City of Dunsmuir

2022-002 Material Weakness in Internal Controls over Compliance: Cost Principles United States Department of Agriculture, Water and Waste Disposal Systems for Rural Communities, CFDA No. 10.760 - Year ended June 30, 2022 Condition: The City does not have written policies and procedures for compliance over Federal award programs approved by City Council. Criteria: Under Uniform Guidance cost principles, all grantees who receive Federal funds must have ?specific? written policies and procedures for compliance over Federal award programs for all 12 compliance requirements found in the Uniform Guidance, especially compliance requirements such as cash management, procurement, suspension and debarment, reporting, activities allowed and allowable costs, since these are the most direct and material to construction-type and CDBG programs. Cause: During the last fiscal year the City has worked towards codifying their policies and procedures for compliance over the Federal compliance requirements for all Federal award programs, however, it has not had these formally approved by City Council. Effect: Without effectively written and communicated policies and procedures the City will be in noncompliance in the operation of Federal programs and employees might not have the direction necessary to stay in compliance with all Federal compliance requirements when working on or managing Federal award programs. Context: This is a repeat finding of 2021-002. There are no questioned costs related to this finding. Recommendation: The City should get the City Council approval of the written policies and procedures for compliance over Federal award programs, distribute them to the appropriate City personnel and provide training on the new policies and procedures. Views of responsible officials: The City agrees with the finding.

2021-002 Material Weakness in Internal Controls over Compliance: Cost Principles 2021-002: United States Department of Agriculture, Water and Waste Disposal Systems for Rural Communities, CFDA No. 10.760 - Year ended June 30, 2021 Condition: The City does not have written policies and procedures for compliance over Federal award programs. While the City downloads specific Federal requirements related to various compliance requirements when it is managing a program, it does not have written policies and procedures for compliance over Federal award programs for all 12 compliance requirements found in the Uniform Guidance. Criteria: Under Uniform Guidance cost principles, all grantees who receive Federal funds must have ?specific? written policies and procedures for compliance over Federal award programs for all 12 compliance requirements found in the Uniform Guidance, especially compliance requirements such as cash management, procurement, suspension and debarment, reporting, activities allowed and allowable costs, since these are the most direct and material to construction-type programs. Cause: The City only has internal policies and procedures that comply with State laws and regulation. Effect: Without effectively written and communicated policies and procedures the City will be in noncompliance in the operation of Federal programs and employees might not have the direction necessary to stay in compliance with all Federal compliance requirements when working on or managing Federal award programs. Context: This is not a repeat finding. There are no questioned costs related to this finding. Recommendation: The City should develop a complete set of ?specific? written policies and procedures for compliance over Federal award programs and communicate them to the appropriate City personnel. Views of responsible officials: The City agrees with the finding.

2021-003 Material Weakness in Internal Controls over Compliance: Cost Principles 2021-003: United States Department of Transportation, Airport Improvement Program and COVID-19 Airports Programs, CFDA No. 20.106 - Year ended June 30, 2021 Condition: The City does not have written policies and procedures for compliance over Federal award programs. While the City downloads specific Federal requirements related to various compliance requirements when it is managing a program, it does not have written policies and procedures for compliance over Federal award programs for all 12 compliance requirements found in the Uniform Guidance. Criteria: Under Uniform Guidance cost principles, all grantees who receive Federal funds must have ?specific? written policies and procedures for compliance over Federal award programs for all 12 compliance requirements found in the Uniform Guidance, especially compliance requirements such as cash management, procurement, suspension and debarment, reporting, activities allowed and allowable costs, since these are the most direct and material to construction-type programs. Cause: The City only has internal policies and procedures that comply with State laws and regulation. Effect: Without effectively written and communicated policies and procedures the City will be in noncompliance in the operation of Federal programs and employees might not have the direction necessary to stay in compliance with all Federal compliance requirements when working on or managing Federal award programs. Context: This is not a repeat finding. There are no questioned costs related to this finding. Recommendation: The City should develop a complete set of ?specific? written policies and procedures for compliance over Federal award programs and communicate them to the appropriate City personnel. Views of responsible officials: The City agrees with the finding.