708
2014-DJ-BX-0390 369,051
13,752
20,583
Total Justice Assistance Grant 608,444
Edward Byrne Memorial Competitive Grant Program 16.751 ""`2014-WY-BX-002" "' 3,427 '
Total U.S Department of Justice 4,573,395
7
City of Miami, Florida
Schedule of Expenditures of Federal Awards and State Financial Assistance (Continued)
Year Ended September 30, 2015
Federal Grantor/Pass-through Grantor/Program Title
U.S. Department of Labor
Federal Pass -through Miami -Dade County, Florida
ARRA-Unemployment Insurance
CFDA Federal
Number Grant/Contract Number Expenditures
17.225 WS-CC-PY'14-13-00 57,537
Federal Pass -through Miami -Dade County, Florida
WIA Adult Program 17.258 WS-CC-PY'14-13-00 232,125
Pass -through South Florida Workforce Investment Board
WIA Adult Program 17.258 WS-CC-PY'14-13-00 24,624
Pass -through Miami -Dade County, Florida
WIA Dislocated Worker Formula Grants 17.278 WS-CC-PY'14-13-00 310,405
Total WIA Cluster 567,154
Total U.S. Department of Labor 624,691
U.S. Department of Transportation
Pass -through Florida Department of Transportation
Highway Planning and Construction
20.205 APG63/410581-1
AQF49/418334-2
351,411
181,530
532,941
Pass -through Florida Division of Transportation
National Priority Safety Programs 20.616 ARB27 3,191
ARM62 : -..... 82,715
BDV25 4,683
Total U.S. Department of Transportation
U.S. Department of Health and Human Services
Pass -through Miami -Dade County, Florida
Temporary Assistance for Needy Families
90,589
623,530
93.558 WS-CC-PY'14-15-00 422,977
Pass -through South Florida Workforce Investment Board
Temporary Assistance for Needy Families 93.558 WS-CC-PY 14-15-00 41,336
Total U.S. Department of Health and Human Services 464,313
8
City of Miami, Florida
Schedule of Expenditures of Federal Awards and State Financial Assistance (Continued)
Year Ended September 30, 2015
Federal Grantor/Pass-through Grantor/Program Title
Executive Office of the President
Pass -through South Florida HIDTA / Monroe County Sheriffs
High Intensity Drug Trafficking Areas Program
Total Executive Office of the President
U.S. Department of Homeland Security
National Urban Search and Rescue Response System
CFDA
Number
95.001
97.025
Federal Pass -through State of Florida
National Urban Search and Rescue Response System 97.025
Assistahee to Firefighters Grant
•
97.044
Pass Through -State of Florida Division of Emergency Management
Pre -disaster Mitigation 97.047
Federal Pass -Through Michigan Public Health Institute/Jackson Health System
Homeland Security Grant Program 97.067
Homeland Security Grant Program 97.067
Staffing for Adequate Fire and Emergency Response 97.083
Total U.S. Department of Homeland Security
Total Expenditures of Federal Awards
Grant/Contract Number
HITDA Letter April 09, 2015
HITDA Letter July 10, 2013
HITDA Letter July 10, 2014
EMW-2012-CA-K00015
EMW -2013-CA-K00015-S01
EMW-2014-CA-K00009
EMW-95-k-4718
EMW-2010-FO-09932
EMW-2011-FO-09623
EMW-2013-FO-035989
LPDM-PJ-04-FL-2009-006
not applicable
14-DS-05-11-23-02-212
14-DS-L2-11-23-02-413
14DS-L5-11-23-02-456
15-DS-P8-11-23-02-453
EMW-2012-FH-00828
EMW-2011-FH-00899
See Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance
9
Federal
Expenditures
18,571
2,338
26,242
47,151
130,601
407,113
656,786
2,095
1,196,595
208,422
233,331
1,144,268
1,586,021
1,364
96
276,345
4,405,445
94,824
938,713
5,715,327
667,598
1,792,173
2,459,771
10,959,174
$ 44,929,431
City of Miami, Florida
Schedule of Expenditures of Federal Awards and State Financial Assistance (Continued)
Year Ended September 30, 2015
State Grantor/Pass-through Grantor/Program Title
Department of Economic Opportunity
Division of CommUnity Development
Total Department of Economic Opportunity
Florida Housing Finance Corporation
State Housing Initiatives Partnership (SHIP) Program
Total Florida Housing Finance Corporation
Department of Transportation
Public Transit Service Development Program
Total Department of Transportation
Department of Health
Emergency Medical Services (EMS) Matching Awards
Pass -through Miami -Dade County, Florida
County Grant Awards
Total Department of Health
Florida Agency for Persons with Disabilities,''
Developmental Disabilities & Family and Supported Living
2011-2014
Total Florida Agency for Persons with Disabilities
Fish and Wildlife Conservation Commission
Florida Boating Improvement Program
Total Fish and Wildlife Conservation Commission
CSFA
Number
40.038
52.901
State
Grant/Contract Number Expenditures
HL 025
not applicable
55.012 AQW24 / FM# 430987-1
AR716
AP993
64.003 Grant ID Code M3007
64.005 EMS County Grant #C0013
67.011 not applicable
77.006 FWC Contract # 12240
Total Expenditures of State Financial Assistance
10
2,000,000
2,000,000
1,124,065
1,124,065
5,219
47,890
187,214
240,323
125,820
31,857
157,677
126,932
126,932
2,037
2,037
3,651,034
City of Miami, Florida
Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance
Year Ended September 30, 2015
Note 1. General and Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards and State Financial Assistance (the
Schedule) presents the activity of all federal programs and state awards of the City of Miami, Florida (the
City) for the year ended September 30, 2015. All expenditures related to federal awards and state
financial assistance received directly from federal and state agencies, as well as federal and state awards
passed through other government agencies are included in the accompanying Schedule. The information
in this Schedule is presented in accordance with the requirements of the OMB Circular A-133, Audits of
States, Local Governments, and Non -Profit Organizations and Chapter 10.550, Rules of the Florida
Auditor General. Because the Schedule presents only a selected portion of the operations of the City, it
is not intended to and does not present the financial position, changes in fund balance/net position or
cash flows, where applicable, of the City. The City's reporting entity is defined in Note 1 of the City's
basic financial statements.
Note 2. Basis of Accounting
The accompanying Schedule is presented using the modified accrual basis of accounting since grants are
accounted for in the governmental fund types of the City. Such expenditures are reported following the
cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal
Governments and the Rules of the Department of Financial Services of the State of Florida, wherein
certain types of expenditures are not allowable or are limited as to reimbursement.
Note 3. Subrecipients
The City provided federal awards to subrecipients as follows:
Amount
Provided to
Name of Program/Project CFDA No. Subreipients
Community Development Block Grant:
Grant/Entitlement Grant Cluster 14.218 $ 1,584,121
Homeland Security Grant Program:
Program V 2012 97.067 276,345
Program V 2013 97.067 3,613,161
Program V 2014 97.067 179,241
Total Homeland Security Grant Program
4,068,747
Total $ 5,652,868
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City of Miami, Florida
Schedule of Findings and Questioned Costs
Fiscal Year Ended September 30, 2015
I — Summary of Independent Auditor's Results
Financial Statements
Type of auditor's report issued:
Internal control over financial reporting:
Material weakness(es) identified?
Significant deficiency(ies) identified?
Noncompliance material to financial statements noted?
Federal Awards
Internal control over major programs:
Material weakness(es) identified?
Significant deficiency(ies) identified?
Type of auditor's report issued on compliance for
major programs:
Any audit findings disclosed that are required
to be reported in accordance with Section 510(a)
of Circular A-133?
Identification of major programs:
The programs tested as major were as follows:
CFDA Number(s)
14.241
14.856
14.871
97.044
97.083
97.067
Yes
Yes
Yes
Unmodified
X No
X None Reported
X No
Yes X No
X Yes None Reported
Unmodified
X Yes No
Name of Federal Program or Cluster
Housing Opportunities for Persons with AIDS
Lower Income Housing Assistance Program — Section 8 Moderate
Rehabilitation
Section 8 Housing Choice Vouchers
Assistance to Firefighters Grant
Staffing for Adequate Fire and Emergency Response
Homeland Security Grant
16.738 Edward Byrne Memorial Justice Assistance Grant
Dollar threshold used to distinguish between type
A and type B programs:
Auditee qualified as low -risk auditee?
(Continued)
12
$ 1347,883
Yes X
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
Section I - Summary of Auditor's Results (Continued)
State Financial Assistance
Internal control over major projects:
Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? Yes X None Reported
Type of auditor's report issued on compliance for
major projects: Unmodified
Any audit findings disclosed that are required
to be reported in accordance with Chapter 10.550,
Rules of the Florida Auditor General? Yes X No
Identification of major projects:
The project tested as major is as follows:
CSFA Number(s)
40.038
Dollar threshold used to distinguish between type
A and type B projects:
13
Name of State Project
Division of Community Development
$300,000
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
Section II — Financial Statements Findings
A. Internal Control
None reported.
B. Compliance
None reported.
14
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
Section III — Federal Awards Findings and Questioned Costs
A. Internal Control over Compliance
IC 2015 — 01 Allowable Costs/Cost Principles
U.S. Department of Homeland Security
Staffing for Adequate Fire and Emergency Response (SAFER)
CFDA No. 97.083
Criteria: OMB Circular A-87 requires employees' salaries and wages to be supported by periodic
certifications when the employees are expected to work solely on a single federal award or cost objective.
These certifications should be prepared at least semi-annually and should be signed by the employee
and supervisory officials with firsthand knowledge of the work performed by the employee.
Condition: We noted that payroll certifications were not prepared for the period from March 31, 2015 to
May 31, 2015 for grant award contract EMW-2012-FH-00828.
Context: See "Condition" above.
Questioned Costs: $78,572
Cause: Lack of effective administrative oversight of the program. Management was not aware that
payroll certifications were required to be completed for the grant program's period of availability 60 day
extension period ending May 31, 2015.
Effect: Failure to comply with OMB Circular A-87's payroll certification requirements may result in a
disallowance of program expenditures and/or loss of future grant funding.
Recommendation: We recommend that the City implement internal control policies and procedures
necessary to allow for ongoing compliance with OMB Circular A-87 payroll certification requirements.
Views of Responsible Official and Planned Corrective Actions: Payroll certifications were prepared and
are on file for the period covered and specified by the original grant agreement. It is the sixty day
extension period from April 2015 thru May 2015 for which certifications were not completed because we
could not find directives specifying the need for certifications for grant extension periods.
15
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
IC 2015 — 02 Reporting
U.S. Department of Homeland Security
Staffing for Adequate Fire and Emergency Response (SAFER)
CFDA No. 97.083
Criteria: Grantees must submit a semi-annual Federal Financial Report (SF-425) within 30 days of the
periods ending June 30th (report due by July 31st) and Dec 31st (report due by Jan 30th).
Condition: We noted that the semi-annual Federal Financial Report (SF-425) for the period ending
June 30, 2015 was not submitted timely to the grantor.
Context: The June 30, 2015 semi-annual Federal Financial Report (SF-425) selected for testing was not
submitted timely to the grantor.
Questioned Costs: Not applicable.
Cause: Lack of effective administrative oversight of the program. Management was not aware of the
specific closeout reporting requirements of the grant program.
Effect: Failure to comply with program reporting requirements may result in a disallowance of program
expenditures and/or loss of future grant funding.
Recommendation: We recommend that the City implement internal control policies and procedures
necessary to allow for ongoing compliance with the reporting requirements of the grant program.
Views of Responsible Official and Planned Corrective Actions: The grant project was completed in April
of 2015 and we assumed that the SF-425 report available for completion in June of 2015 would not need
to be completed because a final SF-425 report would be turned in with the grant closeout. To get
clarification on the issue we called the FEMA Helpdesk during this time and they stated that the pending
June SF-425 did not need to be completed as the grant project was completed in April. However, in
October 2015, while trying to resolve other online system issues with the 2011 AFG grant, we again
checked the status of the SF-425 reports and saw that they were still pending and available for
completion.
The reports were then completed immediately and all on the same day as shown in the documentation
provided. Furthermore, FEMA was contacted regarding this matter on February 2, 2016. FEMA gave us
the same answer stating that the June SF-425 was not needed, however, after a further conversation
where we explained that we ended up completing the June SF-425 in October because the reports would
still show as pending online, we were then advised that indeed the reports needed to be completed if the
grant was completed within the SF-425 reporting period. Thus, a miscommunication occurred which will
be easily mitigated moving forward given the knowledge gained during our difficulties.
16
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
IC 2015 — 03 Allowable Costs/Cost Principles
U.S. Department of Housing and Urban Development
• Section 8 Moderate Rehabilitation
CFDA No. 14.856
• Section 8 Housing Choice Vouchers
CFDA No. 14.871
Criteria: Grantees must maintain complete and accurate accounts and other records for programs in
accordance with HUD requirements.
Condition: We noted the following deficiencies related to program participant records maintained by the
City:
• Section 8 Housing Choice Voucher Program — One participant's housing assistance payment
(HAP) form was not signed by City personnel, as required by program guidelines.
• Section 8 Moderate Rehabilitation — One participant's form HUD — 52517, Section 8 Moderate
Rehabilitation Program Addendum to Lease for fiscal year 2015 was not maintained in the
participant's file, as required by program guidelines.
Context:
• Section 8 Housing Choice Voucher Program — Exceptions were noted in one of sixty participant
files selected for testing.
• Section 8 Moderate Rehabilitation — Exceptions were noted in one of sixty participant files
selected for testing.
Questioned Costs:
• Section 8 Housing Choice Voucher— $10,030
• Section 8 Moderate Rehabilitation — $4,564
Cause: Lack of effective administrative oversight of the program.
Effect: Failure to maintain complete and accurate accounts and other records for the program may result
in a disallowance of program expenditures and/or loss of future grant funding.
Recommendation: We recommend that the City's Department of Community and Economic Development
adhere to its internal control policies and procedures to allow for ongoing compliance with HUD
_requirements to maintain complete and accurate accounts and other records for the program,
17
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
Views of Responsible Official and Planned Corrective Actions:
Section 8 Voucher Program
The City's Department of Community and Economic Development (the Department) agrees that the
Housing Assistance Payment (HAP) form was not signed by City staff even though it was already
executed by the other party, the landlord. The City approved the client's continued eligibility and the
leasing agreement; however, due to an administrative oversight, City staff failed to notice the missing
signature on the HAP form. This was an isolated incident as all previous years' HAP forms were properly
signed and executed. Please note that the City is never a participant in any leasing relationship with
landlords. The HAP form is utilized for the owner to agree with the City to the terms of the assistance
being extended by the Section 8 program on behalf of the client. The lack of a signature on this form did
not in any way jeopardize the lease agreement between the participant and the landlord. The City
believes that all costs charged to the program were allowable, since the City complied with all other
program rules and guidelines. Additionally, the participants in question met all eligibility requirements to
participate in the program. The City will continue to provide training to all staff in the Section 8 unit and
strengthen supervision of that unit to eliminate omissions like this. Our quality control program which was
instituted half way in the current year will be used to assess progress in our attempt to eliminate all errors
from the program.
Section 8 Moderate Rehabilitation
The Department agrees that form HUD — 52517, Section 8 Moderate Rehabilitation Program Addendum
to Lease for FY 2015 was not present in file. This was an administrative oversight since all previous
leases for, ,this tenant..and this landlord _,ingluded,form HUD-52517. The City believes that all costs
charged to the' program was allowable; since the tenant°was income qualified, the HAP payment was not
wrongly calculated and the rent was not higher than program regulations.
The City will continue to provide training to all staff in the Section 8 unit and strengthen supervision of that
unit. Our quality control program which was instituted half way in the current year will be used to assess
progress in our attempt to eliminate all sort of errors from the program.
18
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
IC 2015 — 04 Special Tests and Provisions
U.S. Department of Housing and Urban Development
Section 8 Housing Choice Vouchers
CFDA No, 14.871
Criteria: Grantees must maintain complete and accurate accounts and other records for programs, in
accordance with HUD requirements.
Condition: We noted the following deficiencies related to records kept on file for the program participants:
• One participant's rent comparable report was not present in file
• One participant's Housing Quality Standards (HQS) inspection report showed a property address
that did not match the participant's address.
Context: Exceptions were noted in two of thirteen participant files selected for testing.
Questioned Costs: $19,608
Cause: Lack of effective administrative oversight of the program.
Effect: Failure to maintain complete and accurate accounts and other records for the program may result
in a disallowance of program expenditures and/or loss of future grant funding.
Recommendation: We recommend that the City's Department of Community and Economic Development
adhere to its internal control policies and procedures to allow for ongoing compliance with HUD
requirements to maintain complete and accurate accounts and other records for the program.
Views of Responsible Official and Planned Corrective Actions:
The City's Department of Community and Economic Development (the Department) agrees that the rent
comparable report was not present in file. The completion of a rent comparable is one of the first
processes in any recertification which makes the possibility that it was not performed very remote. We
believe that the form was misfiled during the staffing turnover since the missing form is from a May 2014
recertification. The City has hired a new staff person who is experienced in processing Section 8
vouchers to replace the retired staff person. In addition, all staff in the Section 8 unit have attended
various training geared towards providing them with the necessary skills to process section 8 files with
minimum or no errors. We also believe that our newly instituted quality control program will go a long way
to reduce, if not eliminate errors in the program.
The Department agrees that the HQS inspection report shows a'property address that -did notmatch the
participant's address. However, the HQS inspection report did show the correct participant's nar e'61) the
report ,and a review of the report shows that it was indeed for the participant's residence. Thlssefror
occurred because of the use of an inspection template by the inspector which requires being vigilanf to
ensure that .all the fields. have been updated. The City is looking to a technical solution to perform
l inspections so that the need to use templates could be eliminated. Meanwhile, we wilcontinue to
provide training, additional supervision and the use of the quality control program to eliminate suclterrors.
19
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
IC 2015 — 05 Reporting
U.S. Department of Housing and Urban Development
Section 8 Housing Choice Vouchers
CFDA No. 14.871
Criteria: The Uniform Financial Reporting Standards (24 CFR section 5.801) require grantees to submit
timely Generally Accepted Accounting Principle based (GAAP-based) unaudited and audited financial
information electronically to HUD on the Financial Assessment Sub -system, FASS-PH.
Condition: We noted that GAAP-based audited financial information was not electronically submitted to
HUD on the Financial Assessment Sub -system (FASS-PH), as required by program guidelines.
Context: See "Condition" above.
Questioned. Costs: Not applicable.
Cause: The City's September 30, 2015 audited financial statements could not be submitted to the grantor
to meet the reporting requirements of the program, since program guidelines require GAAP-based
audited reports be completed on a March 31st period end basis. Management has determined that it is
not cost effective for the City to obtain audited financial statements for the period ended March 31, 2015,
in order to comply with the program's reporting requirements.
Effect: Failure to comply with program reporting requirements may result in a disallowance of program
expenditures and/or loss of future grant funding.
Recommendation: We recommend that management communicate the reporting limitations of the City to
the grantor, as it relates to the City's fiscal year, and further discuss alternative reporting options that may
be available, to comply with the program's reporting guidelines going forward.
Views of Responsible Official and Planned Corrective Actions: The City's September 30, 2015 audited
financial statements could not be submitted to the grantor to meet the reporting requirements of the
program, since program guidelines require GAAP-based audited reports be completed on a March 31st
period end basis. Management determined that it is not cost effective for the City to obtain audited
financial statements for the period ended March 31, 2015, in order to comply with the program's reporting
requirements.
To comply with the audited financial statement requirements, the City will align the fiscal year of the
program with that of the September 30, 20xx fiscal year of the City, in order to comply with 24 CFR
section 5.801. Compliance is anticipated for the fiscal year ending 09/30/2017.
20
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
IC 2015 — 06 Reporting
U.S. Department of Housing and Urban Development (HUD)
Section 8 Moderate Rehabilitation
CFDA No. 14.856
Criteria: Grantees are required to file HUD-52681, Voucher for Payment of Annual Contributions and
Operating Statement report within 45 days of HUD's fiscal year-end.
Condition: We noted HUD-52681, Voucher for Payment of Annual Contributions and Operating
Statement report was not filed within 45 days of HUD's fiscal year-end, as required by program
guidelines.
Context: See "Condition" above.
Questioned Costs: Not applicable.
Cause: Lack of effective administrative oversight of the program.
Effect: Failure to comply with program reporting requirements may result in a disallowance of program
expenditures and/or loss of future grant funding.
Recommendation: We recommend that the City adhere to its established internal control policies and
procedures to allow for the ongoing compliance with the reporting requirements of the grant program.
Views of Responsible Official and Planned Corrective Actions: The Department acknowledges that HUD-
52681, Voucher for Payment of Annual Contributions and Operating Statement report was not submitted
timely. The City worked with HUD and continues to receive reimbursements for the Section 8 moderate
rehabilitation program. To ensure that such forms are submitted timely, it has been added to the City's
external report spreadsheet and managed through a task in Microsoft Outlook which is monitored by the
Assistant to the Director and the Director of the Department.
21
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
IC 2015 — 07 Eligibility
U.S. Department of Housing and Urban Development
Housing Opportunities for Persons with AIDS (HOPWA)
CFDA No. 14.241
Criteria: The U.S. Department of Housing and Urban Development has defined total housing costs to
include both shelter and the costs for reasonable amounts of utilities. The amount necessary to cover a
resident's reasonable utility costs in determining housing assistance is the utility allowance.
Condition: We noted that one tenant was afforded a housing utility allowance in excess of the amount
allowed by program guidelines.
Context: The exception was noted in one of the sixty tenants tested.
Questioned Costs: $336
Cause: Management made a clerical error in calculating the utility allowance for the specified tenant and
the City's established internal controls did not identify the error.
Effect: The rental assistance provided to the tenant was not in accordance with the applicable
requirements of 24 CFR section 574.310 as stated in the "Criteria" above.
Recommendation: We recommend that management assess the operating effectiveness of established
internal control policies and procedures in preventing and detecting calculation errors and make
necessary changes to allow for ongoing compliance with the program guidelines, as deemed applicable.
Views of Responsible Official and Planned Corrective Actions: We concur with the auditor's observation.
The City does have procedures in place whereby the utility allowance is recalculated. There was a
clerical error due to an oversight. The City has made the appropriate adjustment to the utility allowance
credited to the client, and the housing assistance payment (HAP) has been adjusted.
22
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
IC 2015 — 08 Reporting
U.S. Department of Homeland Security
Assistance to Firefighters Grant
CFDA No. 97.044
Criteria: Grantees are required to submit the following financial and programmatic reports for each award
received, as a condition of their award acceptance:
• Federal Financial Reports (SF-425) are due within 30 days of the end of each semi-annual
period. Reports are due six months after the initial grant award date and every six months
thereafter, as applicable.
• Semi-annual Programmatic Performance Reports are due six months after the initial grant award
date and every six months thereafter, as applicable.
Condition: We noted that Federal Financial Reports (SF-425) and Semi-annual Programmatic
Performance Reports were not submitted timely to the grantor.
Context: Two of three Federal Financial Reports (SF-425) and two of three Semi-annual Programmatic
Performance Reports selected for testing were noted submitted timely,
Questioned Costs: Not applicable.
Cause: Lack of effective administrative oversight of the program.
Effect: Failure to comply with program reporting requirements may result in a disallowance of program
expenditures and/or loss of future grant funding.
Recommendation: We recommend that the City implement internal control policies and procedures
necessary to allow for ongoing compliance with the reporting requirements of the grant program.
Views of Responsible Official and Planned Corrective Actions: We are implementing steps where the
grant reporting function will be a shared function of the Grant Manager plus the Accountant Supervisor.
By having this internal control adjustment we will track and record the grant report(s) due dates as a grant
is first received with both the Grant Manager and Accountant Supervisor; both will ensure we stay in
compliance with the due dates as the reports become due. Should the reports be late due to FEMA
issues, we will document in writing our notification to FEMA and FEMA's response each time issues come
up that delay our ability to submit reports by the due date.
23
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
A. Compliance
1. CF 2015 — 01 Allowable Costs/Cost Principles
U.S. Department of Homeland Security
Staffing for Adequate Fire and Emergency Response (SAFER)
CFDA No. 97.083
See Section III — Federal Awards Findings and Questioned Costs
IC 2015-01 — Allowable Cost/Cost Principles
2. CF 2015 — 02 Reporting
D. U.S. Department of Homeland Security
Staffing for Adequate Fire and Emergency Response (SAFER)
CFDA No. 97.083
See Section III — Federal Awards Findings and Questioned Costs
IC 2015 02 Reporting
3. CF 2015 — 03 Allowable Costs/Cost Principles
➢ U.S. Department of Housing and Urban Development
Section 8 Moderate Rehabilitation CFDA No. 14.856
Section 8 Housing Choice Vouchers CFDA No. 14.871
See Section III — Federal Awards Findings and Questioned Costs
IC 2015 — 03 Allowable Costs/Cost Principles
4. CF 2015 — 04 Special Tests and Provisions
➢ U.S. Department of Housing and Urban Development
Section 8 Housing Choice Vouchers
CFDA 14.871
See Section III — Federal Awards Findings and Questioned Costs
IC 2015 — 04 Special Tests and Provisions
5. CF 2015 — 05 Reporting
➢ U.S. Department of Housing and Urban Development
Section 8 Housing Choice Vouchers
CFDA No. 14.871
See Section III — Federal Awards Findings and Questioned Costs
IC 2015 — 05 Reporting
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2015
6. CF 2015 — 06 Reporting
➢ U.S. Department of Housing and Urban Development
Section 8 Moderate Rehabilitation
CFDA No. 14.856
See Section III — Federal Awards Findings and Questioned Costs
IC 2015 — 06 Reporting
7. CF 2015 — 07 Eligibility
➢ U.S. Department of Housing and Urban Development
Housing Opportunities for Persons with AIDS (HOPWA)
CFDA No. 14.241
See Section III — Federal Awards Findings and Questioned Costs
IC 2015 — 07 Eligibility
8. CF 2015 — 08 Reporting
➢ U.S. Department of Homeland Security
Assistance to Firefighters Grant
CFDA No. 97.044
See Section III — Federal Awards Findings and Questioned Costs
IC 2015 — 08 Reporting
Section IV — State Financial Assistance Findings and Questioned Costs
A. Internal Control over Compliance
None reported.
B. Compliance
None reported.
City of Miami, Florida
Summary Schedule of Prior Years' Audit Findings
Fiscal Year Ended September 30, 2015
Findings and questioned costs in administering federal awards and state assistance:
2014-01 Equipment and Real Property Management — CFDA #16.738 and 16.804 Corrected
2014-02 Procurement, Suspension and Debarment — CFDA #16.738 and 16.804 Corrected
2014-03 Reporting — CFDA #97.083 Corrected
2014-04 Reporting — CFDA #97.067 Corrected
2014-05 Reporting — CFDA #14.871 Repeated; See IC 2015-05
2014-06 Reporting — CFDA #14.871 Corrected
2014-07 Allowable Costs/Cost Principles — CFDA #14.856 and 14.871 Repeated; See IC 2015-03
2014-08 Reporting — CFDA #14.856 Repeated; See IC 2015-06
2013-0004 Reporting CFDA #97.067 and JAG Cluster — CFDA #16.738 and 16.804 (ARRA) Corrected
26
City of Miami, Florida
Management Letter in Accordance
With Chapter 10.550, Rules of the
Florida Auditor General and
Independent Accountant's Report
on the Examination of the City's Compliance
with Section 218.415, Florida Statutes
For the Year Ended September 30, 2015
Contents
Management Letter in Accordance with
Chapter 10.550 of the Rules of the
Florida Auditor General 1-3
Appendix A — Current Year Findings and Recommendations to Improve Financial
Management 4-5
Appendix B — Status of Prior Years' Findings and Recommendations to Improve Financial
Management 6-10
Independent Accountant's Report
on the Examination of the City's Compliance
with Section 218.415, Florida Statutes
11
U5LLP
Management Letter in Accordance with
Chapter 10.550 of the Rules of the
Florida Auditor General
Honorable Mayor and Members of the
City Commission
City of Miami, Florida
Report on the Financial Statements
We have audited the financial statements of the governmental activities, the aggregate discretely
presented component units, each major fund, and the aggregate remaining fund information of the City of
Miami, Florida (the City), as of and for the fiscal year ended September 30, 2015, and have issued our
report thereon dated March 31, 2016. Our report includes a reference to other auditors who audited the
financial statements of the following component units and funds:
Component Units / Funds
Classification
• Southeast Overtown Park West Redevelopment Agency
• Omni Redevelopment Agency
• Midtown Community Redevelopment Agency
• Virginia Key Beach Park Trust
• Liberty City Community Revitalization District Trusts
• Firefighters' and Police Officers' Retirement Trust
• General Employees' and Sanitation Employees'
Retirement Trust and Other Managed Trusts
• Miami Sports and Exhibition Authority
• Downtown Development Authority
• Bayfront Park
• Civil Investigative Panel
• Coconut Grove Business Improvement District
• Wynwood Business Improvement District
nonmajor special revenue fund
nonmajor special revenue fund
nonmajor special revenue fund
nonmajor special revenue fund
nonmajor special revenue fund
aggregate remaining fund information
aggregate remaining fund information
discretely presented component unit
discretely presented component unit
discretely presented component unit
discretely presented component unit
discretely presented component unit
discretely presented component unit
This management letter does not include the results of the other auditors' testing of compliance and other
matters that are reported on separately by those auditors. Our report also includes an emphasis of matter
paragraph relating to the City's adoption of Governmental Accounting Standards Board (GASB)
Statement No. 68, Accounting and Financial Reporting for Pensions, an Amendment of GASB Statement
No. 27 and Statement No. 71, Pension Transition for Contributions Made Subsequent to the
Measurement Date, an amendment of GASB Statement No. 68, effective October 1, 2014.
THE POWER OF BEING UlNDER, T i
AUDIT I TAX N CONSULTING
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Auditor's Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States.
Other Reports and Schedule
We have issued our Independent Auditor's Report on Internal Control Over Financial Reporting and
Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance
with Government Auditing Standards; Independent Auditor's Report on Compliance for Each Major
Federal Program and State Project, Report on Internal Control Over Compliance, and Report on the
Schedule of Expenditures of Federal Awards and State Financial Assistance Required By OMB Circular
A-133 and Chapter 10.550, Rules of the Florida Auditor General; and Independent Accountant's Report
on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding
compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures
in those reports and schedule should be considered in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address findings and recommendations made in the preceding
annual financial audit report. Corrective actions have been taken to address the findings and
recommendations made in the preceding annual financial audit report, except as disclosed in Appendix B
— Status of Prior Years' Findings and Recommendations to Improve Financial Management.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government and each component unit of the reporting entity be disclosed in
this management letter, unless disclosed in the notes to the financial statements. The information is
disclosed in Note 1 to the financial statements.
Financial Condition
Section 10.554(1)(i)5.a., Rules of the Auditor General, requires that we report the results of our
determination as to whether or not the City has met one or more of the conditions described in Section
218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our
audit, we determined that the City did not meet any of the conditions described in Section 218.503(1),
Florida Statutes.
Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial
condition assessment procedures. It is management's responsibility to monitor the City's financial
condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
Annual Financial Report
Section 10.554(1)(i)5.b., Rules of the Auditor General, requires that we determine whether the annual
financial report for the City for the fiscal year ended September 30, 2015, filed with the Florida
Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with
the annual financial audit report for the fiscal year ended September 30, 2015. As of the date of this letter
the 2015 annual financial report for the City was not filed.
2
Other Matters
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter
any recommendations to improve financial management. Such recommendations are included in
Appendix A — Current Year Findings and Recommendations to Improve Financial. Management.
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have
occurred, that have an effect on the financial statements that is less than material but which warrants
the attention of those charged with governance. In connection with our audit, we did not have any such
findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida
Auditor General, Federal and other granting agencies, the Mayor and City Commission, and applicable
management, and is not intended to be and should not be used by anyone other than these specified
parties.
AsAt
Miami, Florida
March 31, 2016, except for the
examination report on the City's compliance with Section 218.415,
Florida Statutes, Local Government Investment Policies and the
report on compliance for each major federal program and state
project and report on internal control over compliance, for which
the date of each report is April 29, 2016
3
City of Miami, Florida
Appendix A — Current Year Findings and Recommendations to Improve
Financial Management
ML 2015-01 — Use of Restricted Resources
Criteria: The City should establish a funding timeline for capital project related expenditures prior to
obtaining debt financing to fund such projects. This will result in the timely utilization of debt financing
proceeds for funding projects. Also, it is the City's policy to use restricted resources first as they are
needed, followed by the use of unrestricted resources.
Condition: We noted that the City is not expending available capital project bond proceeds in a timely
manner. As of September 30, 2015, the City had $35 million of available bond proceeds restricted for
capital projects related to debt issued between fiscal years 2007 through 2010.
Cause: Lack of effective planning, budgeting, and funding of capital projects with available bond
proceeds.
Effect: Possible non-compliance with bond indentures, applicable covenants under the City's bond
resolution, and tax compliance certificates related to the respective bonds. Additionally, the City is paying
interest expense on related bonds and not utilizing the available proceeds to fund City projects.
Recommendation: We recommend that management develop a plan and budget appropriately to allow
for the utilization of available bond proceeds to fund allowable City projects. Additionally, the City should
establish defined funding timelines for individual capital projects, prior to obtaining debt financing to fund
such projects.
Views of Responsible Officials and Planned Corrective Actions: The City concurs with the
recommendation. The City continues to aggressively spend -down remaining unspent proceeds. During
fiscal year 2015 the City Commission approved the use of unspent bond proceeds to pay for Debt
Service, for certain issuances, as disclosed in the Fiscal Year 2015 Comprehensive Annual Financial
Report. This was the primary reason that the available bond proceeds restricted for capital projects
related to debt decreased significantly from last year. The City has implemented measures to minimize
the risk of this recurring. The City will focus on finding an optimal balance between issuing bonds and the
timing of the expenditures. The timing of the project related expenditures will be scrutinized and factored
into the timing of issuing the debt. Furthermore, the City will issue official letters of intent for bond issues.
The official letter of intent will enable the City to incur the expenditures and subsequently reimburse itself
from bond proceeds.
4
City of Miami, Florida
Appendix A — Current Year Findings and Recommendations to Improve
Financial Management
ML 2015-02 — Accounts Receivable
Criteria: Allowances for uncollectible receivables should be based upon historical trends and the periodic
aging of receivables. Additionally, management should assess the collectability of receivables on a
periodic basis and write-off balances not deemed to be collectible at a future date.
Condition: The City's allowance for uncollectible receivables was $32.5 million as of September 30,
2015. Management should assess the collectability of the allowed receivable balances and write-off
amounts not deemed to be collectible at a future date, after all reasonable collection efforts have been
exhausted.
Effect: Gross receivable balances reported in the financial statements may not be collectible at a future
date.
Cause: Management has been assessing the collectability of the outstanding receivable balances over
time however, formal action has not been taken to write-off amounts not deemed to be collectible at a
future date.
Recommendation: We recommend that management assess the collectability of outstanding receivables
and take formal action to write-off balances for financial statement reporting purposes, which are not
deemed to be collectible at a future date.
Views of responsible officials and planned corrective actions: The City concurs with the recommendation.
The City consistently works on collecting outstanding receivables by mailing out letters and sending
delinquent accounts to a collection agency, The City also assesses these outstanding receivables
periodically. As disclosed in the Fiscal Year 2015 Comprehensive Annual Financial Report, $13.8 million
of the $32.5 million of the allowance for uncollectible receivables is related to Parrot Jungle and Gardens
of Watson Island Inc. These payments are to begin in 2019. However, the City will establish formal
written policies on how and when to write-off balances not deemed to be collectible at a future date.
5
City of Miami, Florida
Appendix B — Status of Prior Years' Findings and Recommendations to Improve Financial
Management
Finding No Finding Title Current Year Status Other Explanation
2014-01 Use of Restricted Resources
Repeated Certain corrective actions taken.
See current year recommendation ML 2015-01.
2014-02 Grant Reimbursements Corrected
2014.03 Password Configurations Repeated
2014-04 User Access Reviews Repeated
2014-05 Data Restoration Repeated
2014-06 Change Management Repeated
2013-02 Accounts Receivable and Due From Other Government Process Corrected
2013-04 Tax Exempt Bonds; Post Issuance Compliance No longer relevant
2013-05 Information Systems General Control No longer relevant
City of Miami, Florida
Appendix B — Status of Prior Years' Findings and Recommendations to Improve Financial
Management (Continued)
ML 2014-03 — Password Configurations
Criteria: General Information Technology (IT) controls require that passwords settings be sufficient to
prevent the unauthorized access to systems and data.
Condition: We noted that password configuration settings for complexity and length do not meet the
minimum requirements as stated in the City's Acceptable Technology Use Policy.
Cause: Password configurations have not been setup to meet minimum requirements as stated in the
City's Acceptable Technology Use Policy.
Effect: Risks include unauthorized use of systems and disclosure, modification, damage, and/or loss of
proprietary information.
Recommendation: We recommend that management adjust password length and complexity
configuration settings to meet the minimum requirements as stated in the City's Acceptable Technology
Use Policy.
Prior Year Views of Responsible Officials and Planned Corrective Actions: We agree with the
recommendation. We are in the process of requesting an Administrative Policy Manual (APM) entry to
authorize the changes needed to address password length and complexity issues outlined in this finding.
APM modifications require City Manager approval which we anticipate obtaining.
Current Year Views of Responsible Officials and Planned Corrective Actions: A password complexity
policy has been submitted and is in the review process.
7
City of Miami, Florida
Appendix B — Status of Prior Years' Findings and Recommendations to Improve Financial
Management (Continued)
ML 2014-04 — User Access Reviews
Criteria: User access rights to an organization's relevant financial reporting applications or data should
be reviewed periodically by management.
Condition: We noted periodic user access reviews are not being performed for the network and Oracle to
validate that employee system access rights are appropriate based on the employee's roles and
responsibilities.
Cause: The City does not have established policies and procedures in place requiring the review of user
access rights on a periodic basis.
Effect: Risks include unauthorized use, disclosure of proprietary information, modification, damage, or
loss of data.
Recommendation: We recommend that management establish formal policies and procedures to allow
for the proper administration of user access rights on an ongoing basis. Such policies and procedures
should address the proper provisioning, modifying, removing, and periodic review of access rights
assigned to employees. Management should determine as part of the user access review that configured
access rights are appropriate based on the employee's roles and responsibilities. This review should
indicate who performed the review, when the review was performed, and if any access changes are
required.
Prior Year Views of Responsible Officials and Planned Corrective Actions: We agree with the
recommendation. We are in the process of implementing a report to be reviewed by the Department
Directors periodically. The report will show the Oracle access each person has in the department. The
Department Director will have the ability to request additional access or the removal of it if required. This
report and the mechanism to deploy it will be in place by the end of September 2015.
Current Year Views of Responsible Officials and Planned Corrective Actions: The Oracle enhancement
to facilitate the periodic review of Oracle access has been developed. We are working to send the first
communication to the stakeholders by the end of June 2016.
The Network group is currently evaluating software which will allow for periodic review and reporting of
user rights to each department.
8
City of Miami, Florida
Appendix B Status of Prior Years' Findings and Recommendations to Improve Financial
Management (Continued)
ML 2014-05 — Data Restoration
Criteria: General information technology (IT) controls require that procedures be in place to allow for the
backup and recovery of financial data on an ongoing basis.
Condition: We noted that stored data (backup) is not being tested on a periodic basis for Oracle and the
network to validate the effectiveness and content of the data backups being performed.
Cause: There is no formal policy in place requiring the periodic backup and restoration of data.
Effect: Risks include modification, damage, and/or loss of data. The lack of a strategy for cyclical testing
of the stored (backup) data exposes the City to operational disruption,
Recommendation: We recommend that management establish formal policies and procedures requiring
the periodic storage (backup) and restoration of data. Such policy should include the requirement that
stored data be tested at least on an annual basis, to validate the effectiveness and content of the data
storage (backup) being performed.
Prior Year Views of Responsible Officials and Planned Corrective Actions: An Oracle Disaster Recovery
Test is done every year prior to hurricane season. The test includes stakeholders mostly from the
Purchasing Department, Human Resources and from the Finance Department. During the second
quarter of 2014, the City relocated its disaster recovery site. This year we will conduct an Oracle Disaster
Recovery Test before June as it was done prior to last year.
Current Year Views of Responsible Officials and Planned Corrective Actions: The Network group is in the
process of developing an internal procedure to randomly test restoration of departmental data on a
semiannual basis.
9
City of Miami, Florida
Appendix B — Status of Prior Years' Findings and Recommendations to Improve Financial
Management (Continued)
ML 2014-06 — Change Management
Criteria: General Information Technology (IT) controls should provide reasonable assurance that
program changes, application configuration changes, system changes and maintenance (including
changes to system software and data structures), production processing changes (including new jobs,
schedule changes), and emergency changes are standardized, documented, approved, and subject to
formal change management procedures.
Condition: We noted that network changes are not being formally documented on a consistent basis as
required by the City's established policies and procedures.
Cause: Change management documentation requirements are not consistently being performed by City
personnel when changes are being made to the City's IT systems.
Effect: Unauthorized changes may be moved to the production environment without management's
knowledge.
Recommendation: We recommend that management adhere to its change management program and
policies which requires proper documentation for all changes to the City's IT systems.
Prior Year Views of Responsible Officials and Planned Corrective Actions: Management agrees with the
recommendation. Network changes and patches will go through the current Change Advisory Board
(CAB) process and will be documented accordingly. Target date: Immediate.
Current Year Views of Responsible Officials and Planned Corrective Actions: There is a Change
Advisory Board (CAB) that meets on a weekly basis to approve planned hardware and software major
changes to the Network and Enterprise applications. The IT department is in the process of implementing
a tool that will allow us to document incidents occurring from unplanned changes.
10
Independent Accountant's Report
The Honorable Mayor, Members of the
City Commission, and City Manager
City of Miami, Florida
We have examined the City of Miami, Florida's (the City) compliance with Section 218.415, Florida
Statutes, Local Government Investment Policies during the year ended September 30, 2015.
Management is responsible for the City's compliance with those requirements. Our responsibility is to
express an opinion on the City's compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence
about the City's compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. We believe that our examination provides a reasonable
basis for our opinion. Our examination does not provide a legal determination on the City's compliance
with specified requirements.
In our opinion, the City complied, in all material respects, with the aforementioned requirements for the
year ended September 30, 2015.
This report is intended solely for the information and use of the Florida Auditor General, the Honorable
Mayor, Members of the City Commission, the City Manager, and applicable management, and is not
intended to be and should not be used by anyone other than these specified parties.
Miami, Florida
April 29, 2016
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