CITY OF CERESLocal Government

Finding 2024-002 – Timeliness CFDA Title and Number: Coronavirus State and Local Fiscal Recovery Funds (21.207) Federal Agency: U.S. Department of the Treasury Pass-through Entity: N/A Year: 2024 Criteria: Section 200.512(a) of the Uniform Guidance states that an audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The City did not complete the audit and submit the data collection form and reporting package within nine months after the end of the fiscal year. Questioned Costs: None Context: The City did not schedule a single audit to be performed until after the deadline had passed. Effect or Potential Effect: The City did not meet the audit requirements as provided in Section 200.512(a). Cause: The City did not have policies in place to have an audit completed or data collection form submitted before the deadline. Recommendation: The City should implement policies and procedures to have the audit completed and data collection form filed before the deadline. Responsible Official’s Response and Corrective Action Planned: The City will work closely with the independent auditor to ensure single audits are competed within the specified timeline.

Finding 2023-002 – Timeliness CFDA Title and Number: Coronavirus State and Local Fiscal Recovery Funds (21.207) Federal Agency: U.S. Department of the Treasury Pass-through Entity: N/A Year: 2023 Criteria: Section 200.512(a) of the Uniform Guidance states that an audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The City did not complete the financial audit in a timely manner to submit the data collection form and reporting package within nine months after the end of the fiscal year. Questioned Costs: None Context: The City did not schedule a single audit to be performed until after the deadline had passed. Effect or Potential Effect: The City did not meet the audit requirements as provided in Section 200.512(a) and potential loss of funding. Cause: The City did not have policies and procedures in place to complete the financial audit in a timely manner and submit the data collection form before the deadline. Recommendation: The City should implement policies and procedures to have the financial audit completed and data collection form filed before the deadline. Responsible Official’s Response and Corrective Action Planned: Management concurs with the auditor’s finding of timeliness due to noncompliance with Section 200.512(a) of the Uniform Guidance. The underlying causes included prolonged resource constraints within the Finance Department, turnover in key accounting positions, challenges associated with the ERP system implementation, and delays in reconciling certain major balance sheet accounts. To address these issues, the City engaged an external financial consultant to assist in completing outstanding bank reconciliations and restoring timely financial reporting. Management is also implementing additional corrective measures, including reprioritizing workloads, enhancing oversight of monthly close activities, and establishing standardized reconciliation checklists for all major balance sheet accounts. Management anticipates that this finding will extend through the Fiscal Year 2024, Fiscal Year 2025, and possibly Fiscal Year 2026 financial statement reporting cycles, with full resolution expected in Fiscal Year 2027.

Finding 2022-001 ? Timeliness CFDA Title and Number: Highway Planning and Construction (20.205) Coronavirus State and Local Fiscal Recovery Funds (21.207) Federal Agency: U.S. Department Transportation U.S. Department of the Treasury Pass-through Entity: State of California Department of Transportation State of California Department of Water Resources Control Board Year: 2022 Criteria: Section 200.512(a) of the Uniform Guidance states that an audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor?s report or nine months after the end of the audit period. Condition: The City did not complete the audit and submit the data collection form and reporting package within nine months after the end of the fiscal year. Questioned Costs: None Context: The City did not schedule a single audit to be performed until after the deadline had passed. Effect or Potential Effect: The City did not meet the audit requirements as provided in Section 200.512(a). Cause: The City did not have policies in place to have an audit completed or data collection form submitted before the deadline. Recommendation: The City should implement policies and procedures to have the audit completed and data collection form filed before the deadline. Responsible Official?s Response and Corrective Action Planned: The City will work closely with the independent auditor to ensure single audits are competed within the specified timeline.