2013 Audit Report

2013 Audit Report

Introduction

This report for fiscal year ended April 30, 2013, was prepared and submitted in accordance with TCOG’s bylaws. We believe the data as presented is accurate in all metrial aspects; that it is presented in a manner designed to fairly set forth the financial position and results of TCOG operations as measured by the financial activity of its various grants and contracts; and, that all disclosures necessary to enable the reader to gain maximum understanding of TCOG’s financial affairs and to satisfy Federal and State requirements of applicable grants are included. Standards issued by the Office of Management and Budget (Circulars A-87 and A-133) and GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments; as amended and interpreted, as of April 30, 2013, were followed in the operation and audit of TCOG.

Accounting System and Budgetary Control

TCOG’s accounting records are maintained on a modified accrual basis, with revenues recorded when susceptible to accrual and expenditures recorded when liabilities are incurred, if measurable. This policy is implemented by generally accepted accounting principles and the Common Rule.

Budgetary amounts reported on the schedule of revenues and epxenditures in memorandum form are monitored monthly for variances by TCOG staff. Variances are dealt with on an individual basis according to contractual requirements of the specific grant or contract.

Internal Controls

In developing and improving TCOG’s accounting system, consideration is given to the adequacy of internal controls. Internal controls are designed to protect TCOG assets, prevent fraud and to insure economy and efficiency of operations within limitations. Internal controls are developed to assure management and funding sources of the integrity of the accounting and reporting systems.

Reporting Entity and Services

TCOG operations are controlled by grant or contract arrangements with the United States of America and the State of Texas. For the fiscal year ended April 30, 2013, the largest subgrantee of TCOG is Tri-County Senior Nutrition Project (Tri-County). Tri-County contracts with an independent public accounting firm for an annual audit of its operations. The resulting audit report has been received and presented to the Governing Board for review and approval.

Functional Activities

During the fiscal year ended April 30, 2013, TCOG, through grants and contracts, operated the Area Agency on Aging of Texoma, Community and Economic Development and Planning Activities, Criminal Justice Planning, Homeland Security Planning, Emergency 911, Weatherization Assistance Program, Comprehensive Energy Assistance Program, Section 8 Housing, Public Housing Authorities of eighteen cities, and other programs for the Texoma Region.

Cash Management

Cash maintained in the general account is not invested in interest bearing instruments because of the restrictions placed on federal funds by the United States Treasury. Funds received from local units of government for matching grants are deopsited into an interest bearing account and TexPool, a division of the Texas State Treasury. The interest earned on local funds is used to match grant requirements, reduce future local government contributions, and satisfy any costs not allowed by grant conditions.

Fixed Assets

Fixed assets are recorded at cost from grant funds or local funds. Fixed assets purchased from local funds are depreciated and grants are charged accordingly in conformity with Office of Management and Budget Circular A-87.

Annual Audit

TCOG’s bylaws require that an annual audit be made of its financial accounts and transactions for the preceding fiscal year. In 1997, the Office of Management and Budget revised Circular A-133 to include units of local government. This circular requires that grantors of the United States of America perform audits which meet the requirements of the Single Audit Act Amendments of 1996. In accordance with these requirements, the Annual Audit Report is contained herein for your review and consideration.

Certification of Indirect Cost Percentage

The undersigned Executive Director and Finance Director hereby certify that based upon the enclosed audited financial data, TCOG’s indirect cost for fiscal year ended April 30, 2013, did not exceed 15 percent of total expenditures, as defined by The Local Government Code, Chapter 391, 586.(f)(1).

Overview

The Annual Audit Report contains an unmodified opinion from the auditors. There is one (1) audit report finding that is addressed below. There are no questions or disallowed costs, instances of noncompliance, or other reportable conditions. The audit firm has not issued a separate management letter.

Audit Findings

Item 2013-1. The General Fund trial balances provided by Management contained both full-accrual and modified accrual basis balances. Balance sheet balances for TCOG’s long-term debt and capital assets should be separated into separate funds within the accounting system. Management agrees with the recommendation to separate these balances and has already taken action to implement this change.

We would like to express our appreciation to everyone associated with the preparation of this Annual Audit Report. We would also like to thank the Members of the Governing Body for their interest and support in planning and conducting the financial operations of Texoma Council of Governments in a responsible and progressive manner.

Download the 2013 Audit Report

FYE2013 Audit Report