EIN: 946019192
UEI: EZ77RK2NWKC8
Data as of August 23, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 5, 2023. 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 5, 2023 (1083 days ago).
What is a management decision? →Section 105(a)(8) of the HCDA and 24 CFR 570.201(e) of the CDBG entitlement regulations clarify the 15 percent limitation for public services activities. If the City does not adhere to the requirements for eligible activities, costs incurred under the program may be deemed ineligible and need to be returned to the grantor. Based on the grantor?s preliminary review for the fiscal year 2021 Consolidated Annual Performance and Evaluation Report (CAPER), it?s noted that the percent of funds obligated for public service activities was reported at 28.66%, which was over the 15% cap by $118,138.19 in the PR26 Part IV Public Service Cap Calculation section. This coverage appears to be caused by $158,746.65 expended for a coronavirus-related public service activity. These expenditures are not exempt from the public services cap because the CARES act stipulated that only 2019 and 2020 funds expended for the prevention, preparation, or response to coronavirus are exempt from the public service cap, however, this portion of activity was funded with 2021 grant funds. The preliminary finding states the city exceeded the 15% public service cap by $118,138.19, which upon the finalization of the CAPER review, would need to be repaid to HUD with non-federal funds. Staff should review and update policies and procedures to ensure compliance specifically with Section 105(a)(8) of the HCDA and 24 CFR 570.201(e) of the CDBG entitlement regulations.
Show full finding ▾Hide full finding ▴Section 105(a)(8) of the HCDA and 24 CFR 570.201(e) of the CDBG entitlement regulations clarify the 15 percent limitation for public services activities. If the City does not adhere to the requirements for eligible activities, costs incurred under the program may be deemed ineligible and need to be returned to the grantor. Based on the grantor?s preliminary review for the fiscal year 2021 Consolidated Annual Performance and Evaluation Report (CAPER), it?s noted that the percent of funds obligated for public service activities was reported at 28.66%, which was over the 15% cap by $118,138.19 in the PR26 Part IV Public Service Cap Calculation section. This coverage appears to be caused by $158,746.65 expended for a coronavirus-related public service activity. These expenditures are not exempt from the public services cap because the CARES act stipulated that only 2019 and 2020 funds expended for the prevention, preparation, or response to coronavirus are exempt from the public service cap, however, this portion of activity was funded with 2021 grant funds. The preliminary finding states the city exceeded the 15% public service cap by $118,138.19, which upon the finalization of the CAPER review, would need to be repaid to HUD with non-federal funds. Staff should review and update policies and procedures to ensure compliance specifically with Section 105(a)(8) of the HCDA and 24 CFR 570.201(e) of the CDBG entitlement regulations.
Staff will update policies and procedures to ensure compliance specifically with Section 105(a)(8) of the HCDA and 24 CFR 570.201(e) of the CDBG entitlement regulations.
FAC accepted this audit on July 27, 2020 — management decision was due January 27, 2021.
The City did not file a HUD 60002 Section 3 summary report in fiscal year 2019 for the CDBG program. Effect: The City is not in compliance with the performance reporting requirements of the CDBG program. Cause: We understand this was due to a staff oversight in the Housing Department. Recommendation: The City must file the delinquent report and develop procedures to ensure timely compliance with all grant reporting requirements. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Show full finding ▾Hide full finding ▴Finding #SA2019-001: Annual Filing of HUD 60002 Performance Report CFDA number: 14.218 CFDA Title: Community Development Block Grants/ Entitlement Grants (CDBG) Name of Federal Agency: Department of Housing and Urban Development (HUD) Federal Award Identification Number and Year: B-18-MC-06-0055; 2018 Criteria: Section L(2), Performance Reporting, of the OMB Compliance Supplement for the CDBG Program requires the annual filing of the HUD 60002 Section 3 Summary Report for each grant for which recipients administer in excess of $200,000 in a program year related to housing rehabilitation, housing construction, or other public construction. HUD 60002 Section 3 applies to all construction related activities and projects when the direct recipient receives more than $200,000 from all sources of Housing and Community Development Assistance funding in a given 12-month reporting period. Condition: The City did not file a HUD 60002 Section 3 summary report in fiscal year 2019 for the CDBG program. Effect: The City is not in compliance with the performance reporting requirements of the CDBG program. Cause: We understand this was due to a staff oversight in the Housing Department. Recommendation: The City must file the delinquent report and develop procedures to ensure timely compliance with all grant reporting requirements. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2019-001: Annual Filing of HUD 60002 Performance Report ? Name(s) of the contact person: Robert Musallam, Housing Authority Administrator ? Corrective Action Plan: City staff has been in communication with their new CPD representative, Curt Klaus, concerning the submission of HUD 60002 Performance Report. The corrective action plan will be as follows: 1. Staff to communicate the lack of submission of the HUD 60002 to HUD ? completed 4/10/2020 in an introductory phone call; follow up request sent 4/24/2020 via email due to lack of response from HUD 2. HUD to provide details on submitting the HUD 60002 past the due date 3. Staff will comply with all requirements HUD details in its communication to Milpitas Staff 4. Staff will alert the Finance Department of the submission of HUD 60002 into IDIS 5. The Finance Department will report back to the Auditor ? Anticipated Completion Date: 7/31/2020 ? Due to COVID-19, our CPD representative has been extremely inundated and not able to assist with non-COVID related items. Additionally, this is our third CPD representative in the past 18 months, with Curt having just taken over in March 2020. Curt is not as familiar with our City and its historical CDBG performance. Milpitas will comply with the requirements he sets forth once he is able to provide us the guidance.
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