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Audit - 2004/2005 I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT December 31,2005 and 2004 CLUBINE AND RETTELE, CHARTERED CERTIFIED PUBLIC ACCOUNTANTS SALlNA,KANSAS I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas TABLE OF CONTENTS Paqe FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT Exhibit I BALANCE SHEETS 2 Exhibit II STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL 3 Exhibit III STATEMENTS OF EXPENSES - BUDGET AND ACTUAL 4 Exhibit IV STATEMENTS OF CASH FLOWS 5 NOTES TO FINANCIAL STATEMENTS 6-9 SUPPLEMENTAL INFORMATION Schedule 1 GRANTS FROM THE KANSAS STATE DEPARTMENT OF HEALTH AND ENVIRONMENT 10 Schedule 2 FEES FOR SERVICES 11 SINGLE AUDIT SECTION 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 12 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 13-14 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 15 NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 16 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 17 CORRECTIVE ACTION PLAN 18 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 19 I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas FINANCIAL SECTION I I I I I I I I I I I I I I I I I I I CLUBlNE& RETTELE CHARfERED Certified Public Accountants (fI1 Robert I. Clubine, C.P.A. David A. Rettele, C.P.A. Jay D. Langley, C.P.A. Jon K. Bell, C.P.A. Leslie M. Corbett, C.P.A. Stacy J. Sokol, C.P.A. Marci K. Fox, C.P.A. Delores K. Longenecker, C.P.A. John T. Millikin, C.P.A. Linda A. Suelter, C.P.A. 218 South Santa Fe P.O. Box 2267 Salina, Kansas 67402-2267 Salina 785/825-5479 Salina Fax 785 / 825-2446 Ellsworth 785/472-3915 Ellsworth Fax 785/472-5478 INDEPENDENT AUDITORS' REPORT To the Governing Board Salina-Saline County Board of Health 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 31,2005 and 2004 as listed in the table of contents. These financial statements are the responsibility of the Board of Health's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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 Kansas Municipal Audit 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As described in Note B(2), management has not included the capitalization and depreciation of property and equipment, which should be included in order to conform with accounting principles generally accepted in the United States of America. The amount that should be capitalized and depreciated is not reasonably determined. In our opinion, except for the effect on the financial statements of the omission described in the preceding 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 31,2005 and 2004, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated May 31,2006 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 the 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audits were conducted for the purpose of forming an opinion 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 also 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 has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Respectfully submitted, ~~~Q \CQm~ CLUBINE AND RETTELE, CHARTERED May 31,2006 (1 ) I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas BALANCE SHEETS ASSETS Cash Accounts receivable State of Kansas Department of Health and Environment (Note 5) Medicare and Medicaid Other care services Totals LIABILITIES AND FUND BALANCE Liabilities Vouchers payable Accrued salaries Accrued liability for compensated absences Animal Shelter Reward fund payable Total Liabilities Deferred Income (Note 5) Fund Balance Unrestricted Totals The accompanying notes are an integral part of these financial statements. (2) Exhibit I December 31, 2005 2004 $ 770,447 $ 510,098 36,724 61,809 50,618 43,199 17,059 52,568 $ 874,848 $ 667,674 $ 138,162 $ 9,408 75,190 70,458 203,224 201,871 97,287 102,324 513,863 384,061 36,489 61,595 324,496 222,018 $ 874,848 $ 667,674 I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas Exhibit II STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2005 2004 Actual Budget Actual Budget Revenues Appropriation from Saline County, Kansas (Note 4) $ 576,934 $ 576,934 $ 527,410 $ 527,411 Appropriation from City of Salina, Kansas (Note 4) 796,362 796,362 740,448 740,447 Grants from the State Department of Health and Environment 817,241 750,515 890,862 690,572 Fees for services 778,210 683,120 794,577 741,120 Interest income 12,292 4,107 850 Miscellaneous revenues 276,501 206,699 276,362 235,175 Total Revenues 3,257,540 3,013,630 3,233,766 2,935,575 Expenses 3,155,062 3,013,630 3,121,586 2,935,575 Excess (Deficit) of Revenues over Expenses 102,478 112,180 Fund Balance, January 1 222,018 385,130 109,838 385,130 Fund Balance, December 31 $ 324,496 $ 385,130 $ 222,018 $ 385,130 The accompanying notes are an integral part of these financial statements. (3) I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas I Exhibit III I STATEMENTS OF EXPENSES - BUDGET AND ACTUAL I For the Year Ended December 31, 2005 2004 Actual Budget Actual Budget I Personal Services Salaries $ 1,927,156 $ 1,869,134 $ 1,862,216 $ 1,826,502 Social security 136,862 141,900 128,517 138,838 I Retirement 71,899 68,565 58,991 61,942 Health insurance 249,527 259,659 261,402 266,357 Unemployment insurance 10,786 10,766 10,584 8,711 Professional services 157,800 152,825 186,473 155,000 I Contractual services Auditing 7,550 7,000 7,170 7,000 Accounting 760 675 675 675 I Building and grounds - Remodeling and repair 6,582 1,500 4,744 28,000 Telephone 20,664 17,500 10,284 8,000 I Mileage 59,068 62,000 57,822 65,000 Service contracts and equipment lease 62,648 41 ,400 47,690 18,000 I Insurance 89,369 89,000 72,156 89,000 Expendable supplies Office supplies 32,128 26,500 39,572 25,000 Postage and express 15,156 12,135 13,129 12,000 I Books, dues and subscriptions 4,794 5,300 5,429 10,750 Equipment maintenance and repair 690 1,000 860 1,000 Gasoline and oil 5,807 7,000 4,998 7,000 I Clinical and medical supplies 122,693 110,000 124,396 115,000 Chemicals 9,552 3,500 7,753 3,000 Veterinary and medical services 33,500 14,000 87,179 15,000 I Animal maintenance 994 3,300 2,559 3,300 Shelter refund 13,000 12,000 18,863 11,000 Professional meetings 23,958 14,000 17,991 14,000 Utilities and water 50,432 38,000 48,200 14,000 I Custodial services 4,181 5,800 3,897 5,000 Health Education 21,685 21,171 36,928 22,000 Miscellaneous expense 3,121 1,000 1,108 1,500 I Capital equipment 12,700 17,000 3,000 Total Expenses $ 3,155,062 $ 3,013,630 $ 3,121,586 $ 2,935,575 I I I The accompanying notes are an integral part of these financial statements. I (4) I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas STATEMENTS OF CASH FLOWS Cash Flow From Operating Activities Saline County, Kansas City of Salina, Kansas Grants Fees Miscellaneous Interest income Cash paid to suppliers and others Cash paid to employees for services Net Cash Provided by Operating Activities Increase in Cash Cash at Beginning of Year Cash at End of Year Exhibit IV $ For the Year Ended December 31, 2005 2004 576,934 $ 527,410 796,362 740,448 817,220 955,246 770,791 834,771 312,010 276,362 12,292 4,107 (1,104,189) (1,269,035) (1,921,071 ) (1,824,837) 260,349 244,472 260,349 244,472 510,098 265,626 770,447 $ 510,098 $ RECONCILIATION OF EXCESS (DEFICIT) OF REVENUES OVER EXPENSES TO NET CASH PROVIDED BY OPERATING ACTIVITIES Excess of Revenues over Expenses - Exhibit II Adjustments to reconcile excess (deficit) of revenues over expenses to net cash provided by operating activities Decrease in accounts receivable Increase (Decrease) in vouchers payable Increase in accrued salaries Increase in accrued compensated absences Increase (Decrease) in Animal Shelter Reward fund payable Increase (Decrease) in deferred income Total Adjustments Net Cash Provided by Operating Activities The accompanying notes are an integral part of these financial statements. (5) $ 102,478 $ 112,180 53,175 49,964 128,754 (10,774) 4,732 19,184 1,353 18,195 (5,037) 1,109 (25,106) 54,614 157,871 132,292 $ 260,349 $ 244,472 I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas NOTES TO FINANCIAL STATEMENTS December 31, 2005 and 2004 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. Based on the criteria set forth in Statement No. 14 of the Governmental Accounting Standards Board, 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 the principles of fund accounting in order to ensure observance of limitations and restrictions placed on the use of resources available. The significant accounting policies followed by the Board of Health are described below to enhance the usefulness of the financial statements to the reader. 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. It is the Board of Health's policy to follow all Financial Accounting Standards Board (FASB) standards issued after November 30, 1989. Deferred revenues arise when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the Board of Health has a legal claim to the resources, the liability for deferred revenue is removed from the balance sheet and revenue is recognized. 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. (6) I I I I I I I I I I I I I I I I I I I 3. Deposits and Investments Deposits - At December 31, 2005 and 2004, respectively, the carrying amount of the Board of Health's deposits were $646,668 and $485,257, and the bank balances were $784,094 and $591,906. The differences are 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 over $100,000. Deposit balances were fully secured by FDIC and joint custody receipts as of December 31, 2005. 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: 2005 2004 Saline County, Kansas Regular tax appropriation $ 576,934 $ 527,410 City of Salina, Kansas Regular tax appropriation $ 796,362 $ 740,448 5. Grants from the State of Kansas Department of Health and Environment Agreements were in effect during 2005 and 2004 with the State of Kansas Department of Health and Environment regarding certain grants which were funded by federal and state monies. Current agreements are for the state's fiscal year ended June 30, 2006. 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 $79,891. 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 $42,274. Special Supplemental Food Program for Women, Infants, and Children 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 $264,621, plus any reallocated federal funds that may become available. This program is on an October 1 through September 30 year-end. Outreach Clinic Services Reimbursements are provided for coordination of Cardiac Outreach Clinics at Salina. The current agreement provides that the Board of Health will be reimbursed quarterly for actual expenses up to an annual total of $7,800. HIV Case Management 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 $45,000. (7) I I I I I I I I I I I I I I I I I I I AIDS Health Education/Risk Reduction Program Funds are provided to identify, coordinate, and provide public information and education regarding Acquired Immune Deficiency Syndrome. The current agreement provides that the Board of Health will receive $8,375. Child Care 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 $73,000 payable in quarterly amounts based on number of licenses issued. 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 $11,080. Breast and Cervical Cancer Screening Provides cervical and breast cancer screening services to women with no insurance or a high deductible that has not been met. The current agreement provides that the Board of Health will receive reimbursement for breast and cervical cancer screenings and diagnostic services that are deemed reimbursable. Lead Poisoning Prevention Program Funds are provided to hire a registered nurse to be the dedicated childhood lead poisoning prevention nurse to coordinate and implement a screening and blood lead testing program within the county. The current agreement provides that the Board of Health will receive $20,000. Bioterrorism Preparedness and Response Program Funds are provided for the completion of a local emergency preparedness and response inventory and a submission of a final local bioterrorism preparedness plan. The Agency agrees to be a full participant in the Health Alert Network. The current agreement provides that the Board of Health will receive $63,888. Emergency Management Funds were provided due to presidential disaster declaration for the State of Kansas. The Board of Health received $9,548. State Programs Food Service Licensing Program Funds are provided for the evaluation, registration, and licensing of food service establishments. The current agreement provides that the Board of Health will receive 80% of annual licensing fees, payable monthly. 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 $39,901 payable in quarterly installments. AIDS Counseling and Testing Site Program Funds are provided for the counseling and testing of Acquired Immune Deficiency Syndrome. The current agreement provides that the Board of Health will receive $3,752. Local Environmental Protection Program Funds are provided for the development and implementation of the Lincoln, Ellsworth, Ottawa, and Saline County Sanitary Codes. The current agreement provides that the Board of Health will receive $50,478. 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 $2,000. (8) I I I I I I I I I I I I I I I I I I I 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 income at December 31,2005 and 2004: December 31, 2005 2004 Accounts Receivable Special Supplemental Food Program for Women, Infants, and Children $ 32,030 $ 41,585 Food Service Licensing Program 2,744 7,096 Outreach Clinic Services 1,950 3,600 Lead Poison Prevention 6,748 Immunization Action Plan 1,385 Breast and Cervical Cancer Screening 842 Tuberculosis Control Program 553 Total Accounts Receivable $ 36,724 $ 61 ,809 Deferred Income HIV Case Management $ 11,250 $ 7,500 General Health Services State Formula Grant 10,054 Child Care License Program 8,816 Local Environmental Protection Program 25,239 25,239 Maternal and Child Health Program 9,986 Total Deferred Income $ 36,489 $ 61,595 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% 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 bases. State law sets a limitation on annual increases on the contribution rates for KPERS employers. The employer rate established for calendar year 2005 was 4.01 % for January 1, 2005 to June 30,2005 and 4.41 % for July 1, 2005 to December 31,2005. The Board of Health employer contributions to KPERS for the years ended December 31,2005,2004 and 2003 were $70,960, $58,991 and $50,710, respectively, equal to the required contributions for each year. 8. Commencing June 14, 2005, the Board of Health updated their copier lease agreement to include additional copiers and printers. The lease term is 63 months. The lease payment is $1,703 per month. Prior to June 14, 2005, the lease payment was $1,299 per month. Total rent expense under this lease was $18,192 for the year ending December 31,2005. Future minimum rental payments required under the lease are as follows: December 31,2006 December 31,2007 December 31,2008 December 31, 2009 December 31,2010 $ 20,796 20,796 20,796 20,796 10,398 9. Compliance with Kansas Statutes Deposits were not adequately secured for all months of the 2005 calendar year. (9) I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas SUPPLEMENTAL INFORMATION I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina. Kansas GRANTS FROM THE KANSAS STATE DEPARTMENT OF HEALTH AND ENVIRONMENT Federal Programs Maternal and Child Health Program Family Planning Program Women, Infants, and Children Supplemental Food Program Outreach Clinic Services HIV Case Management Child Care Licensing Program Immunization Action Plan Breast and Cervical Cancer Screening Lead Poisoning Prevention Bioterrorism Preparedness and Response Program AIDS Health Education/Risk Reduction Program Chronic Disease Risk Reduction Emergency Management Grant Total Federal Programs State Programs Food Service Licensing Program General Health Services - State Formula Grant Local Environmental Protection Program AIDS Counseling and Testing Site Program West Nile Virus Program Tuberculosis Control Program Total State Programs Total Grants (10) Schedule 1 For the Year Ended December 31 , 2005 2004 I I I I I I I I I I I I I I I I I I I Title XVIII Title XIX Patients and insurance Home care services Homemaker services Family planning services General nursing clinics Environmental health fees Day care provider fees Senior care fees Child health assessment fees Immunizations Total Fees for Services SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas FEES FOR SERVICES (11 ) Schedule 2 $ For the Year Ended December 31 , 2005 2004 164,233 $ 133,022 255,820 277,221 37,968 44,599 18,305 17,232 6,364 5,021 48,431 48,374 160,592 189,039 32,674 20,326 8,980 10,449 4,027 5,078 3,797 3,525 37,019 40,691 778,210 $ 794,577 $ I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas SINGLE AUDIT SECTION I I I I I I I I I I I I I I I I I I I CLUBlNE& RETIELE CHARfERED Certified Public Accountants rll Robert I. Clubine, C.P.A. David A. Rettele, C.P.A. Jay D. Langley, C.P.A. Jon K. Bell, C.P.A. Leslie M. Corbett, C.P.A. Stacy J. Sokol, C.P.A. Marci K. Fox, C.P.A. Delores K. Longenecker, C.P.A. John T. Millikin, C.P.A. Linda A. Suelter, C.P.A. 218 South Santa Fe P.O. Box 2267 Salina, Kansas 67402-2267 Salina 785/825-5479 Salina Fax 785 / 825-2446 Ellsworth 785/472-3915 Ellsworth Fax 785/472-5478 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 Governing Board Salina-Saline County Board of Health Salina, Kansas We have audited the accompanying financial statements of Salina-Saline County Board of Health, as of and for the years ended December 31,2005 and 2004 and have issued our report thereon dated May 31,2006. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to Government Auditing Standards, issued by the Comptroller General of the United States and the Kansas Municipal Audit Guide, prescribed by the Director of Accounts and Reports, Department of the Administration of the State of Kansas. Internal Control Over Financial Reportinq In planning and performing our audit, we considered Salina-Saline County Board of Health's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. However, we noted other matters involving the internal control over financial reporting that we have reported to management of Salina- Saline County Board of Health in a separate letter dated May 31 , 2006. Compliance and Other Matters As part of obtaining reasonable assurance about whether Salina-Saline County Board of Health's financial statements are free of 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 that are required to be reported under Government Auditing Standards. This report is intended for the information and use of the governing board, management, others within the organization and federal awarding agencies and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties Respectfully submitted, t~MaJ( ~ CLUBINE AND RETTELE, CHARTERED May 31,2006 (12) I I I I I I I I I I I I I I I I I I I CLUBlNE& RElTELE CHARfERED Certified Public Accountants 'II Robert I. Clubine, C.P.A. David A. Rettele, C.P.A. Jay D. Langley, C.P.A. Jon K. Bell, C.P.A. Leslie M. Corbett, C.P.A. Stacy J. Sokol, C.P.A. Marci K. Fox, C.P.A. Delores K. Longenecker, C.PA John T. Millikin, C.PA Linda A. Suelter, C.PA 218 South Santa Fe P.O. Box 2267 Salina, Kansas 67402-2267 Salina 785/825-5479 Salina Fax 785 / 825-2446 Ellsworth 785/472-3915 Ellsworth Fax 785/472-5478 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Governing Board Salina-Saline County Board of Health Salina, Kansas Compliance We have audited the compliance of the Salina-Saline County Board of Health with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31,2005. Salina-Saline County Board of Health's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of Salina-Saline County Board of Health's management. Our responsibility is to express an opinion on Salina-Saline County Board of Health's compliance based on our audit. 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. Our audit does not provide a legal determination on Salina-Saline County Board of Health's compliance with those requirements. In our opinion, Salina-Saline County Board of Health complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended December 31,2005. Internal Control Over Compliance The management of Salina-Saline County Board of Health is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered Salina-Saline County Board of Health's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. (13) I I I I I I I I I I I I I I I I I I I This report is intended for the information and use of the governing board, management, others within the organization and federal awarding agencies and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~TT~A~~ May 31,2006 (14) I SALINA-SALINE COUNTY BOARD OF HEAL TH Salina, Kansas I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2005 I Federal CFDA Federal Federal Grantor/Pass-Through Grantor/Program Title Number Expenditures I U.S. Department of Aqriculture Passed Through State of Kansas Department of Health and Environment I Special Supplemental Nutrition Program for Women, Infants, and Children - 04/05 10.557 $ 150,246 Special Supplemental Nutrition Program for Women, Infants, and Children - 05/06 10.557 154,721 I U.S. Department of Health and Human Services I Passed Through State of Kansas Department of Health and Environment Maternal and Child Health Services Block Grant Salina Outreach Clinic Services - 04/05 93.994 7,200 I Salina Outreach Clinic Services - 05/06 93.994 3,900 Maternal and Child Health - 04/05 93.994 39,945 Maternal and Child Health - 05/06 93.994 39,946 I Family Planning - Services 04/05 93.217 15,563 05/06 93.217 21,137 I Immunization Action Plan 04/05 93.268 10,081 05/06 93.268 5,540 I Acquired Immunodeficiency Syndrome (AIDS) Activity Aids/HERR - 04/05 93.118 3,078 Aids/HERR - 05/06 93.118 4,188 I HIV Case Management - 04/05 93.917 29,521 HIV Case Management - 05/06 93.917 22,500 Child Welfare Services I Child Care Institutions Licensing - 04/05 93.596 32,294 Child Care Institutions Licensing - 05/06 93.596 39,195 I Breast and Cervical Cancer Screening Breast and Cervical Cancer Screenings - 04/05 93.919 2,635 Breast and Cervical Cancer Screenings - 05/06 93.919 127 I Lead Poisoning Prevention 04/05 66.707 7,607 05/06 66.707 8,177 I Tobacco Prevention Bioterrorism Preparedness and Response Program - 04/05 93.283 31,715 Bioterrorism Preparedness and Response Program - 05/06 93.283 31,944 I Emergency Management Public Assistance - 2005 97.036 9,548 Total $ 670,808 I The accompanying notes are an integral part of these financial statements. I (15) I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31,2005 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. 2. Subrecipients Of the federal expenditures presented in the schedule, Salina-Saline County Board of Health provided federal awards to subrecipients as follows: Federal Program Amount Provided to CFDA Number Subrecipients Special Supplemental Food Program for Women, Infants and Children 10.557 $ 70,195 (16) I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31,2005 Summary of Auditor's Results Financial Statements Type of auditor's report issued: Qualified Internal control over financial reporting: Material weakness(es) identified No Reportable condition(s) 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 Reportable condition(s) 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 Maior proqrams: 10.557 Special Supplemental Food Program for Women, Infants and Children Dollar threshold used to distinguish between type A and type B programs: $ 300,000 Auditee qualified as low-risk auditee: Yes Section II - Financial Statement Findinqs: None Section III - Federal Award Findinqs and Questioned Costs: None (17) I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas CORRECTIVE ACTION PLAN For the Year Ended December 31,2005 None required. (18) I I I I I I I I I I I I I I I I I I I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS For the Year Ended December 31,2005 There are no prior audit findings. (19)