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Audit - 2002/2003 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 31,2003 and 2002 CLUBINE AND RETTELE, CHARTERED CERTIFIED PUBLIC ACCOUNTANTS SALINA, 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 FINANCIAL SECTION 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 1 Exhibit I BALANCE SHEETS 2 Exhibit II STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL STATEMENTS OF EXPENDITURES - BUDGET AND ACTUAL 3 Exhibit III 4 Exhibit IV STATEMENTS OF CASH FLOWS 5 NOTES TO FINANCIAL STATEMENTS 6-10 Schedule 1 SUPPLEMENTAL INFORMATION GRANTS FROM THE KANSAS STATE DEPARTMENT OF HEALTH AND ENVIRONMENT 11 Schedule 2 FEES FOR SERVICES 12 SINGLE AUDIT SECTION REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 13 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 14-1 5 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 16 NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 17 SCHEDULE OF FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTION PLAN 18 19 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 20 I CLUBlNE& RETIELE awrrERED I I I I I I I Certified Public Accountants (fI1 Robert I. Clubine, C.PA David A. Rettele, C.PA Jay D. Langley, C.P.A. Jon K. Bell, C.P.A. Leslie M. Corbett, C.PA Stacy J. Sokol, C.PA Marci K. Fox, C.P.A. Delores K. Longenecker, c.P.A. John T. Millikin, C.PA Linda A. Suelter, C.P.A. I I I I I I I I I I I 218 South Santa Fe PO. Box 2267 Sal ina, Kansas 67402-2267 Salina 785/825-5479 785/827-1188 Ellsworth 785/472-3915 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, 2003 and 2002 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. The financial statements referred to above do not include the general fixed assets account group, which should be included in order to conform with accounting principles generally accepted in the United States of America. The amount that should be recorded in the general fixed assets account group is not known. 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 31,2003 and 2002, 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 July 1, 2004 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 grants. 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 audits. 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 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 referred to above and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Respectfully submitted, ~J..lAAla~ ~ CLUBINE AND RETTELE, CHARTERED July 1, 2004 (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 Funds advanced for future restricted purposes (Note 5) Fund Balance (Exhibit II) Unreserved Totals The accompanying notes are an integral part of these financial statements. (2) Exhibit I December 31, 2003 2002 $ 265,626 $ 182,728 71,579 74,214 85,914 133,021 50,047 50,387 $ 473,166 $ 440,350 $ 20,182 $ 46,706 51,274 45,561 183,676 154,765 101,215 27,510 356,347 274,542 6,981 109,838 165,808 $ 473,166 $ 440,350 I I I I I I I I I I I I I I I I I I I 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 EXPENDITURES - BUDGET AND ACTUAL For the Year Ended December 31, I 2003 2002 Actual Budget Actual Budget Personal Services I Salaries $ 1,836,928 $ 1,804,734 $ 1,921,309 $ 1,893,597 Social security 128,537 134,552 140,362 144,860 Retirement 50,710 51,218 54,096 48,883 I Health insurance 256,685 236,662 220,513 248,307 Unemployment insurance 8,653 6,988 1,930 6,817 Professional services 186,043 180,250 156,006 160,000 I Contractual services Auditing 7,000 6,950 6,950 7,250 Accounting 675 500 1,675 1,000 I Building and grounds - Remodeling and repair 28,798 25,000 30,417 25,000 Telephone 10,298 8,200 8,157 10,000 Mileage 57,042 64,000 63,794 70,000 I Service contracts and equipment lease 21,015 23,000 28,882 22,000 Insurance 84,646 93,193 89,309 62,000 I Expendable supplies Office supplies 30,010 27,000 43,792 42,000 Postage and express 13,085 15,000 12,319 13,000 I Books, dues and subscriptions 18,245 34,667 24,934 18,500 Equipment maintenance and repair 1,262 750 702 1,500 Gasoline and oil 4,126 4,000 4,242 15,000 Clinical and medical supplies 107,954 100,000 136,686 105,000 I Chemicals 4,140 6,000 3,589 3,000 Veterinary and medical services 29,842 16,000 17,606 12,000 Animal maintenance 3,051 7,500 2,383 2,000 I Shelter refund 11,465 12,500 11,172 7,000 Professional meetings 13,304 10,000 12,322 20,000 Utilities and water 15,205 16,500 15,943 24,000 I Custodial services 5,851 5,000 26,110 6,000 Miscellaneous expense 1,541 1,000 7,178 Capital equipment 2,355 10,000 21,457 15,000 I Total Expenditures S 2,938,466 $ 2,901,164 $ 3,063,835 $ 2,983,714 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 Exhibit IV STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2003 2002 457,425 $ 451,037 650,241 626,758 757,362 686,691 793,912 944,089 270,418 257,207 3,220 4,021 (2,849,680) (3,054,414) 82,898 (84,611) 82,898 (84,611 ) 182,728 267,339 265,626 $ 182,728 Cash Flow From Operating Activities Saline County, Kansas $ City of Salina, Kansas Grants Fees Miscellaneous Interest income Cash paid to suppliers and others Net Cash Provided (Used) by Operating Activities Increase (Decrease) in Cash Cash at Beginning of Year Cash at End of Year $ RECONCILIATION OF EXCESS (DEFICIT) OF REVENUES OVER EXPENDITURES TO NET CASH PROVIDED BY OPERATING ACTIVITIES Excess (Deficit) of Revenues over Expenditures - Exhibit II $ (55,970) $ (209,145) Adjustments to reconcile excess (deficit) of revenues over expenditures to net cash provided by operating activities Decrease in accounts receivable 50,082 96,430 Increase (Decrease) in vouchers payable (26,524) 22,926 Decrease in medicare adjustments receivable 18,683 Increase in accrued salaries 5,713 6,113 Decrease (Increase) in accrued compensated absences 28,911 (14,693) Increase (Decrease) in Animal Shelter Reward fund payable 73,705 (2,776) Increase (Decrease) in deferred income 6,981 (2,149) Total Adjustments 138,868 124,534 Net Cash Provided (Used) by Operating Activities $ 82,898 $ (84,611 ) The accompanying notes are an integral part of these financial statements. (5) 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, 2003 and 2002 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. 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) Generally accepted accounting principles require that a general fixed assets account group be maintained. The accompanying financial statements do not conform with generally accepted accounting principles in that a general fixed assets account group is not included. 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. Cash and Investments Deposits - At December 31, 2003 and 2002, respectively, the carrying amount of the Board of Health's deposits were $246,987 and $168,289, and the bank balances were $341,768 and $236,049. 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 not fully secured by FDIC and joint custody receipts as of December 31,2003. The Board of Health money on deposit is categorized into one of three risk categories to give an indication of the level of risk assumed by the Board of Health at year end. Category 1 includes deposits insured or collateralized with securities held by the Board of Health or by its agent in the Board of Health's name. Category 2 includes deposits collateralized with securities held by the pledging financial institution's trust department or agent in the Board of Health's name. Category 3 includes deposits that are uncollateralized, including any deposits that are collateralized with securities held by the pledging financial institution, or by its trust department or agent, but not in the Board of Health's name. All deposits of the Board of Health in excess of FDIC insurance coverage are Risk Category 2. Investments - Kansas municipalities, such as the Salina-Saline County Board of Health, are authorized by Kansas statutes to invest cash balances generally in: 1) Temporary notes or no fund warrants issued by the investing governmental unit, 2) Time deposits, open accounts, 3) Time certificates of deposit, and 4) Repurchase agreements. Other investment options are available if eligible financial institutions cannot or will not make the investments described in (2) and (3) above available at interest rates equal to or greater than the statutory investment rate. The Board of Health had no such investments during the years 2003 and 2002. 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: 2003 2002 Saline County, Kansas Regular tax appropriation $ 457,425 $ 451,037 City of Salina, Kansas Regular tax appropriation $ 650,241 $ 626,758 5. Grants from the State of Kansas Department of Health and Environment Agreements were in effect during 2003 and 2002 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, 2004. 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 $84,096. 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 $34,336. (7) I I I I I I I I I I I I I I I I I I I 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 $264,972, plus any reallocated federal funds that may become available. Outreach Clinic Services Reimbursements are provided for coordination of Cardiac and Neurology 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 $16,800. 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 $33,459. 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 $8,639. 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 $69,201 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 $23,505. 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 receive reimbursement for breast and cervical cancer screenings and diagnostic services that are deemed reimburseable. 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 $24,999. Chronic Disease Risk Reduction Funds are provided for health promotion programs addressing the primary health risk factor of tobacco use in the geographic service area of Saline County, Kansas. The current agreement provides that the Board of Health will receive $5,300. 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 $85,681. 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 $40,408 payable in quarterly installments. (8) I I I I I I I I I I I I I I I I I I I 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 $4,000. 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 income at December 31,2003 and 2002: December 31, 2003 2002 Accounts Receivable Special Supplemental Food Program for Women, Infants, and Children Food Service Licensing Program Outreach Clinic Services Local Environmental Protection Program HIV Case Management Program Breast and Cervical Cancer Screening Total Accounts Receivable $ 64,778 $ 40,550 3,224 7,845 3,150 3,150 13,620 4,716 427 4,333 71,579 $ 74,214 469 $ 1,080 4,182 1,250 6,981 $ $ Deferred Income Aids, Counseling and Testing Site Program Aids Health Education/Risk Education Program HIV Case Management Immunization Action Plan Total Deferred Income $ $ 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 2003 is 3.47% for January 1, 2003 to March 31, 2003 and 3.07% for April 1 , 2003 to December 31,2003. The Board of Health employer contributions to KPERS for the years ended December 31,2003,2002 and 2001 were $50,710, $54,096 and $43,739, respectively, equal to the required contributions for each year. (9) I I I I I I I I I I I I I I I I I I I 8. Cmmencing September 18, 2002, the Board of Health leased four copiers and related equipment with a lease term of 6: months. The lease payment is $1,299 per month. Total rent expense under this lease was $15,588 for the year erding December 31, 2003. Future minimum rental payments required under the lease are as follows: December 31,2004 December 31, 2005 December 31, 2006 December 31, 2007 December 31,2008 15,588 15,588 15,588 15,588 1,299 9. Compliance with Kansas Statutes Deposits were not adequately secured during the months of January, 2003, February, 2003, August, 2003 and December, 2003. 10. Certain reclassifications have been made to the 2002 information to conform to the classifications used in 2003. (10) 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 Schedule 1 GRANTS FROM THE KANSAS STATE DEPARTMENT OF HEALTH AND ENVIRONMENT For the Year Ended December 31, 2003 2002 Federal Programs Maternal and Child Health Program $ 84,746 $ 74,104 Family Planning Program 33,086 38,091 Women, Infants, and Children Supplemental Food Program 277,970 232,335 Outreach Clinic Services 17,500 13,650 HIV Case Management 24,223 35,591 Child Care Licensing Program 58,917 50,725 Immunization Action Plan 14,969 5,021 Breast and Cervical Cancer Screening 21,717 13,580 Lead Poisoning Prevention 13,371 10,000 Bioterrorism Preparedness and Response Program 74,171 13,759 AIDS Health Education/Risk Reduction Program 7,209 14,135 Chronic Disease Risk Reduction 6,742 10,284 Total Federal Programs 634,621 511,275 State Programs Food Service Licensing Program 30,092 40,207 General Health Services - State Formula Grant 40,476 40,195 Local Environmental Protection Program 46,159 62,784 AIDS Counseling and Testing Site Program 2,379 4,027 Kansas LEAN 1 ,400 Tuberculosis Control Program 1,000 Total State Programs 120,106 148,613 Total Grants $ 754,727 $ 659,888 (11 ) 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 (12) $ Schedule 2 $ For the Year Ended December 31, 2003 2002 153,492 $ 180,258 269,453 354,377 41,504 41,277 14,200 10,029 6,603 5,098 45,747 36,652 106,462 113,424 22,217 22,390 8,485 7,535 7,834 6,191 5,365 4,612 65,103 73,936 746,465 $ 855,779 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 CLUBlNE& RETTELE CHARfERED I I I I I I I I I I I I I I I I I Certified Public Accountants v Robert I. Clubine, C.PA David A. Rettele, c.P.A. Jay D. Langley, C.PA Jon K. Bell, C.PA Leslie M. Corbett, c.P.A. Stacy J. Sokol, C.PA Marci K. Fox, C.PA Delores K. Longenecker, c.P.A. John T. Millikin, C.PA Linda A. Suelter, C.P.A. 218 South Santa Fe P.O. Box 2267 Salina, Kansas 67402-2267 Salina 785/825-5479 785/827-1188 Ellsworth 785/472-3915 REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING 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 financial statements of Salina-Saline County Board of Health, as of and for the year ended December 31,2003 and 2002 and have issued our report thereon dated July 1, 2004. 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. Compliance 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 grants, 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. 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 assurance 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 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 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 July 1, 2004. 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, ct{.~ a-Jl (2~ CLUBINE AND RETTELE, CHARTERED July 1, 2004 ( 13) I I I I I I I I I I I I I I I I I I I CLUBlNE& RETIELE CHARfERED Certified Public Accountant! ff/I Robert I. Clubine, C.PA David A. Rettele, C.PA Jay D. Langley, C.PA Jon K. Bell, C.PA Leslie M. Corbell, C.P.A. Slacy J. Sokol, C.PA Marci K. Fox, C.PA Delores K. Longenecker, c.P.A. John 1. Millikin, C.P.A. Linda A. Sueller, C.P.A. 218 South Santa Fe P.O. Box 2267 Salina, Kansas 67402-2267 Salina 785/825-5479 785/827-1188 Ellsworth 785/472-3915 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, 2003. 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 31,2003. 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 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 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. (14) 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. REJ:mi~:Jl ~ CLUBINE AND RETTELE, CHARTERED July 1, 2004 (15) I SALINA-SALINE COUNTY BOARD OF HEALTH Salina, Kansas I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2003 I Federal CFDA Federal Federal Grantor/Pass-Through Grantor/Program Title Number Expenditures I U.S. Deoartment of Aqriculture Passed Through State of Kansas Department of Health and Environment I Special Supplemental Nutrition Program for Women, Infants, and Children - 02/03 10.557 $ 118,984 Special Supplemental Nutrition Program for Women, Infants, I and Children - 03/04 10.557 158,986 U.S. Deoartment of Health and Human Services I Passed Through State of Kansas Department of Health and Environment Maternal and Child Health Services Block Grant I Salina Outreach Clinic Services - 02/03 93.994 10,500 Salina Outreach Clinic Services - 03/04 93.994 7,000 Maternal and Child Health - 02/03 93.994 42,398 Maternal and Child Health - 03/04 93.994 42,348 I Family Planning - Services 02/03 93.217 14,487 I 03/04 93.217 18,599 Immunization Action Plan 02/03 93.268 3,269 I 03/04 93.268 11,700 Acquired Immunodeficiency Syndrome (AIDS) Activity Aids/HERR - 02/03 93.118 3,736 I Aids/HERR - 03/04 93.118 3,473 HIV Case Management - 02/03 93.917 8,159 HIV Case Management - 03/04 93.917 16,064 I Child Welfare Services Child Care Institutions Licensing - 02/03 93.596 25,649 Child Care Institutions Licensing - 03/04 93.596 33,268 I Breast and Cervical Cancer Screening Breast and Cervical Cancer Screenings - 02/03 93.919 10,403 Breast and Cervical Cancer Screenings - 03/04 93.919 11,314 I Lead Poisoning Prevention 02/03 66.707 5,000 03/04 66.707 8,371 I Tobacco Prevention Bioterrorism Preparedness and Response Program - 02/03 93.283 55,035 Bioterrorism Preparedness and Response Program - 03/04 93.283 19,136 I Chronic Disease Risk Reduction - 02/03 93.283 4,092 Chronic Disease Risk Reduction - 03/04 93.283 2,650 I Total $ 634,621 The accompanying notes are an integral part of these financial statements. I (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 NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2003 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 $ 84,966 (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 SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31,2003 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 (18) II 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 31,2003 None required. (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 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS For the Year Ended December 31,2003 There are no prior audit findings. (20)