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City of
Azusa
Azusa, California
Single Audit Report
For the year ended June 30, 2019
City of Azusa
Single Audit Report
For the year ended June 30, 2019
Table of Contents
Page
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 ........................................................... 1
Independent Auditor’s Report on Compliance for Each Major Program and on
Internal Control over Compliance Required by the Uniform Guidance .............................................. 3
Schedule of Expenditures of Federal Awards ................................................................................................... 7
Notes to the Schedule of Expenditures of Federal Awards ............................................................................ 8
Schedule of Findings and Questioned Costs .................................................................................................... 9
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,
To the Honorable Mayor and Members of the City Council
of the City of Azusa
Azusa, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States, the financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the City of
Azusa, California (City), as of and for the year ended June 30, 2019, and the related notes to the financial
statements, which collectively comprise the City’s basic financial statements and have issued our report
thereon dated December 31, 2019.
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.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
2
To the Honorable Mayor and Members of the City Council
of the City of Azusa
Azusa, California
Page 2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal
control or on compliance. This report is an integral 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.
Badawi & Associates, CPAs
Berkeley, California
December 31, 2019
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM
GUIDANCE,
To the Honorable Mayor and Members of the City Council
of the City of Azusa
Azusa, California
Report on Compliance for Each Major Federal Program
We have audited the City of Azusa, California (City)’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 City’s major federal programs for the year ended June 30, 2019. The City’s major federal
programs 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 statutes, regulations, and the terms and
conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the City’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 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. However, our audit does not provide a legal determination of the City’s compliance.
4
To the Honorable Mayor and Members of the City Council
of the City of Azusa
Azusa, California
Page 2
Opinion on Each Major Federal Program
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 for
the year ended June 30, 2019.
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 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 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 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.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
5
To the Honorable Mayor and Members of the City Council
of the City of Azusa
Azusa, California
Page 3
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,
each major fund, and the aggregate remaining fund information of the City, as of and for the year
ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the
City’s basic financial statements. We issued our report thereon dated December 31, 2019 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.
Badawi & Associates, CPAs
Berkeley, California
February 19, 2020, except for the schedule of expenditures of
federal awards, which is as of December 31, 2019
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City of Azusa
Schedule of Expenditures of Federal Awards
For the year ended June 30, 2019
Federal Grantor/
Catalog Pass-through Federal Subrecipient
Grantor Agency and Grant Title Number Number Expenditures Expenditures
U.S. Department of Housing and Urban Development:
Passed through County of Los Angeles
Community Development Block Grant 14.218 Contract 109620 715,806$ 17,922$
Total U.S. Department of Housing and Urban Development 715,806 17,922
U.S. Department of Justice:
Direct Program
Federal Asset Seizure 16.922 CA0190500 124,607 -
2017 JAG Grant 16.738
2017-DJ-BX-0468 12,112 -
Total U.S. Department of Justice 136,719 -
U.S. Department of Health and Human Services:
Passed through County of Los Angeles
Special Program for Aging Title III 93.045 AAA-ENP162001 157,771 -
Total U.S. Department of Health and Human Services 157,771 -
U.S. Department of Transportation:
Highway Planning and Construction Cluster
Passed through State of California Department of Transportation
Surface Transportation Program Local 20.205
STPL-5112 (018)256,175 -
Highway Safety Improvement Program Local 20.205
STPL-5112 (020)1,356 -
Highway Planning and Construction - ARRA 20.205
ESPL-5112(012)985 -
Subtotal Highway Planning and Construction Cluster 258,516 -
Highway Safety Cluster
Passed through State of California Office of Traffic Safety
Selective Traffic Enforcement Program 20.600
PT18005 35,374 -
Selective Traffic Enforcement Program 20.600
PT19005 43,598 -
Subtotal Highway Safety Cluster 78,972 -
Total U.S. Department of Transportation 337,488 -
Total Expenditures of Federal Awards 1,347,784$ 17,922$
See accompanying Notes to Schedule of Expenditures of Federal Awards.
7
City of Azusa
Notes to the Schedule of Expenditures of Federal Awards
For the year ended June 30, 2019
8
A. Reporting Entity
The accompanying schedule presents only the expenditures incurred by the City of Azusa, California,
that are reimbursable under federal programs of federal financial assistance. For the purposes of this
schedule, federal awards include both federal financial assistance received directly from a federal
agency, as well as federal funds received indirectly by the City from a non-federal agency or other
organization. Only the portion of program expenditures reimbursable with such federal funds is
reported in the accompanying schedule. Program expenditures in excess of the maximum federal
reimbursement authorized or the portion of the program expenditures that were funded with state,
local or other non-federal funds are excluded from the accompanying schedule.
B. Basis of Accounting
Funds received under the various grant programs have been recorded within the general, special
revenue, and capital projects funds of the City. The City utilizes the modified accrual basis of
accounting for the general, special revenue, and capital projects funds. Expenditures of federal awards
reported on the Schedule of Expenditures of Federal Awards (Schedule) are recognized when incurred.
C. Relationship of Schedule of Expenditures of Federal Awards to Financial Statements
The accompanying Schedule presents the activity of all federal financial assistance programs of the City.
Federal financial assistance received directly from federal agencies as well as federal financial assistance
passed through the State of California is included in the Schedule.
The Schedule was prepared only from the accounts of various grant programs and, therefore, does not
present the financial position or results of operations of the City.
D. Pass-Through Entities’ Identifying Number
When federal awards were received from a pass-through entity, the Schedule shows, if available, the
identifying number assigned by the pass-through entity. When no identifying number is shown, the
City determined that no identifying number is assigned for the program or the City was unable to
obtain an identifying number from the pass-through entity.
E. Indirect Costs
The City did not elect to use the 10% de minimus indirect cost rate as allowed under the Uniform
Guidance.
City of Azusa
Schedule of Findings and Questioned Costs
For the year ended June 30, 2019
9
Section I – Summary of Auditor’s Results
Financial Statements
Types of auditors’ report issued on whether financial statements
audited were prepared in accordance with GAAP: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? No
Significant deficiency(ies) identified? None noted
Any noncompliance material to the financial statements noted No
Federal Awards
Internal control over major programs:
Material weakness(es) identified? No
Significant deficiency(ies) identified? None noted
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 200.516(a) No
Identification of major programs:
CFDA Number(s) Name of Federal Program or Cluster Expenditures
14.218 Community Development Block Grants/Entitlement Grants 715,806$
Total Expenditures of All Major Federal Programs 715,806$
Total Expenditures of Federal Awards 1,347,784$
Percentage of Total Expenditures of Federal Awards 53%
Dollar threshold used to distinguish between type A and type B program $750,000
Auditee qualified as low-risk auditee under
section 200.520? Yes
City of Azusa
Schedule of Findings and Questioned Costs, Continued
For the year ended June 30, 2019
10
Section II – Current Year Findings
A. Current Year Findings – Financial Statement Audit
No current year findings.
B. Current Year Findings and Questioned Costs – Major Federal Award Program Audit
No current year findings or questioned costs.
Section III- Prior Year Findings
A. Prior Year Findings – Financial Statement Audit
No prior year findings.
B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit
No prior year findings or questioned costs.