Read the audit of Alabama federal programs

104 Pages·2013·0.67 MB·English

Report on the

Single Audit of Federal Financial Assistance
Programs Performed in Accordance With the
Single Audit Act Amendments of 1996
(Public Law 104-156) and U. S. Office of
Management and Budget Circular A-133

State of Alabama

October 1, 2011 through September 30, 2012

Filed: September 6, 2013

Department of
Examiners of Public Accounts
50 North Ripley Street, Room 3201
P.O. Box 302251
Montgomery, Alabama 36130-2251
Website: www.examiners.alabama.gov
Ronald L. Jones, Chief Examiner
13-378

State of Alabama
Department of
Examiners of Public Accounts
P.O. Box 30225 I, Montgomery, AL 36 I 30-225 I
50 North Ripley Street, Room 320 I
Montgomery, Alabama 36 I 04-3833
Ronald L. Jones Telephone [phone]
Chief Examiner FAX (334) 242-I 775
Honorable Ronald L. Jones
Chief Examiner of Public Accounts
Montgomery, Alabama 36130
Dear Sir:
Under the authority of the Code ofA labama 1975, Section 41-5-21, I submit this report on the
Single Audit of Federal Financial Assistance Programs Performed in Accordance with the
Single Audit Act Amendments of 1996 (Public law 104-156) and U.S. Office of Management
and Budget Circular A-133 for the State of Alabama for the period October 1, 2011 through
September 30,2012.
Respectfully submitted,
Sworn to and subscribed before me this
the ~ day of ~ : 201.3_.
~e J.(f!k~ Gail Traylor, CPA
No ary Pubhc Examiner of Public Accounts
Director State Audit Division
rb
13-378

Table of Contents
Page

Summary A

Contains items pertaining to the scope and objective of the audit, a description
of the contents of the report, and other information pertaining to the State of
Alabama Single Audit.

Exhibit #1 Schedule of Expenditures of Federal Awards – contains financial
information and notes relative to federal financial assistance. 1

Notes to the Schedule of Expenditures of Federal Awards 43

Exhibit #2 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 – a report on internal controls related to the financial
statements and on whether the State of Alabama complied with laws
and regulations which could have a direct and material effect on the
State’s financial statements. 46

Exhibit #3 Report on Compliance With Requirements That Could Have
a Direct and Material Effect on Each Major Program and on
Internal Control Over Compliance in Accordance With OMB
Circular A-133 – a report on internal controls over compliance
with requirements of laws, regulations, contracts, and grants
applicable to major federal programs and an opinion on whether
the State complied with laws, regulations, and the provisions of
contracts or grant agreements which could have a direct and material
effect on each major program. 49

Exhibit #4 Schedule of Findings and Questioned Costs – A schedule
summarizing the results of audit findings relating to the financial
statements as required by Government Auditing Standards and
findings and questioned costs for federal awards as required by
OMB Circular A-133.

Department of Finance – Section I 54
Department of Finance – Section II 56
Department of Finance – Section III 60
Alabama Medicaid Agency 61
Department of Human Resources 63
Department of Public Health 67
Department of Mental Health 70

Single Audit of Federal
Financial Assistance Programs
State of Alabama

Table of Contents
Page

Exhibit #5 Summary Schedule of Prior Audit Findings – a report, prepared
by the management of State Agencies, which provides the status of
all audit findings relative to federal awards in the prior audit’s
Schedule of Findings and Questioned Costs.

Department of Finance 71
Alabama Medicaid Agency 72
Department of Economic and Community Affairs 73
Department of Human Resources 74
Department of Public Health 75
Military Department 76

Auditee Responses/Corrective Action Plans – responses by State Agencies
on the results of the audit and their plans for corrections.

Exhibit #6 Section II – Financial Statement Findings (GAGAS):
Department of Finance 77
Department of Transportation 78
Department of Labor 79

Exhibit #7 Section III – Federal Awards Findings and Questioned Costs:
Department of Finance 81
Alabama Medicaid Agency 83
Department of Human Resources 86
Department of Public Health 90
Department of Mental Health 92
___________________________________________
Single Audit of Federal
Financial Assistance Programs
State of Alabama

Department of
Examiners of Public Accounts

SUMMARY

Single Audit of Federal Financial Assistance Programs
State of Alabama
October 1, 2011 through September 30, 2012

This report presents the results of an audit of federal financial assistance
programs administered by the State of Alabama contained in the Single Audit of the State
of Alabama. This audit was conducted in accordance with the requirements of the
Department of Examiners of Public Accounts under the authority of the Code of Alabama
1975, Section 41-5-14.

Audit of General Purpose Financial Statements

The audit of the State of Alabama General Purpose Financial Statements for the fiscal year
ended September 30, 2012, which is a required component of a Single Audit, was issued by
the Department of Examiners of Public Accounts as Report Number 13-235 on May 17, 2013.
The audited Basic Financial Statements were included in the State of Alabama
Comprehensive Annual Financial Report prepared and published by the Department of
Finance. Included with the Comprehensive Annual Financial Report are the Independent
Auditor's Report and a Report on Compliance and on Internal Control Over Financial
Reporting Based on an Audit of Financial Statements Performed in Accordance With
Government Auditing Standards, both of which are required by Government Auditing
Standards for financial audits.

Single Audit

The Single Audit was performed in accordance with the requirements of the Single
Audit Act Amendments of 1996 and the U. S. Office of Management and Budget (OMB)
Circular A-133. The objective of the Single Audit was to determine whether the State of
Alabama has complied with applicable laws and regulations of federal financial assistance
programs and the State of Alabama. The audit was performed in accordance with generally
accepted auditing standards and Government Auditing Standards, issued by the Comptroller
General of the United States.

13-378 A
This report is a statewide Single Audit report that includes federal financial assistance
programs administered by state agencies. The Federal programs and administering agencies
(component units of the State of Alabama) listed in the table below are not included in the
Schedule of Expenditures of Federal Awards and were not included in our audit. These
programs were audited in accordance with OMB Circular A-133 by other auditors.

CFDA Federal
Component Unit Federal Program Number Expenditures

Housing Finance Authority Home Investment Partnerships Program 14.239 $21,243,601

ARRA-Tax Credit Assistance Program 14.258 $ 5,299,910
Water Pollution Control Authority Capitalization Grants for State
Revolving Funds 66.458 $18,382,493
Drinking Water Finance Authority Capitalization Grants for Drinking Water – State
Revolving Funds 66.468 $15,132,259
State Employees’ Insurance Board Grants to State for Operation of Qualified 93.780 $ 896,534
High Risk Pools

We have also excluded federal financial assistance programs administered by state-supported
colleges and universities, which are a part of the financial reporting entity of the State of
Alabama and included on the Basic Financial Statements. The Single Audits of the state-
supported colleges and universities are performed and issued separately for each institution.

Significant deficiencies and material weaknesses in internal control were found during the
audit of the Comprehensive Annual Financial Report (CAFR). These findings are reported in
Exhibit 2, the 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. Details of the findings and recommendations are included
in the Schedule of Findings and Questioned Costs. The findings are numbered and reported
by the fiscal year in which the finding was originally reported.

Significant deficiencies and material weaknesses in internal control, and instances of
noncompliance with the requirements of federal grant awards were found during the audit of
federal financial assistance programs (Single Audit). These findings are reported in Exhibit 3,
the Report on Compliance With Requirements That Could Have a Direct and Material
Effect on Each Major Program and on Internal Control Over Compliance in Accordance
With OMB Circular A-133. Details of the findings and recommendations are included in the
Schedule of Findings and Questioned Costs. The findings are numbered and reported by the
fiscal year in which the finding was originally reported

At the completion of the audit, exit conferences were held with directors, chief financial
officers and other staff of agencies that administered major programs. An Auditee
Response/Corrective Action Plan for each agency with findings is included as Exhibit 6,
Section II - Financial Statement Findings, and Exhibit 7, Federal Awards Findings and
Questioned Costs.

13-378 B