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Audit - 2011/2012 SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT December 31, 2012 and 2011 CLUBINE AND RETTELE, CHARTERED CERTIFIED PUBLIC ACCOUNTANTS SALINA, KANSAS SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas TABLE OF CONTENTS Page FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT 1-2 MANAGEMENT'S DISCUSSION AND ANALYSIS 3 Exhibit I STATEMENTS OF NET POSITION 4 Exhibit II STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - BUDGET AND ACTUAL 5 Exhibit III STATEMENTS OF CASH FLOWS 6 NOTES TO FINANCIAL STATEMENTS 7-10 SUPPLEMENTAL INFORMATION Schedule 1 GRANTS FROM THE STATE OF KANSAS 11 Schedule 2 FEES FOR SERVICES 12 SINGLE AUDIT SECTION 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 13-14 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 15-16 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 17 NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 18 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 19 CORRECTIVE ACTION PLAN 20 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 21 SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas FINANCIAL SECTION C U INE RE E& TIE INDEPENDENT AUDITORS' REPORT I- 1 .l 1LL C To the Governing Board Salina-Saline County Board of Health Certified Public Accountants Salina, Kansas We have audited the accompanying financial statements of Salina-Saline County Board of Health, Salina, Kansas, as of and for the years ended December 31, 2012 and 2011, and the related notes to the financial statements, which collectively comprise the basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial Robert I. Clubine,CPA statements in accordance with accountin g principles generally accepted in the United David A. Rettele,CPA Jay D. Langley,CPA,COMA States of America; this includes the design, implementation, and maintenance of internal Jon K. Bell,CPA control relevant to the preparation and fair presentation of the financial statements that are Leslie M. Corbett, CPA free from material misstatement, whether due to fraud or error. Stacy J.Osner,CPA Auditors' Responsibility Marci K. Fox,CPA Linda A.Suelter,CPA Our responsibility is to express opinions on these financial statements based on our audit. Valerie K. Linenberger,CPA We conducted our audit in accordance with auditing standards generally accepted in the Johnna R.Vosseller,CPA 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 Kansas Municipal Audit and Accounting Guide, prescribed by the Director of Accounts and Reports, Department of Administration of the State of Kansas. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 218 South Santa Fe We believe that the audit evidence we have obtained is sufficient and appropriate to P.O. Box 2267 provide a basis for our audit opinions. Salina,Kansas 67402-2267 Basis for Qualified Opinion As described in Note 1. B.(2), management has not included the capitalization and Salina depreciation of property and equipment. Accounting principles generally accepted in the 785/825-5479 United States of America require that assets with useful lives of one year or more be 785 Fax capitalized and depreciated. The amount that should be capitalized and depreciated is not 785/825-2446 P P P� p reasonably determined. Ellsworth 785/472-3915 Qualified Opinion Ellsworth Fax 785/472-5478 In our opinion, except for the effects of the matter described in the"Basis for Qualified Opinion" paragraph, the financial statements referred to above present fairly, in all material respects, the financial position of the Salina-Saline County Board of Health at December 31, 2012 and 2011, and changes in financial position and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. (1) Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on page 3 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audits were conducted for the purpose of forming opinions on the basic financial statements taken as a whole. The supplemental information on pages 11 and 12 is presented for purposes of additional analysis and is not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements of Salina- Saline County Board of Health. The supplemental information and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate 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 information is fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 21, 2013, on our consideration of Salina-Saline County Board of Health's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Salina-Saline County Board of Health's internal control over financial reporting and compliance. CLUBINE AND RETTELE, CHARTERED G1,6t4�c 44,d 4 G( August 21, 2013 (2) SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas MANAGEMENT'S DISCUSSION AND ANALYSIS The management of the Salina-Saline County Board of Health provides readers of the Board of Health's financial statements an overview and analysis of the Salina-Saline County Board of Health's financial activities for the year ended December 31, 2012. Please read it in conjunction with the Board's financial statements which begin on page 4; Financial Highlights_ 1. Due to structural concerns at the current.location the Health Department, had to move out of the building located at 125 W. Elm. Unbudgeted moving expenses of approximately $90,000 were incurred in the move to 148 N. Oakdale and 625 E. North St. Condensed Financial Information 2012 201.1. Total Assets $ 2,285,882 $ 2,336,510 Total Liabilities (638,458) (620,452) Deferred Inflows of Resources (20,007) (18,422) Total Net Position ,$ 1,627,417 $ 1,697,636 Revenues Appropriations $ 1,790,225 $ 1,790,225 Grants 772,318 819,152 Fees for services 986,713 962,522 Interest income 1,534 1,196 Miscellaneous 336,837 282,960 Total Revenues 3,887,627 3,856,055 Expenses Personal services 2,875,350 2,873,506 Contractual services 423,569 474,866 Supplies 265,411 211,654 Admistrative 393,516 358.,485 Total Expenses 3,957,846 3,918,511 Excess (Deficit) of Revenue over Expenses (70,219) (62,456) Beginning Net Position 1,697,636 1,760,092 Ending Net Position $ 1,627,417 $ 1.,697,636 Future. 1. Complete the community health assessment. 2. Develop a quality improvement plan. 3. Next step in finalizing future building issues. (3) SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas Exhibit:I STATEMENTS OF NET POSITION D:ecerribet'31, 201.2. 2011 Assets Cash $ 1,929,509 $ 2,019,936 Accounts receivable State Of Kansas (Note 5) 105;61.6 63;4.0.4 Medicare and Medicaid 175';535 150,54.5 Other care services 7.5222 102,625 Total.Assets; $ 2,285,882 $ 2,336,510 Liabilities Vouchers payable $ 22,650 <$. 26;561 Accrued salaries 43,169 42;451 Accrued liability for compensated absences 296,425 270,242 Animal Shelter Reward fund payable 27.6,2&4 28,1,.1,98 Total Liabilities 638,458. 620,452 Deferred Inflows of Resources (Note 5) 20;0Q7 . __ 18,422 :Net;Position. Unrestricted' _ 1;627;41'7 .1,69:7,636. Total Liabilities, Deferred Inflows of Resources and Net Position $ 2,285,882 $ 2,336,51:0 The accompanying notes are an integral part of these financial statements. (4) SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas Exhibit II STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - BUDGET AND ACTUAL For the Year Ended December 31, 2012 2011 Actual . __ _Budget_ _ _Actual Budget Revenues - Appropriation from Saline County, Kansas $ 772,124 $ 772,124 $ 772,124 $ 772,124 Appropriation from City of Salina, Kansas 1,018,101 1,018,101 1,018,101 1,018,101 Grants from the State of Kansas 772,318 769,320 819,152 813,022 Fees for services 986,713 929,705 962,522 966,871 Interest income 1,534 - '1,196 - Miscellaneous revenues 336,837 343;600 282,960 233,500 Total Revenues 3,887,627 3,832,850 3,856,055 3,803,6.18 Expenses Personal Services Salaries 2,239,404 2,233,294 2,248,107 2,228,295 Social security 157,443 170,847 157,686 170,465 Retirement 173,451 169,077 163,217 156,785 Health insurance 302,840 347,228 299,794 325,416 Unemployment insurance 2,212 4,690 4,702 8,022 Contractual Services Professional services 255,895 275,414 312,056 255,635 Professional meetings 19,935 15,000 12,815 15,000 Memberships and dues 3,927 4,000 4,011 4,150 Building and grounds 26,305 16,000 41,181 61,905 Mileage 48,041 62,500 48,482 60,000 Shelter refund 69,466 60,000 56,321 50,000 Sup ip es Clinical and medical supplies 139,053 130,000 123,718 138,000 Animal supplies and donation fund expense 111,342 15,000 85,853 18,828 Environmental supplies 15,016 1,500 2,083 3,750 Administrative Telephone 22,734 30,000 19,415 26,000 Office supplies 53,387 29,000 55,931 30,072 Postage and express 15,785 13,000 14,928 14,000 Service contracts and equipment lease 66,697 63,000 65,253 58,000 Printing 687 500 - -. Books and periodicals 610 500 - Auditing 8,200 8,300 8,200 8,000 Accounting 700 700 850 700 Insurance 53,331 83,000 84,187 88,395 Equipment maintenance and repair 1,000 509 1,200 Gasoline and oil 13,313 12,000 9,387 12,000 Utilities and water 51,515 50,000 47,974 50,000 Custodial services 5,161 8,000 4,015 6,000 Health education 4,782 20,000 41,000 13,000 Moving expenses 88,795 - - Miscellaneous Capital Equipment 7,819 10,000 6,836 Total Expenses _-_ 3,957,846 . 3,833,550 3,918,511, 3,803,618 Excess (Deficit)of Revenues over Expenses (70,219) $ (700) (62,456) $ - Net Position, January 1 1;697;636 1,760,092 Net Position, December 31 $ 1,627,417 $ 1,697,636 The accompanying notes are an integral part of these financial statements. (5) SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas Exhibit III STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2012 2011 Cash Flows From Operating Activities Saline County, Kansas $ 772,124 $ 772,124 City of Salina, Kansas 1,018,101 1,018,101 Grants 731,691 861,903 Fees 989,126 1,032,136 Miscellaneous 336,837 282,960 Interest income 1,534 1,196 Cash paid to suppliers and others (1,727,337) (1,615,170) Cash paid to employees for services (2,212,503) (2,239,164) Net Cash Provided (Used) by Operating Activities _ (90,427) 114,086 Increase (Decrease) in Cash (90,427) 114,086 Cash at Beginning of Year 2„019,936 1,905,850 Cash at End of Year $ 1,929,509 $ 2,019,936 RECONCILIATION OF EXCESS (DEFICIT) OF REVENUES OVER EXPENSES TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Excess (Deficit) of Revenues over Expenses - Exhibit II $ (70,219) $ (62,456) Adjustments to reconcile excess (deficit) of revenues over expenses to net cash provided by operating activities Decrease (Increase) in accounts receivable (39,799) 110,480 Decrease in vouchers payable (3,911) (15,069) Increase(Decrease) in accrued salaries 718 (475) Increase in accrued compensated absences 26,183 9,418 Increase (Decrease) in Animal Shelter Reward fund payable -(4,984) 70,303 Increase in deferred income 11585 Total Adjustments _ (20,208) 176,542 Net Cash Provided (Used) by Operating Activities $ (90,427) $ 114,086 The accompanying notes are an integral part of these financial statements. (6) SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas NOTES TO FINANCIAL STATEMENTS December 31, 2012 and 2011 1. Summary of Significant Accounting Policies A. Reporting Entity The Salina-Saline County Board of Health was formed on June 28, 1955, under the Joint Resolution and Agreement of the County of Saline and the City of Salina. The Board of Health is a joint venture organized for the purpose of promoting the public health and sanitation of the county and city. The Governing Body of the Board of Health is composed of eleven members, three appointed City Commissioners, three appointed County Commissioners, and five members selected by the six appointed Commissioners. The Board of Health is considered a joint venture between the County of Saline and the City of Salina due to ongoing financial responsibility of those governments for the Board of Health. B. Basis of Statement Presentation The Board of Health maintains its accounting records in accordance with modified accrual basis of accounting. The significant accounting policies followed by the Board of Health are described below. 1) The accompanying financial statements have been prepared on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues from cost-reimbursement grants are recognized in the period the expenditure is made. Effective January 1, 2012, the Board of Health implemented the provisions of GASB No. 62— Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 GASB and AICPA Pronouncements. Implementation of this statement required modification to the disclosure in the Summary of Significant Accounting Policies. Effective January 1, 2012, the Board of Health implemented GASB No. 63 —Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. This resulted in the replacement of the Board's Balance Sheet with a Statement of Net Position. In addition, previously reported deferred income items are identified as Deferred Inflows of Resources. Deferred Inflows of Resources arise when grant monies are received prior to the incurrence of qualifying expenditures. 2) Accounting principles generally accepted in the United States of America require that property and equipment be capitalized and depreciated. The accompanying financial statements do not conform with U.S. generally accepted accounting principles in that property and equipment is not capitalized and depreciated. 3) Individual accounts receivable are written off to bad debt expense in the period in which it is determined that they are uncollectible. The Board of Health considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is required. 4) For purposes of the Statements of Cash Flows, cash equivalents include time deposits and all highly liquid debt instruments with maturities of three months or less. 5) The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. Budget The Board of Health does not have tax levying powers and is not required to publish a budget. A budget is adopted annually by the governing board for the purpose of determining appropriations to be requested from Saline County and the City of Salina. The budget is prepared on the modified accrual basis of accounting. (7) 3. Deposits The carrying amount of the Board of Health's bank deposits were $1,917,296 and $2,014,089, and the bank balances were $2,005,036 and $2,011,627 at December 31, 2012 and 2011, respectively. The differences are cash on hand, outstanding checks and deposits. In accordance with Kansas statutes, collateral securities were held under joint custody receipts issued by a third-party bank, which is independent of the depository financial institution, to secure balances in excess of the $250,000 FDIC coverage. 4. Appropriations from Taxing Authorities Saline County and the City of Salina share the net operating costs of the Board of Health. Necessary funds are included in the tax levies of the respective municipalities, and are summarized by the following schedule: 2012 2011 Saline County, Kansas Regular tax appropriation $ 772,124 $ 772,124 City of Salina, Kansas Regular tax appropriation $ . 1.,01.8,101 $ _ 1,018,101. 5. Grants from the State of Kansas Agreements were in effect during 2012 and 2011 with the State of Kansas regarding certain grants which were funded by federal and state monies. Current agreements are for the state's fiscal year ended June 30, 2013. Unless specifically noted, the grants are payable 25% on or about July 1, and 12.5% on or about October 1, November 15, January 1, February 15, April 1, and May 15. Unexpended grant amounts are periodically withheld from grant payments. If expenditures for these programs exceed the grant award, the Board of Health is responsible for the excess. Descriptions of the grants follow: Federal Programs Maternal and Child Health Program Matching funds are provided to furnish comprehensive health care services for mothers and infants, children and adolescents. The current agreement provides that the Board of Health will receive $74,626. Family Planning Program Matching funds are provided to establish and maintain family planning centers to furnish and disseminate • information concerning planned parenthood. The current agreement provides that the Board of Health will receive $37,528. Special Supplemental Food Program.for Women, lnf ants, and Children (WIC) Reimbursements are provided for administrative costs of the Women, Infants and Children Supplemental Food Program. The program provides nutritious foods for pregnant and nursing women, infants up to age 1 year, and children up to age 5 years. The current agreement provides that the Board of Health will be reimbursed monthly for actual expenses up to $314,974, plus any reallocated federal funds that may become available. This program is on an October 1 through September 30 fiscal year. Ryan White Treatment Modernization Act Program Funds are provided for services performed for new and previously diagnosed HIV positive persons. The current agreement provides that the Board of Health will receive$53,338. Child Care Institutions Licensing Program Funds are provided for the evaluation, registration, and licensing of homes and/or centers caring for children. The current agreement provides that the Board of Health will receive$90,293 payable in quarterly amounts based on the number of licenses issued. (8) Immunization Action Plan Funds are provided for the implementation of an increased age-appropriate level of immunization for children aged birth to two years. The current agreement provides that the Board of Health will receive $47,718 which includes $34,261 specifically for the Women, Infant Children (WIC) Immunization Collaboration. Lead Poisoning Prevention Program Funds are provided for elevated blood level inspection per protocols to identify lead hazards of children. The current agreement provides a maximum payment of$200 per address per year for elevated blood level inspection services. Public Health Emergency Preparedness and Response Program Funds are provided to build and strengthen the abilities of public health departments to respond effectively to public health threats, whether they are natural, unintentional, or intentional events, through the Public Health Emergency Preparedness cooperative agreement(PHEP). The current agreement provides that the Board of Health will receive $80,028. State Programs General Health Services-State Formula Grant Matching funds are provided to help insure that adequate health services are available to the Saline County Community. The current agreement provides that the Board of Health will receive $38,705 payable in quarterly installments. Local Environmental Protection Program Funds are provided for the development and implementation of the Lincoln, Ellsworth, Ottawa, and Saline County Sanitary Codes. The agreement was not renewed at July 1, 2012. Tuberculosis Control Program Funds are provided to expand services for people with low income who are not eligible for medicaid, have no health insurance and no other means of payment for diagnosis and/or treatment of tuberculosis. The current contract agreement provides that the Board of Health will receive $3,000. The Board of Health periodically receives payments in advance or reimbursements to finance expenditures incurred in administering the above programs. The following schedules summarize accounts receivable and deferred inflows of resources at December 31, 2012 and 2011: - Accounts Receivable Special Supplemental Food Program for Women, Infants, and Children $ 81,948 $ 63,095 Public Health Emergency Preparedness 21,144 Family Planning 2,000 - Tuberculosis Control Program 524 309. Total Accounts Receivable $__ _ 105,616 Deferred Inflows of Resources Public Health Emergency Preparedness $ 20,007 $ 5,501 Local Environmental Protection Program - 12,921- Total Deferred Inflows of Resources $ 20,007 $ 18,422 (9) 6. Home Health Agency The Board of Health provides services to patients which are reimbursed by third party payers, principally Medicare and Medicaid. Total fees for services include reimbursements made under the Medicare and Medicaid programs. 7. Defined Benefit Pension Plan Plan Description: The Board of Health participates in the Kansas Public Employees Retirement System (KPERS), a cost-sharing multiple-employer defined benefit pension plan as provided by K.S.A. 74-4901, et seq. KPERS provides retirement benefits, life insurance, disability income benefits and death benefits. Kansas law establishes and amends benefit provisions. KPERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to KPERS, 611 South Kansas, Suite 100, Topeka, KS 66603-3803 or by calling 1-888-275-5737. Funding Policy: K.S.A. 74-4919 establishes the KPERS member-employer contribution rate at 4%for members hired before July 1, 2009 (Tier 1) and 6%for members hired on or after July 1, 2009 (Tier 2) of covered salary. The employer collects and remits member-employee contributions according to the provisions of section 414(h) of the Internal Revenue Code. State law provides that the employer contribution rate be determined annually based on the results of an annual actuarial valuation. KPERS is funded on an actuarial reserve basis. State law sets a limitation on annual increases on the contribution rates for KPERS employers. The employer rate established for calendar year 2012 was 8.34%. Included in this rate is the contribution for Group Death and Disability Insurance of 1.00%. From April 1, 2012 through June 30, 2012, there was a moratorium on the collection of the premium of 1.00% of the Group Death and Disability Insurance rate. The Board of Health employer contributions to KPERS for the years ended December 31, 2012, 2011 and 2010 were$173,451, $163,217 and $161,430, respectively, equal to the required contributions for each year. 8. Lease Agreement Commencing December 13, 2011, the Board of Health updated their copier lease agreement to include additional copiers and printers. The new lease term is 60 months. The lease payment is $2,725 per month. Total rent expense under this lease was$36,088 and $36,088 for the years ending December 31, 2012 and 2011, respectively. Future minimum rental payments required under the lease are as follows: December 31, 2013 $ 32,700 December 31, 2014 32,700 December 31, 2015 32,700 December 31, 2016 32,700 9. Other Post Employment Benefits As a joint venture between Salina County and the City of Salina, the Board of Health participates in the City's defined benefit healthcare plan that is administered by the City. The Employee Benefit Plan (the Plan) provides medical and dental benefits to eligible early retirees and their spouses. K.S.A. 12-5040 requires all local governmental entities in the state that provide a group health care plan to make participation available to all retires and dependents until the retiree reaches the age of 65 years. No separate financial report is issued for the Plan. The Board of Health is not required to make contributions to the plan. The OPEB cost, actuarial valuations of the ongoing plan and net OPEB obligations for the Board of Health as a sub- group of the plan, are calculated and recorded in the City's Comprehensive Annual Financial Report. 10. Subsequent Events The Board of Health's management has evaluated events and transactions occurring after December 31, 2012 through August 21, 2013. The aforementioned date represents the date the financial statements were available to be issued. The Saline County Commission at their meeting on August 20, 2013, indicated that the Board of Health will become a . department of Saline County effective January 1, 2014. The intention is that the Board of Health will move back to their previous location, once necessary repairs have been completed. (10) SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas SUPPLEMENTAL INFORMATION SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas Schedule 1 GRANTS FROM THE STATE OF KANSAS For the Year Ended December 31, 2012 _201.1 _. Federal Programs Maternal and Child Health Program $ 76,738 $ 76,277 Family Planning Program 42,895 41,098 Women, Infants and Children Supplemental Food Program 329,632 • 360,279 Women, Infants and Children Immunization Collaboration 30,584 26,908 Ryan White Treatment Modernization Act Program 53,338 53,761 Child Care Licensing Program 89,630 79,984 Immunization Action Plan 12,185 10,914 Lead Poisoning Prevention 2,760 1,000 Public Health Preparedness and Response Program 79,662 62,522 Evidence-Based Public Health Mini-Grant _ 5,794• Total Federal Programs 717;424 718;537. State Programs General Health Services- State Formula Grant ;38;4'52 38;46:1, Local Environmental Protection Program 1'2,927 50,58 Breast Feeding Refund 1A0 Healthy Homes and Lead 150. Miscellanous grant 325 - Tuberculosis Control Program 3,196' _ _ 2,846, Total State Programs 54;894 100;61'5.. ToCal'G�aiifs; $; 1772';3.18:. ,$, __ 819152 (11) SAUNA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas Schedule 2 FEES FOR SERVICES For the Year Ended December 31, 2012 _ 2011 Title XVIII $ 336,348 $ 325,804 Title XIX 202,405 196,378 Patients and insurance 113,880 149,555 Home care services 25,360 19,840 Homemaker services 3,531 3,987 Family planning services 33,520 30,203 General nursing clinics 15,839 13,498 Environmental health fees 85,040 36,560 Day care provider fees 11,652 13,654 Senior care fees 4,125 2,730 Immunizations 155,013 170,313 Total Fees for Services 6 .9.86,713 $ 962,522 • (12) SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas SINGLE AUDIT SECTION • CLUBINE INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL RETTELE& REPORTING ON AN AUDIIT OF FINANCIAL PE FORMED IN CHARTERED ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Certified Public Accountants To the Governing Board Salina-Saline County Board of Health Salina, Kansas We have audited, in accordance with the auditing standards generally accepted in the Robert I. Clubine,CPA United States of America and the standards applicable to financial audits contained in David A. Rettele,CPA Government Auditing Standards issued by the Comptroller General of the United States, Jay D. Langley,CPA,CGMA and the Kansas Municipal Audit and Accounting Guide, prescribed by the Director of Jon K.Bell,CPA Accounts and Reports, Department of Administration of the State of Kansas, the financial Leslie M.Corbett,CPA statements of the business type activities of Salina-Saline County Board of Health, as of Stacy J.Osner,CPA and for the years ended December 31, 2012 and 2011 and the related notes to the financial statements which collectively comprise the Salina-Saline County Board of Health's Marci K.Fox,CPA basic financial statements and have issued our report thereon dated August 21, 2013. Linda A.Suelter,CPA Valerie K. Linenberger,CPA C Johnna R.Vosseller,CPA Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Salina- Saline County Board of Health'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 Salina-Saline County Board of Health's internal control. Accordingly, we do not express an opinion on the effectiveness of Salina- Saline County Board of Health'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 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. 218 South Santa Fe Our consideration of internal control over financial reporting was for the limited purpose P.O. Box 2267 described in the first paragraph of this section and was not designed to identify all Salina, Kansas 67402-2267 deficiencies in internal control that might be material weaknesses or significant deficiencies. Given those limitations, we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material Salina weaknesses may exist that have not been identified. 785/825-5479 Salina Fax Compliance and Other Matters 785/825-2446 Ellsworth As part of obtaining reasonable assurance about whether Salina-Saline County Board of • 785/472-3915 Health's financial statements are free of material misstatement, we performed tests of its Ellsworth Fax compliance with certain provisions of laws, regulations, contracts and grant agreements, 785/472-5478 noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. • (13) 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.. CLUBINE AND RETTELE, CHARTERED • August 21, 2013 (14) CLUE I E INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR EETTELE PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE �Li l 1 L REQUIRED BY OMB CIRCULAR A-133 CHARTERED Certified Public Accountant To the Governing Board Salina-Saline County Board of Health Salina, Kansas Report on Compliance for Each Major Federal Program We have audited Salina-Saline County Board of Health's compliance requirements described in OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Salina-Saline County Board of Health's major federal programs for the year ended December 31, 2012. Salina-Saline County Board of Health's major Robert I.Clubine,CPA federal programs are identified in the summary of auditor's results section of the David A. Rettele,CPA accompanying schedule of findings and questioned costs. Jay D. Langley,CPA,CGMA Jon K. Bell,CPA Management's Responsibility Leslie M.Corbett,CPA g p y Stacy J.Osner,CPA Management is responsible for compliance with the requirements of laws, regulations, Marci K.Fox,CPA contracts, and grants applicable to its federal programs. Linda A. Suelter,CPA Valerie K.Linenberger,CPA Auditors' Responsibility Johnna R.Vosseller, CPA Our responsibility is to express an opinion on compliance for each of Salina-Saline County Board of Health'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 OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Salina-Saline County Board of Health'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 on Salina-Saline County Board of Health's compliance with those requirements. 218 South Santa Fe Opinion on Each Major Federal Program P.O. Box 2267 Salina,Kansas In our opinion, Salina-Saline County Board of Health complied, in all material respects, with 67402-2267 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, 2012. : Salina 785/825-5479 Report on Internal Control Over Compliance Salina Fax 785/825-2446 Management of Salina-Saline County Board of Health is responsible for establishing and Ellsworth maintaining effective internal control over compliance with requirements referred to above. 785/472-3915 In planning and performing our audit of compliance, we considered Salina-Saline County Ellsworth Fax Board of Health's internal control over compliance with the types of requirements that could 785/472-5478 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 OMB Circular A-133, 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 Salina-Saline County Board of Health's internal control over compliance. (15) 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. 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 OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. CLUBINE AND RETTELE, CHARTERED U°uyttc Cam•/ �Pbf�,e(, atM *A?v( August 21, 2013 (16) SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2012 Federal CFDA Federal Federal Grantor/Pass-Through Grantor/Program Title Number Expenditures. U.S. Department of Agriculture Passed Through State of Kansas Department of Health and Environment Special Supplemental Nutrition Program for Women, Infants and Children 10.557 $ 329,632 U.S. Department of Health and Human Services Passed Through State of Kansas Department of Health and Environment Maternal and Child Health Services 93.994 76,738 Family Planning - Services 93.217 42,895 Immunization Action Plan 93.268 12,185 Women, Infants and Children Immunization Collaboration 93.268 30,584 Acquired Immunodeficiency Syndrome (AIDS)Activity Ryan White Treatment Modernization Act Program 93.917 53,338 Child Welfare Services Child Care Institutions Licensing 93.596 89,630 Bioterrorism Public Health Preparedness and Response 93.069 79,662 Environmental Protection Agency Passed Through State of Kansas Department of Health and Environment Lead Poisoning Prevention 66.707 2,760 Total $ 717,424 The accompanying notes are an integral part of this schedule of expenditures of federal awards (17) SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2012 1. Basis of Presentation The accompanying schedule of expenditures of federal awards includes federal grant activity of Salina-Saline County Board of Health and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. (18)' SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2012 Summary of Auditor's Results Financial Statements Type of auditor's report issued: Qualified Internal control over financial reporting: Material weakness(es) identified No Significant deficiencies identified that are not considered to be material weaknesses? None reported Noncompliance material to financial statements noted? No Federal Awards Internal control over major programs: Material weakness(es) identified? No Significant deficiencies identified that are not considered to be material weakness(es) None reported Type of auditor's report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133? No Identification of Major programs: 10.557 Special Supplemental Food Program for Women, Infants and Children 93.596 Child Care Institutions Licensing Dollar threshold used to distinguish between type A and type B programs: $ 300,000 Auditee qualified as low-risk auditee: No Financial Statement Findings: None Federal Award Findings and Questioned Costs: None (19) SAUNA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas CORRECTIVE ACTION PLAN For the Year Ended December 31, 2012 None required. (20) SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS For the Year Ended December 31, 2012 There are no prior audit findings. (21)