West Haven-Fed-State Compliance 6-30-09

CITY OF WEST HAVEN, CONNECTICUT
FEDERAL AND STATE FINANCIAL AND COMPLIANCE REPORT

FISCAL YEAR ENDED JUNE 30, 2009
McGladrey & Pullen, LLP is a member firm of RSM International,

an affiliation of separate and independent legal entities.
FEDERAL AND STATE FINANCIAL AND COMPLIANCE REPORT
TABLE OF CONTENTS
REPORT REQUIRED BY THE FEDERAL SINGLE AUDIT ACT AND OMB CIRCULAR A-133
Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major
Program, on Internal Control Over Compliance in Accordance with OMB Circular A-133
and on the Schedule of Expenditures of Federal Awards................................................... 1-2
Schedule of Expenditures of Federal Awards ........................................................................... 3-4
Notes to Schedule of Expenditures of Federal Awards ............................................................. 5
Schedule of Findings and Questioned Costs ............................................................................ 6-22
Summary of Prior Year Audit Findings ...................................................................................... 23
INDEPENDENT AUDITOR’S REPORT REQUIRED BY GOVERNMENT AUDITING

STANDARDS
Independent Auditor’s Report 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 ..................................... 24-25
REPORT REQUIRED BY THE STATE SINGLE AUDIT ACT C.G.S.

SECTION 4-230 TO 4-236
Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major
Program, on Internal Control over Compliance in Accordance with the State Single
Audit Act and on the Schedule of Expenditures of State Financial Assistance ................ 26-27
Schedule of Expenditures of State Financial Assistance .........................................................................
28-30
Notes to Schedule of Expenditures of State Financial Assistance ........................................ 31-32
Schedule of State Single Audit Compliance Findings and Questioned Costs .......................................... 33-35
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM, ON INTERNAL CONTROL OVER
COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND ON THE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
To the Honorable Mayor and

Members of the City Council
City of West Haven, Connecticut
Compliance: We have audited the compliance of the City of West Haven, Connecticut 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 June
30, 2009. The City of West Haven, Connecticut'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 its major federal programs is the
responsibility of the City of West Haven, Connecticut's management. Our responsibility is to express an
opinion on the City of West Haven, Connecticut'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 the City of
West Haven, Connecticut'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 the City of West Haven, Connecticut's
compliance with those requirements.
In our opinion, the City of West Haven, Connecticut complied, in all material respects, with the
requirements referred to above that are applicable to its major federal programs for the year ended
June 30, 2009.

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Internal Control Over Compliance: The management of the City of West Haven, Connecticut 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 the City of West Haven, Connecticut'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. Accordingly, we do not express
an opinion on the effectiveness of the City of West Haven, Connecticut’s internal control over compliance.
A control deficiency in an entity’s internal control over compliance exists when the design or operations of
a control does not allow management or employees, in the normal course of performing their assigned
functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program
on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,
that adversely affects the entity’s ability to administer a federal program such that there is more than a
remote likelihood that noncompliance with a type of compliance requirement of a federal program that is
more than inconsequential will not be prevented or detected by the entity’s internal control
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in

more than a remote likelihood that material noncompliance with a type of compliance requirement of a
federal program will not be prevented or detected by any entity’s internal control.
Our consideration of the internal control over compliance was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above.
Schedule of Expenditures of Federal Awards: We have audited the basic financial statements of the
governmental activities, each major fund, and the aggregate remaining fund information of the City of West
Haven, Connecticut as of and for the year ended June 30, 2009, and have issued our report thereon dated
January 29, 2010. Our audit was performed for the purpose of forming opinions on the financial
statements that collectively comprise the City of West Haven’s basic financial statements. The
accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis
as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such
information 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.
This report is intended solely for the information and use of the management and the City Council of the
City of West Haven, Connecticut, 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.
New Haven, Connecticut

January 29, 2010
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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

For the Year Ended June 30, 2009
Catalog of
Federal
Domestic Pass-Through
Federal Grantor/Pass-Through Assistance Grantors Federal
Grantor/Program Title Number Number Expenditures
U.S. Department of Agriculture

Passed Through State Department of Education:
National School Lunch Program 10.555 12060-SDE64370-20560-2008 $ 342,211
National School Lunch Program 10.555 12060-SDE64370-20560-2009 731,369
School Breakfast Program 10.553 12060-SDE64370-20508-2008 122,459
School Breakfast Program 10.553 12060-SDE64370-20508-2009 222,795
Food Distribution - Non-cash 10.555 N/A 137,755
Total U.S. Department of Agriculture 1,556,589
U.S. Department of Transportation

Passed Through State Department of Transportation
Alcohol Traffic Safety & Drunk Driving Prevention Incentive Grants 20.601 12062-DOT57533-22086 9,972
Intrastate Highway Projects 20.205 13033-DOT57191-41404 22,595
Total U.S. Department of Transportation 32,567
U.S. Department of Housing and Urban Development

Direct Programs
Community Development Block Grant 14.218 N/A 913,497
U.S. Department Environmental Protection

Passed Through State Department of Environmental Protection
Long Island Study 66.437 12060-DEP43720-21773 777,976
Environmental Quality N/A 12026-DEP43510-40202 100
Consolidated Forestry Programs N/A 12060-DEP44165-22052 1,250
Emergency Spill Response N/A 12026-DEP43950-40198 40
Remediation Clean-up N/A 12060-DEP43750-55050 43,000
822,366
U.S. Department of Education:

Passed Through the State Department of Education:
Special Education - IDEA State Grants 84.027 12060-20977-82032-2008 794,050
Special Education - IDEA State Grants 84.027 12060-20977-82032-2009 1,750,869
Carl D. Perkins Vocational and Applied Technology State Grant 84.048 12060-20742-84010-2008 141,347
Title II Part D - Technology 84.318 12060-20826-82079-2008 242
Title II Part D - Technology 84.318 12060-20826-82079-2009 10,547
Special Education - IDEA Preschool Grants 84.173 12060-20983-82032-2009 117,219
Special Education - IDEA Preschool Grants 84.173 12060-20983-82032-2008 1,000
Title V Innovative Education Strategies 84.298 12060-20909-84131-2008 648
Title I Improving Basic Programs 82.070 12060-20679-82070-2008 482,766
The accompanying notes are an integral part of this schedule.
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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS, Continued

Catalog of
Federal
Domestic Pass-Through
Federal Grantor/Pass-Through Assistance Grantors Federal
Grantor/Program Title Number Number Expenditures
U.S. Department of Education, Continued:

Title I Improving Basic Programs 82.070 12060-20679-82070-2009 2,038,940
School Improvement 82.071 12060-22223-82071-2009 33,926
Quality Enhancement Grant 82.079 12060-90242-82079-2009 42,019
Adult Education 84.002 12060-20784-84002-2008 40,000
Title II Part A - Teachers 84.367 12060-20858-84131-2008 53,200
Title II Part A - Teachers 84.367 12060-20868-84131-2009 325,365
Title III Part A - English Language 84.365 12060-20868-82075-2009 69,692
Title III Part A - English Language 84.365 12060-20868-82075-2008 17,235
Title IV - Safe & Drug Free Schools and Communities State Grants 84.186 12060-20873-84131-2009 26,531
Total U .S. Department of Education 5,945,596
U.S. Election Assistance Commission

Passed Through the State Secretary Office
Help America Vote Act 9.400 12060-SOS-12500-21465 15,122
U.S. Department of Social Services

SSBG Day Care 93.667 12060-DSS60794-20699 284,408
SSA Vocational Rehabilitation 93.667 12060-DSS60771-20310 1,650
Total U .S. Department of Social Services 286,058
U.S. Department of Homeland Security

School Security Competitive Grant N/A 12060-EHS99530-90516 138,992
Total Federal Awards $ 9,710,787
The accompanying notes are an integral part of this schedule.
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NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Note 1. Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal grant activity of the
City of West Haven 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.” Therefore, some amounts presented in this schedule may
differ from amounts presented in, or used in, the preparation of the basic financial statements.
Note 2. Contributions
U.S.D.A. Contributions
The United States Department of Agriculture makes available commodities for donations to schools. The
amount of $137,755, represents the fair value of such commodities used during the period.
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS

I. SUMMARY OF INDEPENDENT AUDITOR’S RESULTS
Financial Statements
Type of auditor’s report issued: unqualified
Internal Control Over Financial Reporting
Material weakness(es) identified? X Yes No

Significant deficiency(ies) identified that are not
considered to be material weaknesses? X Yes None reported
Noncompliance material to financial statements noted? Yes X No
Federal Awards
Internal control over major programs:
Material weakness(es) identified? Yes X No

considered to be material weaknesses? Yes X 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 OMB
Circular A-133? X Yes No
Identification of Major Programs
CFDA Numbers Program Name or Cluster
10.553/10.555 National School Lunch/Breakfast Cluster

84.027/84.173 Special Education Cluster
14.218 CDBG
Dollar threshold used to distinguish between
type A and type B programs $300,000
Auditee qualified as low-risk auditee? Yes X No
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS, Continued

II. FINDINGS RELATING TO THE FINANCIAL STATEMENT AUDIT AS REQUIRED TO BE

REPORTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS.
A. Deficiencies in Internal Control
SDIC09-1. Criteria:
Generally accepted accounting principles for entities using the modified

accrual basis of accounting use the current financial resources
measurement focus. Under this method of accounting, the City's
General Fund fund deficit is ($4,834,577) as of June 30, 2009.
Condition:
The City has an accumulated fund deficit in the General Fund of

($4,834,577).
Cause:
The City has overestimated budget revenues and overspent

appropriations.
Effect:
The City needs to continue to address the funding for eliminating the
General Fund deficit.
Recommendation:
We recommend the City continue to develop a plan to fund the existing

deficit.
SDIC09-2. Criteria:
The City's tax office should have proper internal control policies in place
to lower the risk of fraud and theft and proper recording of receipts.
-7-

Condition:
There is no daily reconciliation between each of the cashier drawer

deposits to the bank.
The bank reconciliation for the Tax Collector account was not prepared
on a monthly basis throughout the year. One bank reconciliation was
prepared only at year-end.
Tax bills that are returned for insufficient address are not researched in
a timely manner.
There is no tax collector's report that is prepared at any time during the
fiscal year. In addition, there is no reconciliation process between the
Walsh tax system and the general ledger during the year. The proper
reports are not prepared in order to complete monthly reconciliations in
a timely manner.
The reconciliation of the Assessor’s Grand List to the Tax Collector’s

rate book is not done on a timely basis. The reconciliations are done at
year end.
Context:
Controls should be established to ensure the proper recording of tax

receipts.
Cause:
Systemic in nature.
Effect:
When tax transactions and records are not recorded timely or

accurately, the reports used by management and the City Council may
not represent actual amounts needed to make financial decisions and
budget forecasts, and have the risk of misappropriation. In addition, if
reconciliations were done timely, management would be aware of any
issues in a timely manner.
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Recommendation:
It is recommended that a daily reconciliation between the cashier’s

drawers and the deposits be done daily. This will reduce the risk of
theft, misappropriation of assets and improper recording of amounts.
In addition, returned tax bills should be researched and resent timely.

This will prevent the loss of revenue to the City and records will be
updated timely.
Polices and procedures should be written and implemented that will

provide guidance to the tax office on the standard reports and
reconciliations that should be prepared monthly and annually. For
instance, a grand list to rate book reconciliation should be performed
timely and formally submitted to the Finance Department. A tax
collectors report should be prepared monthly which would then assist in
the reconciliation between the Walsh tax system, the bank, and the
general ledger on a monthly basis. Bank reconciliations should be
prepared monthly with accuracy, they should be reconciled to the
general ledger, and reviewed by the proper individual.
SDIC09-3. Criteria:
To maintain a proper internal control, all bank accounts must be

reconciled on a monthly basis and be reviewed and approved by a
person independent of the cash receipt and disbursement process.
Condition:
Monthly bank reconciliations were not performed in a timely manner

throughout the year.
Context:
Bank reconciliations are not performed on a routine/monthly basis.
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Cause:
The Board of Education and the City have not implemented procedures
which result in reconciliation of all bank accounts on a monthly basis.
Effect:
Transactions may be recorded in error, and fraud can occur.
Recommendation:
All bank accounts should be reconciled on a monthly basis to the

general ledger and be properly reviewed.
SDIC09-4. Criteria:
In order to record, reconcile and depreciate the City's capital assets, a

system needs to be in place in which capital asset transactions are
properly recorded on a timely basis.
Condition:
The City does not have a formal system to properly capture, record and
depreciate capital asset transactions as they occur throughout the year.
The assets are recorded and depreciated manually through an excel
spreadsheet, at year end.
Context:
The capital assets are not always identified when purchased, or retired.
Cause:
Systemic in nature.
Effect:
Capital asset transactions may not be reported in accordance with

generally accepted accounting principles.
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Recommendation:
Capital assets should be identified and recorded throughout the year,

not just at year end to ensure proper reporting of City capital assets in
the financial statements.
SDIC09-5. Criteria:
The use of a purchase order system allows management to properly

monitor the budget and forecast future expenditures.
Condition:
The City departments do not use purchase orders properly.

Departments use a voucher system rather than the available purchase
order system. At times when purchase orders are issued, the goods
and services were ordered and received by the issuer of the purchase
order before the purchase order was properly prepared and approved.
Context:
Purchase order system is improperly utilized.
Cause:
Systemic in nature.
Effect:
Expenditures were incurred prior to funds being committed and

approved.
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Recommendation:
Proper internal control over purchases ordinarily should require

purchase orders to be approved prior to the ordering of the goods or
services, include a separation of duties between the purchasing
requisition function and the receiving function.
In addition, procurement procedures in “Accounting Polices and

Procedures Manual” should be reviewed and revised to ensure proper
procedures exist, are implemented and followed.
SDIC09-6. Criteria:
The City should have an updated accounting and policy procedures

manual.
Condition:
Although the City has an accounting and procedures manual outlining

certain reporting responsibilities and describing the steps involved in
processing certain transactions, it should be reviewed to determine if all
significant transaction and account balances are included. A current
manual would improve the City's ability to maintain continuity of
operations during any absences of personnel responsible for
accounting and financial administration. It would also be useful in the
training of new personnel. This manual should be updated annually or
when significant changes are made to the processing systems to
document all accounting, administrative and internal control procedures
and all financial reporting requirements. The City should make sure all
departments are included in the manual and all departments have a
copy. This will provide a basis for maintaining continuity of operations
should any key employees be absent for an extended period.
Context:
The policies need to be updated to comply with new GASB's and

accounting rules.
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Cause:
Systemic in nature.
Effect:
Improper documentation of internal controls and functions.
Recommendation:
It is recommended that the manual be updated to include new

accounting rules and GASB pronouncements. In addition, the
procedures should be updated to include modifications to the MUNIS
system and the processing of transactions.
SDIC09-7. Criteria:
In the payable module in MUNIS, the City should have an approved

vendor listing that is periodically reviewed for old vendors. Changes
made to the listing should be approved by the appropriate party.
Condition:
While performing our audit procedures, we noted that no one reviews

the vendors that are entered into the system which could result in
unapproved vendors being used and payments being made to those
vendors.
Context:
There is no approved vendor listing and no policies and procedures for

addition of new vendors.
Cause:
Systemic in nature.
Effect:
Payments can be made to fictitious vendors.
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Recommendation:
It is recommended that any changes to the vendor listing be approved

by Finance. In addition, the vendor listing should be periodically
reviewed to remove any old vendors.
SDIC09-8. Criteria
The City should properly update accounts receivable subsidiary ledgers

when transactions occur and reconcile them to the general ledger on a
monthly or quarterly basis. The City should also analyze allowance for
doubtful accounts periodically throughout the year.
Condition:
The City has various accounts receivable balances on the general

ledger that do not reconcile to the subsidiary ledger throughout the
year. All reconciliations are done at year end. In addition, certain files
could not be found.
Context:
Periodic reconciliations are not being performed on accounts

receivable. Also, a periodic review of the allowance for doubtful
accounts is not being performed.
Cause:
The City does not have procedures in place to properly review accounts
receivable listings, throughout the year.
Effect:
Amounts due to the City from third parties could go uncollected,

resulting in lost revenue to the City.
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Recommendation:
It is recommended that the City use the receivable module to properly

track and record accounts receivable outstanding throughout the year.
In addition, the reserve for uncollectible accounts represents an

estimate of the amount of gross receivables that will not be collected.
This amount is used to reduce receivables to an amount representing
cash to be collected from existing receivables. The reserve for
uncollectible accounts is a significant estimate that requires an analysis
and evaluation of outstanding balances. We recommend the valuation
of accounts receivable be performed monthly and include an analysis of
aged accounts receivable outstanding and estimated collection rates by
payer.
SDIC09-9. Criteria:
Proper documentation should be maintained for all retirees in relation to

distributions made.
Condition:
It was noted that retirees did not have proper support in their files
documenting how their benefit was calculated after the initial year of
retirements.
Context:
Controls should be established to ensure proper documentation is

maintained to ensure retirees are receiving the proper payment
amounts.
Cause:
Systemic in nature.
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Effect:
Police officers could possibly not be receiving appropriate amounts in

accordance with plan documents. The pension plan could become
underfunded.
Recommendation:
It is recommended that the City maintain the proper supporting

documentation of all retirees, to properly support amounts being paid
out.
SDIC09-10. Criteria:
In order to maintain the proper internal controls, the City should have
proper segregation of duties for all material financial activities.
Condition:
Below are listed the department significant internal control weaknesses

noted during the audit and any recommendations developed during the
process; however, we recommend the City conduct an in-depth review
of its overall processes at each department in order to identify all
weaknesses, determine the cost benefit of improving internal controls
and efficiency, and evaluate the overall structure of the City's policies
and procedures.
City and Board of Education Payroll - The same individual gathers

payroll information from departments, is allowed to make changes to the
payroll, runs the payroll and reviews the final payroll run.
Student Activities - One individual at each school is responsible for all

aspects of receipting, disbursing, record keeping and accounting related
to the student activity funds.
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Parks and Recreation Department - The same individual is

responsible for collecting receipts, maintaining the subsidiary ledger for
receipts, maintaining the receipts until deposit, preparing the deposit
slip, making the deposits, processing the checks written, performing
bank reconciliations, and maintaining the accounting of the funds. In
addition, the accounts are not reviewed by the Finance Department and
are not recorded on the City's books.
Police Pension - The same individual prepares the benefit payment

listing and has control over those retiring, with no oversight or review of
the information sent over to Wilmington Trust that is used to process
monthly benefit payments.
Context:
Controls should be established to ensure the proper segregation of

duties within these departments.
Cause:
Systemic in nature.
Effect:
The lack of proper controls and segregation of duties increases the risk
of error, fraud, misappropriation of assets and inaccurate financial
reporting.
Recommendation:
To improve segregation of duties and adequacy of internal controls,

significant responsibilities must be segregated between two unrelated
individuals. The City's policies should be reviewed to evaluate whether
the responsibilities can be restructured to provide improved controls
with the existing staffing.
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For payroll procedures, one individual should gather the information and
enter it into the system, and another should run the payroll. The payroll
should also be reviewed by an individual in the supervision committee.
The Board of Education should create policies and procedures for the
Student Activity Fund to separate the cash collections from the deposit
function and reconciliation. In addition, the central office should review
the information periodically throughout the year.
All departments performing collections should separate the act of

collection and receipting, custody over collections, performing bank
reconciliations, and making the deposits between two unrelated
individuals.
In addition, a member of management should review all signed checks

with related supporting documents, before checks are mailed by
another person.
Trial balances must be reviewed and appropriate adjusting journal

entries made on a monthly basis to ensure accurate reporting.
Condition:
There were significant adjustments made to the final trial balance such
as:
Recording of loans and accounts receivable at year-end.

Recording of BOE accounts payable at year-end.
Recording of Police pension fund.
Context:
All closing entries were not recorded.
Cause:
Systemic in nature.
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Effect:
No interim financial statements were available.
Recommendation:
We recommend that the City review its month-end and year-end closing
procedures.
The Board of Education should have formal uniform policies and

procedures for Student Activity funds held at various schools throughout
the City.
Condition:
It was noted that there are no formal policies and procedures for
Student Activity funds, in relation to the use of funds, documentation of
collections, the approval process and the timely completion of bank
reconciliations.
Context:
The Student Activity funds bank reconciliations are not performed

timely, and they do not follow proper internal control procedures.
Cause:
Systemic in nature.
Effect:
Bank reconciliations were not timely performed, proper approvals were

not obtained, and improper items could be purchased.
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Recommendation:
We recommend that the Board of Education adopt and implement

uniform Student Activity policies and procedures. They should include
policies on types of items that can be purchased with the funds,
approval policies, documentation policies, and bank reconciliation
policy. In addition, bank reconciliations should be prepared monthly
and reviewed by appropriate persons.
The City should fund their pension plan at the level recommended by
the actuary.
Condition:
It was noted that the City did not fund their pension plan at the level
recommended by the actuary.
Context:
The pension plan was not funded at the level recommended by the
actuary.
Cause:
Systemic in nature.
Effect:
The pension plan could be underfunded in future years.
Recommendation:
We recommend that the City fund their pension plan at the level
recommended by the actuary.
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The City was unable to locate several Community Development Block

Grant loan files.
Condition:
It was noted that the City has no formal process for maintaining their
Community Development Block Grant loan files.
Context:
There were loan files that could not be located.
Cause:
Systemic in nature.
Effect:
Loans receivable could be misstated.
Recommendation:
We recommend that the City implement a process to track loan files.
B. Compliance Findings
CF09-1. Criteria:
The City did not fully address in their 2008/2009 General Fund budget
the accumulated deficit in the General Fund.
Cause:
Budget and economic conditions.
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Context:
Systemic in nature.
Effect:
The City was not in compliance with Section 7-390 of the Connecticut
General Statutes.
Recommendation:
The City should explore all alternatives to the General Fund deficit and
incorporate the plan in future budgets.
Corrective Action:
The City will continue to explore all options to eliminate the General Fund
deficit.
III. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS
A. Internal Control
None reported.
B. Compliance
None reported.
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SUMMARY OF PRIOR YEAR AUDIT FINDINGS
IC08-1. Repeated.
IC08-2. Repeated.
IC08-3. Repeated.
IC08-4. Repeated.
IC08-5. Repeated.
IC08-6. Repeated.
IC08-7. Repeated.
IC08-8. Repeated.
IC08-9. Repeated.
IC08-10. Repeated.
IC08-11. Repeated.
IC08-12. Repeated.
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INDEPENDENT AUDITOR’S REPORT 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
To the Honorable Mayor

and Members of the City Council
We have audited the financial statements of the governmental activities, each major fund and the
aggregate remaining fund information of the City of West Haven, Connecticut, as of and for the year ended
June 30, 2009, which collectively comprise the City of West Haven, Connecticut’s basic financial
statements, and have issued our report thereon dated January 29, 2010. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America 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: In planning and performing our audit, we considered the City
of West Haven, Connecticut's internal control over financial reporting as a basis for designing our auditing
procedures for the purpose of expressing our opinions on the basic financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City of West Haven’s internal control over
financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of West
Haven, Connecticut’s internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in the
preceding paragraph and would not necessarily identify all deficiencies in internal control over financial
reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we
identified certain deficiencies in internal control over financial reporting that we consider to be significant
deficiencies.
A control deficiency 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 misstatements
on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,
that adversely affects the entity’s ability to initiate, authorize, record, process, or report financial data
reliably in accordance with generally accepted accounting principles such that there is more than a remote
likelihood that a misstatement of the entity’s financial statements that is more than inconsequential, will not
be prevented or detected by the entity’s internal control. We consider the deficiencies described in the
-24-
accompanying schedule of findings and responses to be significant deficiencies in internal control over
financial reporting (SDIC09-1 through SDIC09-14.)

more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by the entity’s internal control.
Our consideration of the internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and would not necessarily identify all deficiencies in the internal control
that might be significant deficiencies and, accordingly, would not necessarily disclose all significant
deficiencies that are also considered to be material weaknesses. However, we consider items SDIC09-1 –
SDIC09-2 described above to be material weaknesses.
Compliance and Other Matters: As part of obtaining reasonable assurance about whether the City of
West Haven, Connecticut'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 one instance of
noncompliance or other matters that are required to be reported under “Government Auditing Standards,”
which is described in the accompanying Schedule of Findings and Questioned Costs as Item CF09-1.
This report is intended solely for the information and use of the City Council, the management of the City of
West Haven, Connecticut and federal and state awarding agencies and pass-through entities and is not

January 29, 2010
-25-
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH
REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM, ON INTERNAL
CONROL OVER COMPLIANCE IN ACCORDANCE WITH THE STATE SINGLE
AUDIT ACT AND ON THE SCHEDULE OF EXPENDITURES OF STATE
FINANCIAL ASSISTANCE
To the Honorable Mayor and

Members of the City Council
Compliance: We have audited the compliance of the City of West Haven, Connecticut with the types of
compliance requirements described in the "Office of Policy and Management Compliance Supplement”
that are applicable to each of its major state programs for the year ended June 30, 2009. The major state
programs are identified in the summary of audit results section of the accompanying schedule of state
single audit compliance findings and questioned costs. Compliance with the requirements of laws,
regulations, contracts and grants applicable to each of its major state programs is the responsibility of the
City of West Haven, Connecticut's management. Our responsibility is to express an opinion on 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 the State Single Audit Act. Those
standards and the State Single Audit Act 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 state program occurred. An audit includes examining,
on a test basis, evidence about the City of West Haven, Connecticut'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
the City of West Haven, Connecticut's compliance with those requirements.
In our opinion, the City of West Haven, Connecticut complied, in all material respects, with the
requirements referred to above that are applicable to each of its major state programs for the year ended
June 30, 2009.

-26-
Internal Control Over Compliance: The management of the City of West Haven, Connecticut is
responsible for establishing and maintaining effective internal control over compliance with requirements of
laws, regulations, contracts and grants applicable to state programs. In planning and performing our audit,
we considered the internal control over compliance with requirements that could have a direct and material
effect on a major state program in order to determine our auditing procedures for the purpose of
expressing our opinion on compliance 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 of West Haven, Connecticut’s internal control over compliance.
A control deficiency in an entity’s internal control over compliance 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 noncompliance with a type of compliance requirement of a state program on
a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that
adversely affects the entity’s ability to administer a state program such that there is more than a remote
likelihood that noncompliance with a type of compliance requirement of a state program that is more than
inconsequential will not be prevented or detected by the entity’s internal control.

more than a remote likelihood that material noncompliance with a type of compliance requirement of a
state program will not be prevented or detected by an entity’s internal control.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above.
Schedule of Awards/Expenditures of State Financial Assistance: We have audited the financial

statements of the governmental activities, each major fund, and the aggregate remaining fund information
of the City of West Haven, Connecticut as of and for the year ended June 30, 2009, and have issued our
report thereon dated January 29, 2010. Our audit was performed for the purpose of forming opinions on
the financial statements that collectively comprise the City of West Haven’s basic financial statements.
The accompanying schedule of awards/expenditures of state financial assistance is presented for
purposes of additional analysis as required by the State Single Audit Act and is not a required part of the
basic financial statements. Such information 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.
This report is intended solely for the information and use of the City Council, management of the City of
West Haven, Connecticut, the Office of Policy and Management and state awarding agencies and is not

January 29, 2010
-27-
SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE

State Grant Program

State Grantor/Pass-Through CORE-CT
Grantor/Program Title Number Expenditures
Office of Policy & Management:

Property Tax Disability Exemption 11000-OPM20600-17011 $ 7,351
Payment in Lieu of Taxes (PILOT) on Private Colleges and
General/Chronic Disease Hospitals 11000-OSC15910-17006 2,023,177
Property Tax Relief for Manufacturing, Machinery,
Equipment and Commercial Vehicles 11000-OPM20600-17031 288,598
Property Tax Relief for Elderly and Totally
Disabled Homeowners 11000-OPM20600-17018 415,540
Property Tax Relief for Elderly Homeowners -
Freeze Program 11000-OPM20600-17021 20,000
Property Tax Relief for Veterans 11000-OPM20600-17024 148,942
Local Capital Improvement 12050-OPM20600-40254 493,885
Municipal Video Competition 12060-OPM20600-35362 3,710
Heating Assistance Schools 11000-OPM20600-17096 76,099
Total Office of Policy and Management 3,477,302
Department of Education:
Adult Education 11000-SDE64370-17030 345,749
Health Services 11000-SDE64370-17034 192,002
Bilingual Education 11000-SDE64370-17042 27,402
Youth Services Bureau 11000-SDE64370-17052 43,134
Youth Services Enhancement 11000-SDE64370-16201 7,550
School Breakfast Program 11000-SDE64370-17046 41,569
Interdistrict Cooperative Grant 11000-SDE64370-17045 766,733
School Readiness & Child Care 11000-SDE64370-17043 1,489,221
Magnet School Transportation 11000-SDE64370-17057 115,457
School Readiness Quality Enhancement 12060-SDE64370-90242 42,019
Healthy Foods Grant 12060-SDE64370-16072 26,120
Family Resource Centers 11000-SDE64370-16110 97,200
School Accountability 11000-SDE64480-12453 3,000
School Improvement 11000-SDE64370-22223 72,500
Web Based Adult Diploma 12060-BAA77200-20137 2,600
Total Department of Education 3,272,256
Department of Environmental Protection:

Environmental Quality 12026-DEP43510-40202 100
Clean Water Fund 21015-OTT14230-42318 759,678
759,778
Department of Transportation:
Town Aid Road Grant - Transportation Fund 12001-DOT57000-17036 305,346
Improvement State Bridge/Railroad 13033-DOT57124-43115 21,483
Capital Resurfacing-Related Imp 13033-DOT57191-41404 4,550
Total Department of Transportation 331,379
See Notes to Schedule. (Continued)
-28-
SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE, Continued

State Grant Program

Board of Education Services to the Blind:

Education of Handicapped Blind Children 11000-ESB65000-12060 74,598
Office of the State Comptroller:

Mashantucket Pequot/Mohegan Fund 12009-OSC15910-17005 1,068,794
PILOT on State Owned Property 11000-OSC15910-17004 10,407
Boat Grant 12027-OSC15910-40211 10,411
Total Office of the State Comptroller 1,089,612
Department of Social Services:

General Assistance 11000-DSS60439-10020 42,843
Child Day Care Local Governments 11000-DSS60794-17022 227,786
Services to the Elderly 11000-DSS60782-16123 13,450
Total Department of Social Services 284,079
Department of Emergency Homeland Security:

State Homeland Security 12060-EHS99530-21877 5,800
Emergency Management Perform Grant 11000-EHS99660-21881 3,155
Total Department of Emergency Homeland Security 8,955
Department of Public Health:

Local & District Dept. of Health 11000-DPH44558-17009 126,015
Preparedness & Resp Bioterrorism 12060-DPH48557-21096 40,145
Prevention Health Services Block Grant 12060-DPH48558-21530 8,257
X-Ray Screen 11000-DPH48666-16112 15,640
Vaccination Assistance 12060-DPH48664-20911 50,664
Other expenses 11000-DPH48664-10020 30,639
Total Department of Public Health 271,360
Department of Revenue Services:

Funds Awaiting Distribution 34003-DSR18309-42350 11,169
Department of Agriculture
Shell Fish Taxes 34003-DAG42660-42337 7,859
Connecticut Grown Food PA 05228 12060-DAG42710-90458 800
Total Department of Agriculture 8,659
Department of Public Safety:

Drug Assets Forfeiture Funds 12060-DPS32155-35142 10,331
Enhanced 911 Telecommunication 12060-DPS32740-35190 107,891
Total Department of Public Safety 118,222
See Notes to Schedule. (Continued)
-29-
SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE, Continued

State Grant Program

Department of Fire Prevention and Control

Fire School Training and Education Extension 12060-FPC36520-35180 300
Fire School Auxiliary Services 12060-FPC36510-35192 2,790
Total Fire Prevention and Control 3,090
Department of Children and Families:

Individualized Family Supports 11000-DCF91178-16140 11,781
Caseworker Visits PSSF Program 12060-DCF91147-22147 600
Total Department of Children and Families 12,381
Judicial Branch:
Nonbudgeted Operating 34001-JUD95162-40001 8,207
Total State Financial Assistance Before

Exempt Programs 9,731,047
EXEMPT PROGRAMS
Education Cost Sharing 11000-SDE64000-17041 41,319,451
Transportation of School Children 11000-SDE64000-17027 1,048,940
School Construction Progress Payment 13009-SDE64000-40896 1,570,601
School Construction - Interest 11000-SDE64000-17002 123,201
Excess Cost - Student Based 11000-SDE64000-17047 2,197,306
Non-Public School Transportation 11000-SDE64000-17049 70,590
Total Exempt Programs 46,330,089
Total State Financial Assistance $ 56,061,136
See Notes to Schedule.
-30-
NOTES TO SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE

Various departments and agencies of the State of Connecticut have provided financial assistance to the
City of West Haven through grants and other authorizations in accordance with the General Statutes of the
State of Connecticut. The financial assistance programs fund several programs including education, public
works, social services, education, property tax relief and public safety.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of West Haven, Connecticut conform to accounting principles
generally accepted in the United States of America as applicable to governments. The following is
a summary of the more significant policies relating to the aforementioned grant programs.
Basis of Accounting
The financial statements for the Governmental funds contained in the City of West Haven's basic
financial statements are prepared on the modified accrual basis of accounting.
The Schedule of Expenditures of State Financial Assistance, contained in this report, is also
prepared on the modified accrual basis of accounting and on regulations established by the State
of Connecticut Office of Policy and Management. In accordance with these regulations, certain
grants are not dependent on expenditure activity, and accordingly, are considered to be expended
in the fiscal year of receipt. These grant program receipts are reflected as awards in the
expenditures column of the Schedule of Expenditures of State Financial Assistance.
As a result, certain classifications of revenues and expenditures under accounting principles

generally accepted in the United States of America differ from classifications utilized for the
Schedule of Expenditures of State Financial Assistance.
-31-
NOTES TO SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE, Continued

2. LOAN PROGRAMS
In accordance with Section 4-236–23(a)(4)(F) of the Regulations to the State Single Audit Act, the
notes to the Schedule of Expenditures of State Financial Assistance shall include loans and loan
activities. The following is a summary of the various loan program activity for the year ended
June 30, 2009:
Department of Environmental Protection
Clean Water Fund 6864-3105-999
Balance Balance
July 1, 2008 Issued Retired June 30, 2009
$14,488,783 $ - $1,494,649 $12,994,134
Interim Clean Water Fund Financing
Balance Balance
July 1, 2008 Issued Retired June 30, 2009
$521,055 $567,479 $ - $1,088,534
-32-
SCHEDULE OF STATE SINGLE AUDIT COMPLIANCE FINDINGS AND QUESTIONED COSTS

I. SUMMARY OF AUDIT RESULTS
Financial Statements
Type of auditor’s report issued: unqualified.
Internal control over financial reporting:
Material weakness(es) identified? X Yes No

considered to be material weaknesses? X Yes None reported
Noncompliance material to financial statements
noted? Yes X No
State Financial Assistance
Internal control over major programs:
Material weakness(es) identified? Yes X No

considered to be material weaknesses? Yes X 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 4-236-24
of the Regulations to the State Single Audit Act? Yes X No
-33-
SCHEDULE OF STATE SINGLE AUDIT COMPLIANCE FINDINGS AND QUESTIONED COSTS, Continued
The following schedule reflects the major state programs included in the State compliance audit:
State CORE-CT
State Grantor and Program Number Expenditures
Office of Policy and Management

Payment in Lieu of Taxes (PILOT) on Private Colleges and
General/Chronic Disease Hospitals 11000-OSC15910-17006 $ 2,023,177
Property Tax Relief for Manufacturing, Machinery, Equipment
and Commercial Vehicles 11000-OPM20600-17031 288,598
Property Tax Relief for Elderly and Totally Disabled Homeowners 11000-OPM20600-17018 415,540
Property Tax Relief for Veterans 11000-OPM20600-17024 148,942
Local Capital Improvement 12050-OPM20600-40254 493,885
Department of Education
Adult Education 11000-SDE64000-17030 345,749
Health Services 11000-SDE-64000-17034 192,002
Interdistrict Cooperative Grant 11000-SDE-64000-17045 766,733
School Readiness & Child Care 11000-SDE64000-17043 1,489,221
Magnet Schools/Transportation 11000-SDE64000-17057 115,457
Department of Environmental Protection

Clean Water Fund Loan 21015-OTT14230-42318 759,678
Department of Transportation
Town Aid Road Grant - Transportation Fund 12001-DOT57000-17036 305,346
Office of the State Comptroller

Mashantucket Pequot/Mohegan Fund 12009-OSC15910-17005 1,068,794
Department of Social Services

Child Daycare Center (CDC) 11000-DSS60000-17022 227,786
Department of Public Health

Local & District Dept. of Health 11000-DPH44558-17009 126,015
Department of Public Safety

Enhanced 911 Telecommunication 12060-DPS3270-35190 107,891
-34-
SCHEDULE OF STATE SINGLE AUDIT COMPLIANCE FINDINGS AND QUESTIONED COSTS, Continued
II. SUMMARY OF FINDINGS RELATED TO FINANCIAL STATEMENTS

REQUIRED UNDER GOVERNMENT AUDITING STANDARDS
We issued reports, dated January 29, 2010, on internal control over financial reporting and
compliance and other matters based on an audit of the basic financial statements
performed in accordance with “Government Auditing Standards.”
Our report on compliance indicated one reportable instance of noncompliance.
Our report on internal control over financial reporting noted two matters that we consider
to be material weaknesses and twelve matters that we consider to be significant
deficiencies.
III. FINDINGS AND QUESTIONED COSTS FOR STATE FINANCIAL ASSISTANCE
A. Deficiencies in Internal Controls
None reported.
B. Compliance Findings
None reported.
-35-

West Haven-Fed-State Compliance 6-30-09

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CITY OF WEST HAVEN, CONNECTICUT

FEDERAL AND STATE FINANCIAL AND COMPLIANCE REPORT

McGladrey & Pullen, LLP is a member firm of RSM International,

FEDERAL AND STATE FINANCIAL AND COMPLIANCE REPORT

INDEPENDENT AUDITOR’S REPORT REQUIRED BY GOVERNMENT AUDITING

REPORT REQUIRED BY THE STATE SINGLE AUDIT ACT C.G.S.

To the Honorable Mayor and

McGladrey & Pullen, LLP is a member firm of RSM International,

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in

New Haven, Connecticut

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

U.S. Department of Agriculture

U.S. Department of Transportation

U.S. Department of Housing and Urban Development

U.S. Department Environmental Protection

U.S. Department of Education:

The accompanying notes are an integral part of this schedule.

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS, Continued

U.S. Department of Education, Continued:

U.S. Election Assistance Commission

U.S. Department of Social Services

U.S. Department of Homeland Security

Total Federal Awards $ 9,710,787

The accompanying notes are an integral part of this schedule.

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Note 1. Basis of Presentation

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

I. SUMMARY OF INDEPENDENT AUDITOR’S RESULTS

Type of auditor’s report issued: unqualified

Internal Control Over Financial Reporting

Material weakness(es) identified? X Yes No

Internal control over major programs:

Material weakness(es) identified? Yes X No

Type of auditor’s report issued on compliance for major programs: unqualified

Any audit findings disclosed that are required to be

Identification of Major Programs

CFDA Numbers Program Name or Cluster

10.553/10.555 National School Lunch/Breakfast Cluster

Auditee qualified as low-risk auditee? Yes X No

SCHEDULE OF FINDINGS AND QUESTIONED COSTS, Continued

II. FINDINGS RELATING TO THE FINANCIAL STATEMENT AUDIT AS REQUIRED TO BE

A. Deficiencies in Internal Control

Generally accepted accounting principles for entities using the modified

The City has an accumulated fund deficit in the General Fund of

The City has overestimated budget revenues and overspent

We recommend the City continue to develop a plan to fund the existing

SCHEDULE OF FINDINGS AND QUESTIONED COSTS, Continued

There is no daily reconciliation between each of the cashier drawer

The reconciliation of the Assessor’s Grand List to the Tax Collector’s

Controls should be established to ensure the proper recording of tax

When tax transactions and records are not recorded timely or

SCHEDULE OF FINDINGS AND QUESTIONED COSTS, Continued

It is recommended that a daily reconciliation between the cashier’s

In addition, returned tax bills should be researched and resent timely.

Polices and procedures should be written and implemented that will

To maintain a proper internal control, all bank accounts must be

Monthly bank reconciliations were not performed in a timely manner

Bank reconciliations are not performed on a routine/monthly basis.

SCHEDULE OF FINDINGS AND QUESTIONED COSTS, Continued

Transactions may be recorded in error, and fraud can occur.

All bank accounts should be reconciled on a monthly basis to the

In order to record, reconcile and depreciate the City's capital assets, a

Capital asset transactions may not be reported in accordance with