HomeMy WebLinkAboutSingle Audit ReportsCity of Miami, Florida
Single Audit Reports in Accordance with
Uniform Guidance and Chapter 10.550, Rules
of the Florida Auditor General
Fiscal Year Ended September 30, 2016
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 the
Uniform Guidance 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 —18
Summary Schedule of Prior Years' Audit Findings 19
■�
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
RSM
RSM US LLP
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, 2016, 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 30, 2017. 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 Community 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 Management Trust
• Coconut Grove Business Improvement District
• Wynwood Business Improvement District
nonmajor special revenue fund
nonmajor special revenue fund
non major 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
This report does not include the results of the other auditors' testing of internal control over financial
reporting or compliance and other matters that are reported on separately by those auditors.
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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 and therefore, material weaknesses or significant deficiencies may
exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies
in internal control that we consider to be material weaknesses. We did identify a deficiency in internal
control, described in the accompanying schedule of findings and questioned costs as item IC 2016-01
that we consider to be a significant deficiency.
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.
City's Response to Finding
The City's response to the finding 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 the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
RsAi vs .cam
Miami, Florida
March 30, 2017
2
II MI
Report on Compliance for Each Major
Federal Program and State Project;
Report on Internal Control Over Compliance; and
Report on Schedule of Expenditures of
Federal Awards and State Financial
Assistance Required by the Uniform Guidance 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
RSM
RSM US UP
We have audited the City of Miami, Florida's (the City) compliance with the types of compliance
requirements described in the OMB 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 projects for the year ended
September 30, 2016. The City's major federal programs and state projects 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 federal and state statutes, regulations and the terms and
conditions 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 projects based on our audit of the types of compliance requirements referred to above. We
conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America, the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2
U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (Uniform Guidance) and Chapter 10.550, Rules of the Florida
Auditor General (Chapter 10.550). Those standards, the Uniform Guidance 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 a legal determination of the City's
compliance.
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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 projects for the year ended September 30, 2016.
Other Matters
The results of our auditing procedures disclosed instances of noncompliance, which are required to be
reported in accordance with the Uniform Guidance and which are described in the accompanying
schedule of findings and questioned costs as items CF 2016-01, CF 2016-02 and CF 2016-03. Our
opinion on each major federal program 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 Uniform Guidance 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 certain deficiencies in internal control over compliance, as described in the accompanying
schedule of findings and questioned costs as items IC 2016-02, IC 2016-03 and IC 2016-04 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.
4
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
Uniform Guidance and Chapter 10.550. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards and State Financial Assistance Required
by the Uniform Guidance 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, 2016,
and have issued our report thereon dated March 30, 2017, which contained unmodified opinions on those
financial statements, and included a reference to other auditors. 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 Uniform Guidance 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 financial statements. The information has
been subjected to the auditing procedures applied in the audit of the financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the financial statements or to the financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the schedule of expenditure of federal awards and state
financial assistance is fairly stated in all material respects in relation to the basic financial statements as a
whole.
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Miami, Florida
April 28, 2017, except for the Schedule of Expenditures of Federal Awards
and State Financial Assistance for which the date is March 30, 2017
5
City of Miami, Florida
Schedule of Expenditures of Federal Awards and State Financial Assistance
Fiscal Year Ended September 30, 2016
Federal GrentorrPess-through Grantor!Program or Cluster Title
CFDA Pass -Through Entity Identifying Passed Through Federal
Number Grant/Contract Number Number to Subrecipients Expenditures
U.S Department of Agriculture
Pass -Through Florida Department of Health
Child and Adult Care Food Program
Federal Pass -Through Miami -Dade County, Florida
Supplemental Nutrition Assistance Program
10.558 A-2384 16165FL350N1099 8 $ 185,047
S-578 16165FL350N1099116165FL350N2020 73,481
258.528
10.551 WS-SP-PT15-14-00 AA-26773.15.554,-12 5,26D
WS-CC•PY15.13.00 AA-26773-15.554-12 43,582
48.842
Federal Pass -Through Miami -Dade County, Florida
State Administrative Matching Grants for the Supplemental Nutrition 10.561 WS-SP-PY15-14-00 AA-26773-15-55-A-12 1,092
Assistance Program WS-CC-PY15.13.00 AA-26773-15.55-A-12 35,249
36,341
Total U.S Department of Agriculture 343,711
U.S Department of ttouslna and Urban Development
Community Development Block Grants/Fnttement Grants
Emergency Solutions Grant Program
Federal Pass -Through Miami -Dade County, Honda
Supportive Housing Program
14.218 8-07-MC-120013 385
B-08-MN-120016 537,267
B-09-MC-120013 5,156
5-10-MC-120013 87,030 303,315
S-11-MC-120013 188
8-12-M0-120013 209,618
B-13-MC-120013 7,531
014-MC-120013 48,879 342,323
B-15-MC-120013 1,480,305 4,229,512
B-16•MC-120013 452,346 1,436,982
2,068,560 7,072,257
14.231 E-15-MC-120002 282,222
E-16-M0•120002 127,632
409,854
14.235 FL0189L40001407 596000573 288,479
FL0190L40001407 596000573 136,806
FL0211L40001407 596000573 247,480
(Continued)
6
672,765
City of Miami, Florida
Schedule of Expenditures of Federal Awards and State Financial Assistance
Fiscal Year Ended September 30, 2016
Federal Grantor/Pass-through Grantor/Program Title
CFDA Pass -Through Entity Identifying Passed Through Federal
Number Grant/Contract Number Number to Subrecipients Expenditures
Home Investment Partnerships Program
14239 M-05-MC-120211
M-95-MC-120211
M-07-MC-120011
M-08-MC-120011
M-09-MC-120011
M-10-MC-120011
M-11-MG-12001 1
M-12-MC-120011
M-15-MG-120011
M-16-MC-120011
5 653,984
25,137
254,889
33.142
132,616
1,432,051
375.996
313,569
932, 086
28,761
4,161,631
Housing Opportunities for Persons with AIDS 14.241 F-LH-10-F005 1,507,164
F-LH-12-F005 834,107
F-LH-13-F005 589,317
F-LH-14-F005 41,359
F-LH-15-F005 4,141,048
F-LH-16-F005 3,875,421
Lower Income Housing Assistance Program -Section e, Moderate
Rehabilitation
Section 8 Housing Choice Vouchers
10,988,416
14.856 F1_145MR0001 1,750,935
FL145MROD02 614,548
2,385,484
14.871 FL145 1,665,573
Total U.S Department of Housing and Urban Development 27,355,989
U.S Department of Justice
Equitable Shanng Program
Pass -Through Office of the Florida Attorney General
Crime Victim Assistance
Public Safety Partnership and Community Policing Grants Recovery
Edward Byrne Memorial Justice Assistance Grant Program
Pass -Through Florida Department of Law Enforcement
Edward Byrne Memorial Justice Assistance Grant Program
Total Justice Assistance Grant Cluster
16.922 not applicable 343,532
not applicable 135,263
478,795
15.575 V003-14185 not applicable 1,124
V003-14185 2014VAGX0026 28.652
29,976
15710 2013ULWX0011 156,050
2014ULVi6t3043 665,359
821,439
16.738 2013-DJ-BX-0448 22,753
2015-0J-8X-1015 323,573
346,426
16.738 2015-JAGC-DADE-26-63-209 2014MU0X6092 6,819
2016-JAGC-DADE-24-43-180 2015MUBX1066 36,317
43,136
359,562
Edward Byrne Memorial Competitive Grant Program 16.751 2014-WY-BX. 0002 509,451
Total U.S Department of Justice 2,229,233
(Continued)
7
City of Miami, Florida
Schedule of Expenditures of Federal Awards and State Financial Assistance
Fiscal Year Ended September 30, 2016
CFDA Pass -Through Entity Identifying Passed Through Federal
Federal GraetorlPass-through Grantor/Program Title Number Grant/Contract Number Number to Subrecipients Expenditures
U.S Department of Labor
Federal Pass -Through Miami Cade County, Florida
ARRA-Unemployment Insurance 17.225 WS-CC-PY15-13-00 AA-26773-15-55-A-12 $ 5 52.207
WS-SP-PY'15.14-00 AA-26773-15-55-A-12 7,035
Federal Pass -Through Karol Dade County, Florida
WA Adult! Program
Federal Pass -Through Miami -Dade County, Florida
WIA Dislocated Worker Formula Grants
Federal Pass -Through Miami -Dade County, Florida
WIA Rapid Response
59.242
17.258 WS-CC-PY'15-10-00 AA-26773-15-55-A-12 336,282
WS-SP-PY'15-14-00 AA-26773-15-55-A-12 33,600
369,882
17.278 WS-CC-PY'15-13-00 AA-26773-15-55-A-12 339,664
WS-SP-PY15-14-00 AA-26773-15-55-A-12 41,337
381,001
17.278 WS-CC-Pr15-13-00 AA-26773-15-55-A-12 41,766
WS-SP-PY15.14.00 M-26773-15-55•A-12 7,588
49,294
Total WIA Cluster 300,177
Total U.S Department of Labor 859,419
U.S. Deoartment of Transportation
Pass -Through Florida Department of Transportation
Highway Planning and Construction
20.205 AQF491418334-2 nut applicable 303,917
Total U.S Department of Transportation 303,917
U.S Department of Health and Human Services
Pass -Through Miami -pads County, Florida
Temporary Assistance for Needy Families
93.558 WS-CC-PY15.13-00 M-26773-15-55-A-12 340,720
WS-SP-PY'15-14-00 AA-26773-1.5-55-A-12 40,232
380,952
Total U.S Deportment of Health and Human Services 380,952
(Continued)
8
City of Miami, Florida
Schedule of Expenditures of Federal Awards and State Financial Assistance
Fiscal Year Ended September 30, 2016
Federal Grantor/Pass-through Grantor.Program Title
CFDA
Number Grant/Contract Number
Pass -Through Entity Identifying Passed Through Federal
Number
to Subrecipients Expenditures
Executive Office of the President
Pass -Through South Flonda HiDTAIMonroe County Sheriffs Office
High Intensity Drug Trafficking Areas Program
Total Executive Office of the President
U.S Department of Homeland Security
National Urban Search and Rescue (US&R) Response System
Federal Pass Through State of Florida
National Urban Search and Rescue (US&R) Response System
Assistance to Firefighters Grant
Homeland Security Grant Program
Total U.S Department of Homeland Security
Total Expenditures for Federal Awards
95.001 HITDA Letter July 10, 2014
HITDA Letter April 09, 2015
G15M10001A
97.025 EMW-2013-CA-K000IS-501
EMW-2014-CA-K00009
97.025 EMW2015CA00042
97.044 EMW-2011-F609623
EM W-2013-FP-00810
97.067
See Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance
15-DS-P5-11-23-02-453
16 D S-P4-11- 2 3- 02- 2 45
16DS-T9-10-60-02-432
16-DS-U7-11-23-02-366
9
G16Mi0001A
G16M10001A
G15M10001A
2015-CA-00042-S01
$
$ 11,496
61,322
5,936
78,754
101,584
519,779
905,177
1,526,540
2,224
4,994
7,128
3,521,051 4,283,294
98,962
7,830 70,357
271,043 871,357
3,799,924 5323,970
6,857,638
5.868,484 $ 38,409,804
City of Miami, Florida
Schedule of Expenditures of Federal Awards and State Financial Assistance
Fiscal Year Ended September 30, 2016
State Grantor/Pass-through GrantorlProgram Title
CSFA State
Number Grant/Contract Number Expenditures
Florida Housing Finance Corporation
State Housing Initiatives Partnership (SHIP) Program
Total Florida Housing Finance Corporation
40.901 Not applicable $ 811,377
611,377
Department of Transportation
Public Transit Service Development Program 55.012 AR716 14,309
ARP46/FM#430987-2-84-01 634,866
Total Department of Transportation 649,175
Department of Health
Pass -Through Miami -Dade County, Florida
Grants to States for Construction of State Home Facilities
Total Department of Health
Florida Agency for Persons with Disabilities
Supported Employment Services -Developmental Disabilities
Total Florida Agency for Persons with Disabilities
64.005 EMS County Grant#C0013 51,195
51,195
67.011 Not applicable 66,502
66,502
Total Expenditures of State Financial Assistance $ 1,578,249
See Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance
10
City of Miami, Florida
Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance
Fiscal Year Ended September 30, 2016
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 ail federal programs and state awards of the City of Miami, Florida (the
City) for the year ended September 30, 2016. 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 Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance) 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 the Uniform Guidance 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. Indirect Cost Recovery
The City did not recover its indirect costs using the 10% de minimis indirect cost rate provided under
Section 200.414 of the Uniform Guidance.
11
City of Miami, Florida
Schedule of Findings and Questioned Costs
Fiscal Year Ended September 30, 2016
I — Summary of Independent Auditor's Results
Financial Statements
Type of auditor's report issued:
Internal control over financial reporting:
Material weakness(es) identified? Yes
Significant deficiency(ies) identified? X Yes
Noncompliance material to financial statements noted? Yes
Federal Awards
Unmodified
X No
None Reported
X No
Internal control over major programs:
Material weaknesses) identified? Yes X No
Significant deficiency(ies) identified? X Yes None Reported
Type of auditor's report issued on compliance for
major programs: Unmodified
Any audit findings disclosed that are required
to be reported in accordance with Section
2 CFR 200.516(a)? X Yes No
Identification of major programs:
The programs tested as major were es follows:
CFDA Number(s1
14.218
14.239
14.241
14.856
14.871
97.025
Name of Federal Program or Cluster
Community Development Block Grants/Entitlement Grants
Home Investment Partnerships Program
Housing Opportunities for Persons with AIDS
Lower Income Housing Assistance Program — Section 8 Moderate Rehabilitation
Section 8 Housing Choice Vouchers
National Urban Search and Rescue (US&R) Response System
Dollar threshold used to distinguish between type
A and type B programs: $ 1,152,288
Auditee qualified as low -risk auditee? Yes X No
(Continued)
12
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2016
Section I — Summary of Auditor's Results (Continued)
State Financial Assistance
Internal control over major projects:
Material weakness(es) identified?
Significant deficiency(ies) identified?
Type of auditor's report issued on compliance for
major projects:
Any audit findings disclosed that are required
to be reported in accordance with Chapter 10.550,
Rules of the Florida Auditor General?
Identification of major projects:
The projects tested as major were as follows:
CSFA Numbers)
55.012
40.901
Yes X No
Yes X None Reported
Unmodified
Yes X No
Name of State Project
Public Transit Service Development Program
State Housing Initiatives Partnership (SHIP) Program
Dollar threshold used to distinguish between type
A and type B projects: $300,000
13
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2016
Section II — Financial Statements Findings
A. Internal Control
IC 2016-01 — Self Insurance Actuarial Valuation
Criteria: An actuarial analysis should include claim experience for all years with open case reserves that
are expected to be paid by an organization in future periods when developing an estimate of the year-end
self-insurance liability.
Condition: We noted that the City's self-insurance liability actuarial valuation report did not consider claim
experience data for policy years from 1985 and prior when developing an estimate of the City's year end
self-insurance liability. Our review of the actual loss runs for this period indicated that significant case
reserves were still open for the time period that would be relevant to the actuarial analysis performed for
the fiscal year -ended September 30, 2016.
Context: The City's self-insurance liability balance was adjusted to increase the balance by approximately
$11.4 million for the fiscal year -ended September 30, 2016, which is approximately 6% of the total
liability,
Cause: Lack of effective management oversight of the actuary services provided and review of the self-
insurance liability actuarial valuation report resulted in the condition noted above. The City's actuary
determined that claim experience data for policy years from 1985 and prior were not relevant to their
analysis, even though significant case reserves were still open for such related claims.
Effect: The development of the City's Toss experience could result in the miscalculation of the estimated
liability.
Recommendation: We recommend that management personnel with requisite knowledge oversee the
actuarial services being provided and perform an in-depth review of the self-insurance liability actuarial
valuation report. We further believe that it is prudent that the actuary incorporates all relevant claims and
loss experience, which should encompass the historical period that represent the life cycle of the initiation
of the claims and their corresponding settlements.
Views of Responsible Official and Planned Corrective Actions: The City concurs with the auditor
recommendation. The administration will insist that on all future actuarial services that all data available
be used in preparation of future actuarial reports.
B. Compliance
None reported.
14
City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2016
Section III — Federal Awards Findings and Questioned Costs
A. Internal Control over Compliance
IC 2016 — 02 Reporting
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: The Uniform Financial Reporting Standards (24 CFR section 5.801) require that grantees submit
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: Lack of effective administrative oversight of the program. The City's September 30, 2016 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 315'
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, 2016, 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, 2016 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 31s1
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, 2016, 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 September 30, 2017.
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City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2016
IC 2016 — 03 Equipment and Real Property Management
U.S. Department of Homeland Security
Urban Search and Rescue (US&R)
CFDA No. 97.025
Criteria: The program Cooperative Agreement requires that equipment inventory records include the
FEMA cache number for each item, as it is specifically identified on the current FEMA approved
equipment cache list.
Condition: We noted that the equipment inventory records maintained by management did not include the
FEMA cache number for each item as required by program guidelines.
Context: See "Condition' above.
Questioned Costs: Undeterminable.
Cause: Lack of effective administrative oversight of the program. The inventory database system was not
properly designed to allow for the tracking of all pertinent inventory information as required by program
guidelines.
Effect: Failure to comply with program equipment and real property management requirements may result
in a disallowance of program expenditures and/or loss of future grant funding.
Recommendation: We recommend that the City update their equipment inventory database to include the
FEMA cache number for each item, as required by program guidelines.
Views of Responsible Official: We have contracted a vendor to update and perform the necessary
maintenance to our current database that will allow us to perform the necessary steps in -order to assure
the equipment cache number, respective PO numbers, and other vital information is loaded onto the item
description for each purchase made. This maintenance is scheduled to occur in April 2017.
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City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2016
IC 2016 — 04 Procurement and Suspension and Debarment
U.S. Department of Homeland Security
Urban Search and Rescue (US&R)
CFDA No. 97.025
Criteria: Non-federal entities are precluded from contracting with or making sub -awards for covered
transactions to parties that are suspended or debarred or whose principals are suspended or debarred.
When a non-federal entity enters in a covered transaction with an entity at a lower tier, the non-federal
entity must verify that the entity is not suspended or debarred or otherwise excluded. This verification may
be accomplished by searching the excluded parties list maintained at sam.gov, collecting a certification
from the entity, or adding a clause or condition to the contract for the covered transaction with that entity.
Condition: We noted no documentation evidencing that the City complied with the federal requirements
for verifying the suspension and debarment of vendors used in the program. The City's policy requires
that vendors be verified on the federal registry, or that management collect a certification from the vendor
regarding suspension and debarment, and/or a clause be included in the vendor contract.
Context: There was no documentation evidencing that the City complied with the federal requirements for
verifying suspension and debarment for three of the four vendors selected for testing.
Questioned Costs: Not applicable.
Cause: The City's vendor contract and procurement review controls does not incorporate an assessment
of the vendor's suspension or debarment.
Effect: Failure to comply with program procurement and suspension and debarment requirements may
result in a disallowance of program expenditures and/or loss of future grant funding.
Recommendation: As described in the condition above. A review control should be established whereby a
debarment check is completed prior to the execution of a vendor contract and subsequently verified at a
minimum on an annual basis. Additionally, documentation evidencing the verification of the suspension
and debarment of vendors used in the program should be kept on file to demonstrate compliance.
Views of Responsible Official: The City created a Program Directive that assures the purchasing team will
check the sam.gov website for each purchase we make with a supplier. The debarment record check will
be kept with our justification documents for each purchase.
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City of Miami, Florida
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30, 2016
A. Compliance
1. CF 2016 — 01 Reporting
➢ 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 2016-02 — Reporting
2. CF 2016 — 02 Equipment and Real Property Management
➢ U.S. Department of Homeland Security
Urban Search and Rescue (US&R)
CFDA No. 97.025
See Section III — Federal Awards Findings and Questioned Costs
IC 2016 — 03 Equipment and Real Property Management
3. CF 2016 — 03 Procurement and Suspension and Debarment
➢ U.S. Department of Homeland Security
Urban Search and Rescue (US&R)
CFDA No. 97.025
See Section 111— Federal Awards Findings and Questioned Costs
IC 2016 — 04 Procurement and Suspension and Debarment
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, 2016
Finding No.
Finding Title Current Year Status
Federal Awards Findings and Questioned Costs
Internal Control over Compliance Findings
IC 2015-01 Allowable Costs/Cost Principles — CFDA #97.083 Corrected
IC 2015-02 Reporting — CFDA #97.083 Corrected
IC 2015-03 Allowable Costs/Cost Principles— CFDA #14.856 and 14.871 Corrected
IC 2015-04 Special Tests and Provisions — CFDA #14.871 Corrected
IC 2015-05 Reporting — CFDA #14.871 Repeated; See IC 2016-02
IC 2015-06 Reporting — CFDA #14.856 Corrected
IC 2015-07 Eligibility — CFDA #14.241 Corrected
IC 2015-08 Reporting — CFDA #97.044 Corrected
Compliance Findings
CF 2015-01 Allowable Costs/Cost Principles — CFDA #97.083 Corrected
CF 2015-02 Reporting — CFDA #97.083 Corrected
CF 2015-03 Allowable Costs/Cost Principles — CFDA #14.856 and 14.871 Corrected
CF 2015-04 Special Tests and Provisions — CFDA #14.871 Corrected
CF 2015-05 Reporting — CFDA #14.871 Repeated; See IC 2016-02
CF 2015-06 Reporting — CFDA #14.856 Corrected
CF 2015-07 Eligibility — CFDA #14.241 Corrected
CF 2015-08 Reporting — CFDA #97.044 Corrected
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