EIN: 946000436
UEI: YV3KNQAKJLQ7
Audited by: The Pun Group, LLP
Cognizant agency: 66 [Environmental Protection Agency]
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Data as of August 31, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 11, 2026. 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 September 11, 2026 (9 days from today).
What is a management decision? →CDBG - Entitlement/Special Purpose Grants Cluster For two (2) out of forty (40) payroll samples tested, employees’ benefits and compensated leave were charged to the CDBG program for the pay periods selected even though the employees did not have any actual hours charged to the program. Emergency Solutions Grant Program (ESG) For two (2) employees out of the seven (7) tested with ESG and ESG-CV charges, payroll-related costs were charged to the ESG program even though these employees were not included on the official budget allocation file used to support the distribution of payroll costs. The exceptions consisted of benefits and compensated leave and occurred in five (5) of twenty-three (23) total payroll transactions tested. In addition, our review of the disbursement reports during fiscal year 2024 identified three (3) additional employees with ESG or ESG-CV payroll charges who were not included on the official budget allocation file, bringing the total to five (5) employees not included on the official budget allocation file. Coronavirus State and Local Fiscal Recovery Funds (ARPA) Our review of the distribution reports indicated that one (1) employee who did not work on ARPA during the pay period tested had benefit costs allocated to ARPA. In addition, for one (1) out of the forty (40) employees tested, certain benefit amounts were charged twice to the ARPA program, with duplicate lines posted to the same expense account as regular salaries. The City indicated that the duplicate charges were due to a system setup error. Cause: The condition appears to have occurred because the City did not perform sufficient review procedures over payroll allocations to federal programs. Payroll charges were allowed to post based on budget allocation files and system configurations that were not regularly validated to underlying timekeeping records. In addition, system setup issues that resulted in duplicate postings of certain benefits were not identified and corrected in a timely manner. Effect or Potential Effect: As a result of these conditions, payroll and related benefit costs charged to ESG, ARPA, and CDBG was not be fully supported or was allocated properly to the respective federal programs. Federal expenditures reported to the grantor may therefore be misstated, and there is an increased risk that the City could be required to reclassify or refund portions of the costs charged to these awards. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2023-003. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Views of Responsible Officials: Management concurs with the finding.
Show full finding ▾Hide full finding ▴2024-004 – Allowable Costs/Cost Principles – Internal Control and Compliance over Payroll Expenditures Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: CDBG - Entitlement/Special Purpose Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-21-MC-06-0026, B-23-MC-06-0026, B-20-MW-06-0026, Program Income Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-23-MC-06-0026, E-20-MW-06-0026 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: Be incorporated into the organization’s official records; Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: CDBG - Entitlement/Special Purpose Grants Cluster For two (2) out of forty (40) payroll samples tested, employees’ benefits and compensated leave were charged to the CDBG program for the pay periods selected even though the employees did not have any actual hours charged to the program. Emergency Solutions Grant Program (ESG) For two (2) employees out of the seven (7) tested with ESG and ESG-CV charges, payroll-related costs were charged to the ESG program even though these employees were not included on the official budget allocation file used to support the distribution of payroll costs. The exceptions consisted of benefits and compensated leave and occurred in five (5) of twenty-three (23) total payroll transactions tested. In addition, our review of the disbursement reports during fiscal year 2024 identified three (3) additional employees with ESG or ESG-CV payroll charges who were not included on the official budget allocation file, bringing the total to five (5) employees not included on the official budget allocation file. Coronavirus State and Local Fiscal Recovery Funds (ARPA) Our review of the distribution reports indicated that one (1) employee who did not work on ARPA during the pay period tested had benefit costs allocated to ARPA. In addition, for one (1) out of the forty (40) employees tested, certain benefit amounts were charged twice to the ARPA program, with duplicate lines posted to the same expense account as regular salaries. The City indicated that the duplicate charges were due to a system setup error. Cause: The condition appears to have occurred because the City did not perform sufficient review procedures over payroll allocations to federal programs. Payroll charges were allowed to post based on budget allocation files and system configurations that were not regularly validated to underlying timekeeping records. In addition, system setup issues that resulted in duplicate postings of certain benefits were not identified and corrected in a timely manner. Effect or Potential Effect: As a result of these conditions, payroll and related benefit costs charged to ESG, ARPA, and CDBG was not be fully supported or was allocated properly to the respective federal programs. Federal expenditures reported to the grantor may therefore be misstated, and there is an increased risk that the City could be required to reclassify or refund portions of the costs charged to these awards. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2023-003. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Views of Responsible Officials: Management concurs with the finding.
2024-004 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures City’s Corrective Action Plan: The City accepts the finding, which resulted from the implementation of a new ERP system for position control, benefits, and payroll that began in 2024 and was completed in 2025. To address the identified conditions, the City will strengthen internal controls over federal payroll allocations by implementing documented reconciliation and review procedures, regularly validating system configuration and allocation files, and establishing processes to identify and correct duplicate or unusual benefit postings. The finding appears to be based on salary charges from two staff members whose time was charged to ESG-related accounts that were not part of their original salary allocation setup. Charging time to accounts outside of original salary allocations is not atypical across City departments and is a common practice when staff responsibilities or work assignments cross funding sources. Executive-time was designed to allow this flexibility so that time charged accurately reflects how staff time is spent. In this instance, the two staff members performed ESG-related activities, and time was charged accordingly to reflect actual work performed. Cross-department internal controls for federal payroll expenditure processing and reporting will be updated, with revisions expected to be completed and tested by 2027. Responsible Person: Payroll & Department(s) Administering Grants Expected Implementation Date: Fiscal Year 2026
2023-003
Coronavirus State and Local Fiscal Recovery Funds (ARPA) During our audit, we noted that eleven (11) out of thirty seven (37) suspension and debarment samples tested, the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases. We also noted that thirty one (31) out of thirty seven (37) procurement samples tested, the City didn’t have purchase orders for these samples. Assistance to Firefighters Grant During our audit, we noted that two (2) out of two (2) procurement samples tested, the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City did not have a consistent process in place to ensure that the procurement process have been followed and maintained, and to require staff maintain the proof of verification performed on checking the suspension or debarment over vendors that the City makes contracts with federally-funded projects. Effect or Potential Effect: The lack of purchase orders limits transparency into procurement process, approval, and authorization, and weakens internal controls over spending. Without verifying whether vendors are suspended or debarred from working on federally-funded projects, the City could be contracting with vendors that are prohibited from working on federally-funded projects. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure the procurement process is implemented and monitored, and vendors are not suspended or debarred from federallyfunded purchases. Views of Responsible Officials: Management concurs with the finding.
Show full finding ▾Hide full finding ▴2024-005 - Procurement and Suspension, and Debarment – Internal Control and Compliance over Procurement and Verification Against the System for Award Management (“SAM”) Identification of the Federal Program: Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Assistance Listing Number: 97.044 Assistance Listing Title: Assistance to Firefighters Grant Federal Agency: Department of Homeland Security Pass-Through Entity: N/A Federal Award Identification Number: EMW-2020-FG-15445, EMW-2021-FG-00268 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Pursuant to 2 CFR 200.318 of the Uniform Guidance, the City is required to comply with the procurement standards, when using federal funds. These standards require non‑federal entities to maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in 2 CFR 200.317 through 2 CFR 200.327. The City’s purchasing policies require that all purchases charged to the City have an authorized Purchase Order (PO) in place before an order is placed or goods are received. The policy states that if an individual attempts to make a purchase without a City PO number, the vendor must request an authorized PO number and the name and department of the individual. The purchase order number is essential for conducting business with the City and ensures proper authorization, documentation, and payment. Therefore, all transactions including orders of goods or materials regardless of cost or type must be supported by a valid, approved PO prior to purchase activity. Condition: Coronavirus State and Local Fiscal Recovery Funds (ARPA) During our audit, we noted that eleven (11) out of thirty seven (37) suspension and debarment samples tested, the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases. We also noted that thirty one (31) out of thirty seven (37) procurement samples tested, the City didn’t have purchase orders for these samples. Assistance to Firefighters Grant During our audit, we noted that two (2) out of two (2) procurement samples tested, the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City did not have a consistent process in place to ensure that the procurement process have been followed and maintained, and to require staff maintain the proof of verification performed on checking the suspension or debarment over vendors that the City makes contracts with federally-funded projects. Effect or Potential Effect: The lack of purchase orders limits transparency into procurement process, approval, and authorization, and weakens internal controls over spending. Without verifying whether vendors are suspended or debarred from working on federally-funded projects, the City could be contracting with vendors that are prohibited from working on federally-funded projects. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure the procurement process is implemented and monitored, and vendors are not suspended or debarred from federallyfunded purchases. Views of Responsible Officials: Management concurs with the finding.
2024-005 – Procurement and Suspension, and Debarment – Internal Control over Procurement and Verification Against the System for Award Management (“SAM”) City’s Corrective Action Plan: The City acknowledges the finding and is in the process of implementing a formal procurement policy. This is currently under development and is expected to be approved by FY-26. To address these issues, the City will implement standardized procurement procedures requiring the use of purchase orders and direct invoicing, documented approvals, and verification of vendors’ eligibility for all projects. Procurement policies will include suspension and debarment checking using SAM.gov, and all supporting documentation will be retained in procurement files. Staff involved in procurement and grant management will receive training to ensure consistent compliance with the updated procedures and federal regulations. Responsible Person: Procurement Manager, Grants Manager, and CFO Expected Implementation Date: FY- 2026.
CDBG - Entitlement/Special Purpose Grants Cluster (CDBG) We noted that the City did not submit any of the four (4) quarterly Section 15011 Reports for the year ended June 30, 2024. Coronavirus State and Local Fiscal Recovery Funds (ARPA) During testing of the City’s reporting under the ARPA Revenue Loss category, we noted that the City recorded $3,570,000 in expenditures related to revenue loss that were not reported in the quarterly Project and Expenditure (P&E) reports. Additionally, the April–June 2024 P&E report, which is also included in the annual performance report, incorrectly recorded an amount in 2023 revenue loss that duplicated the same amounts reported for 2022, resulting in a change to the reported revenue loss from the previous quarter. We also noted that two out of four quarterly P&E reports required for the year ended June 30, 2024 were submitted after the required due dates as follows: Grant / Project Period Covered Due Date Submitted SLT-3028-P&E Report-Q3 2023 July- Sept 2023 10/31/2023 11/5/2023 SLT-3028-P&E Report-Q1 2024 Jan- March 2024 4/30/2024 5/1/2024 Furthermore, the P&E report covering April–June 2024 did not include current period expenditure amounts for all projects. During our audit, we found that the City reported only $11,867,558 in the P&E reports instead of the actual $15,225,289 in expenditures incurred during year ended June 30, 2024. Water Infrastructure Finance and Innovation (WIFIA) During testing, we noted that the Annual Comprehensive Financial Report for year ending June 30, 2024 was dated on September 17, 2025, which was after the 180 days submission deadline (December 27, 2024). Cause: The City was not aware of the Section 15011 CARES reporting. Lack of monitoring to ensure the timely submission of the required reports with appropriate support. The delay in financial reporting also led to the incompliance with the WIFIA reporting requirement. Effect or Potential Effect: Delay in filing and not filing the reports resulted in noncompliance with the compliance requirements, and the errors had led to potential misstatements on the SEFA. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2023-005. Recommendation: We recommend that the City conduct thorough research on the reports needed to be submitted and contact the grantor if there is any confusion. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Views of Responsible Officials: Management concurs with the finding.
Show full finding ▾Hide full finding ▴2024-006 – Reporting – Internal Control and Compliance over Reporting Information of the Federal Program(s): Assistance Listing Number: 14.218 Assistance Listing Title: CDBG - Entitlement/Special Purpose Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Assistance Listing Number: 66.958 Assistance Listing Title: Water Infrastructure Finance and Innovation Federal Agency: U.S. Environmental Protection Agency Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The OMB Compliance Supplement requires that reports submitted to the Federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and are presented in accordance with program requirements. Community Development Block Grants-Entitlement Grants Cluster Pursuant to Guidance on Section 15011 of the CARES Act requires that recipients of $150,000 or more of CARES Act funding submit, not later than 10 days after the end of each calendar quarter, a report containing: information regarding the amount of funds received; the amount of funds obligated or expended for each project or activity; a detailed list of all such projects or activities, including a description of the project or activity; and detailed information on any subcontracts or subgrants awarded by the recipient. This report is limited to Community Development Block Grants/Entitlement Grants Cluster - COVID-19 funding and does not include other Community Development Block Grants/Entitlement Grants Cluster funds that may be used to address coronavirus. Grantees and subrecipients have reported data meeting the Section 15011 requirements at usaspending.gov. The Pandemic Response Accountability Committee (PRAC), an independent oversight committee within the Council of the Inspectors General on Integrity and Efficiency, has determined that the data reported in usaspending.gov has fulfilled these reporting requests. (“Section 15011 Report”). Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation) (Continued): Coronavirus State and Local Fiscal Recovery Funds Quarterly Project and Expenditure Reports (QP&E) – All metropolitan cities and counties with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, a quarterly Project and Expenditure Report must be submitted to U.S. Department of the Treasury by the last day of the month following the end of the period covered. The due dates of each quarterly reports is noted below: Reporting Period Grantee QP&E Covered Submission Deadlines July 1 - September 31, 2023 October 31, 2023 October 1 - December 31, 2023 January 31, 2024 January 1 - March 31, 2024 April 30, 2024 April 1 - June 30, 2024 July 31, 2024 The recipients are also required to disclose all current period obligations, cumulative obligations, current period expenditures, and cumulative expenditures in Quarterly Project and Expenditure Reports, as a part of the obligations and expenditures requirement. Water Infrastructure Finance and Innovation In accordance with Section 16, Annual Financial Statements, of the WIFIA Loan Agreement, the City is required to deliver to the WIFIA Lender, as soon as available but no later than one hundred eighty (180) days after the end of each City Fiscal Year, a copy of the audited income statement and balance sheet of the City, along with related audited statements of operations and cash flows for the fiscal year. Condition: CDBG - Entitlement/Special Purpose Grants Cluster (CDBG) We noted that the City did not submit any of the four (4) quarterly Section 15011 Reports for the year ended June 30, 2024. Coronavirus State and Local Fiscal Recovery Funds (ARPA) During testing of the City’s reporting under the ARPA Revenue Loss category, we noted that the City recorded $3,570,000 in expenditures related to revenue loss that were not reported in the quarterly Project and Expenditure (P&E) reports. Additionally, the April–June 2024 P&E report, which is also included in the annual performance report, incorrectly recorded an amount in 2023 revenue loss that duplicated the same amounts reported for 2022, resulting in a change to the reported revenue loss from the previous quarter. We also noted that two out of four quarterly P&E reports required for the year ended June 30, 2024 were submitted after the required due dates as follows: Grant / Project Period Covered Due Date Submitted SLT-3028-P&E Report-Q3 2023 July- Sept 2023 10/31/2023 11/5/2023 SLT-3028-P&E Report-Q1 2024 Jan- March 2024 4/30/2024 5/1/2024 Furthermore, the P&E report covering April–June 2024 did not include current period expenditure amounts for all projects. During our audit, we found that the City reported only $11,867,558 in the P&E reports instead of the actual $15,225,289 in expenditures incurred during year ended June 30, 2024. Water Infrastructure Finance and Innovation (WIFIA) During testing, we noted that the Annual Comprehensive Financial Report for year ending June 30, 2024 was dated on September 17, 2025, which was after the 180 days submission deadline (December 27, 2024). Cause: The City was not aware of the Section 15011 CARES reporting. Lack of monitoring to ensure the timely submission of the required reports with appropriate support. The delay in financial reporting also led to the incompliance with the WIFIA reporting requirement. Effect or Potential Effect: Delay in filing and not filing the reports resulted in noncompliance with the compliance requirements, and the errors had led to potential misstatements on the SEFA. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2023-005. Recommendation: We recommend that the City conduct thorough research on the reports needed to be submitted and contact the grantor if there is any confusion. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Views of Responsible Officials: Management concurs with the finding.
2024-006 – Reporting – Internal Control and Compliance over Reporting City’s Corrective Action Plan: This finding is related to COVID-19 funding that was administered during the height of the pandemic, when multiple funding sources were required to be expended simultaneously. Section 15011 reporting was a new requirement within the CARES Act of 2020, to the Department and the City at that time. By the time this issue was identified as an area of deficiency in the prior audit period, it was no longer possible to retroactively correct or report for that respective audit year, nor for the current audit period. In response to the prior audit report, the City evaluated options to centralize Section 15011 reporting, given that it falls under the Federal Funding Accountability and Transparency Act (FFATA) of 2006 and is closely tied to procurement activities of over $150,000. The City explored whether this reporting could be managed through the City’s Grant Manager position under the Administrative Services Department (ASD) The City accepts the finding of noncompliance with WIFIA reporting requirements, as the Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2024 was dated September 17, 2025, which exceeded the required 180-day submission deadline of December 27, 2024. The delay was due to challenges in completing the City-wide ACFR resulting from ongoing staff turnover. As a corrective action, the City will strengthen internal processes and oversight to ensure the ACFR is completed and submitted in a timely manner in future reporting periods. The City will implement enhanced internal controls to ensure timely, accurate, and complete submission of Quarterly Project and Expenditure (P&E) Reports for both SLFRF and ARPA Revenue Loss. Corrective actions include establishing a formal internal reporting calendar with assigned responsibilities to meet Treasury deadlines, performing a documented quarterly reconciliation of general ledger obligations and expenditures to P&E report amounts, correcting prior reporting errors or duplications, and requiring supervisory review and approval of all reports before submission to the U.S. Department of the Treasury. Additionally, the City will develop standardized reporting templates, provide staff training on Treasury reporting requirements, and maintain oversight by the Finance Director to ensure ongoing compliance, accuracy, and timely reporting of all expenditures. Responsible Person: Grants Manager; Accounting Manager, CFO and Departments Administering Grants Expected Implementation Date: FY 2026
2023-005
During testing of environmental review records, one (1) of twenty one (21) environmental review records tested did not include a signature from the responsible official. Although the environmental review documentation and supporting analysis were present, the ERR lacked the required signature from the certifying official, as required by HUD regulations. Cause: Lack of internal control over the ERR to ensure the forms were properly signed and reviewed prior to approving the project activities. Effect or Potential Effect: Without a signed Environmental Review Record, the City cannot demonstrate it is in compliance with the environmental review and certification requirements under 24 CFR Part 58. This omission could potentially place the City at risk of noncompliance with federal environmental requirements and jeopardize the eligibility of the related project funded by Community Development Block Grants/Entitlement Grants (“CDBG”). Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City strengthen its internal controls over environmental review documentation to ensure that all Environmental Review Records are fully completed, including the signature of the certifying official prior to project approval or commitment of CDBG funds. Views of Responsible Officials: Management concurs with the finding.
Show full finding ▾Hide full finding ▴2024-007 – Special Tests and Provisions – Internal Control over Environmental Reviews Information of the Federal Program(s): Assistance Listing Number: 14.218 Assistance Listing Title: CDBG - Entitlement/Special Purpose Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-23-MC-06-0026 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The OMB Compliance Supplement requires that recipients must perform environmental reviews in accordance with 24 CFR Part 58. The responsible entity must prepare and maintain an Environmental Review Record (ERR) that documents the environmental review and the decision-making process. Projects must have an environmental review unless they meet criteria specified in the regulations that would exempt or exclude them from RROF and environmental certification requirements (24 CFR sections 58.1, 58.22, 58.34, 58.35, and 570.604). Pursuant CDBG Grants Management Manual, Chapter 3, Environmental review, The environmental certifying officer “ECO” accepts full responsibility for the completeness and accuracy of the review and compliance with applicable laws and regulations. Local officials should review the municipal liability and indemnification statutes as well as the status and coverage of local liability insurance policies when accepting responsibility under environmental laws. The responsibilities of the ECO include making findings and signing required certifications. Condition: During testing of environmental review records, one (1) of twenty one (21) environmental review records tested did not include a signature from the responsible official. Although the environmental review documentation and supporting analysis were present, the ERR lacked the required signature from the certifying official, as required by HUD regulations. Cause: Lack of internal control over the ERR to ensure the forms were properly signed and reviewed prior to approving the project activities. Effect or Potential Effect: Without a signed Environmental Review Record, the City cannot demonstrate it is in compliance with the environmental review and certification requirements under 24 CFR Part 58. This omission could potentially place the City at risk of noncompliance with federal environmental requirements and jeopardize the eligibility of the related project funded by Community Development Block Grants/Entitlement Grants (“CDBG”). Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City strengthen its internal controls over environmental review documentation to ensure that all Environmental Review Records are fully completed, including the signature of the certifying official prior to project approval or commitment of CDBG funds. Views of Responsible Officials: Management concurs with the finding.
2024-007 – Special Tests and Provisions – Internal Control and Compliance over Environmental Reviews City’s Corrective Action Plan: Out of a sample size of twenty-one (21) files, one environmental review document was missing the required signatures. Current procedural documentation states that after the environmental review document is completed by the project manager, it is to be routed to the First Level Reviewer (Division Manager), then to the Certifying Officer for signature. The Department will diligently ensure that the documentation is completed and routed through the approval process and will make this a priority Responsible Person: Director of Economic Development and Housing Manager Expected Implementation Date: FY 2025
During our audit, we noted that for four (4) out of five (5) total sub-recipients tested this year, the ESG Grant Fund obligated to sub-recipients under obligation testing were outside of the obligation timeframe of 180 days in case of ESG and 240 days in case of ESG CV without further justifications. In addition, we noted two (2) out of third (3) samples selected for payment requirements testing were outside of 30 days window without further justifications. Cause: The City does not have formal policies and procedures in place to obligate the funds within the required timeframe nor complete the subrecipient’s payment request within 30 days. In addition, the City did not have procedures in place to timely request grantor extensions and/or document exceptions that are outside of uniform guidance. Effect or Potential Effect: The exceptions noted resulted in noncompliance. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2023-006. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient’s payment requests are processed timely. Views of Responsible Officials: Management concurs with the finding.
Show full finding ▾Hide full finding ▴2024-008 – Special Tests and Provisions – Internal Control and Compliance over Obligation, Expenditure, Payment Requirements Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-21-MC-06-0026, E-22-MC-06-0026 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to May 2024 Compliance Supplement, Special Tests and Provisions – Obligation, Expenditures and Payment Requirements: Obligation-ESG funds allocated to metropolitan cities, urban counties, and territories. Within 180 days after the date that HUD signs the grant agreement (or a grant amendment for reallocation of funds) with a metropolitan city, urban county, or territory, the recipient must obligate all of the grant amount, except the amount for its administrative costs. ESG-CV funds must be obligated by the recipient in accordance with 24 CFR 576.203(a)(1) and (2), except as provided below. The applicable period for obligating ESG-CV funds begins on the date HUD signed the recipient’s grant agreement for the first allocation of ESG-CV funds. The obligation deadlines below apply to both the first and second allocations of ESG-CV funds. HUD is also providing further flexibility for recipients (including states and non-states) by allowing additional time to identify entities that have the capacity and expertise to mitigate the impacts of coronavirus, including entities that have not previously or recently received ESG funding. a. Recipients that are metropolitan cities, urban counties, or territories may have up to 240 days from the date HUD signs the grant agreement to obligate ESG-CV funds. Recipients must maintain in their program records a description of any changes the recipient implemented to identify and select new subrecipients. Payments to Subrecipients. The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s complete payment request. This requirement also applies to each subrecipient that is a unit of general-purpose local government (24 CFR section 576.203). Condition: During our audit, we noted that for four (4) out of five (5) total sub-recipients tested this year, the ESG Grant Fund obligated to sub-recipients under obligation testing were outside of the obligation timeframe of 180 days in case of ESG and 240 days in case of ESG CV without further justifications. In addition, we noted two (2) out of third (3) samples selected for payment requirements testing were outside of 30 days window without further justifications. Cause: The City does not have formal policies and procedures in place to obligate the funds within the required timeframe nor complete the subrecipient’s payment request within 30 days. In addition, the City did not have procedures in place to timely request grantor extensions and/or document exceptions that are outside of uniform guidance. Effect or Potential Effect: The exceptions noted resulted in noncompliance. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2023-006. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient’s payment requests are processed timely. Views of Responsible Officials: Management concurs with the finding.
2024-008 – Special Tests and Provisions – Internal Control and Compliance over Obligation, Expenditure, Payment Requirements City’s Corrective Action Plan: The Department concurs with this finding. The City has since implemented policies and procedures to ensure timely issuance of award letters to satisfy the 180-day obligation requirement, and processing of payments within 30 days of receipt of complete documentation, or to document the reason payment cannot be processed. Staff will continue to follow and improve compliance with these established processes and procedures to ensure timely contract execution and payment processing. While unforeseen circumstances may occasionally cause delays, such instances will be documented and addressed promptly. Responsible Person: Director of Economic Development, Housing Manager Expected Implementation Date: March 12, 2024
2023-006
During our audit, we noted that the City has not performed any housing inspections required under the HOME Investment Partnerships Program since 2019, citing staff shortages as the reason for nonperformance. Cause: The City did not perform housing inspections due to staffing issues and lack of adequate resources allocated to the compliance function. Effect or Potential Effect: Failure to conduct required housing inspections increases the risk that HOME-assisted units do not meet federal property standards, potentially resulting in noncompliance with program requirements and exposure to questioned costs or repayment obligations. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: The City should implement procedures to ensure timely housing inspections in accordance with HOME Program requirements. This includes allocating sufficient staff resources, establishing a monitoring schedule, and documenting all inspections performed. If staffing limitations persist, the City should consider temporary contracting or interdepartmental support to meet compliance obligations. Views of Responsible Officials: Management concurs with the finding.
Show full finding ▾Hide full finding ▴2024-009 – Special Tests and Provisions – Internal Control and Compliance over Housing Quality Standards Assistance Listing Number: 14.239 Assistance Listing Title: HOME Investment Partnerships Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: M-17-MC-06-0221, M-21-MC-06-0221, M-22-MC-06-0221, M-21- MP-06-0221 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to 24 CFR 92.209(i), 92.251(f), and 92.504(d), the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than (a) every three years for projects containing one to four units, (b) every two years for projects containing five to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME/HOMEARP- assisted tenant-based rental assistance to determine compliance with housing quality standards. Condition: During our audit, we noted that the City has not performed any housing inspections required under the HOME Investment Partnerships Program since 2019, citing staff shortages as the reason for nonperformance. Cause: The City did not perform housing inspections due to staffing issues and lack of adequate resources allocated to the compliance function. Effect or Potential Effect: Failure to conduct required housing inspections increases the risk that HOME-assisted units do not meet federal property standards, potentially resulting in noncompliance with program requirements and exposure to questioned costs or repayment obligations. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: The City should implement procedures to ensure timely housing inspections in accordance with HOME Program requirements. This includes allocating sufficient staff resources, establishing a monitoring schedule, and documenting all inspections performed. If staffing limitations persist, the City should consider temporary contracting or interdepartmental support to meet compliance obligations. Views of Responsible Officials: Management concurs with the finding.
2024-009–Special Tests and Provisions – Internal Control and Compliance over Housing Quality Standards City’s Corrective Action Plan: HOME on-site monitoring requires dedicated staffing capacity. The Housing Division has developed clear policies and procedures for HOME on-site monitoring; however, implementation has been constrained by limited staffing resources. The Department has requested additional staff in the most recent budget development cycles to support these requirements but has not been successful. The Department is evaluating alternative solutions, including the potential use of third-party consultants, to support implementation of HOME on-site monitoring requirements. Responsible Person: Director of Economic Development, and Housing Manager Expected Implementation FY 2026
FAC accepted this audit on August 27, 2024 — management decision was due February 27, 2025.
Emergency Solutions Grant Program The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program has benefit charged to program. Community Development Block Grants-Entitlement Grants Cluster Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs were not supported by approved time samples or updated cost allocation methods/plan, nor were they reconciled to actual time spent on the various programs. Cause: The City did not adhere to its established policies and procedures for verifying that employee compensation charged to federal programs was supported by contemporaneous time records or an after-the-fact distribution of actual time and effort spent on federal program activities. Additionally, a thorough review and reconciliation of payroll time entries and postings from the old financial system (HTE) to the new financial system (MUNIS) was not conducted, resulting in the failure to preserve supporting documentation, such as timesheets, during the transition process. Effect or Potential Effect: The City did not comply with the program’s requirements for allowable costs. There is an increased risk that employees’ compensation charged to the program may not have represented an actual time and effort expended on the program’s activities. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved. Views of Responsible Officials: Management concurs with the finding.
Show full finding ▾Hide full finding ▴2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-20-MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026 Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026, B-21-MC-06-0026, B-22-MC-06-0026, B-23-MC-06-0026 Program Income Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: Emergency Solutions Grant Program The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program has benefit charged to program. Community Development Block Grants-Entitlement Grants Cluster Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs were not supported by approved time samples or updated cost allocation methods/plan, nor were they reconciled to actual time spent on the various programs. Cause: The City did not adhere to its established policies and procedures for verifying that employee compensation charged to federal programs was supported by contemporaneous time records or an after-the-fact distribution of actual time and effort spent on federal program activities. Additionally, a thorough review and reconciliation of payroll time entries and postings from the old financial system (HTE) to the new financial system (MUNIS) was not conducted, resulting in the failure to preserve supporting documentation, such as timesheets, during the transition process. Effect or Potential Effect: The City did not comply with the program’s requirements for allowable costs. There is an increased risk that employees’ compensation charged to the program may not have represented an actual time and effort expended on the program’s activities. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved. Views of Responsible Officials: Management concurs with the finding.
City’s Corrective Action Plan: The City of Stockton has performed a review of the data for payroll and performed isolated testing in fiscal year 2023-24 that concludes the issues have been corrected. The City has hired a grant manager to assist with the periodic reconciliation of grants to the general ledger as well as establishing policies and procedures over the annual process. Finance, Budget and Payroll staff will communicate and work with the grant contacts to ensure proper documentation is maintained and allocation of salaries charged by program are approved and documented. Responsible Person: Queen Gray (Assistant Chief Financial Officer over Payroll), Imelda Arroyo (Budget), and Jennifer Winn (Grants Manager) Expected Implementation Date: September 2024
During our audit, we noted five (5) samples out of nine (9) samples selected for the eligibility requirement testing with internal control deficiency related to the income eligibility verification. The city failed to collect the zero income attestation document from applicant. The amount of income shown in documents uploaded by applicant was different from the amount shown in application/system, check box for income verification was not ticked off by supervisor though the verification was completed. However, we recalculated those five applicants’ income based on the income verification support provided and those applicants were eligible to receive the grant subsidy based on the income limit. Cause: The City did not have proper internal controls in place to review the process performed. Effect or Potential Effect: The City could potentially be out of compliance with the eligibility requirement due to the error in executing the internal control procedures. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-003. Recommendation: We recommend the City enhance its internal control by implementing policies and procedures over eligibility requirement. Views of Responsible Officials: Management concurs with the finding.
Show full finding ▾Hide full finding ▴2023-004 – Eligibility – Internal Control Over Eligibility Identification of the Federal Program: Assistance Listing Number: 21.023 Assistance Listing Title: Emergency Rental Assistance Program Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to the May 2023 Compliance Supplement, Eligibility: This approach to eligibility was implemented in accordance with 15 USC 9058a, for ERA 1 in 15 USC 9058a(c)(2)(C)(ii) concerning documentation of payments to households, 15 USC 9058a(f)(2)(A) and (B) of the Act concerning signature requirements for applications and documentation required for tenants, 15 USC 9058a (k)(1) concerning area median income determinations, and 15 USC 9058a (k)(3)(A)(I) and (II) concerning eligible household determinations and attestation requirements. This treatment is further explained in the ERA FAQs; 15 USC 9058a; and the Treasury, Department of Justice and Department of Housing and Urban Development joint letter issued August 27, 2021 (https://home.treasury.gov/system/files/136/Eviction- Moratorium-Joint-Letter.pdf). To the extent that a grantee has established and consistently followed its own reasonable procedures for implementing an eligibility determination process, consistent with Treasury’s guidance, it is not Treasury’s expectation that grantees should seek additional documentation from a beneficiary after the initial determination of eligibility has been completed, including for those determined to be eligible using self-attestation, categorical eligibility, or fact-specific proxies in qualifying circumstances. Testing of individual household eligibility-related documentation should be limited to material already collected by the grantee during application as much as possible to avoid imposing undue burden on households that remain at risk of housing instability. Condition: During our audit, we noted five (5) samples out of nine (9) samples selected for the eligibility requirement testing with internal control deficiency related to the income eligibility verification. The city failed to collect the zero income attestation document from applicant. The amount of income shown in documents uploaded by applicant was different from the amount shown in application/system, check box for income verification was not ticked off by supervisor though the verification was completed. However, we recalculated those five applicants’ income based on the income verification support provided and those applicants were eligible to receive the grant subsidy based on the income limit. Cause: The City did not have proper internal controls in place to review the process performed. Effect or Potential Effect: The City could potentially be out of compliance with the eligibility requirement due to the error in executing the internal control procedures. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-003. Recommendation: We recommend the City enhance its internal control by implementing policies and procedures over eligibility requirement. Views of Responsible Officials: Management concurs with the finding.
City’s Corrective Action Plan: At the time of Emergency Rental Assistance Program (ERAP) implementation, the guidance provided by U.S. Treasury was continuously evolving and the ERAP team was navigating a complex social and economic crisis. Residents became unemployed, had income reductions as direct result of the pandemic, and/or had limited access to technology to complete application documents. Prior to official guidance recommending the use of an attestation form, some applicants provided written statements that they did not have any income. Furthermore, these applications were accompanied by eviction notices. These households were clearly at risk of experiencing homelessness or housing instability, which constitutes an “eligible household” as defined by 15 USC 9058a (k)(3)(A)(ii). This section of the U.S. Code states that a “household can demonstrate a risk of experiencing homelessness or housing instability” by providing a “past due utility or rent notice or eviction notice.” While the portal used to intake, review, and approve applications shows occasional inconsistencies with income verification boxes not checked off, all of the sampled cases were verified to be under the income threshold, provided an eviction notice, past due rent notice, and/or signed a written statement that they had zero income. Although certain boxes were not checked within the portal, all cases were verified through diligent and compassionate coordination with households requesting support. Furthermore, a risk assessment by the State's Housing & Community Development for the 2021 Program Year evaluated the City's risk profile as Low Risk. All program expenditures were concluded in fiscal year 2022-23. This was one-time funding. There will be some administrative costs related to the grant in fiscal year 2023-24, but no additional funding was received, therefore eligibility requirements will not be direct material in fiscal year 2023-24. Responsible Person: Jordan Peterson (Deputy Director of Redevelopment), Carrie Wright (Director of Economic Development) Expected Implementation Date: July 2023
2022-003
As a result of our test work, we noted that the City did not submit any of the four (4) quarterly Section 15011 Reports for the year ended June 30, 2023. Cause: The City was not aware of the Section 15011 CARES reporting. Effect or Potential Effect: Delay in filing and not filing the reports resulted in noncompliance with the compliance requirements, which can result in errors going undetected by management. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not Applicable. Recommendation: We recommend that the City conduct thorough research on the reports needed to be submitted and contact the grantor if there is any confusion. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Views of Responsible Officials: Management concurs with the finding.
Show full finding ▾Hide full finding ▴2023-005 – Reporting – Internal Control and Compliance over Reporting Information of the Federal Program(s): Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The OMB Compliance Supplement requires that reports submitted to the Federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and are presented in accordance with program requirements. Pursuant to Guidance on Section 15011 of the CARES Act requires that recipients of $150,000 or more of CARES Act funding submit, not later than 10 days after the end of each calendar quarter, a report containing: information regarding the amount of funds received; the amount of funds obligated or expended for each project or activity; a detailed list of all such projects or activities, including a description of the project or activity; and detailed information on any subcontracts or subgrants awarded by the recipient. This report is limited to Community Development Block Grants/Entitlement Grants Cluster - COVID-19 funding and does not include other Community Development Block Grants/Entitlement Grants Cluster funds that may be used to address coronavirus. Grantees and subrecipients have reported data meeting the Section 15011 requirements at usaspending.gov. The Pandemic Response Accountability Committee (PRAC), an independent oversight committee within the Council of the Inspectors General on Integrity and Efficiency, has determined that the data reported in usaspending.gov has fulfilled these reporting requests. (“Section 15011 Report”). Condition: As a result of our test work, we noted that the City did not submit any of the four (4) quarterly Section 15011 Reports for the year ended June 30, 2023. Cause: The City was not aware of the Section 15011 CARES reporting. Effect or Potential Effect: Delay in filing and not filing the reports resulted in noncompliance with the compliance requirements, which can result in errors going undetected by management. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not Applicable. Recommendation: We recommend that the City conduct thorough research on the reports needed to be submitted and contact the grantor if there is any confusion. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Views of Responsible Officials: Management concurs with the finding.
City’s Corrective Action Plan: This is pandemic-related funding with limited guidance on reporting requirements. However, the City has tracked all expenditures and retained documentation for allowable costs. The City will maintain supporting documentation when a federal or grantor agency allows for an extension or removes any reporting requirement. The City will centralize reporting requirements to assist in verifying compliance is met. Responsible Person: Carrie Wright (Director of Economic Development), Jennifer Winn (Grants Manager) Expected Implementation Date: September 2024
During our audit, we noted that the ESG Grant Fund obligated to sub-recipients under obligation testing were outside of the obligation timeframe of 180 days in case of ESG and 240 days in case of ESG CV without further justifications. In addition, we noted two (2) out of seven (7) samples selected for payment requirements testing were outside of 30 days window without further justifications. Cause: The City does not have formal policies and procedures in place to obligate the funds within the required timeframe nor complete the subrecipient’s payment request within 30 days. In addition, the City did not have procedures in place to timely request grantor extensions and/or document exceptions that are outside of uniform guidance. Effect or Potential Effect: The exceptions noted resulted in noncompliance. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-006. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient’s payment requests are processed timely. Views of Responsible Officials: Management concurs with the finding.
Show full finding ▾Hide full finding ▴2023-006 – Special Tests and Provisions – Internal Control and Compliance over Obligation, Expenditure, Payment Requirements Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-20-MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to May 2023 Compliance Supplement, Special Tests and Provisions – Obligation, Expenditures and Payment Requirements – Obligation-ESG. Funds allocated to metropolitan cities, urban counties, and territories. Within 180 days after the date that HUD signs the grant agreement (or a grant amendment for reallocation of funds) with a metropolitan city, urban county, or territory, the recipient must obligate all of the grant amount, except the amount for its administrative costs. ESG-CV funds must be obligated by the recipient in accordance with 24 CFR 576.203(a)(1) and (2), except as provided below. The applicable period for obligating ESG-CV funds begins on the date HUD signed the recipient’s grant agreement for the first allocation of ESG-CV funds. The obligation deadlines below apply to the both the first and second allocation of ESG-CV funds. HUD is also providing further flexibility for recipients (including states and non-states) to provide additional time to identify entities that have capacity and expertise to mitigate the impacts of coronavirus, including those who have not previously or recently received ESG funding. a. Recipients that are metropolitan cities, urban counties, or territories may have up to 240 days from the date HUD signs the grant agreement to obligate ESG-CV funds. Recipients must maintain in their program records a description of any changes the recipient implemented to identify and select new subrecipients. Payments to Subrecipients. The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s complete payment request. This requirement also applies to each subrecipient that is a unit of general-purpose local government (24 CFR section 576.203). Condition: During our audit, we noted that the ESG Grant Fund obligated to sub-recipients under obligation testing were outside of the obligation timeframe of 180 days in case of ESG and 240 days in case of ESG CV without further justifications. In addition, we noted two (2) out of seven (7) samples selected for payment requirements testing were outside of 30 days window without further justifications. Cause: The City does not have formal policies and procedures in place to obligate the funds within the required timeframe nor complete the subrecipient’s payment request within 30 days. In addition, the City did not have procedures in place to timely request grantor extensions and/or document exceptions that are outside of uniform guidance. Effect or Potential Effect: The exceptions noted resulted in noncompliance. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-006. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient’s payment requests are processed timely. Views of Responsible Officials: Management concurs with the finding.
City’s Corrective Action Plan: The City concurs that during the height of the pandemic there were multiple sources of funds that needed to be expended at a rapid pace. The City's subrecipients were overwhelmed with providing services and the City at times did not enter into contracts within the 180 days or pay out on invoices within 30 days. Since this occurrence, the City has implemented policies and procedures to provide award letters and process payments within 30 days or document why the payment cannot be made given the documentation provided. Responsible Person: Carrie Wright (Director of Economic Development), Juan Gonzalez (Housing Manager) Expected Implementation Date: March 2024
2022-006
FAC accepted this audit on May 15, 2023 — management decision was due November 15, 2023.
During our audit, we noted 4 samples out of 40 samples selected for the eligibility requirement testing with internal control deficiency related to the income eligibility verification. The application reviewer made errors on data input and reported those applicants? income as zero instead of the actual income provided by the applicants. However, we recalculated those four applicants? income based on the income verification support provided and those applicants were eligible to receive the grant subsidy based on the income limit. Cause: The City did not have proper internal controls in place to review the data input performed by the application reviewer. Effect or Potential Effect: The City could potentially be out of compliance with the eligibility requirement due to the error in executing the internal control procedures. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal control by implementing policies and procedures over eligibility requirement. Views of Responsible Officials: Management concurs the finding.
Show full finding ▾Hide full finding ▴2022-003 - Eligibility ? Internal Control Over Eligibility Identification of the Federal Program: Assist Listing Number:21.023 Assistance Listing Title: Emergency Rental Assistance Program Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to the April 2022 Compliance Supplement, Eligibility: This approach to eligibility was implemented in accordance with Consolidated Appropriations Act, 2021, for ERA 1 in sections 501(c)(2)(C)(ii) of the Act concerning documentation of payments to households, sections 501(f)(2)(A) and (B) of the Act concerning signature requirements for applications and documentation required for tenants, section 501(k)(1) concerning area median income determinations, and sections 501(k)(3)(A)(I) and (II) concerning eligible household determinations and attestation requirements. This treatment is further explained in the ERA FAQs; the Consolidated Appropriations Act, 2021; and the Treasury, Department of Justice and Department of Housing and Urban Development joint letter issued August 27, 2021 (https://home.treasury.gov/system/files/136/Eviction-Moratorium-Joint-Letter.pdf). To the extent that a grantee has established and consistently followed its own reasonable procedures for implementing an eligibility determination process, consistent with Treasury?s guidance, it is not Treasury?s expectation that grantees should seek additional documentation from a beneficiary after the initial determination of eligibility has been completed, including for those determined to be eligible using self-attestation, categorical eligibility, or fact-specific proxies in qualifying circumstances. Testing of individual household eligibility-related documentation should be limited to material already collected by the grantee during application as much as possible to avoid imposing undue burden on households that remain at risk of housing instability. Condition: During our audit, we noted 4 samples out of 40 samples selected for the eligibility requirement testing with internal control deficiency related to the income eligibility verification. The application reviewer made errors on data input and reported those applicants? income as zero instead of the actual income provided by the applicants. However, we recalculated those four applicants? income based on the income verification support provided and those applicants were eligible to receive the grant subsidy based on the income limit. Cause: The City did not have proper internal controls in place to review the data input performed by the application reviewer. Effect or Potential Effect: The City could potentially be out of compliance with the eligibility requirement due to the error in executing the internal control procedures. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal control by implementing policies and procedures over eligibility requirement. Views of Responsible Officials: Management concurs the finding.
2022-003 Eligibility ? Internal Control Over Eligibility City?s Corrective Action Plan: For the cases identified, the auditors focused on a feature of the Intake System (Yardi) that allowed a reviewer to make modifications to the reported income. As part of the review process, conducted by a separate entity (El Concilio - Contractor) a number of documents (including income verification) were reviewed to ensure that the household was eligible for funding under the program. In all instances, the income was reviewed and determined to be under the eligibility threshold; however, the ?Monthly Income Correction? feature in the Intake System was utilized to make an income determination of $0. The ?Monthly Income Correction? feature being utilized does not mean that the income was not accurately verified for any of the cases. In none of the cases sampled did the households have income that was over the established income limits. Funding for this program has been fully disbursed as of December 2022. Responsible Person: Jordan Peterson (Program Admin), Raquel Chavarria (Fiscal) Expected Implementation Date: May 2023
During our audit, we noted that the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City does not have a process in place to require staff maintain the proof of verification performed on checking the suspension or debarment over vendors that the City makes contracts with federally-funded projects. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects, the City could be contracting with vendors that are prohibited from working on federally-funded projects. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure vendors are not suspended or debarred from federally-funded purchases. Views of Responsible Officials: Management concurs the finding.
Show full finding ▾Hide full finding ▴2022-004 - Procurement and Suspension, and Debarment ? Internal Control over Verification Against the System for Award Management (?SAM?) Identification of the Federal Program (s): Assist Listing Number: 20.205, 21.027 Assistance Listing Title: Highway Planning and Construction, Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Transportation, Department of Treasury Pass-Through Entity: State of California Department of Transaction, N/A Federal Award Identification Number: Refer to the Schedule, N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our audit, we noted that the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City does not have a process in place to require staff maintain the proof of verification performed on checking the suspension or debarment over vendors that the City makes contracts with federally-funded projects. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects, the City could be contracting with vendors that are prohibited from working on federally-funded projects. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure vendors are not suspended or debarred from federally-funded purchases. Views of Responsible Officials: Management concurs the finding.
2022-004 Procurement and Suspension, and Debarment ? Internal Control over Verification Against the System for Award Management (?SAM?) City?s Corrective Action Plan: The City conducts debarment checks but has not been previously documenting the verification. The procurement department has been alerted to this requirement and has changed their process to include documentation of the suspension and debarment checks. Responsible Person: Alexandria De Lashmutt (Procurement Supervisor) Expected Implementation Date: May 2023
During the audit, we noted that the City was not aware of the reporting requirements from the loan agreements and only filed the Construction Reporting. Cause: The City was not familiar with the loan agreement reporting requirements. Effect or Potential Effect: Without filing all the required reports by the loan agreement resulted in noncompliance. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to make sure the required reports are filed properly and timely.Views of Responsible Officials: Management concurs the finding.
Show full finding ▾Hide full finding ▴2022-005 ? Reporting ? Internal Control and Compliance over Reporting Identification of the Federal Program: Assistance Listing Number: 66.958 Assistance Listing Title: Water Infrastructure Finance and Innovation (WIFIA) Federal Agency: United Statements Environmental Protection Agency Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to the WIFIA Loan Agreement between the City and the Environmental Protection Agency, Section 16. Reporting Requirement, below reporting are required: (a) Updating Financial Model: The City shall provide to the WIFIA Lender not later than one hundred eighty (180) days after the beginning of each City Fiscal Year, an updated Base Case Financial Model reflecting the then-current and projected conditions. (b) Annual Financial Statements. The City shall deliver to the WIFIA Lender, as soon as available, but no later than one hundred eighty (180) days after the end of each City Fiscal Year. (c) Reserved (d) Construction Reporting. The WIFIA Lender shall have the right in its sole discretion to monitor (or direct its agents to monitor) the development of the Project, including environmental compliance, design, and construction of the Project. The City shall be responsible for administering construction oversight of the Project in accordance with applicable federal, state and local governmental requirements. The City agrees to cooperate in good faith with the WIFIA Lender in the conduct of such monitoring by promptly providing the WIFIA Lender with such reports, documentation or other information as shall be requested by the WIFIA Lender or its agents, including any independent engineer reports, documentation or information. During the period through Substantial Completion of the Project, the City shall furnish to the WIFIA Lender, on a quarterly basis, a report on the status of the Project, substantially in the form of Exhibit K (Form of Quarterly Report). The report shall be executed by the City?s Authorized Representative and, for any quarter, shall be delivered to the WIFIA Lender within thirty (30) days following such quarter (or if such day is not a Business Day, on the next following Business Day). If the then-current projection for the Substantial Completion Date is a date later than the Projected Substantial Completion Date, the City shall provide in such report a description in reasonable detail to the reasonable satisfaction of the WIFIA Lender of the reasons for such projected delay, an estimate of the impact of such delay on the capital and operating costs of the System (if any), and that the new date could not reasonably be expected to result in a Material Adverse Effect. (e) Public Benefits Report. The City shall deliver to the WIFIA Lender a report, in the form of Exhibit L (Form of Public Benefits Report Public Benefits Report later than thirty (30) days prior to the Effective Date, (ii) within ninety (90) days following the Substantial Completion Date and (iii) within ninety (90) days following the fifth (5th) anniversary of the Substantial Completion Date. The City agrees that information described under this Section 16(e) may be made publicly available by the WIFIA Lender at its discretion. (f) Modifications to Total Project Costs. For the period through the Substantial Completion Date, the City shall provide the WIFIA Lender with written notification at least thirty (30) days prior to instituting any increase or decrease to the aggregate Total Project Costs in an amount equal to or greater than five percent (5%), which notification shall set forth the nature of the proposed increase or decrease and an estimate of the impact of such increase or decrease on the capital costs and operating costs of the System. The City s notice shall demonstrate that the proposed increase or decrease is consistent with the provisions of this Agreement, is necessary or beneficial to the Project City ability to comply with its obligations under the Related Documents (including any financial ratios or covenants included therein), and could not reasonably be expected to result in a Material Adverse Effect. (g) Operations and Maintenance. The WIFIA Lender shall have the right, in its sole discretion, to monitor (or direct its agents to monitor) the Project s operations and, as the WIFIA Lender may request from time to time, to receive reporting on the operation and management of the Project, and copies of any contracts relating to the operation and maintenance of the Project. The City agrees to cooperate in good faith with the WIFIA Lender in the conduct of such monitoring by promptly providing the WIFIA Lender with such reports, documentation, or other information requested by the WIFIA Lender. The WIFIA Lender has the right, in its sole discretion, to retain such consultants or advisors, to carry out the provisions of this Section 16(g). On or prior to the Substantial Completion Date, the City shall deliver to the WIFIA Lender an operations and maintenance manual with respect to the Project, in form and substance reasonably acceptable to the WIFIA Lender. (h) Notices. a. The City shall, within fifteen (15) days after the City learns of the occurrence, give the WIFIA Lender notice of any of the following events or receipt of any of the following notices, as applicable, setting forth details of such event: i. Substantial Completion ii. Defaults; Events of Default iii. Litigation iv. Delayed Governmental Approvals v. Environmental Notices vi. Amendments vii. Related Document Defaults viii. Uncontrollable Force ix. Ratings Changes x. 2 C.F.R. ? 180.350 Notices xi. Additional Principal Project Contracts xii. Issuance of System Obligations xiii. Postings on EMMA xiv. Other Adverse Events xv. Draws on WIFIA Reserve Account a. Within thirty (30) calendar days after the City learns of the occurrence of an event specified in clause (i) above (other than sub-clauses (A) (Substantial Completion), (F) (Amendments) or (I) (Ratings Changes) (in the case of a ratings upgrade)), the City s Authorized Representative shall provide a statement to the WIFIA Lender setting forth the actions the City proposes to take with respect thereto. The City shall also provide the WIFIA Lender with any further information reasonably requested by the WIFIA Lender from time to time concerning the matters described in clause (i) above. (i) Requested Information. The City shall, at any time while the WIFIA Loan remains outstanding, promptly deliver to the WIFIA Lender such additional information regarding the business, financial, legal or organizational affairs of the City or regarding the Project or the System Revenues as the WIFIA Lender may from time to time reasonably request. Condition: During the audit, we noted that the City was not aware of the reporting requirements from the loan agreements and only filed the Construction Reporting. Cause: The City was not familiar with the loan agreement reporting requirements. Effect or Potential Effect: Without filing all the required reports by the loan agreement resulted in noncompliance. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to make sure the required reports are filed properly and timely.Views of Responsible Officials: Management concurs the finding.
2022-005 Reporting ? Internal Control and Compliance over Reporting City?s Corrective Action Plan: A recent appointment to the Debt and Treasury department has allowed for restructuring of the processes present within the department. Debt and Treasury personnel have been made aware of the previous insufficiencies and will work with funding sources to identify which requirements are fulfilled by external project managers and which requirements need to be fulfilled by City staff. Responsible Person: Teri Chapa (Program Manager) Expected Implementation Date: March 2023
During our audit, we noted two out of nine samples selected for obligation testing were outside of the obligation without further justifications. In addition, we noted three out of forty samples selected for payment requirements testing were outside of 30 days window without further justifications. Cause: The City does not have formal policies and procedures in place to obligate the funds within the required timeframe nor complete the subrecipient?s payment request within 30 days. In addition, the City did not have procedures in place to timely request grantors for extensions nor document the exceptions. Effect or Potential Effect: The exceptions noted resulted in noncompliance. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient?s payment requests are processed timely. Views of Responsible Officials: Management concurs the finding.
Show full finding ▾Hide full finding ▴2022-006 ? Special Tests and Provisions ? Internal Control and Compliance over Obligation, Expenditure, Payment Requirements Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-20-MC-06-0026, E-21-MC-06-0026, E-20-MW-06-0026 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to April 2022 Compliance Supplement, Special Tests and Provisions ? Obligation, Expenditures and Payment Requirements ? Obligation-ESG. Funds allocated to metropolitan cities, urban counties, and territories. Within 180 days after the date that HUD signs the grant agreement (or a grant amendment for reallocation of funds) with a metropolitan city, urban county, or territory, the recipient must obligate all of the grant amount, except the amount for its administrative costs. ESG-CV funds must be obligated by the recipient in accordance with 24 CFR 576.203(a)(1) and (2), except as provided below. The applicable period for obligating ESG-CV funds begins on the date HUD signed the recipient?s grant agreement for the first allocation of ESG-CV funds. The obligation deadlines below apply to the both the first and second allocation of ESG-CV funds. HUD is also providing further flexibility for recipients (including states and non-states) to provide additional time to identify entities that have capacity and expertise to mitigate the impacts of coronavirus, including those who have not previously or recently received ESG funding. b. Recipients that are metropolitan cities, urban counties, or territories may have up to 240 days from the date HUD signs the grant agreement to obligate ESG-CV funds. Recipients must maintain in their program records a description of any changes the recipient implemented to identify and select new subrecipients. Payments to Subrecipients. The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient?s complete payment request. This requirement also applies to each subrecipient that is a unit of general-purpose local government (24 CFR section 576.203). Condition: During our audit, we noted two out of nine samples selected for obligation testing were outside of the obligation without further justifications. In addition, we noted three out of forty samples selected for payment requirements testing were outside of 30 days window without further justifications. Cause: The City does not have formal policies and procedures in place to obligate the funds within the required timeframe nor complete the subrecipient?s payment request within 30 days. In addition, the City did not have procedures in place to timely request grantors for extensions nor document the exceptions. Effect or Potential Effect: The exceptions noted resulted in noncompliance. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient?s payment requests are processed timely. Views of Responsible Officials: Management concurs the finding.
2022-006 Special Tests and Provisions ? Internal Control and Compliance over Obligation, Expenditure, Payment Requirements City?s Corrective Action Plan: When invoices from subrecipients are received, they are reviewed thoroughly by staff. Documentation sent may range from a few pages to several hundred pages. The larger the packet submitted, the longer the review process. In the review process, it may be determined that the information sent is not sufficient to support the claim/amount for reimbursement. This initiates a back and forth between staff and the subrecipient that could take up to several weeks to resolve. The department continuously holds workshops with all vendors/subrecipients on best practices, and invoicing procedures to cut down on the time spent reviewing invoices. The department makes great effort in working with all subrecipients to expedite documentation review and payment process and continues to make great improvement in this area. Staff will also maintain records of any delays in processing as a result of insufficient documentation submitted by the subrecipient. Responsible Person: Julisa Villalobos (Program Admin), Raquel Chavarria (Fiscal) Expected Implementation Date: July 2023
FAC accepted this audit on September 19, 2022 — management decision was due March 19, 2023.
FAC accepted this audit on April 1, 2021 — management decision was due October 1, 2021.
During our reviewing of the Schedule of Expenditures of Federal Awards (?SEFA?) provided by the City, we noted that the following grants did not have accurate expenditure total respective to each grant award number as expenditures showed more than the grant received total. Amount CFDA Grant Award Federal Provided to Number Number Expenditures Subrecipients U.S. Department of Housing and Urban Development Direct Program: CDBG - Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants 14.218 B-19-MC-06-0026 $ 5,567,348 $ 771,161 Emergency Solutions Grant Program 14.231 E-19-MC-06-0026 455,714 438,015 U.S. Department of Transportation (continued) Pass-Through State of California Department of Transportation: Highway Planning and Construction Cluster: HSIP 8 INSTALL PED XNG 9 20.205 HSIPL-5008(161) 1,444,284 - LT TURN ADD @ VARIOUS LOC 20.205 CML-5008(169) 2 4,303 -
Show full finding ▾Hide full finding ▴2020-001 Internal Control Over Preparation of Schedule of Expenditures of Federal Awards Information on the Federal Programs: Community Development Block Grants / Entitlement Grants, (CFDA 14.218, U.S. Department of Housing and Urban Development, Award Numbers B-17-MC-06-0026, B-18-MC-06-0026, and B-19-MC-06-0026), Emergency Solutions Grant Program (CFDA 14.231, U.S. Department of Housing and Urban Development, Award Numbers E-18-MC-06- 0026 and E-19-MC-06-0026), and Highway Planning and Construction Cluster (CFDA 14.218, U.S. Department of Transportation, Pass-Through State of California Department of Transportation, Award Numbers HSIPL-5008(161) and CML-5008(169)). Criteria: Under OMB Circular A-133, Subpart C ? Auditees, ?___.300 Auditee responsibilities, the auditee shall: ?(a) Identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal program and award identification shall include, as applicable, the CFDA title and number, award number and year, name of the Federal agency, and name of the pass-through entity. (b) Maintain internal control over Federal programs that provides reasonable assurance that the auditee is managing Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs. (c) Comply with laws, regulations, and the provisions of contracts or grant agreements related to each of its Federal programs. (d) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with ?___.310.? Condition: During our reviewing of the Schedule of Expenditures of Federal Awards (?SEFA?) provided by the City, we noted that the following grants did not have accurate expenditure total respective to each grant award number as expenditures showed more than the grant received total. Amount CFDA Grant Award Federal Provided to Number Number Expenditures Subrecipients U.S. Department of Housing and Urban Development Direct Program: CDBG - Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants 14.218 B-19-MC-06-0026 $ 5,567,348 $ 771,161 Emergency Solutions Grant Program 14.231 E-19-MC-06-0026 455,714 438,015 U.S. Department of Transportation (continued) Pass-Through State of California Department of Transportation: Highway Planning and Construction Cluster: HSIP 8 INSTALL PED XNG 9 20.205 HSIPL-5008(161) 1,444,284 - LT TURN ADD @ VARIOUS LOC 20.205 CML-5008(169) 2 4,303 -
Time constraints prevented the Finance Division from being able to assemble the federal expenditures in time for the audit that make up the SEFA. Staff will compile the federal expenditures for submittal. Housing Division procedures: The SEFA expenditures are reconciled against the staff?s expenditure tracking sheet as they are accrued and as reflected in IDIS. Economic Development Department (EDD) Administrative Analyst II will track and submit information to Finance Department for SEFA purposes. This will be implemented for the FY20-21 audit.
The City did not submit the required Quarterly Performance Report, Disaster Recovery Grant Reporting (DRGR), that are due each quarter for the fiscal year quarter 3 (January 2020 to March 2020) and for the fiscal year quarter 4 (April 2020 to June 2020). Cause: The City did not have policies and procedures in place to monitor the filing of reports to ensure timely filing. Furthermore, the City had employee turnovers during the year. Effect or Potential Effect: Non-compliance with the compliance requirements.
Show full finding ▾Hide full finding ▴Information of the Federal Program: CDBG ? Entitlement Grants Cluster / Neighborhood Stabilization Program (CFDA 14.218, U.S. Department of Housing and Urban Development, Award Number B-08-MN-060009 and B-11-MN-060009 Pursuant to the OMB August 2020 Compliance Requirements for CFDA 14.218 CDBG ? Entitlement Grants Cluster ? Quarterly Performance Report (QPR), Disaster Recovery Grant Reporting (DRGR) is due each quarter from state CDBG-DR grantees after the first full quarter following execution of a grant agreement with HUD. Reporting Period Grantee Submission End Date Deadlines 30-Mar 30-Apr 30-Jun 30-Jul 30-Sep 30-Oct 30-Dec 30-Jan Each quarter, after submission of the QPR, HUD reviews the QPRs and provides approvals/rejection-revision directions to the grantee. Pursuant to the Disaster Recovery Grant Reporting (DRGR) System Grantee User Manual ? Section 6 Quarterly Performance Report Module 6.1.3 QPR Due Dates, A grantee?s first QPR is due 30 days after the first full quarter after the initial grant agreement is signed. Due dates vary by grant appropriation. Reporting Period Grantee QPR End Date Submission Deadlines 31-Mar 30-Apr 30-Jun 30-Jul 30-Sep 30-Oct 31-Dec 30-Jan Condition: The City did not submit the required Quarterly Performance Report, Disaster Recovery Grant Reporting (DRGR), that are due each quarter for the fiscal year quarter 3 (January 2020 to March 2020) and for the fiscal year quarter 4 (April 2020 to June 2020). Cause: The City did not have policies and procedures in place to monitor the filing of reports to ensure timely filing. Furthermore, the City had employee turnovers during the year. Effect or Potential Effect: Non-compliance with the compliance requirements.
City?s DRGR report was submitted late due to the DRGR portal not accepting the quarterly report. Staff was notified that until HUD completed and reviewed the City?s Annual Action Plan the NSP Quarter report could not be submitted/uploaded for review. Upon approval of the Annual Action Plan by the HUD the DRGR report was submitted and accepted. Economic Development Department (EDD) Administrative Analyst II will follow up with HUD to ensure timely submission. This will be implemented for the FY20- 21 audit.
FAC accepted this audit on March 24, 2020 — management decision was due September 24, 2020.
FAC accepted this audit on March 27, 2019 — management decision was due September 27, 2019.
FAC accepted this audit on March 29, 2018 — management decision was due September 29, 2018.
GSA_MIGRATION
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GSA_MIGRATION
2016-007
GSA_MIGRATION
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GSA_MIGRATION
2016-006
FAC accepted this audit on March 30, 2017 — management decision was due September 30, 2017.
GSA_MIGRATION
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