ernst & young llp - orlando · internal control over compliance in accordance with omb circular...

S C H E D U L E O F E X P E N D I T U R E S O F F E D E R A L A W A R D S A N D S T A T E F I N A N C I A L A S S I S T A N C E

City of Orlando, Florida Year Ended September 30, 2012 With Report of Independent Certified Public Accountants

Ernst & Young LLP

1304-1060158

City of Orlando, Florida

Schedule of Expenditures of Federal Awards and State Financial Assistance

Year Ended September 30, 2012

Contents

Report of Independent Certified Public Accountants ......................................................................1

Schedule of Expenditures of Federal Awards and State Financial Assistance ................................4

Notes to Schedule of Expenditures of Federal Awards and Financial Assistance ........................11

Schedule of Findings and Questioned Costs ..................................................................................12

Schedule of Prior Year Findings ....................................................................................................17

Report of Independent Certified Public Accountants 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 .....................................................................................................................18

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Report of Independent Certified Public Accountants on Compliance With Requirements That Could Have a Direct and Material Effect on

Each Major Federal Program and State Project and on Internal Control Over Compliance in Accordance With OMB Circular A-133 and

Chapter 10.550, Rules of the Auditor General

Honorable Mayor and Members of City Council City of Orlando

Compliance

We have audited the City of Orlando, Florida’s (the City) compliance with the types of compliance requirements described in the US Office of Management and Budget (OMB) Circular A-133 Compliance Supplement and the Department of Financial Services’ State Projects Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs and state projects for the year ended September 30, 2012. The City’s major federal programs and state projects 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 and state projects is the responsibility of the City’s management. Our responsibility is to express an opinion on the City’s compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Auditor General. Those standards, OMB Circular A-133, and Chapter 10.550, 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 or state project occurred. An audit includes examining, on a test basis, evidence about the City’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 of the City’s compliance with those requirements.

As described in item 2012-01 in the accompanying schedule of findings and questioned costs, the City did not comply with requirements regarding allowable costs/cost principles that are applicable to its Community Development Block Grant program. Compliance with such requirements is necessary, in our opinion, for the City to comply with requirements applicable to that program.

Ernst & Young LLP Suite 1700 390 North Orange Avenue Orlando, FL 32801-1671 Tel: +1 407 872 6600 Fax: +1 407 872 6626 www.ey.com

A member firm of Ernst & Young Global Limited

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In our opinion, except for the noncompliance described in the preceding paragraph, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and state projects for the year ended September 30, 3012.

Internal Control Over Compliance

The management of the City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs and state projects. In planning and performing our audit, we considered the City’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program or state project to determine the 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 and Chapter 10.550, Rules of the Auditor General, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance.

Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2012-01 to be material weaknesses.

The City’s response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. We did not audit the City’s response and accordingly, we express no opinion on the response.


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Schedule of Expenditures of Federal Awards

We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of and for the year ended September 30, 2012, and have issued our report thereon dated March 1, 2013 which contained an unqualified opinion on those financial statements. Our audit was performed for the purpose of forming our opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying schedule of expenditures of federal awards and state financial assistance is presented for purposes of additional analysis as required by OMB Circular A-133, Section 215.97, Florida Statues, and Chapter 10.550, Rules of the Auditor General, and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain other procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States. In our opinion, the schedule of expenditures of federal awards and state financial assistance is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

This report is intended solely for the information and use of management, the Mayor, City Council, others within the entity, and federal and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

April 3, 2013, except for the schedule of expenditures of federal awards and state financial assistance, as to which the date is March 1, 2013


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Identification CFDA FederalGrantor/Federal Program Title/Pass-Through Grantor/ Number Number Expenditures

FEDERAL AWARDS

U.S. Department of Agriculture:Summer Food Service Program for Children

Passed through Florida Department of Education FY11-12 04-0875 10.559 186,728$

U.S. Department of Commerce:Public Safety Interoperable Communications Grant Program

Passed through Lake County Board of County Commissioners, Florida

Florida, Region 5

09-DS-31-06-45-01 Sub 11.555 74,889

U.S. Department of Housing and Urban Development:CLUSTER – CDBG: Community Development Block Grants/Entitlement Grants (Amount paid to subrecipients $1,818,626)

FY07/08 B-07-MC-12-0015 14.218 168,767 FY09/10 B-09-MC-12-0015 14.218 200,000 FY 10/11 B-10-MC-12-0015 14.218 421,370 FY11/12 B-11-MC-12-0015 14.218 1,365,707 FY11/12 Administrative B-11-MC-12-0015 14.218 408,986

2,564,830

Neighborhood Stabilization Program FY08/09 (Amount paid to subrecipients $203,900) B-08-MN-12-0020 14.218 374,811

Neighborhood Stabilization Program – 3 FY10/11 (Amount paid to subrecipients $265,081) B-11-MN-12-0020 14.218 266,171 CLUSTER-CDBG TOTAL 3,205,812

Emergency Shelter Grants Program (Amount paid to subrecipients $99,048)

FY11/12 S-11-MC-12-0008 14.231 99,048

HOME Investment Partnerships Program (Amount paid to subrecipients $1,000,962)

FY 08/09 M-08-MC-12-0214 14.239 11,784 FY09/10 M-09-MC-12-0214 14.239 72,765 FY 10/11 M10-MC120214 14.239 916,413 FY11/12 Administrative M11-MC120214 14.239 121,405

1,122,367


Schedule of Expenditures of Federal Awards


and State Financial Assistance

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FEDERAL AWARDS

U.S. Department of Housing and Urban Development (Cont):Housing Opportunities for Persons with AIDS (Amount paid to subrecipients $3,379,824)

FY10/11 FL-H-10-F0-02 14.241 23,019 FY11/12 FLH11F002 14.241 3,356,804 FY11/12 Administrative FLH11F002 14.241 109,167

3,488,990 Community Development Block Grants/Brownfields Economic Development Initiative

FY08/09 Redevelopment Parramore B-08-SP-FL0548 14.246 11,250 Economic Development Initiative – Special Project, Neighborhood Initiative and Miscellaneous Grants

FY06/07 Redevelopment Parramore B-06-SP-FL-0237 14.251 43,490 FY09/10 Redevelopment Parramore B-09-SP-FL-0161 14.251 8,779

52,269 American Recovery and Reinvestment Act: Homelessness Prevention and Rapid Re-Housing Program(HPRP) (Amount paid to subrecipients $182,373)

FY09/10 S09-MY-12-0008 ARRA14.257

189,537

8,169,273 U.S. Department of Justice:

National Institute of Justice Research, Evaluation, and Development Project Grants

FY09 NIJ Solving Cold Cases with DNA 2009-DN-BX-K005 16.560 30,123

Edward Byrne Memorial State and Local Law Enforcement Assistance Discretionary Grants Program

Passed through City of Tampa, FloridaSecurity Support for the FY2012 Presidential Nominating Convention 2012-NC-BX-3070 16.580 263,010

Bulletproof Vest Partnership ProgramFY10 FY10 16.607 51,890 FY11 FY11 16.607 17,713

69,603

Public Safety Partnership and Community Policing GrantsFY10 COPS Technology Program (Tech) – IRIS 2010CKWX0090 16.710 188,204


Schedule of Expenditures of Federal Awards and State Financial Assistance (continued)

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FEDERAL AWARDS

U.S. Department of Justice (Cont.):American Recovery and Reinvestment Act: Public

Safety Partnership and Community Policing GrantsCOPS Hiring Recovery Program (CHRP) 2009RJWX0031 ARRA 1,091,226

16.7101,279,430

Gang Resistance Education and Training (GREAT)FY09 2009-JV-FX-0023 16.737 31,302

CLUSTER - JAG: Edward Byrne Memorial Justice Assistance Grant Program (JAG)

FY10 Local Solicitation 2010-DJ-BX-1497 16.738 9,937 FY12 Local Solicitation – In-Car Camera Systems 2012-JAGC-ORAN-1-C4-013 16.738 96,959

106,896 Edward Byrne Memorial Justice Assistance Formula Grant- Countywide

FY12 Local Solicitation – Portable Radios 2011-DJ-BX-2853 16.738 291,767

American Recovery and Reinvestment Act: FY 09 Recovery Act – Edward Byrne Memorial Justice Assistance Grant (JAG) Local Program

Tasers & Radios 2009-SB-B9-2474 ARRA16.804

65,945

CLUSTER-JAG TOTAL 464,608

Federal Equitable Sharing Agreement FY12 FY12 16.922 344,685

2,482,761 U.S. Department of Transportation:

Highway Planning and Construction Passed through Florida Department of Transportation

Church Street Improvements, Design Phase 419774-1-38-01/AOL90 20.205 360,337 Church Street Improvements, Right of Way 419774-1-48-01/AOL90 20.205 57,779 Dinky Line Trail Phase 2, Design 415433-1-38-01 20.205 6,144 Dinky Line Trail Phase 2 415433-1-58-01 20.205 773,522 International Drive, Design Phase 417258-1-38-01 20.205 142,933 Mills Avenue Congestion Management Design 408428-1-58-01

408428-1-58-02408428-1-58-03415745-1-58-01415745-1-58-02

20.205 112,277

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FEDERAL AWARDS

U.S. Department of Transportation (Cont.):Citywide Fiber Optic Installation Project – Off System 428986-2-58-01 20.205 247,961 Citywide Fiber Optic Installation Project – On System 428986-1-58-01 20.205 405,543 Shingle Creek Oakridge to Sand Lake 430225-3-38-01 20.205 97,653 Cady Way (Gaston Edwards Park) Improvements 428987-1-58-01 20.205 423,375 Citywide Sidewalk Improvements 428046-1-58-02 20.205 1,453,303 Downtown Orlando ITS Project Phase 2 430201-1-58-01 20.205 281,243

4,362,070 Alcohol Impaired Driving Countermeasures Incentive Grants

Passed through Florida Department of Transportation

State and Community Highway Safety Program – DUI Enforcement K8-12-06-17 20.601 100,000

4,462,070

U.S. Equal Employment Opportunity Commission:Employment Discrimination – Title VII

FY11/12 EECCN100093, Mod. No. 2 30.002 17,900

U.S. Environmental Protection Agency:Capitalization Grants for Clean Water State Revolving Funds

Passed through Florida Department of Environmental Protection

Orlando Treatment Facilities (Aeration Process Improvements at the Conserv II WWTF)

WW48040 (140131) 66.458 4,278,592

Nonpoint Source Implementation Grants (Section 319) Passed through Florida Department of Environmental Protection

Orlando Wet Pond Expansion and Exfiltration G0286 66.460 103,908

4,382,500

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FEDERAL AWARDS

U.S. Department of Energy:Energy Efficiency and Renewable Energy Information Dissemination, Outreach, Training and Technical Analysis/Assistance

Metro Orlando's Green Future Alliance-Bringing Solar to Central Florida

DE-FC36-08GO18090 81.117 34,954

American Recovery and Reinvestment Act: Energy Efficiency and Conservation Block Grant Program (EECBG)

Various Energy Efficiency & Conservation Strategies

DE-EE000779/000 ARRA81.128

844,514

879,468

Executive office of the President:High Intensity Drug Trafficing Areas Program (HIDTA)

FY2011 G11CF0012H 95.001 62,380

U.S. Department of Homeland Security:Homeland Security Grant Program

Passed through Seminole County, FloridaState Homeland Security Grant Program (SHSGP) 09-DS-51-13-00-16-409 97.067 31,314

Passed through State of Florida State Homeland Security Grant Program (SHSGP) 010-DS-39-13-00-16-414 97.067 68,238 State Homeland Security Grant Program (SHSGP)/ FY2011 SWAT Night Vision Grant

11-DS-9Z-08-39-01-371 97.067 5,624

State Homeland Security Grant Program (SHSGP)/ FY2010 HAZMAT

11-DS-9Z-13-00-16-436 (local) 97.067 1,149

State Homeland Security Grant Program (SHSGP)/ FY2011 SWAT Issue 2

12-DS-20-06-58-02-461 97.067 14,663

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FEDERAL AWARDS

U.S. Department of Homeland Security (Cont):Passed through Florida Department of Law Enforcement

State Homeland Security Grant Program (SHSGP)/ SWAT

2012-SHSP-ORAN-1-S4-075 97.067 7,232

FY08 Urban Area Security Initiatives OPD Non-cash assistance, receipt of equipment

09-DS-48-06-58-02-442 97.067 172,775

FY09 Urban Area Security Initiatives, OFD 11-DS-32-06-58-02-089 97.067 26,724 FY09 Urban Area Security Initiatives, OPD 11-DS-32-06-58-02-089 97.067 1,870 FY09 Urban Area Security Initiatives, OFD Non-cash assistance, receipt of equipment

11-DS-32-06-58-02-089 97.067 104,577

FY09 Urban Area Security Initiatives, OPD Non-cash assistance, receipt of equipment

11-DS-32-06-58-02-089 97.067 617,664

1,051,830 Staffing for Adequate Fire and Emergency Response (SAFER)

FY10 EMW-2009-FH-00144 97.083 2,972,407 4,024,237

TOTAL EXPENDITURES OF FEDERAL AWARDS 24,742,206$

See accompanying notes to Schedule of Expenditures of Federal Awards and State Financial Assistance

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Identification CSFA StateGrantor/State Program Title/Pass-Through Grantor/ Number Number Expenditures

STATE FINANCIAL ASSISTANCE

Florida, Executive Office of the Governor:Economic Development Transportation Fund

Amcor Rigid Plastics USA, Inc 11-00441/ SB12-018 31.002 50,600$ Florida Department of Environmental Protection:

Voluntary Cleanup Tax Credit (VCTC) Program – Brownfield SitesEvents Center (Apps169/210) Non-cash assistance, value of tax credit certification sold

FY11/12 37.056 359,259

Dr. Phillips Performing Arts Center (App 222) Non-cash assistance, value of tax credit certification sold

FY11/12 37.056 42,023

Lake Highland (App 215) Non-cash assistance, value of tax credit certification sold

FY11/12 37.056 500,000

901,282

Florida Housing Finance Corporation:State Housing Initiatives Partnership Program (SHIP)

FY08/09 FY08/09 52.901 5,065 FY11/12 Administrative FY11/12 52.901 25,147 FY11/12 FY11/12 52.901 50,000

80,212

Florida Department of Transportation:State-Funded State Infrastructure Bank Loan Agreement

Commuter Rail 422729-1 55.020 3,322,867

Florida Department of State, Division of Cultural Affairs:General Program Support

FY11-12 Harry P. Leu Gardens 12.6.0216 45.003 11,187

Florida Department of Revenue:Facilities for New Professional Sports, Retained Professional Sports, or Retained Spring Training Franchise

Passed through Florida Office of Tourism, Trade, and Economic Development

Retained Orlando Magic FY09 73.016 2,000,004 TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE 6,366,152$ See accompanying notes to Schedule of Expenditures of Federal Awards and State Financial Assistance




Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance


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1. Basis of Presentation

This schedule summarizes the expenditures incurred under all federal programs and state projects by the City of Orlando, Florida (the City) for the fiscal year ended September 30, 2012. For purposes of this schedule, federal programs and state projects include all grants and contracts entered into directly between the City and agencies and departments of the federal or state government with expenditures during the fiscal year ended September 30, 2012. Federal programs and state projects passed through to other government agencies, if any, are also included in the schedule.

Expenditures for federal programs and state projects are recognized on the modified accrual basis of accounting.

2. Payments to Sub-Recipients

Amounts remitted to sub-recipients are shown parenthetically under the program title.

3. Contingency

The grant revenue amounts received are subject to audit and adjustment. If any expenditures are disallowed by grantor agency as result of such an audit, any claim for reimbursement to the grantor agencies would become a liability of the City. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreements and applicable federal and state laws and regulations.


Schedule of Findings and Questioned Costs


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Part I—Summary of auditor’s results

Financial statements section

Type of auditor’s report issued (unqualified, qualified, adverse or disclaimer): Unqualified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X none reported Noncompliance material to financial statements noted? yes X no Federal awards and state financial assistance section

Internal control over major programs: Material weakness(es) identified? X yes no Significant deficiency(ies) identified? yes X none reported Type of auditor’s report issued on compliance for major programs (unqualified, qualified, adverse or disclaimer):

Unqualified, except for CDFA 14.218, for which our opinion is Qualified

Any audit findings disclosed that are required to be reported in accordance with section .510(a) of OMB Circular A-133 and/or Chapter 10.550, Rules of the Auditor General? X yes no Identification of major programs:

CFDA numbers Name of federal program or cluster

Federal Programs: 14.218 Community Development Block Grants/ Entitlement Grants ARRA 14.257 Homelessness Prevention and Rapid Re-Housing Program

(HPRP) ARRA 16.710 Public Safety Partnership and Community Policing Grants 66.458 Capitalization Grants for Clean Water State Revolving Funds ARRA 81.128 Energy Efficiency and Conservation Block Grant Program 97.067 Homeland Security Grant Program


Schedule of Findings and Questioned Costs (continued)

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CSFA numbers Name of state project

State Projects: 37.056 Voluntary Cleanup Tax Credit Program – Brownfield Sites 55.020 State Funded Infrastructure Bank Loan Agreement 73.016 Facilities for New Professional Sports, Retained Professional

Sports, or Retained Spring Training Franchise Dollar threshold used to distinguish between Type A and Type B programs:

Federal: State:

$ 742,266 $ 300,000

Auditee qualified as low-risk auditee? X yes no Part II—Financial statement findings section

This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations of provisions of contracts and grant agreements, and abuse related to the financial statements for which Government Auditing Standards require reporting in a Circular A-133 audit.

No matters were reported.



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Part III—Federal award and state financial assistance findings and questioned costs section

This section identifies the audit findings required to be reported by Circular A-133 section .510(a) and/or Chapter 10.550 Rules of the Auditor General (for example, material weaknesses, significant deficiencies and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards and state financial assistance that are material to a major program/project.

Finding 2012-01

Federal program information : CFDA 14.218 Community Development Block Grants/Entitlement Grants

Criteria or specific requirement (including statutory, regulatory or other citation):

Circular A-87, Appendix A, Section C1 provides, in part, that “To be allowable under Federal awards, cost must meet the following criteria: (j) Be adequately documented.”

Condition : During the 2012 fiscal year, the employees

of the City’s Housing Department did not consistently prepare bi-weekly activity reports to support the allocation of administrative payroll costs to the CDBG program. Specifically, we noted that 24 of the 61 activity reports selected for testing were not prepared, of record, and were therefore not available for application of required audit procedures. The preparation and timely supervisory review of such activity reports is required in accordance with the City’s Housing Department guidelines as a means of documenting the allowability of administrative costs charged to the various grant programs administered by the Housing Department. In the absence of such activity reports, the City cannot demonstrate, of record, that administrative payroll costs charged to the CDBG program were allowable as defined in OMB Circular A-87 or that internal controls over program compliance requirements were operating as intended.



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Questioned costs : Questioned costs are $167,284. Context : We selected 61 activity reports for testing from

a population of 494 activity reports that should have been prepared and reviewed during the year ended September 30, 2012 to support allocated administrative costs and we were unable to test 24 of the items sampled. For the remaining 37 activity reports selected for testing, no instances of non-compliance were noted. Based on the error rate noted, we consider this finding to be indicative of a systemic deficiency related to the preparation and maintenance of supporting records. It should also be noted that City management detected this deficiency in connection with their periodic grant program reconciliation procedures wherein certain anomalies were detected and brought to the attention of the City’s Internal Audit department for follow-up procedures.

Effect: The City charged the CDBG program for

administrative payroll costs that could not be supported as allowable program costs. However, as noted above, although the unsupported expenditures were not prevented, the error was detected after its occurrence through the City’s periodic grant reconciliation process.

Cause: It appears that while effective prevent controls

had been designed (i.e., requirement for preparation, review and maintenance of bi-weekly activity reports), such controls were not operating as intended throughout the audit period, and supporting documentation related to costs charged to the CDBG program was not properly maintained.



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Recommendation: We recommend that the City provide additional training to Housing Department personnel regarding the requirements of OMB A-87 and other requirements of the program, including record retention protocols. We also recommend that an additional control procedure be implemented whereby a summary documenting the supervisory review of activity reports be prepared and maintained in connection with the preparation of reimbursement requests.

Views of responsible officials and planned corrective actions :

The City agrees to provide additional training to Housing Department personnel regarding the requirements of OMB A-87 and other requirements of the program, including record retention protocols. The City agrees to implement an additional control procedure whereby a summary documenting the supervisory review of activity reports be prepared and maintained in connection with the preparation of reimbursement requests.


Schedule of Prior Audit Findings

For The Year Ended September 30, 2012

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Part IV – Summary schedule of prior audit findings

Prior Finding No. Program/Requirement Description Status

Federal Awards Finding 2011-01

CFDA 14.239 HOME Investment Partnerships Program/Cash Management

During the 2011 fiscal year, the City requested and received federal HOME program funds as reimbursement for certain expenditures that had been incurred and previously reimbursed in the prior fiscal year. The error was detected by the City in connection with its year end grant expenditure reconciliation process, and the overdrawn funds were returned to the grantor in March 2012. The questioned cost was $30,407.

The Office of Business and Financial Services continued its process to reconcile grant reimbursements to expenditures to properly account for grant revenues each year end. Housing staff continue their process to perform and review reconciliations of program expenditures to reimbursement requests prior to submitting each monthly cash draw-down request. The finding is considered to be remediated.

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Report of Independent Certified Public Accountants on Internal Control over Financial Reporting and on Compliance and Other Matters Based on

an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards

The Honorable Mayor and Members of the City Council City of Orlando

We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Orlando, Florida (the City) as of and for the year ended September 30, 2012, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 1, 2013. We have also audited the financial statements of the City’s Firefighters Pension Fund, the Police Pension Fund and the General Employees’ Pension Fund as of and for the year ended September 30, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

Management of the City is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the City’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis.

Ernst & Young LLP Suite 1700 390 North Orange Avenue Orlando, FL 32801-1671 Tel: +1 407 872 6600 Fax: +1 407 872 6626 www.ey.com


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Our consideration of internal control over financial reporting was for the limited purpose described in this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether City’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 or other matters that are required to be reported under Government Auditing Standards.

We noted certain matters that we reported to management of the City in a separate letter dated March 1, 2013.

This report is intended solely for the information and use of management, the Mayor, Members of the City Council, and applicable federal and state awarding agencies and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties.

March 1, 2013


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