EIN: 330338303
UEI: XF9TMFLSDCN5
Data as of August 23, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on August 19, 2024. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by February 19, 2025 (550 days ago).
What is a management decision? →The Town applied for approximately $6.4 million in a California Water and Wastewater Arrearages Payment Program Grant (Grant) from the State Water Resources Control Board, which was received in May 2022. The funding source for this Grant is the American Rescue Plan Act. The Grant Guidelines state that wastewater treatment providers and billing entities that accrued residential and commercial customer arrearages during the COVID-19 pandemic bill relief period (March 4, 2020 through June 15, 2021) are eligible for funding under the Grant. The Guidelines also state that wastewater treatment providers and wastewater billing entities must provide documentation from accounting or billing systems verifying the reported arrearages as part of the application. The authorized representative, or its designee, must attest to the accuracy of the application material and the reported arrearages based on the wastewater treatment provider's or wastewater billing entity's documentation or the methodology used by the State Water Board if supporting documentation is unavailable. In summary, the purpose of the Grant was to help local governments that had incurred losses due to customers who were delinquent on paying water and sewer fees during the above period. Once the Grant was received, local governments were to credit the customer accounts within 60 days, using the Grant funds. In addition, the Grant required local governments to remit all unused moneys back to the State Water Resources Control Board within 6 months of receiving the funds. After reviewing the Grant Guidelines, we noted during our audit that the amount requested by the Town represented approximately one year’s worth of revenue in the Sewer Fund. Since the period mentioned above only covered about 15 months, and the amount claimed appeared excessive, we questioned the Town’s Finance staff about it. The Town’s Finance staff researched the situation, and it became apparent the amount received was significantly in excess of the amount that should have been claimed based on the Grant requirements. However, based on our discussions and the Town’s research, during the 2022-23 fiscal year, a substantial portion of the $6.4 million grant was credited to ineligible customer accounts (no arrearages during the above period), and the Town didn’t collect the Sewer fees they normally would have. Therefore, approximately $6.2 million of the grant received is reported as Due to Other Governments in the Sewer Fund and $187,494 in the General Fund as of June 30, 2022.
Show full finding ▾Hide full finding ▴The Town applied for approximately $6.4 million in a California Water and Wastewater Arrearages Payment Program Grant (Grant) from the State Water Resources Control Board, which was received in May 2022. The funding source for this Grant is the American Rescue Plan Act. The Grant Guidelines state that wastewater treatment providers and billing entities that accrued residential and commercial customer arrearages during the COVID-19 pandemic bill relief period (March 4, 2020 through June 15, 2021) are eligible for funding under the Grant. The Guidelines also state that wastewater treatment providers and wastewater billing entities must provide documentation from accounting or billing systems verifying the reported arrearages as part of the application. The authorized representative, or its designee, must attest to the accuracy of the application material and the reported arrearages based on the wastewater treatment provider's or wastewater billing entity's documentation or the methodology used by the State Water Board if supporting documentation is unavailable. In summary, the purpose of the Grant was to help local governments that had incurred losses due to customers who were delinquent on paying water and sewer fees during the above period. Once the Grant was received, local governments were to credit the customer accounts within 60 days, using the Grant funds. In addition, the Grant required local governments to remit all unused moneys back to the State Water Resources Control Board within 6 months of receiving the funds. After reviewing the Grant Guidelines, we noted during our audit that the amount requested by the Town represented approximately one year’s worth of revenue in the Sewer Fund. Since the period mentioned above only covered about 15 months, and the amount claimed appeared excessive, we questioned the Town’s Finance staff about it. The Town’s Finance staff researched the situation, and it became apparent the amount received was significantly in excess of the amount that should have been claimed based on the Grant requirements. However, based on our discussions and the Town’s research, during the 2022-23 fiscal year, a substantial portion of the $6.4 million grant was credited to ineligible customer accounts (no arrearages during the above period), and the Town didn’t collect the Sewer fees they normally would have. Therefore, approximately $6.2 million of the grant received is reported as Due to Other Governments in the Sewer Fund and $187,494 in the General Fund as of June 30, 2022.
Management agrees that in order to maintain the integrity of the accounting and financial reporting system, and to ensure timely reporting, an adequate system of internal controls should be designed and implemented to ensure effective operation. Management is aware of the reconciliation issue between the receivables in Sewer and Solid Waste Funds which, in part, is due to inherent limitation in the system used for utility billings. Staff is working diligently to perform the reconciliations or to develop a different methodology of accurately reporting receivables in both Funds. The complete and accurate reconciliations between these two funds should take place during FY 2024-25. Earlier reconciliation is possible. Management agrees to the adjustments related to OPEB and other liabilities, writing off significant uncollectible interfund receivables, amounts due from other governments, and capital assets. Management and staff are preparing a detailed and comprehensive schedule of accounting duties for the year-end closing process, to include individuals responsible for completing each task along with completion dates and sign-off elements. The OPEB and other liabilities, writing off significant uncollectible interfund receivables, amounts due from other governments, and capital assets are corrected during FY 2022-23. Timely issuance of audit reports involves collaboration and teamwork between auditor and auditee. The finance staff worked diligently and promptly responded to the auditors’ requests for information and documentation. The timeliness of reconciliations related to the Sewer and Solid Waste funds were delayed but were not associated with the rest of the funds. However, the audit of all financial information of the Town was suspended for more than a year when the lack of reconciliations for these two funds was brought to the attention of the auditors. Name of Responsible Person: Emad Gewaily, Director of Finance Implementation Date: June 30, 2025
FAC accepted this audit on March 28, 2019 — management decision was due September 28, 2019.
GSA_MIGRATION
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GSA_MIGRATION
2017-004
FAC accepted this audit on March 27, 2018 — management decision was due September 27, 2018.
GSA_MIGRATION
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GSA_MIGRATION
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