City of DixonLocal Government

Criteria or Specific Requirement: Management is required to establish and maintain effective internal controls over each federal award, allowing management to evaluate and monitor compliance with statutes, regulations, and terms of the federal award, per Uniform Guidance section 200.303 Internal Controls. Condition: The City has not established internal controls over the program monitoring requirement of this federal award. Cause of Condition: The City has engaged third party specialists to oversee this program and its compliance requirements, however, the City has not established and maintained internal controls surrounding the work being completed by the specialists to ensure federal award requirements are being followed. Effect or Potential Effect of Condition: Without established controls within the City to review the work performed by the specialist engaged to monitor the federal program the City may be unaware of potential noncompliance with grant requirements, causing noncompliance by the City. If noncompliance occurs, the City could be at risk of reduced funding. Context: The City has not established internal controls over the program monitoring requirement of this federal award. Questioned Costs: None. Repeat Finding: This is a new finding for the fiscal year ended June 30, 2023. Recommendation: The City should establish and maintain a review of procedures performed by third party specialists the City has engaged to oversee any federal program, to ensure all appropriate federal award requirements are being implemented and completed. Management Response and Corrective Action: The City of Dixon will be hiring an Economic Development Specialist that will oversee this grant program. The Specialist will review the report from the consultant to ensure that all procedures were completed and submitted to the State.

Loan Continuing Compliance Requirements Reference Number: 2021-002 Evaluation of finding: Noncompliance/Significant Deficiency Federal Award Information CFDA Number: 14.239 Program Title: Home Investment Partnerships Federal Award Number: Outstanding Loans Name of Federal Agency: U.S. Department Housing and Urban Development Condition While the City did not have any new loans within the fiscal year, the City has not performed continuing compliance verification on the existing loans reported on the SEFA. Criteria or Specific Requirement According to Title 24 CFR, Subpart F, Project Requirements, Section 92.254 Qualification as affordable housing: Homeownership, (a)(5) Resale and recapture, all participating jurisdictions must establish the resale or recapture requirements that comply with the standards of this section. Resale requirements must ensure, if the housing does not continue to be the principal residence of the family for the duration of the period of affordability that the housing is made available for subsequent purchase only to a buyer whose family qualifies as a low-income family and will use the property as the family?s principal residence. Except as provided in paragraph (a)(5)(i)(B) of this section, deed restrictions, covenants running with the land, or other similar mechanisms must be used as the mechanism to impose the resale requirements. Cause of the Condition The Housing Department at the City has not documented the insurance records received for existing loans or perform annual verification of principal residence. Effect or Possible Effect Failure to timely document continuing loan compliance has resulted in noncompliance. Questioned Costs No questioned costs were identified ($0). Recommendation Procedures should be implemented requiring the annual verification of principal residence and documentation of insurance records received. Management?s Response and Corrective Action: The City agrees with the finding and has implemented a process by which the Economic Development and Grants Manager will report the completion of this annual task to the Loan Committee.