HomeMy WebLinkAboutPACKET Audit Committee 2017-08-15
Tuesday August 15, 2017 8:30 a.m. – 10:00 a.m.
Administration Conference Room
1. CALL TO ORDER
2. NEW BUSINESS
a) 2016 CAFR and Single Audit Review
i. Review 2016 Management Letter and Single Audit Findings with Auditors.
ii. Confirm readiness for August 22, 2017 Town Board presentation.
b) Consideration of going out to bid for audit services for 2017 to 2021.
3. ADJOURN
Attachments:
Attachment A: CliftonLarsonAllen Governance Letter
Attachment B: CliftonLarsonAllen Management Letter
Attachment C: Single Audit Report for year ended 12-31-2016 **
Provided Separately CAFR for year ended 12-31-2016 **
** Hard copies of the reports will be distributed at the meeting
AUDIT COMMITTEE
AGENDA
FINANCE Memo
To: Audit Committee
Through: Town Administrator Lancaster
From: Duane Hudson, Finance Director
Date: 8/9/17
RE: Consideration of going out to bid for audit services for 2017 to 2021
Objective:
Authorize staff to solicit audit service proposals for the five year period from 2017 to
2021.
Present Situation:
CliftonLarsonAllen LLP (CLA) has completed the audit for the year ended Dec 31, 2016.
This was the fifth year on their five year contract so the Town will need to select an audit
firm for the next five year term.
The Town has historically followed the industry best practice to bid out audit services on
a periodic basis, generally once every five years. This practice allows an audit firm to
recover the initial costs associated with a new client over several years and provides
stability for both the audit firm and Town staff. Staff recommends the Town continue
this practice by soliciting proposals for a five year engagement to audit the years of
2017 through 2021.
It is also an industry best practice to allow the previous audit firm to submit a proposal
for continuance of audit services if the firm chooses to do so. While it is not mandatory
to change firms each time, when there is sufficient competition from qualified audit
firms, many governments find it is useful to change firms in order to have a fresh
perspective on the Town accounting processes. Staff recommends the Town follow
this practice as well and allow, but not require, CLA to submit an audit proposal for the
next five years.
Proposal:
Staff will issue a Request for Proposals (RFP) for audit services for the years ended
December, 31, 2017 through 2021. Staff will then work with the Audit Committee to
evaluate the proposals, develop a short list of qualified firms for consideration,
coordinate any interviews of firms, and facilitate the Audit Committee’s final decision.
It should be clearly understood that while the Finance Department works very closely
with the selected audit firm and will provide input for the Audit Committee’s
consideration, the audit firm does not work for the Finance Department. The firm is
appointed by and works for the Audit Committee and the Town Board.
Advantages:
The Town is required by State Statute, bond and debt covenants, and various grants to
have an annual financial statement audit. For Federal grants, the grant audit must also
be in compliance with 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
Requirement for Federal Awards.
Disadvantages:
Failure to have an audit conducted would put the Town in violation of the requirements
listed above.
Action Recommended:
Authorize the Finance Director to issue a RFP for audit services for the years ended
December 31, 2017 through 2021. The Audit Committee will then be invited to
participate in the selection process, firm interviews and will ultimately meet again to
make the final selection decision, currently expected sometime in October/November.
Budget:
The audit fee is budgeted in the following accounts:
101-1500-415-22-01 25%
502-6501-560-22-01 50%
503-6500-560-22-01 25%
Level of Public Interest
Low.
Sample Motion:
I move for the approval/denial to authorize staff to issue a RFP for audit services for
the years ended December 31, 2017 through 2021.
ATTACHMENTS
Board of Trustees
Town of Estes Park
Estes Park, Colorado
We have audited the financial statements of the governmental activities, the business-type activities,
the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund
information of the Town of Estes Park as of and for the year ended December 31, 2016, and have
issued our report thereon dated July 14, 2017. We have previously communicated to you information
about our responsibilities under auditing standards generally accepted in the United States of America,
Government Auditing Standards, and Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance), as well as certain information related to the planned scope and timing of our audit.
Professional standards also require that we communicate to you the following information related to our
audit.
Significant audit findings
Qualitative aspects of accounting practices
Accounting policies
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by Town of Estes Park are described in Note 1 to the financial statements.
As described in Note 1, the Town adopted the provisions of GASB Statement No. 72, Fair Value
Measurement and Application, which is effective for financial statement periods beginning after
June 15, 2015. GASB Statement No. 72 requires disclosures to be made about fair value
measurements, the level of fair value hierarchy, and valuation techniques. See Note 3 for information
related to the fair value measurement of the Town’s investments.
We noted no transactions entered into by the entity during the year for which there is a lack of
authoritative guidance or consensus. All significant transactions have been recognized in the financial
statements in the proper period.
Accounting estimates
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management’s knowledge and experience about past and current events and assumptions
about future events. Certain accounting estimates are particularly sensitive because of their
significance to the financial statements and because of the possibility that future events affecting them
may differ significantly from those expected. The most sensitive estimates affecting the financial
statements were:
Management’s estimate of depreciation expense is based on an estimated useful life of the
asset from the date it is placed in service.
CliftonLarsonAllen LLP
CLAconnect.com
Attachment A: Governance Letter Page 1
Board of Trustees
Town of Estes Park
Page 2
Management’s estimate of the net pension liability and associated deferred inflows and outflows
of resources are based on an actuarial analysis performed by the Public Employee’s Retirement
Association of Colorado.
Self-insured liabilities, including claims payable and incurred but not reported (IBNR) claims, are
estimated based on past experience and with the assistance of third party actuaries, who utilize
assumptions about inflation, recent claims, settlement trends, and other economic factors.
The Town’s other postemployment benefit obligation is determined based on an actuarial
analysis of the projected economic conditions.
Management’s estimate of the intergovernmental receivable, revenue and deferred inflow of
resources related to grant activity, specifically FEMA, is based on expenditures incurred and
recorded during 2016.
Management’s estimate of the environmental remediation is based on a drainage plan and
actual costs for completing necessary repairs and monitoring the site for three fiscal years. See
Note 6 to the financial statements.
We evaluated the key factors and assumptions used to develop these estimates in determining that
they are reasonable in relation to the financial statements taken as a whole.
Financial statement disclosures
Certain financial statement disclosures are particularly sensitive because of their significance to
financial statement users. The most sensitive disclosure affecting the financial statements is the Town’s
disclosure regarding its $75,000 liability related to future monitoring costs associated with the
environmental remediation, as described in Note 6 to the financial statements.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties encountered in performing the audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Uncorrected misstatements
Professional standards require us to accumulate all misstatements identified during the audit, other
than those that are clearly trivial, and communicate them to the appropriate level of management. The
attached schedule summarizes uncorrected misstatements of the financial statements. Management
has determined that their effects are immaterial, both individually and in the aggregate, to the financial
statements taken as a whole.
Corrected misstatements
The attached schedule summarizes all misstatements (material and immaterial) detected as a result of
audit procedures that were corrected by management.
Disagreements with management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditors’ report. No such disagreements arose during our audit.
Attachment A: Governance Letter Page 2
Board of Trustees
Town of Estes Park
Page 3
Management representations
We have requested certain representations from management that are included in the
attached management representation letter dated July 14, 2017.
Management consultations with other independent accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation
involves application of an accounting principle to the entity’s financial statements or a determination of
the type of auditors’ opinion that may be expressed on those statements, our professional standards
require the consulting accountant to check with us to determine that the consultant has all the relevant
facts. To our knowledge, there were no such consultations with other accountants.
Significant issues discussed with management prior to engagement
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to engagement as the entity’s auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses
were not a condition to our engagement.
Other audit findings or issues
We have provided a separate letter to you dated July 14 2017, communicating internal control related
matters identified during the audit.
Audits of group financial statements
We noted no matters related to the group audit that we consider to be significant to the responsibilities
of those charged with governance of the group.
Other information in documents containing audited financial statements
With respect to the required supplementary information (RSI) accompanying the financial statements,
we made certain inquiries of management about the methods of preparing the RSI, including whether
the RSI has been measured and presented in accordance with prescribed guidelines, whether the
methods of measurement and preparation have been changed from the prior period and the reasons
for any such changes, and whether there were any significant assumptions or interpretations underlying
the measurement or presentation of the RSI. We compared the RSI for consistency with management’s
responses to the foregoing inquiries, the basic financial statements, and other knowledge obtained
during the audit of the basic financial statements. Because these limited procedures do not provide
sufficient evidence, we did not express an opinion or provide any assurance on the RSI.
With respect to the schedule of expenditures of federal awards (SEFA) accompanying the financial
statements, on which we were engaged to report in relation to the financial statements as a whole, we
made certain inquiries of management and evaluated the form, content, and methods of preparing the
SEFA to determine that the SEFA complies with the requirements of the Uniform Guidance, the method
of preparing it has not changed from the prior period or the reasons for such changes, and the SEFA is
appropriate and complete in relation to our audit of the financial statements. We compared and
reconciled the SEFA to the underlying accounting records used to prepare the financial statements or
to the financial statements themselves. We have issued our report thereon dated July 14, 2017.
Attachment A: Governance Letter Page 3
Board of Trustees
Town of Estes Park
Page 4
With respect to the combining and individual nonmajor fund financial statements, budgetary schedules,
and Local Highway Finance Report (collectively, the supplementary information) accompanying the
financial statements, on which we were engaged to report in relation to the financial statements as a
whole, we made certain inquiries of management and evaluated the form, content, and methods of
preparing the information to determine that the information complies with accounting principles
generally accepted in the United States of America, the method of preparing it has not changed from
the prior period or the reasons for such changes, and the information is appropriate and complete in
relation to our audit of the financial statements. We compared and reconciled the supplementary
information to the underlying accounting records used to prepare the financial statements or to the
financial statements themselves. We have issued our report thereon dated July 14, 2017.
The introductory and statistical sections accompanying the financial statements, which is the
responsibility of management, was prepared for purposes of additional analysis and is not a required
part of the financial statements. Such information was not subjected to the auditing procedures applied
in the audit of the financial statements, and, accordingly, we did not express an opinion or provide any
assurance on it.
In connection with the entity’s annual report, we did not perform any procedures or corroborate other
information included in the annual report. Our responsibility for such other information does not extend
beyond the financial information identified in our auditors’ report. We have no responsibility for
determining whether such other information is properly stated and do not have an obligation to perform
any procedures to corroborate other information contained in such documents. However, as required by
professional standards, we read management’s discussion and analysis of financial conditions and
results of operations and considered whether the information or the manner in which it was presented
was materially inconsistent with information or the manner of presentation of the financial statements.
We did not identify any material inconsistencies between the other information and the audited financial
statements.
Our auditors’ opinion, the audited financial statements, and the notes to financial statements should
only be used in their entirety. Inclusion of the audited financial statements in a document you prepare,
such as an annual report, should be done only with our prior approval and review of the document.
* * *
This communication is intended solely for the information and use of the Board of Trustees and
management of the Town of Estes Park and is not intended to be, and should not be, used by anyone
other than these specified parties.
a
CliftonLarsonAllen LLP
Greenwood Village, Colorado
July 14, 2017
Attachment A: Governance Letter Page 4
Town of Estes Park
Year Ended
12/31/2016
Account Description Debit Credit
101-0000-126.10-02 FEDERAL GRANTS / FEMA 3,385
101-0000-222.30-00 DEFERRED REVENUE / FEDERAL GRANTS 3,385
Total 3,385$ 3,385$
502-0000-170.00-00 OTHER ASSETS / DO-CONTR AFTER MEASU DATE 24,812
502-0000-190.00-00 DEFERRED OUTFLOW / CONTR SUBSEQ TO MEAS DATE 474,829
502-0000-195.00-00 DO - Change in Proportionate Share 135,801
502-0000-196.00-00 DO - Change in Experience 23,831
502-0000-238.20-00 DEFERRED POSTEMPLOY BENEF / DEF INFL-PERA EXPERIENCE 368
502-0000-238.30-00 DEFERRED POSTEMPLOY BENEF / DEF INFL-PROPORTION SHARE 39,031
502-6301-540.14-50 Pension Expense Distribution 290,245
502-6401-550.14-50 Pension Expense - Customer Accounts 44,105
502-6501-560.14-50 Pension Expense - Admin.108,826
502-0000-238.10-00 DEFERRED POSTEMPLOY BENEF / NET PENSION LIABILITY 851,215
502-0000-263.00-00 DI - Change of Assumptions 58,179
502-6301-540.14-32 EMPLOYER BENEFITS / RETIREMENT/PERA 152,239
502-6401-550.14-32 EMPLOYER BENEFITS / RETIREMENT/PERA 23,134
502-6501-560.14-32 EMPLOYER BENEFITS / RETIREMENT/PERA 57,081
Total 1,141,848$ 1,141,848$
502-0000-333.00-00 INTERGOVERNMENTAL REVENUE / FEDERAL GRANT 269,264
502-0000-126.10-02 FEDERAL GRANTS / FEMA 269,264
Total 269,264$ 269,264$
503-0000-170.00-00 OTHER ASSETS / DO-CONTR AFTER MEASU DATE 14,178
503-0000-190.00-00 DEFERRED OUTFLOW / CONTR SUBSEQ TO MEAS DATE 270,205
503-0000-195.00-00 DO - Change in Proportionate Share 34,116
503-0000-196.00-00 DO - Change in Experience 13,618
503-0000-238.20-00 DEFERRED POSTEMPLOY BENEF / DEF INFL-PERA EXPERIENCE 223
503-0000-238.30-00 DEFERRED POSTEMPLOY BENEF / DEF INFL-PROPORTION SHARE 10,580
503-6200-530.14-50 Pension Expense - Purification 44,200
503-6300-540.14-50 Pension Expense - Operation 137,401
503-6400-550.14-50 Pension Expense - Cust. Account 14,179
503-6500-560.14-50 Pension Expense - Admin.30,744
503-0000-238.10-00 DEFERRED POSTEMPLOY BENEF / NET PENSION LIABILITY 403,369
503-0000-238.40-00 DI - Change in Assumptions 33,245
503-6200-530.14-32 EMPLOYER BENEFITS / RETIREMENT/PERA 25,918
503-6300-540.14-32 EMPLOYER BENEFITS / RETIREMENT/PERA 80,570
503-6400-550.14-32 EMPLOYER BENEFITS / RETIREMENT/PERA 8,314
503-6500-560.14-32 EMPLOYER BENEFITS / RETIREMENT/PERA 18,028
Total 569,444$ 569,444$
503-0000-126.10-02 FEDERAL GRANTS / FEMA 265,533
503-0000-333.00-00 INTERGOVERNMENTAL REVENUE / FEDERAL GRANT 265,533
Total 265,533$ 265,533$
503-0000-333.00-00 INTERGOVERNMENTAL REVENUE / FEDERAL GRANT 194,983
503-0000-279.00-00 RETAINED EARNINGS / UNRESERVED 194,983
Total 194,983$ 194,983$
General Fund
Adjusting Journal Entries JE # 1
To reallocated grant receivables and unearned revenue
Light and Power Fund
Adjusting Journal Entries JE # 1
To record GASB 68 activity based on 12/31/15 measurement date
Adjusting Journal Entries JE # 2
To reallocate grant receivables and revenue.
Adjusting Journal Entries JE # 3
Entry to record prior period adjustment to Water Fund Grants Accounts Receivable.
Water Fund
Adjusting Journal Entries JE # 1
To record GASB 68 activity based on the 12/31/15 measurement date.
Adjusting Journal Entries JE # 2
To reallocate grant receivables and revenue.
Attachment A: Governance Letter Page 5
Town of Estes Park
Year Ended
12/31/2016
Account Description Debit Credit
204-0000-126.10-08 FEDERAL GRANTS / FTA 107,956
204-0000-333.00-00 FEDERAL GRANT 107,956
Total 107,956$ 107,956$
244-0000-222.30-00 DEFERRED REVENUE / FEDERAL GRANTS 107,956
244-0000-126.10-00 INTERGOVERN. RECEIVABLE / FEDERAL GRANTS 107,956
Total 107,956$ 107,956$
To correct entry posted to wrong fund for grant receivable and unearned revenue.
Community Reinvestment Fund
Adjusting Journal Entries JE # 1
To correct funds for entry posted to incorrect fund related to grant receivable and revenue.
Trails Expansion Fund
Adjusting Journal Entries JE # 1
Attachment A: Governance Letter Page 6
UNCORRECTED ADJUSTMENTSDescriptionAssets LiabilitiesFund Balance / Net AssetsNet Expense/Revenue and Change in Net Assets / Fund BalanceTown recorded a voided check in 2016 rather than 2015. (11,780) 11,780 Net current year misstatements (Iron Curtain Method) - - (11,780) 11,780 Net prior year misstatements - - (44,474) (85,129) Combined current and prior year misstatements (Rollover Method)-$ -$ (56,254)$ (73,349)$ Financial statement totals 8,407,467$ (2,985,381)$ (5,422,086)$ 1,223,276$ Current year misstatement as a % of financial statement totals (Iron Curtain Method)0%1%Current and prior year misstatement as a % of financial statement totals (Rollover Method)1%-6%INADEQUATE DISCLOSURESAmount (If Applicable)Effect of misstatements on:Town of Estes ParkSUMMARY OF UNCORRECTED MISSTATEMENTS - AUDITDescriptionNone notedYear Ended December 31, 2016General FundAttachment A: Governance Letter Page 7
UNCORRECTED ADJUSTMENTSDescriptionAssets LiabilitiesFund Balance / Net AssetsNet Expense/Revenue and Change in Net Assets / Fund BalanceThe trial balance does not agree to the GASB 34 schedule. 22,003$ (22,003)$ Net current year misstatements (Iron Curtain Method) 22,003 - (22,003) - Net prior year misstatements- - - Combined current and prior year misstatements (Rollover Method)22,003$ -$ (22,003)$ -$ Financial statement totals59,618,198$ (15,062,407)$ (44,555,791)$ 784,992$ Current year misstatement as a % of financial statement totals (Iron Curtain Method)0%0%0%0%Current and prior year misstatement as a % of financial statement totals (Rollover Method)0%0%0%0%INADEQUATE DISCLOSURESAmount (If Applicable)SUMMARY OF UNCORRECTED MISSTATEMENTS - AUDITTown of Estes ParkBusiness Type ActivitiesYear Ended December 31, 2016Effect of misstatements on:DescriptionNone noted.Attachment A: Governance Letter Page 8
UNCORRECTED ADJUSTMENTSDescriptionAssets LiabilitiesFund Balance / Net AssetsNet Expense/Revenue and Change in Net Assets / Fund BalanceThe trial balance does not agree to the GASB 34 schedule.22,003$ (22,003)$ Net current year misstatements (Iron Curtain Method)22,003 - (22,003) - Net prior year misstatements- - - - Combined current and prior year misstatements (Rollover Method)22,003$ -$ (22,003)$ -$ Financial statement totals29,189,066$ (8,983,939)$ (20,205,127)$ (313,920)$ Current year misstatement as a % of financial statement totals (Iron Curtain Method)0.000753810%Current and prior year misstatement as a % of financial statement totals (Rollover Method)0%0%INADEQUATE DISCLOSURESAmount (If Applicable)SUMMARY OF UNCORRECTED MISSTATEMENTS - AUDITTown of Estes ParkLight and Power FundYear Ended December 31, 2016Effect of misstatements on:DescriptionNone notedAttachment A: Governance Letter Page 9
UNCORRECTED ADJUSTMENTSDescriptionAssets LiabilitiesFund Balance / Net AssetsNet Expense/Revenue and Change in Net Assets / Fund BalanceAccrued salaries are not recorded as of 12/31/16 (16,380)$ 16,380$ Net current year misstatements (Iron Curtain Method) - (16,380) 16,380 - Net prior year misstatements - - - - Combined current and prior year misstatements (Rollover Method)-$ (16,380)$ 16,380$ -$ Financial statement totals 2,304,529$ (979,313)$ (1,500,947)$ 269,739$ Current year misstatement as a % of financial statement totals (Iron Curtain Method) 0% 2% -1% 0%Current and prior year misstatement as a % of financial statement totals (Rollover Method) 0% 2% -1% 0%INADEQUATE DISCLOSURESAmount (If Applicable)SUMMARY OF UNCORRECTED MISSTATEMENTS - AUDITTown of Estes ParkVisit Estes ParkYear Ended December 31, 2016Effect of misstatements on:DescriptionNone notedAttachment A: Governance Letter Page 10
Board of Trustees and Management
Town of Estes Park
Estes Park, Colorado
In planning and performing our audit of the financial statements of the Town of Estes Park as of and for
the year ended December 31, 2016, in accordance with auditing standards generally accepted in the
United States of America, we considered the entity’s internal control over financial reporting (internal
control) as a basis for designing audit procedures that are appropriate in the circumstances for the
purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. Accordingly, we do not express an opinion
on the effectiveness of the entity’s internal control.
However, during our audit we became aware of deficiencies in internal control other than significant
deficiencies and material weaknesses and other matters that are opportunities to strengthen your
internal control and improve the efficiency of your operations. Our comments and suggestions
regarding those matters are summarized below. A separate communication dated July 14, 2017,
contains our written communication of significant deficiencies in the entity’s internal control. This letter
does not affect our report on the financial statements dated July 14, 2017.
Bank Reconciliation Procedures
We reviewed the May 2016 bank reconciliation for the Town and noted the bank reconciliation was not
reviewed until November 2016. This could result in outstanding checks and cash receipts not being
verified in a timely manner. In addition, the Town has several outstanding checks which remain
outstanding for periods greater than six months. Certain outstanding checks have been outstanding for
more than 5 years. We recommend the Town review the bank reconciliation review process to ensure
all bank reconciliations are reviewed in the subsequent month. We also recommend the Town review
all outstanding checks and remit those checks outstanding for longer than five years to the State of
Colorado as unclaimed property.
Inventory Reconciliation
The Town was unable to provide inventory detail for the 2016 fiscal year. We recommend the Town
perform and reconcile all inventory to be reported in the yearend Comprehensive Annual Finance
Report on an annual basis to help ensure all inventory balances are accurate.
Information Technology User Access
During testing over the financial software system and employee’s related user access, it was noted
certain employees have access to modules within the software system, which do not align with their job
function or job description. We recommend the Finance Department perform a review over employee’s
user access, specifically, when employees switch positions within the Town or within the Finance
Department.
CliftonLarsonAllen LLP
CLAconnect.com
Attachment B - Management Letter Page 1
Board of Trustees and Management
Town of Estes Park
Page 2
We will review the status of these comments during our next audit engagement. We have already
discussed many of these comments and suggestions with various entity personnel, and we will be
pleased to discuss them in further detail at your convenience, to perform any additional study of these
matters, or to assist you in implementing the recommendations.
This communication is intended solely for the information and use of management, the Board of
Trustees, and others within the entity, and is not intended to be, and should not be, used by anyone
other than these specified parties.
a
CliftonLarsonAllen LLP
Greenwood Village, Colorado
July 14, 2017
Attachment B - Management Letter Page 2
TOWN OF ESTES PARK
SINGLE AUDIT REPORT
YEAR ENDED DECEMBER 31, 2016
Attachment C - Single Audit Report
TOWN OF ESTES PARK
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2016
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS 1
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH
MAJOR FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL
OVER COMPLIANCE, AND REPORT ON THE SCHEDULE OF
EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE
UNIFORM GUIDANCE 3
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 6
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 7
SCHEDULE OF FINDINGS AND QUESTIONED COSTS 8
SUMMARY SCHEUDLE OF PRIOR YEAR FINDINGS 13
Attachment C - Single Audit Report
(1)
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Board of Trustees
Town of Estes Park
Estes Park, Colorado
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, the aggregate discretely presented component unit, each major
fund, and the aggregate remaining fund information of the Town of Estes Park, as of and for the year
ended December 31, 2016, and the related notes to the financial statements, which collectively
comprise the Town of Estes Park’s basic financial statements, and have issued our report thereon
dated July 14, 2017.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town of Estes
Park'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 Town of Estes
Park’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town of
Estes Park’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. However, material
weaknesses may exist that have not been identified. We did identify certain deficiencies in internal
control, described in the accompanying schedule of findings and questioned costs as items 2016-001
and 2016-002 that we consider to be significant deficiencies.
CliftonLarsonAllen LLP
CLAconnect.com
Attachment C - Single Audit Report
Board of Trustees
Town of Estes Park
(2)
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Estes Park'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.
Town of Estes Park’s Response to Findings
The Town of Estes Park’s response to the findings identified in our audit are described in the
accompanying schedule of findings and questioned costs. The Town of Estes Park’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 result 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.
a
CliftonLarsonAllen LLP
Greenwood Village, Colorado
July 14, 2017
Attachment C - Single Audit Report
(3)
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR
FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER COMPLIANCE, AND
REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
REQUIRED BY THE UNIFORM GUIDANCE
Board of Trustees
Town of Estes Park
Estes Park, Colorado
Report on Compliance for Each Major Federal Program
We have audited the Town of Estes Park’s compliance with the types of compliance requirements
described in the OMB Compliance Supplement that could have a direct and material effect on each of
the Town of Estes Park’s major federal programs for the year ended December 31, 2016. The Town of
Estes Park’s major federal programs are identified in the summary of auditors’ results section of the
accompanying schedule of findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and
conditions of its federal awards applicable to its federal programs.
Auditors’ Responsibility
Our responsibility is to express an opinion on compliance for each of the Town of Estes Park’s major
federal programs based on our audit of the types of compliance requirements referred to above. We
conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements
of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the
Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about
whether noncompliance with the types of compliance requirements referred to above that could have a
direct and material effect on a major federal program occurred. An audit includes examining, on a test
basis, evidence about the Town of Estes Park’s compliance with those requirements and performing
such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major
federal program. However, our audit does not provide a legal determination of the Town of Estes Park’s
compliance.
Opinion on Each Major Federal Program
In our opinion, the Town of Estes Park complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on each of its major federal
programs for the year ended December 31, 2016.
CliftonLarsonAllen LLP
CLAconnect.com
Attachment C - Single Audit Report
Board of Trustees
Town of Estes Park
(4)
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 2016 - 003. Our opinion on each major federal
program is not modified with respect to these matters.
The Town of Estes Park’s response to the noncompliance findings identified in our audit are described
in the accompanying schedule of findings and questions costs. The Town of Estes Park’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 Town of Estes Park 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 Town of Estes Park’s internal
control over compliance with the types of requirements that could have a direct and material effect on
each major federal program to determine the auditing procedures that are appropriate in the
circumstances for the purpose of expressing an opinion on compliance for each major federal program
and to test and report on internal control over compliance in accordance with the Uniform Guidance,
but not for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of the Town of Estes
Park’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that
there is a reasonable possibility that material noncompliance with a type of compliance requirement of
a federal program will not be prevented, or detected and corrected, on a timely basis. A significant
deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in
internal control over compliance with a type of compliance requirement of a federal program that is less
severe than a material weakness in internal control over compliance, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies 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 a certain deficiency in internal control over compliance, as described in the accompanying
schedule of findings and questioned costs as item 2016 - 003 that we consider to be a significant
deficiency.
The Town of Estes Park’s response to the internal control over compliance findings identified in our
audit are described in the accompanying schedule of findings and questioned costs. The Town of Estes
Park’s response was not subjected to the auditing procedures applied in the audit of compliance and,
accordingly, we express no opinion on the response.
Attachment C - Single Audit Report
Board of Trustees
Town of Estes Park
(5)
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type activities,
the aggregate discretely presented component unit, each major fund, and the aggregate remaining
fund information of the Town of Estes Park as of and for the year ended December 31, 2016, and the
related notes to the financial statements, which collectively comprise the Town of Estes Park’s basic
financial statements. We issued our report thereon dated July 14, 2017, which contained unmodified
opinions on those financial statements. 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 is presented for purposes of additional analysis as required
by the Uniform Guidance and is not a required part of the basic financial statements. Such information
is the responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the basic financial statements. The information has been
subjected to the auditing procedures applied in the audit of the financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the 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 expenditures of
federal awards is fairly stated in all material respects in relation to the basic financial statements as a
whole.
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CliftonLarsonAllen LLP
Greenwood Village, Colorado
July 14, 2017
Attachment C - Single Audit Report
Pass-
Through
Federal Entity Passed
Federal Grantor/Pass through Grantor/CFDA Identifying Through to Federal
Program or Cluster Title Number Number Subrecipients Expenditures
Department of Commerce
Direct Programs:
Economic Adjustment Assistance 11.307 -$ 62,000$
Total Department of Commerce Direct Programs 62,000
Department of Housing and Urban Development
Passed through Colorado Department of
Housing and Urban Development:
Community Development Block Grants—
Disaster Recovery Grants 14.269 See Note 3 - 384,810
Total Department of Housing and Urban Development 384,810
Department of Justice
Direct Programs:
Bulletproof Vest Partnership Program 16.607 - 718
Total Department of Justice Direct Programs 718
Department of Transportation
Direct Programs:
Paul S. Sarbanes Transit in the Parks 20.520 - 181,821
Passed through Colorado Department of Transportation:
Highway Planning and Construction 20.205 See Note 3 - 239,418
Passed through Larimer County
Highway Planning and Construction 20.205 374,626
Total Highway Planning and Construction 614,044
Passed through Colorado Department of Transportation:
State and Community Highway Safety 20.600 16NHTSA405B.6102 - 1,704
Total Department of Transportation 797,569
U.S. Department of Homeland Security
Passed through Colorado Department of Public Safety:
Division of Homeland Security and Emergency Management
Disaster Grants - Public Assistance 97.036 See Note 3 - 480,179
Total U.S. Department of Homeland Security 480,179
Total Expenditures of Federal Awards -$ 1,725,276$
TOWN OF ESTES PARK
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED DECEMBER 31, 2016
(6)
Attachment C - Single Audit Report
TOWN OF ESTES PARK
NOTES TO SCHEDULE OF FEDERAL AWARDS
YEAR ENDED DECEMBER 31, 2016
(7)
NOTE 1: BASIS OF PRESENTATION
The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of
the Town for the year ended December 31, 2016. All federal awards received directly from federal
agencies, as well as federal awards passed through other governmental agencies, are included in the
schedule. The information in this Schedule is presented in accordance with the requirements of 2 CFR
Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from
amounts presented in, or used in the presentation of, the basic financial statements.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
Expenditures of federal awards are recognized in the accounting period when the liability is incurred or
accrual basis of accounting. Such expenditures are recognized following the cost principles contained
in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to
reimbursement. The Town has elected to not use the 10 percent de minimis indirect cost rate as
allowed under the Uniform Guidance.
NOTE 3: PASS THROUGH ENTITY IDENTIFYING NUMBERS
The pass through award numbers for the Community Development Block Grants – Disaster Recovery
Grants were CDBGDR2-EST-01, CDBGDR2-EST-02, CDBGDR2-EST-03, CDBGDR2-EST-04,
D5DR1-40-EP2, D5DR1-40EP5, D5DR1-60-09, R1-60-EP1.2, R1-60-EP1.4, F5DR1P14013,
F5DR2P15068, and F7DR2P16026.
The pass through award numbers for the Highway Planning and Construction Grant were AQC
M405-020 and AQC M405-018.
The pass through award numbers for the Disaster Grants – Public Assistance program were PW 5,
PW 6, PW 33, PW 43, PW 50, PW 69, PW 159, PW 195, PW 197, PW 213, PW 240, PW 255, PW 258,
PW 276 and PW 958.
Attachment C - Single Audit Report
TOWN OF ESTES PARK
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED DECEMBER 31, 2016
(8)
Section I – Summary of Auditors’ Results
Financial Statements
1. Type of auditors’ report issued: Unmodified
2. Internal control over financial reporting:
Material weakness(es) identified? yes x no
Significant deficiency(ies) identified? x yes none reported
3. Noncompliance material to financial
statements noted? yes x no
Federal Awards
1. Internal control over major federal programs:
Material weakness(es) identified? yes x no
Significant deficiency(ies) identified? x yes none reported
2. Type of auditors’ report issued on
compliance for major federal programs: Unmodified
3. Any audit findings disclosed that are required
to be reported in accordance with
2 CFR 200.516(a)? x yes no
Identification of Major Federal Programs
CFDA Number(s) Name of Federal Program or Cluster
14.269 Community Development Block Grants – Disaster
Recovery Grants
20.205 Highway Planning and Construction
Dollar threshold used to distinguish between
Type A and Type B programs: $ $750,000
Auditee qualified as low-risk auditee? yes x no
Attachment C - Single Audit Report
TOWN OF ESTES PARK
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED DECEMBER 31, 2016
(9)
Section II – Financial Statement Findings
2016 – 001 Capital Assets
Type of Finding:
Significant Deficiency in Internal Control over Financial Reporting
Condition: During prior years, the Town received donations in the form of capital assets which were
not recorded within the fixed asset software at acquisition cost.
Criteria or specific requirement: Accurate financial reporting of capital assets is critical to ensure the
Town’s report is in accordance with the Governmental Accounting Standards Board.
Context: We reviewed the capital asset additions during the current year and also inquired of Town
personnel. Through the procedures performed, it was noted the Town did not record a donated asset in
prior years in the amount of $60,000.
Effect: The Town’s prior year asset registers did not properly reflect capital asset related to donated
assets.
Cause: Capital asset activity was not properly recorded and accounted for the donated capital asset
described above.
Repeat Finding: A finding over capital assets was identified as finding 2015-003 in the prior fiscal year.
Recommendation: We recommend the Town implement a process over the review of capital asset
additions to ensure all donated assets are properly recorded within the Town’s fixed asset registers.
Views of responsible officials and planned corrective actions: The Town concurs with the
recommendation. During preparation for the audit, the Town had noticed that this asset needed to be
recorded so the entry was made and then this was reported to the auditors upon start of the final audit
fieldwork. To help avoid similar issues in the future, the Finance Director has developed a process to
identify and document assets donated as well as sold throughout the year, instead of relying upon year
end inquiries. Together with the year-end inquiries, the risk of missing a similar transaction should be
reduced.
Attachment C - Single Audit Report
TOWN OF ESTES PARK
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED DECEMBER 31, 2016
(10)
2016 – 002 Custody of Electronic Signatures
Type of Finding:
Significant Deficiency in Internal Control over Financial Reporting
Condition: The Town uses electronic signature images for check signing purposes and the Town
saved the electronic signature plates on a shared Finance Department Town drive.
Criteria or specific requirement: Appropriate custody and controls surrounding electronic signatures
is critical to ensure electronic signatures are not used in a fraudulent manner.
Context: Through inquiry of Town personnel and review of internal control documents, it was noted the
Town did not have appropriate controls surrounding access to the electronic signatures required for
check signing purposes as the electronic signatures were saved on an individual user drive shared
within the Finance Department.
Effect: Electronic signatures could be used by individuals in a fraudulent manner to write checks in the
Town’s name.
Cause: The Town did not utilize electronic signatures in prior years and did not implement the proper
controls surrounding custody of the electronic signatures.
Repeat Finding: This is not a repeat finding.
Recommendation: We understand the Town has implemented controls to ensure custody of electronic
signatures required for check signing is now segregated to select individuals. We recommend the Town
continue to review and enhance internal processes to ensure proper custody of the electronic
signatures is maintained.
Views of responsible officials and planned corrective actions: The Finance Department held
discussions with our bank late in 2016 regarding fraud prevention methods available. Signature
verification is automated by the bank with no discernable difference between manual signatures and
electronic signatures. In addition, the bank does not verify or enforce dual signatures. In response, to
strengthen fraud prevention controls, the Town is in the process of implementing “positive pay” services
with the bank. This will vastly improve internal controls to prevent checks not originated by the Town
being presented against our bank account.
Attachment C - Single Audit Report
TOWN OF ESTES PARK
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED DECEMBER 31, 2016
(11)
Section III – Findings and Questioned Costs – Major Federal Programs
2016 – 003
Federal agency: U.S. Department of Transportation
Federal program title: Highway Planning and Construction
CFDA Number: 20.205
Pass-Through Agency: Colorado Department of Transportation and Larimer County
Pass-Through Number(s): See Note 3 to the Schedule of Expenditures of Federal
Awards Type of Finding:
Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Management of the Town is responsible for the accurate reporting of
financial statements, including the schedule of expenditures of federal awards (SEFA) in accordance
with 2CFR 200.510 – Financial Statements. This includes ensuring all costs reported on the SEFA were
incurred during the current fiscal year and also ensuring all costs reported on the current year SEFA
are allowable.
Condition: We identified expenditures incurred by the Town which are unallowable under the grant
agreement entered into by the Town due to only construction costs being allowable under the grant
agreement. In addition, we identified costs incurred during 2015 which were inadvertently omitted by
the Town on the 2015 SEFA related to the Highway Planning and Construction grant.
Questioned costs: $3,220.53
Context: We selected a sample of four general disbursements for allowable cost testing from a
population of twenty five general disbursements made by the Town during 2016 under the Highway
Planning and Construction grant. From our testing population of four, we identified one transaction
which was unallowable under the grant agreement and one transaction which was omitted from the
2015 SEFA.
Cause: The Town’s controls over the review of grant agreements entered into and subsequent review
of federal expenditures under the grant agreement were not operating effectively. As a result,
unallowable costs were included in the 2016 federal expenditure detail and 2015 expenditures were
omitted from the 2015 SEFA.
Effect: Unallowable costs were considered allowable by the Town and the 2015 SEFA was
understated.
Repeat Finding: A component of the current year finding surrounding the inadvertent omission of
expenditures on the prior year SEFA is a repeat finding and was identified as finding 2015 – 008 on the
2015 Schedule of Findings and Questioned Costs.
Attachment C - Single Audit Report
TOWN OF ESTES PARK
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED DECEMBER 31, 2016
(12)
Recommendation: We recommend that management continue the effort started late in 2016 to
strengthen their policies and procedures to ensure federal expenditures incurred during a fiscal year
are complete, accurate and properly recorded on the SEFA. Furthermore, we recommend that the
Finance Department take a stronger role in coordination with the Town departments of any new grants
to aid in identification of eligible costs before the grant project starts.
Views of responsible officials: The Town concurs with the finding. Beginning September 26, 2016,
the Finance Department grant coordinator began development of a new grant tracking and monitoring
process. This process documented all the activity on these grants going back to the very start of each
active grant project, some going back as far as 2011. This was an exhaustive effort, tracking all the
grant activity, including the impact of numerous FEMA grant payment reallocations made by the State.
As a result of this comprehensive effort, some expenses were identified as grant eligible that had been
missed during the 2015 accrual entries. We are confident that this new process will prevent similar
occurrences in the future.
Also, as part of this process, grant receivables on a new grant project were recorded based on the
originating department’s understanding that the grant covered all the project costs. However, the grant
coordinator discovered after year end that the grant only covered construction costs, not engineering
and design, resulting in $3,220.53 in questioned costs. Upon discovery, this was immediately reported
to the auditors. The grant reimbursement request had not been submitted at the time of discovery but it
was too late to make an accounting correction for 2016. To help avoid a similar situation in the future,
the Finance Department is requesting that the fixed term grant coordinator position which expires at the
end of 2017 be made a permanent position within the Department’s budget. If approved, the grant
coordinator could begin regular coordination efforts with the project managers in other departments to
review any new grants, including the eligible costs and other compliance requirements.
Attachment C - Single Audit Report
TOWN OF ESTES PARK
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED DECEMBER 31, 2016
(13)
Section IV – Prior Year Financial Statement Findings
2015 – 001 Prior Period Restatement
Condition: Through work performed over accounts payable, it was noted the December 31, 2014 balance
was overstated by approximately $87,325. In addition, it was also noted during the current year, a journal
entry was posted in error which created a total misstatement of approximately $174,000. Finally, through
inquiries with Town personnel, it was brought to our attention that a journal entry was made in 2015 to
correct a prior period balance; however, it was posted to current year activity in error.
Status: A prior period was identified during the 2016 fiscal year audit, however, the Town identified the
adjustment through their internal controls. As a result, internal controls appear corrected.
2015 – 002 Grant Receivables, Unearned Revenue and Revenues
Condition: During our audit procedures performed over grant revenues, we noted the Town did not
record receivables, unearned revenue and revenue during fiscal year 2014 for expenditures incurred
surrounding the Federal Emergency Management Agency (FEMA) reimbursement grant. In addition,
during 2015, the Town recorded receivables and unearned revenue in excess of current year expenditures
and recorded revenue in error to the incorrect fund.
Status: Client journal entries were prepared during the current year related to grant revenues due to the
Town’s internal control structure identifying the adjustments. As a result, internal controls appear
corrected.
2015 – 003 Capital Assets
Condition: Through work performed over capital assets, the Town was the recipient of a donated street
during 2015 valued at approximately $550,000. We noted the Town did not add the donated asset to the
capital asset register during 2015. In addition, the Town was the recipient of a donated asset in 2010
valued at approximately $400,000. We noted this asset was never placed into service by the Town,
however, it was added to the capital asset register as a non-depreciable asset. This asset was disposed of
during the current year.
Status: See current year finding 2016-001. Current year finding is related to difference asset in the
amount of $60,000.
Reason for finding’s recurrence: The Town was donated a capital asset during fiscal year 2014 which
was not properly capitalized until fiscal year 2016 as the Town’s asset registers did not properly reflect the
donated capital asset.
Corrective Action: To help avoid similar issues in the future, the Finance Director has developed a
process to identify and document assets donated as well as sold throughout the year, instead of relying
upon year end inquiries. Together with the year-end inquiries, the risk of missing a similar transaction
should be reduced.
Attachment C - Single Audit Report
TOWN OF ESTES PARK
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED DECEMBER 31, 2016
(14)
2015 – 004 Town’s Purchasing Process
Condition: Through inquiries and testing over purchases and general disbursements, we noted the Town
is issuing purchase orders after invoices are received. All disbursements over $500 are required to have a
purchase order before the goods or services are purchased.
Status: Corrected. Through current year audit procedures, no instances were identified.
2015 – 005 User Access Rights
Condition: Through work performed over user access rights, we noted individual access rights are not
updated when an employee switches positions within the Town’s Finance Department. For example,
certain employees have access rights to cash receipts and utility billing which were part of the employee’s
prior position, but unrelated to their current position.
Status: The Town has started to implement a process to review individual user access rights and as a
result, finding did not rise to the level of a material weakness or a significant deficiency in 2016 due to the
newly implemented process.
2015 – 006 Long Term Debt Continuing Disclosures
Condition: Through inquiry of the Town and work performed over debt continuing disclosures, we noted
the Town has not followed the Provision of Annual Reports requiring annual financial reports to be filed as
part of continuing disclosures with EMMA within 9 months of the end of the Town’s fiscal year.
Status: Corrected. The Town implemented a process to submit the annual financial reports with EMMA.
2015 – 007 Yearend Journal Entries
Condition: At the end of each fiscal year, the Town records a liability under GASB Statement No. 62. The
objective is to recognize the expense and related liability for maintenance and replacement of capital
assets, as necessary, to cover future costs related to the water system. Through review of this liability
account, it was noted the Town did not record the liability as of December 31, 2015 in the amount of
$108,000.
Status: Corrected. The Town has implemented a process to record the change in the liability at the end of
the fiscal year.
Attachment C - Single Audit Report
TOWN OF ESTES PARK
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED DECEMBER 31, 2016
(15)
Section V – Prior Year Findings and Questioned Costs – Major Federal Programs
2015 – 008 CFDA 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disaster)
Condition: During our testing over 2015 FEMA grant expenditures, we noted certain federal expenditures
incurred during fiscal year 2014 were inadvertently omitted from the SEFA for the FEMA grant program on
the 2014 SEFA.
Status: Prior year finding appears corrected as it did not appear costs were omitted from the SEFA in
2016.
Attachment C - Single Audit Report