EIN: 956000741
UEI: QKR1DK2Z7K81
Data as of August 22, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on May 4, 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 November 4, 2026 (73 days from today).
What is a management decision? →During our audit, we noted that the City charged indirect costs totaling $223,758 under the Community Development Block Grants (CDBG)/Entitlement Grants and $25,483 under the HOME Investment Partnerships Program without an approved cost allocation plan, a federally negotiated indirect cost rate, or an election to use the 10-percent de minimis rate, based on our review of the applicable grant agreements. Cause: The City did not obtain the required approval from the grantor agency to charge indirect costs to the CDBG and HOME federal awards. In addition, the City had not established an approved cost allocation plan, a federally negotiated indirect cost rate, or elected to use the 10-percent de minimis rate. Effect: As a result of charging indirect costs without an approved cost allocation plan, a federally negotiated indirect cost rate, or an election to use the 10-percent de minimis rate, the City charged $223,758 to the CDBG program and $25,483 to the HOME program in a manner that does not comply with federal grant requirements. These unapproved charges increase the risk that program expenditures may be questioned or deemed unallowable by the grantor agency, potentially requiring repayment of funds. However, the City has since identified and allocated other eligible expenditures to appropriately replace the $223,758 for CDBG. Questioned Costs: $25,483 for the HOME program. Recommendation: We recommend that the City establish procedures to ensure that indirect costs are charged to Federal awards only after confirming that such costs are allowable under the specific grant and that all regulatory requirements have been met. This includes determining whether the grant permits indirect cost recovery and ensuring the City has an approved indirect cost methodology in place—either a federally negotiated indirect cost rate, an approved cost allocation plan, or a formal election of the 10-percent de minimis rate when eligible. The City should also obtain grantor approval when required and maintain documentation supporting the basis for any indirect cost charges. In addition, the City should provide staff training on Federal indirect cost requirements, grant allowability rules, and internal procedures to ensure consistent and compliant application. View of Responsible Officials and Corrective Action Plan: The City will implement a policy directing City staff that, if allowed, grant applications should include the option to charge indirect costs for the execution of the grant work. Upon grant application submissions, the department submitting the grant will coordinate with the Senior Finance Analyst to provide indirect cost rates and/or charges. As it relates to CDBG and HOME Program Grants, the Finance and Administration Department, in conjunction with the Community Development Director, will conduct a year-end review to ensure allowable indirect costs are appropriately charged. Personnel Responsible for Implementation: Meredith Elguira, Carol Molina, Ralston Turner Position of Responsible Personnel: Interim Community Development Director, Interim Finance and Administration Director, Senior Finance Analyst Expected Date of Implementation: April 30, 2026
Show full finding ▾Hide full finding ▴Identification of the Federal Programs: Assistance Listing Number: 14.218, 14.239 Assistance Listing Title: Community Development Block Grants (CDBG)/Entitlement Grants, HOME Investment Partnerships Program Federal Agency: U.S. Department of Housing and Urban Development Federal Award Number: B24-MC-06-0559, M24-MC060521 Federal Award Year: 7/7/2024 – 9/31/2031, FY2024 – FY2032 Criteria or Specific Requirements: Pursuant to 2 CFR 200.414, Indirect Costs, a non-federal entity may charge indirect costs to federal awards only if it has a federally negotiated indirect cost rate, an approved indirect cost allocation plan as required for state and local governments under Appendix V and VII to 2 CFR Part 200 or has formally elected the 10-percent de minimis rate when eligible. Identified Condition: During our audit, we noted that the City charged indirect costs totaling $223,758 under the Community Development Block Grants (CDBG)/Entitlement Grants and $25,483 under the HOME Investment Partnerships Program without an approved cost allocation plan, a federally negotiated indirect cost rate, or an election to use the 10-percent de minimis rate, based on our review of the applicable grant agreements. Cause: The City did not obtain the required approval from the grantor agency to charge indirect costs to the CDBG and HOME federal awards. In addition, the City had not established an approved cost allocation plan, a federally negotiated indirect cost rate, or elected to use the 10-percent de minimis rate. Effect: As a result of charging indirect costs without an approved cost allocation plan, a federally negotiated indirect cost rate, or an election to use the 10-percent de minimis rate, the City charged $223,758 to the CDBG program and $25,483 to the HOME program in a manner that does not comply with federal grant requirements. These unapproved charges increase the risk that program expenditures may be questioned or deemed unallowable by the grantor agency, potentially requiring repayment of funds. However, the City has since identified and allocated other eligible expenditures to appropriately replace the $223,758 for CDBG. Questioned Costs: $25,483 for the HOME program. Recommendation: We recommend that the City establish procedures to ensure that indirect costs are charged to Federal awards only after confirming that such costs are allowable under the specific grant and that all regulatory requirements have been met. This includes determining whether the grant permits indirect cost recovery and ensuring the City has an approved indirect cost methodology in place—either a federally negotiated indirect cost rate, an approved cost allocation plan, or a formal election of the 10-percent de minimis rate when eligible. The City should also obtain grantor approval when required and maintain documentation supporting the basis for any indirect cost charges. In addition, the City should provide staff training on Federal indirect cost requirements, grant allowability rules, and internal procedures to ensure consistent and compliant application. View of Responsible Officials and Corrective Action Plan: The City will implement a policy directing City staff that, if allowed, grant applications should include the option to charge indirect costs for the execution of the grant work. Upon grant application submissions, the department submitting the grant will coordinate with the Senior Finance Analyst to provide indirect cost rates and/or charges. As it relates to CDBG and HOME Program Grants, the Finance and Administration Department, in conjunction with the Community Development Director, will conduct a year-end review to ensure allowable indirect costs are appropriately charged. Personnel Responsible for Implementation: Meredith Elguira, Carol Molina, Ralston Turner Position of Responsible Personnel: Interim Community Development Director, Interim Finance and Administration Director, Senior Finance Analyst Expected Date of Implementation: April 30, 2026
The City will implement a policy directing City staff that, if allowed, grant applications should include the option to charge indirect costs for the execution of the grant work. Upon grant application submissions, the department submitting the grant will coordinate with the Senior Finance Analyst to provide indirect cost rates and/or charges. As it relates to CDBG and HOME Program Grants, the Finance and Administration Department, in conjunction with the Community Development Director, will conduct a year-end review to ensure allowable indirect costs are appropriately charged. Personnel Responsible for Implementation: Meredith Elguira, Carol Molina, Ralston Turner Position of Responsible Personnel: Interim Community Development Director, Interim Finance and Administration Director, Senior Finance Analyst Expected Date of Implementation: April 30, 2026
During the audit, the City was unable to provide evidence demonstrating that vendor eligibility was verified prior to contract execution for all eight vendors selected for testing. The absence of such documentation raises concerns regarding compliance with the suspension and debarment requirements and highlights the need for strengthened internal controls over vendor verification processes. Cause: The issue occurred due to significant staff turnover within the department, which resulted in gaps in institutional knowledge and inconsistent application of required vendor verification procedures. As responsibilities transitioned between personnel, key steps in the suspension and debarment verification process were not consistently performed or documented. The lack of continuity and insufficient training for new staff contributed to the failure to maintain adequate supporting documentation demonstrating vendor eligibility prior to contract execution. Effect: The absence of required documentation increases the risk that contracts may have been awarded to ineligible or suspended parties, which could result in questioned costs or other compliance findings. Additionally, the lack of consistent verification practices, exacerbated by staff turnover, indicates weaknesses in internal controls over procurement and vendor management, reducing assurance that Federal funds are being administered in accordance with program requirements. Questioned Costs: None Recommendation: As this issue has been noted in prior audit periods, the City should take steps to remediate deficiencies in its suspension and debarment verification process. The City should implement alternative verification procedures, such as obtaining vendor certifications or including compliance clauses in contracts, when vendors are not listed in SAM. Staff should receive training on suspension and debarment requirements and acceptable verification methods to promote consistent application across departments. The City should also develop formal written policies outlining required verification steps, including procedures for vendors not registered in SAM, and strengthen monitoring and oversight to ensure these procedures are followed. Finally, the City should maintain complete documentation of all verification efforts to demonstrate compliance during audits. These actions will help strengthen internal controls, reduce compliance risks, and support adherence to Federal suspension and debarment requirements. Views of Responsible Officials and Planned Corrective Action Plan: The Finance and Administration Department will create an internal policy requiring a copy of the SAM.gov search results for the vendor, including the date of the search, and store the documentation in the appropriate grant file. Further, the policy will require a sign-off process where the vendor payment cannot be finalized without a "Debarment Check Complete". The Finance and Administration Department will include quality control checks and perform regular internal audits of a sample of vendor files related to grants to check for the presence of the Suspension and Debarment Check. Personnel Responsible for Implementation: Meredith Elguira, Carol Molina, Ralston Turner Position of Responsible Personnel: Interim Community Development Director, Finance and Administration Director, Senior Finance Analyst Expected Date of Implementation: April 30, 2026
Show full finding ▾Hide full finding ▴Identification of the Federal Programs: Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of the Treasury Federal Award Number: N/A Federal Award Year: FY 2025 Criteria or Specific Requirements: Non-federal entities must comply with the Suspension and Debarment compliance requirement, which prohibits entering into covered transactions with parties that are suspended, debarred, or otherwise excluded. Covered transactions include procurement contracts for goods and services under nonprocurement transactions (e.g., grants or cooperative agreements) that are expected to equal or exceed $25,000, or as specified in 2 CFR § 180.220. Additionally, all subawards to subrecipients are considered covered transactions, regardless of the award amount, unless exempt per 2 CFR § 180.215. To verify vendor eligibility, non-federal entities must confirm that lower-tier entities are not suspended, debarred, or excluded, as defined in 2 CFR § 180.995. This can be achieved through one of the following methods: 1. Checking the SAM: Use the SAM Exclusions database, managed by the General Services Administration (GSA), at SAM.gov. 2. Collecting a Certification: Obtain a certification directly from the entity confirming their eligibility to participate. 3. Including Contractual Clauses: Add a clause or condition to the transaction that requires the entity to comply with suspension and debarment requirements. Identified Condition: During the audit, the City was unable to provide evidence demonstrating that vendor eligibility was verified prior to contract execution for all eight vendors selected for testing. The absence of such documentation raises concerns regarding compliance with the suspension and debarment requirements and highlights the need for strengthened internal controls over vendor verification processes. Cause: The issue occurred due to significant staff turnover within the department, which resulted in gaps in institutional knowledge and inconsistent application of required vendor verification procedures. As responsibilities transitioned between personnel, key steps in the suspension and debarment verification process were not consistently performed or documented. The lack of continuity and insufficient training for new staff contributed to the failure to maintain adequate supporting documentation demonstrating vendor eligibility prior to contract execution. Effect: The absence of required documentation increases the risk that contracts may have been awarded to ineligible or suspended parties, which could result in questioned costs or other compliance findings. Additionally, the lack of consistent verification practices, exacerbated by staff turnover, indicates weaknesses in internal controls over procurement and vendor management, reducing assurance that Federal funds are being administered in accordance with program requirements. Questioned Costs: None Recommendation: As this issue has been noted in prior audit periods, the City should take steps to remediate deficiencies in its suspension and debarment verification process. The City should implement alternative verification procedures, such as obtaining vendor certifications or including compliance clauses in contracts, when vendors are not listed in SAM. Staff should receive training on suspension and debarment requirements and acceptable verification methods to promote consistent application across departments. The City should also develop formal written policies outlining required verification steps, including procedures for vendors not registered in SAM, and strengthen monitoring and oversight to ensure these procedures are followed. Finally, the City should maintain complete documentation of all verification efforts to demonstrate compliance during audits. These actions will help strengthen internal controls, reduce compliance risks, and support adherence to Federal suspension and debarment requirements. Views of Responsible Officials and Planned Corrective Action Plan: The Finance and Administration Department will create an internal policy requiring a copy of the SAM.gov search results for the vendor, including the date of the search, and store the documentation in the appropriate grant file. Further, the policy will require a sign-off process where the vendor payment cannot be finalized without a "Debarment Check Complete". The Finance and Administration Department will include quality control checks and perform regular internal audits of a sample of vendor files related to grants to check for the presence of the Suspension and Debarment Check. Personnel Responsible for Implementation: Meredith Elguira, Carol Molina, Ralston Turner Position of Responsible Personnel: Interim Community Development Director, Finance and Administration Director, Senior Finance Analyst Expected Date of Implementation: April 30, 2026
The Finance and Administration Department will create an internal policy requiring a copy of the SAM.gov search results for the vendor, including the date of the search, and store the documentation in the appropriate grant file. Further, the policy will require a sign-off process where the vendor payment cannot be finalized without a "Debarment Check Complete". The Finance and Administration Department will include quality control checks and perform regular internal audits of a sample of vendor files related to grants to check for the presence of the Suspension and Debarment Check. Personnel Responsible for Implementation: Meredith Elguira, Carol Molina, Ralston Turner Position of Responsible Personnel: Interim Community Development Director, Finance and Administration Director, Senior Finance Analyst Expected Date of Implementation: April 30, 2026
2024-001
During the audit, the City was unable to provide the required supporting documentation for several sampled properties. Specifically, documentation was not available to support: • proof of current homeowner’s insurance and verification of updated property tax payments for thirteen sampled properties; • evidence of owner occupancy for the required loan term for the twelve sampled properties; • executed home loan agreements for two sampled properties; and • proof supporting the number of residential units for one sampled commercial property. Because the required documents were not available, we were unable to test compliance with program eligibility requirements. Cause: The condition occurred due to insufficient internal controls over record retention and documentation management within the housing rehabilitation and loan programs. Staff turnover and transitions in program responsibilities contributed to gaps in institutional knowledge and inconsistent maintenance of required records. Effect: The lack of complete and accessible records limits the City’s ability to demonstrate compliance with Federal requirements. These documentation gaps also indicate weaknesses in internal controls over record retention and program oversight, which may affect the reliability of program administration and future audit results. Questioned Costs: None. Recommendation: The City should strengthen its internal controls over record retention and documentation management to ensure all required program records are complete, accurate, and readily accessible for audit. This includes establishing clear procedures for maintaining documentation supporting property eligibility, loan terms, and compliance requirements, as well as implementing a centralized and organized record‑keeping system. The City should also provide training to staff responsible for administering the housing rehabilitation and loan programs to promote a consistent understanding of Federal documentation and retention requirements. Additionally, periodic internal reviews should be conducted to verify that required records are being properly maintained. Views of Responsible Officials and Planned Corrective Action Plan: Management acknowledges the auditors’ review of HUD HOME eligibility testing. We believe our current processes generally comply with HUD requirements; however, we recognize the opportunity to strengthen controls. To address the auditors’ comments, we will enhance our eligibility verification procedures, improve documentation consistency, and provide additional staff training. These corrective actions will help ensure ongoing compliance and accuracy in eligibility determinations. Personnel Responsible for Implementation: Meredith Elguira Position of Responsible Personnel: Community Development Director Expected Date of Implementation: April 30, 2026
Show full finding ▾Hide full finding ▴Identification of the Federal Programs: Assistance Listing Number: 14.239 Assistance Listing Title: Home Investment Partnerships Program Federal Agency: U.S. Department of Housing and Urban Development Federal Award Number: M24-MC060521 Federal Award Year: FY2024 – FY2032 Criteria or Specific Requirements: Federal regulations require recipients of federal housing rehabilitation and loan program funds to maintain complete, accurate, and reliable documentation demonstrating compliance with all program terms and conditions. Under 2 CFR 200.303, Internal controls, recipients must establish and maintain effective internal controls over Federal awards to ensure proper stewardship of program funds. In addition, 2 CFR 200.334, Record retention requirements, requires recipients to retain records that document compliance with Federal program requirements and make such records available for audit or review. Identified Condition: During the audit, the City was unable to provide the required supporting documentation for several sampled properties. Specifically, documentation was not available to support: • proof of current homeowner’s insurance and verification of updated property tax payments for thirteen sampled properties; • evidence of owner occupancy for the required loan term for the twelve sampled properties; • executed home loan agreements for two sampled properties; and • proof supporting the number of residential units for one sampled commercial property. Because the required documents were not available, we were unable to test compliance with program eligibility requirements. Cause: The condition occurred due to insufficient internal controls over record retention and documentation management within the housing rehabilitation and loan programs. Staff turnover and transitions in program responsibilities contributed to gaps in institutional knowledge and inconsistent maintenance of required records. Effect: The lack of complete and accessible records limits the City’s ability to demonstrate compliance with Federal requirements. These documentation gaps also indicate weaknesses in internal controls over record retention and program oversight, which may affect the reliability of program administration and future audit results. Questioned Costs: None. Recommendation: The City should strengthen its internal controls over record retention and documentation management to ensure all required program records are complete, accurate, and readily accessible for audit. This includes establishing clear procedures for maintaining documentation supporting property eligibility, loan terms, and compliance requirements, as well as implementing a centralized and organized record‑keeping system. The City should also provide training to staff responsible for administering the housing rehabilitation and loan programs to promote a consistent understanding of Federal documentation and retention requirements. Additionally, periodic internal reviews should be conducted to verify that required records are being properly maintained. Views of Responsible Officials and Planned Corrective Action Plan: Management acknowledges the auditors’ review of HUD HOME eligibility testing. We believe our current processes generally comply with HUD requirements; however, we recognize the opportunity to strengthen controls. To address the auditors’ comments, we will enhance our eligibility verification procedures, improve documentation consistency, and provide additional staff training. These corrective actions will help ensure ongoing compliance and accuracy in eligibility determinations. Personnel Responsible for Implementation: Meredith Elguira Position of Responsible Personnel: Community Development Director Expected Date of Implementation: April 30, 2026
Management acknowledges the auditors’ review of HUD HOME eligibility testing. We believe our current processes generally comply with HUD requirements; however, we recognize the opportunity to strengthen controls. To address the auditors’ comments, we will enhance our eligibility verification procedures, improve documentation consistency, and provide additional staff training. These corrective actions will help ensure ongoing compliance and accuracy in eligibility determinations. Personnel Responsible for Implementation: Meredith Elguira Position of Responsible Personnel: Community Development Director Expected Date of Implementation: April 30, 2026
FAC accepted this audit on March 19, 2025 — management decision was due September 19, 2025.
During the audit, the City was unable to provide evidence demonstrating that vendor eligibility had been verified prior to entering into contracts with two of the eight sampled vendors. This lapse in documentation raises concerns regarding compliance with the suspension and debarment requirements and highlights the need for strengthened internal controls over vendor verification processes. Cause: Lack of knowledge regarding alternative procedures for verifying the suspension and debarment status of vendors not registered in the SAM. Effect or Potential Effect: The City’s lack of knowledge regarding alternative procedures to verify the suspension and debarment status of vendors not registered in SAM increases the risk of engaging vendors who may be suspended or debarred. This could result in noncompliance with federal regulations, jeopardize the integrity of procurement processes, and expose the City to potential financial and reputational consequences. Questioned Costs: None Recommendation: We recommend that the City: 1. Implement Alternative Verification Procedures • Establish clear alternative methods, such as obtaining vendor certifications or including suspension and debarment compliance clauses in contracts, to verify vendors not listed in SAM. 2. Provide Staff Training • Educate staff on the suspension and debarment requirements and alternative verification options to ensure consistent compliance practices. 3. Develop Internal Policies • Create formal policies outlining the verification process, including steps for handling vendors not registered in SAM, to standardize procedures across all departments. 4. Enhance Monitoring and Oversight • Implement regular monitoring and oversight mechanisms to ensure verification processes are consistently followed for all covered transactions. 5. Document Verification Efforts • Maintain detailed records of vendor eligibility verification to provide evidence of compliance during audits. By adopting these measures, the City can address the issue, mitigate risks, and ensure adherence to suspension and debarment requirements. Views of Responsible Officials and Planned Corrective Action Plan: Former City Manager Ernie Hernandez has instructed department heads and grant analysts to enhance the City’s practice in the suspension/debarment verification process starting Quarter 4, FY2023 -24. However, the two service providers noted for not having proper debarment search in the current fiscal year 2023-24 Single Audit were MiSalud, a healthcare service provider, which normally does not warrant a search, and Tanner, whose service was acquired by the City prior to the previous year’s audit. Julian Lee, Interim City Manager, will ensure staff better adhering to the Uniform Guidance in the suspension/debarment verification process. For existing vendors that the City has not verified debarment or for vendors who do not register with SAM.gov, the City would accomplish the verification by (1) collecting a certification from the entity, or (2) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Personnel Responsible for Implementation: Julian Lee Position of Responsible Personnel: Interim City Manager Expected Date of Implementation: March 31, 2026
Show full finding ▾Hide full finding ▴Identification of the Federal Programs: Assistance Listing Number:21.027 Assistance Listing Title:Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Federal Award Number:N/A Federal Award Year:FY 2024 Criteria or Specific Requirements: Non-federal entities must comply with the Suspension and Debarment compliance requirement, which prohibits entering into covered transactions with parties that are suspended, debarred, or otherwise excluded. Covered transactions include procurement contracts for goods and services under nonprocurement transactions (e.g., grants or cooperative agreements) that are expected to equal or exceed $25,000, or as specified in 2 CFR § 180.220. Additionally, all subawards to subrecipients are considered covered transactions, regardless of the award amount, unless exempt per 2 CFR § 180.215. To verify vendor eligibility, non-federal entities must confirm that lower-tier entities are not suspended, debarred, or excluded, as defined in 2 CFR § 180.995. This can be achieved through one of the following methods: 1. Checking the SAM: Use the SAM Exclusions database, managed by the General Services Administration (GSA), at SAM.gov. 2. Collecting a Certification: Obtain a certification directly from the entity confirming their eligibility to participate. 3. Including Contractual Clauses: Add a clause or condition to the transaction that requires the entity to comply with suspension and debarment requirements. Identified Condition: During the audit, the City was unable to provide evidence demonstrating that vendor eligibility had been verified prior to entering into contracts with two of the eight sampled vendors. This lapse in documentation raises concerns regarding compliance with the suspension and debarment requirements and highlights the need for strengthened internal controls over vendor verification processes. Cause: Lack of knowledge regarding alternative procedures for verifying the suspension and debarment status of vendors not registered in the SAM. Effect or Potential Effect: The City’s lack of knowledge regarding alternative procedures to verify the suspension and debarment status of vendors not registered in SAM increases the risk of engaging vendors who may be suspended or debarred. This could result in noncompliance with federal regulations, jeopardize the integrity of procurement processes, and expose the City to potential financial and reputational consequences. Questioned Costs: None Recommendation: We recommend that the City: 1. Implement Alternative Verification Procedures • Establish clear alternative methods, such as obtaining vendor certifications or including suspension and debarment compliance clauses in contracts, to verify vendors not listed in SAM. 2. Provide Staff Training • Educate staff on the suspension and debarment requirements and alternative verification options to ensure consistent compliance practices. 3. Develop Internal Policies • Create formal policies outlining the verification process, including steps for handling vendors not registered in SAM, to standardize procedures across all departments. 4. Enhance Monitoring and Oversight • Implement regular monitoring and oversight mechanisms to ensure verification processes are consistently followed for all covered transactions. 5. Document Verification Efforts • Maintain detailed records of vendor eligibility verification to provide evidence of compliance during audits. By adopting these measures, the City can address the issue, mitigate risks, and ensure adherence to suspension and debarment requirements. Views of Responsible Officials and Planned Corrective Action Plan: Former City Manager Ernie Hernandez has instructed department heads and grant analysts to enhance the City’s practice in the suspension/debarment verification process starting Quarter 4, FY2023 -24. However, the two service providers noted for not having proper debarment search in the current fiscal year 2023-24 Single Audit were MiSalud, a healthcare service provider, which normally does not warrant a search, and Tanner, whose service was acquired by the City prior to the previous year’s audit. Julian Lee, Interim City Manager, will ensure staff better adhering to the Uniform Guidance in the suspension/debarment verification process. For existing vendors that the City has not verified debarment or for vendors who do not register with SAM.gov, the City would accomplish the verification by (1) collecting a certification from the entity, or (2) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Personnel Responsible for Implementation: Julian Lee Position of Responsible Personnel: Interim City Manager Expected Date of Implementation: March 31, 2026
Former City Manager Ernie Hernandez has instructed department heads and grant analysts to enhance the City’s practice in the suspension/debarment verification process starting Quarter 4, FY2023 -24. However, the two service providers noted for not having proper debarment search in the current fiscal year 2023-24 Single Audit were MiSalud, a healthcare service provider, which normally does not warrant a search, and Tanner, whose service was acquired by the City prior to the previous year’s audit. Julian Lee, Interim City Manager, will ensure staff better adhering to the Uniform Guidance in the suspension/debarment verification process. For existing vendors that the City has not verified debarment or for vendors who do not register with SAM.gov, the City would accomplish the verification by (1) collecting a certification from the entity, or (2) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Personnel Responsible for Implementation: Julian Lee Position of Responsible Personnel: Interim City Manager Expected Date of Implementation: March 31, 2026
2023-003
During the audit, we noted that two of the sampled properties received HOME funds, even though their after-rehabilitation values exceeded 95 percent of the median purchase price for the area. Cause: Lack of proper oversight and review processes to ensure compliance with HUD’s requirements. Specifically, there appears to be an absence of controls to verify that the after-rehabilitation values of properties receiving HOME funds remain within the allowable limits of 95% of the median purchase price for the area. Effect or Potential Effect: The improper allocation of HOME funds to properties exceeding the after-rehabilitation value limit could result in noncompliance with HUD regulations. This may lead to financial penalties, grant disallowances, or the need to repay the misallocated funds. Additionally, such instances undermine the program’s goal of promoting affordable housing and may erode trust in the City’s ability to manage federal funds responsibly. Questioned Costs: The known questioned cost is $78,921. Recommendation: We recommend that the City: 1. Strengthen Verification Processes • Implement stricter controls to verify that after-rehabilitation property values align with HUD’s requirement of not exceeding 95% of the median purchase price for the area. 2. Provide Training on Compliance Requirements • Conduct regular training sessions for staff involved in administering HOME funds to ensure they fully understand HUD’s regulations and limits. 3. Enhance Documentation Standards • Require thorough documentation of eligibility verification, including evidence of compliance with the after-rehabilitation value threshold, to maintain audit readiness. 4. Develop Oversight Mechanisms • Establish internal review or monitoring procedures to identify and address noncompliance issues promptly. 5. Consult HUD for Guidance • Engage with HUD for clarification or support in applying the 95% rule to ensure the City’s procedures align with federal expectations. These measures will help the City ensure compliance, avoid financial penalties, and maintain the integrity of the HOME program. View of Responsible Officials: Gabriel Linares, Director of Community Development, will enhance the department’s HOME assistance rules to ensure the value of the HOME-assisted property after rehabilitation will not exceed 95 percent of the median purchase price for the area starting Quarter 4, FY2024 -25. Personnel Responsible for Implementation: Gabriel Linares Position of Responsible Personnel: Director of Community Development Expected Date of Implementation: June 30, 2025
Show full finding ▾Hide full finding ▴Identification of the Federal Programs: Assistance Listing Number: 14.239 Assistance Listing Title: HOME Investment Partnership Program Federal Agency: Department of Housing and Urban Development Federal Award Number: M-21-MC-060521;M-22-MC-060521;M-23-MC-060521 Federal Award Year: FY 2024 Criteria or Specific Requirements: Under 24 CFR 92.254, Qualifications for Affordable Housing: Homeownership, participating jurisdictions utilizing HOME funds for homebuyer assistance or the rehabilitation of owner-occupied single-family properties must adhere to the affordable homeownership limits established by the United States Department of Housing and Urban Development (HUD). These limits are determined separately for newly constructed and existing housing. For housing that is currently owned by a family to qualify as affordable, it must meet the following criteria: (1) The estimated value of the property, after rehabilitation, does not exceed 95 percent of the median purchase price for the area, described in paragraph (a)(2)(iii) of this section; and (2) The housing is the principal residence of an owner whose family qualifies as a low-income family at the time HOME funds are committed to the housing. In determining the income eligibility of the family, the participating jurisdiction must include the income of all persons living in the housing. Identified Condition: During the audit, we noted that two of the sampled properties received HOME funds, even though their after-rehabilitation values exceeded 95 percent of the median purchase price for the area. Cause: Lack of proper oversight and review processes to ensure compliance with HUD’s requirements. Specifically, there appears to be an absence of controls to verify that the after-rehabilitation values of properties receiving HOME funds remain within the allowable limits of 95% of the median purchase price for the area. Effect or Potential Effect: The improper allocation of HOME funds to properties exceeding the after-rehabilitation value limit could result in noncompliance with HUD regulations. This may lead to financial penalties, grant disallowances, or the need to repay the misallocated funds. Additionally, such instances undermine the program’s goal of promoting affordable housing and may erode trust in the City’s ability to manage federal funds responsibly. Questioned Costs: The known questioned cost is $78,921. Recommendation: We recommend that the City: 1. Strengthen Verification Processes • Implement stricter controls to verify that after-rehabilitation property values align with HUD’s requirement of not exceeding 95% of the median purchase price for the area. 2. Provide Training on Compliance Requirements • Conduct regular training sessions for staff involved in administering HOME funds to ensure they fully understand HUD’s regulations and limits. 3. Enhance Documentation Standards • Require thorough documentation of eligibility verification, including evidence of compliance with the after-rehabilitation value threshold, to maintain audit readiness. 4. Develop Oversight Mechanisms • Establish internal review or monitoring procedures to identify and address noncompliance issues promptly. 5. Consult HUD for Guidance • Engage with HUD for clarification or support in applying the 95% rule to ensure the City’s procedures align with federal expectations. These measures will help the City ensure compliance, avoid financial penalties, and maintain the integrity of the HOME program. View of Responsible Officials: Gabriel Linares, Director of Community Development, will enhance the department’s HOME assistance rules to ensure the value of the HOME-assisted property after rehabilitation will not exceed 95 percent of the median purchase price for the area starting Quarter 4, FY2024 -25. Personnel Responsible for Implementation: Gabriel Linares Position of Responsible Personnel: Director of Community Development Expected Date of Implementation: June 30, 2025
Gabriel Linares, Director of Community Development, will enhance the department’s HOME assistance rules to ensure the value of the HOME-assisted property after rehabilitation will not exceed 95 percent of the median purchase price for the area starting Quarter 4, FY2024 -25. Personnel Responsible for Implementation: Gabriel Linares Position of Responsible Personnel: Director of Community Development Expected Date of Implementation: June 30, 2025
The City did not submit the CAPER within the required timeframe, resulting in a delayed submission on October 17, 2024, which was 17 days past the deadline. Furthermore, three of the four required quarterly Section 15011 Reports for the fiscal year 2024 were not prepared or submitted. The only report submitted, the third quarterly report for the fiscal year 2024, was submitted late on April 15, 2024, which was 5 days past the deadline. Cause: The delay in submission and non-submission of the reports was attributed to inadequate internal processes and a lack of oversight, which hindered the timely completion and submission of the required documentation. Effect or Potential Effect: The delayed submission of the reports could result in noncompliance with federal reporting requirements, potentially jeopardizing future funding opportunities. It may also lead to increased scrutiny from oversight agencies and diminish confidence in the City’s ability to meet critical deadlines and manage federal programs effectively. Questioned Costs: None. Recommendation: We recommend that the City establish clear internal timelines and accountability measures, ensuring all responsible staff are aware of reporting deadlines. The City should proactively request an extension from the relevant federal agency if circumstances arise that might impact the timely submission of the reports. This includes providing a clear justification for the delay, outlining the steps being taken to complete the report, and proposing a revised timeline. Regular communication with the agency during the extension period will demonstrate accountability and commitment to compliance. Views of Responsible Officials and Planned Corrective Action Plan: Gabriel Linares, Director of Community Development, will enhance the department’s policy/desk procedure to ensure timely filing of the CAPER and Section 15011 reports starting Quarter Four, FY2024 -25. Personnel Responsible for Implementation: Gabriel Linares Position of Responsible Personnel: Director of Community Development Expected Date of Implementation: June 30, 2025
Show full finding ▾Hide full finding ▴dentification of the Federal Programs: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants (CDBG) – Entitlement Grants Cluster Federal Agency: Department of Housing and Urban Development Federal Award Number: B-20-MW-060559; B-23-MC-060559 Federal Award Year: FY 2024 Criteria or Specific Requirements: Pursuant to the Guidance on Consolidated Annual Performance and Evaluation Report (CAPER) (24 CFR 91.520). Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) – Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee’s program year. 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 CDBG-CV funding and does not include other CDBG 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”). Identified Condition: The City did not submit the CAPER within the required timeframe, resulting in a delayed submission on October 17, 2024, which was 17 days past the deadline. Furthermore, three of the four required quarterly Section 15011 Reports for the fiscal year 2024 were not prepared or submitted. The only report submitted, the third quarterly report for the fiscal year 2024, was submitted late on April 15, 2024, which was 5 days past the deadline. Cause: The delay in submission and non-submission of the reports was attributed to inadequate internal processes and a lack of oversight, which hindered the timely completion and submission of the required documentation. Effect or Potential Effect: The delayed submission of the reports could result in noncompliance with federal reporting requirements, potentially jeopardizing future funding opportunities. It may also lead to increased scrutiny from oversight agencies and diminish confidence in the City’s ability to meet critical deadlines and manage federal programs effectively. Questioned Costs: None. Recommendation: We recommend that the City establish clear internal timelines and accountability measures, ensuring all responsible staff are aware of reporting deadlines. The City should proactively request an extension from the relevant federal agency if circumstances arise that might impact the timely submission of the reports. This includes providing a clear justification for the delay, outlining the steps being taken to complete the report, and proposing a revised timeline. Regular communication with the agency during the extension period will demonstrate accountability and commitment to compliance. Views of Responsible Officials and Planned Corrective Action Plan: Gabriel Linares, Director of Community Development, will enhance the department’s policy/desk procedure to ensure timely filing of the CAPER and Section 15011 reports starting Quarter Four, FY2024 -25. Personnel Responsible for Implementation: Gabriel Linares Position of Responsible Personnel: Director of Community Development Expected Date of Implementation: June 30, 2025
Gabriel Linares, Director of Community Development, will enhance the department’s policy/desk procedure to ensure timely filing of the CAPER and Section 15011 reports starting Quarter Four, FY2024 -25. Personnel Responsible for Implementation: Gabriel Linares Position of Responsible Personnel: Director of Community Development Expected Date of Implementation: June 30, 2025
2023-004
FAC accepted this audit on March 30, 2024 — management decision was due September 30, 2024.
During our audit, we noted that the City did not have documentation on verifying the vendors against the SAM prior entering into contracts with the vendors to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City does not have a process on documentation of performing suspension or debarment checks on vendors that the City entered into contracts with for 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 context of the finding. Identification as a Repeat Finding, If Applicable: Repeated finding from prior year finding 2022-002. Recommendation: We recommended the City establish internal control procedures to document its suspension and debarment check to ensure vendors are not suspended or debarred from federally-funded purchases. View of Responsible Officials: Management concurs the finding.
Show full finding ▾Hide full finding ▴Finding 2023-003 Procurement and Suspension, and Debarment – Internal Control over Verification Against the System for Award Management (“SAM”) Identification of the Federal Programs: Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Federal Award Number and Award Year: 2023 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 prior entering into contracts with the vendors to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City does not have a process on documentation of performing suspension or debarment checks on vendors that the City entered into contracts with for 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 context of the finding. Identification as a Repeat Finding, If Applicable: Repeated finding from prior year finding 2022-002. Recommendation: We recommended the City establish internal control procedures to document its suspension and debarment check to ensure vendors are not suspended or debarred from federally-funded purchases. View of Responsible Officials: Management concurs the finding.
2023-003 Procurement and Suspension, and Debarment – Internal Control Over Verification Against the System for Award Management (“SAM”) City’s Response City have verified the vendors but lack of sufficient documentation that shows the verification took place prior to awarding the contract. Corrective Action Plan: Ernie Hernandez, City Manager, will enhance the City’s practice in the suspension/debarment verification process going forward, and will save proper documentation starting Quarter Four, FY2023-24.
2022-002
The City did not submit the CAPER on time. The CAPER was submitted on February 28, 2024. In addition, the City did not submit Section 15011 report for the first three quarters during the year end June 30, 2023. The City started submitting Section 15011 report for the quarter ended June 30, 2023. However, the report was submitted on July 27, 2023 which was after the due date July 10, 2023. Cause: Insufficient training and ineffective policies and procedures to ensure that the reports were submitted timely in accordance with the timelines established by HUD. Effect or Potential Effect: Delay in filing the reports resulted in noncompliance with the compliance requirements. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Repeated finding as 2022-003. Recommendation: We recommend that the City provide training to staff and update policies and procedures to strengthen the report submission process to ensure all required reports are properly reviewed and approved and submitted timely. 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. View of Responsible Officials: Management concurs the finding.
Show full finding ▾Hide full finding ▴Finding 2023-004 Reporting – Internal Control and Compliance over Reporting Information of the Federal Programs: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants - Entitlement Grants Federal Agency: Department of Housing and Urban Development (“HUD”) Federal Award Number and Award Year: B-20-MC-060559, B-20-MW-060559, B-21-MC-060559, and B-22-MC-060559 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to the Guidance on Consolidated Annual Performance and Evaluation Report (“CAPER”) (24 CFR 91.520). Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) – Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee’s program year. Section IV.B.2.(c) of the CDBG-CV Notice reiterated the waiver authorized by a May 7, 2020, HUD memorandum (found in the waiver information link noted in IV. Other Information, below) that waives the 90 day requirement for program year 2019 annual performance and evaluation reports, subject to the condition that within 180 days after the evaluation reports, subject to the condition that within 180 days after the close of a jurisdiction’s program year that it submit its performance report. Auditors are only expected to test information extracted from IDIS in the following system-generated reports and which include (1) PR26 – CDBG Financial Summary Report (“PR26”). A grantee’s CAPER, submitted through the IDIS e-Con Planning Suite, is due 90 days after the close of a jurisdiction’s program year. 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 CDBG-CV funding and does not include other CDBG 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: The City did not submit the CAPER on time. The CAPER was submitted on February 28, 2024. In addition, the City did not submit Section 15011 report for the first three quarters during the year end June 30, 2023. The City started submitting Section 15011 report for the quarter ended June 30, 2023. However, the report was submitted on July 27, 2023 which was after the due date July 10, 2023. Cause: Insufficient training and ineffective policies and procedures to ensure that the reports were submitted timely in accordance with the timelines established by HUD. Effect or Potential Effect: Delay in filing the reports resulted in noncompliance with the compliance requirements. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Repeated finding as 2022-003. Recommendation: We recommend that the City provide training to staff and update policies and procedures to strengthen the report submission process to ensure all required reports are properly reviewed and approved and submitted timely. 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. View of Responsible Officials: Management concurs the finding.
2023-004 Reporting – Internal Control and Compliance Over Reporting City’s Response City concurs with this recommendation. Corrective Action Plan: Gabriel Linares, Director of Community Development, will enhance the department’s policy/desk procedure to ensure timely filing of the CAPER and Section 15011 reports starting Quarter Four, FY2023-24.
2022-003
FAC accepted this audit on March 30, 2023 — management decision was due September 30, 2023.
During our audit, we noted that the City did not have documentation on verifying the vendors against the SAM prior entering into contracts with the vendors to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City does not have a process to train new staff on documentation of performing suspension or debarment checks on vendors that the City entered into contracts with for 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 context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to document its suspension and debarment check to ensure vendors are not suspended or debarred from federally-funded purchases. View of Responsible Officials: Management concurs the finding.
Show full finding ▾Hide full finding ▴2022-002 Procurement and Suspension, and Debarment ? Internal Control over Verification Against the System for Award Management (?SAM?) Identification of the Federal Programs: Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Federal Award Number and Award Year: 2021 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 prior entering into contracts with the vendors to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City does not have a process to train new staff on documentation of performing suspension or debarment checks on vendors that the City entered into contracts with for 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 context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to document its suspension and debarment check to ensure vendors are not suspended or debarred from federally-funded purchases. View of Responsible Officials: Management concurs the finding.
Ernie Hernandez, City Manager, will enhance the City?s practice in the suspension/debarment verification process going forward, and will save proper documentation starting Quarter four, FY2022-23.
The City did not submit the CAPER on time. The CAPER was submitted on November 28, 2022. In addition, the City did not submit Section 15011 report for the year ended June 30, 2022. Cause: The City staff was unavailable prior to the due date of September 30, 2022 to ensure filing CAPER timely. In addition, the City was not aware of the Section 15011 reporting requirement. Effect or Potential Effect: Delay in filing and not filing the reports resulted in noncompliance with the compliance requirements. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Repeated finding as 2021-001. Recommendation: We recommended that the City implement policies and procedures to file required reports such as the CAPER and Section 15011 report timely. View of Responsible Officials: Management is in agreement with the Finding.
Show full finding ▾Hide full finding ▴Information of the Federal Programs: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants / Entitlement Grants Federal Agency: Department of Housing and Urban Development Federal Award Number and Award Year: B-20-MC-06-0559, B-20-MW-06-0559, and B-21-MC-06-0559 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to the Guidance on Consolidated Annual Performance and Evaluation Report (?CAPER?) (24 CFR 91.520). Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) ? Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. Section IV.B.2.(c) of the CDBG-CV Notice reiterated the waiver authorized by a May 7, 2020, HUD memorandum (found in the waiver information link noted in IV. Other Information, below) that waives the 90 day requirement for program year 2019 annual performance and evaluation reports, subject to the condition that within 180 days after the evaluation reports, subject to the condition that within 180 days after the close of a jurisdiction?s program year that it submit its performance report. Auditors are only expected to test information extracted from IDIS in the following system-generated reports and which include (1) PR26 ? CDBG Financial Summary Report (?PR26?). A grantee?s CAPER, submitted through the IDIS e-Con Planning Suite, is due 90 days after the close of a jurisdiction?s program year. 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 CDBG-CV funding and does not include other CDBG 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: The City did not submit the CAPER on time. The CAPER was submitted on November 28, 2022. In addition, the City did not submit Section 15011 report for the year ended June 30, 2022. Cause: The City staff was unavailable prior to the due date of September 30, 2022 to ensure filing CAPER timely. In addition, the City was not aware of the Section 15011 reporting requirement. Effect or Potential Effect: Delay in filing and not filing the reports resulted in noncompliance with the compliance requirements. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Repeated finding as 2021-001. Recommendation: We recommended that the City implement policies and procedures to file required reports such as the CAPER and Section 15011 report timely. View of Responsible Officials: Management is in agreement with the Finding.
Gabriel Linares, Community Development (CD) Director, will enhance the department?s policy/desk procedure to ensure timely filing of the CAPER report. In addition, CD staff will research the Section 15011 requirement, and start timely and properly file the required report.
2021-001
FAC accepted this audit on August 11, 2022 — management decision was due February 11, 2023.
The City did not submit the required Cash on Hand Quarterly Report in a timely manner. The quarterly Cash on Hand Quarterly Report for the reporting period ended June 30, 2021 was submitted on August 4, 2021. Cause: The City?s staff was unavailable prior to the due date of August 4, 2021 to ensure timely filing of the Cash on Hand Quarterly Report. Effect or Potential Effect: Delay in filing the reports resulted in non-compliance with the compliance requirements. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Repeated finding from prior year finding 2020-001. Recommendation: We recommend that the City implement procedures to ensure timely filing of quarterly reports. View of Responsible Officials: Management is in agreement with the finding.
Show full finding ▾Hide full finding ▴Current Year Findings and Questioned Costs ? Major Federal Award Program Audit 2021-001 Reporting ? Internal Control and Compliance over Reporting Information of the Federal Programs: Catalog of Federal Domestic Assistance (CFDA?) Number: 14.218 CDFA Title: Community Development Block Grants / Entitlement Grants Federal Agency: Department of Housing and Urban Development Federal Award Number and Award Year: B-14-MC-06-0559, B-16-MC-06-0559, B-18-MC-06-0559 B-19-MC-06-0559, B-20-MC-06-0559 and B-20-MW-06-0559 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to the Guidance on Cash on Hand Quarterly Report (replaced the Federal Financial Report, SF-425) and financial reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327: Quarterly reports: Program award recipients must submit Cash on Hand Quarterly Report reports to HUD quarterly, 30 days after the reporting period end date. Each report must cover all expenditures on the cooperative agreement from the start date of the reporting period to the reporting period end date. The following federal fiscal year quarter reporting period will be used for all quarterly reports, are due to HUD 30 days after the period end dates noted below: Reporting Period Due Date of Report Quarter 4: 7/1-9/30 October 30 Quarter 1: 10/1 - 12/31 January 30 Quarter 2: 1/1-1/31 April 30 Quarter 3: 4/1-6/30 July 30 Condition: The City did not submit the required Cash on Hand Quarterly Report in a timely manner. The quarterly Cash on Hand Quarterly Report for the reporting period ended June 30, 2021 was submitted on August 4, 2021. Cause: The City?s staff was unavailable prior to the due date of August 4, 2021 to ensure timely filing of the Cash on Hand Quarterly Report. Effect or Potential Effect: Delay in filing the reports resulted in non-compliance with the compliance requirements. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Repeated finding from prior year finding 2020-001. Recommendation: We recommend that the City implement procedures to ensure timely filing of quarterly reports. View of Responsible Officials: Management is in agreement with the finding.
Harry Wong, the City?s new Director of Finance & Administration, will update the implemented procedures to ensure a secondary staff person (Accountant/Accounting Technician) will handle the preparation of the report data to be provided to Community Development staff in a timely manner, in the event that the primary staff person (Senior Accountant) responsible for the task is unavailable. The expected implementation date is July 28, 2022.
2020-001
FAC accepted this audit on April 5, 2021 — management decision was due October 5, 2021.
The City did not submit the required Federal Financial Reports in a timely manner. The quarterly FFRs for the reporting periods ended September 30, 2019 and December 31, 2019 were submitted on March 2, 2020 and March 9, 2020, respectively. Cause: The City was in the process of implementing policies and procedures to monitor and ensure timely filing of the quarterly FFRs. Effect or Potential Effect: Delay in filing the reports resulted in non-compliance with the compliance requirements.
Show full finding ▾Hide full finding ▴Information of the Federal Programs: Catalog of Federal Domestic Assistance (CFDA?) Number: 14.218 CDFA Title: Community Development Block Grants / Entitlement Grants Federal Agency: Department of Housing and Urban Development Federal Award Number and Award Year: B-16-MC-06-0559, B-17-MC-06-0559 and B-18-MC-06-0559 and B-19-MC-06-0559 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to the Guidance on Federal Financial Report (?FFR?), SF-425 and financial reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327: Quarterly reports: Program award recipients must submit SF 425 reports to HUD quarterly, 30 days after the reporting period end date. Each report must cover all expenditures on the cooperative agreement from the start date of the reporting period to the reporting period end date. The following federal fiscal year quarter reporting period will be used for all quarterly reports, are due to HUD 30 days after the period end dates noted below: Reporting Period Due Date of Report Quarter 4: 7/1-9/30 October 30 Quarter 1: 10/1 - 12/31 January 30 Quarter 2: 1/1-1/31 April 30 Quarter 3: 4/1-6/30 July 30 Condition: The City did not submit the required Federal Financial Reports in a timely manner. The quarterly FFRs for the reporting periods ended September 30, 2019 and December 31, 2019 were submitted on March 2, 2020 and March 9, 2020, respectively. Cause: The City was in the process of implementing policies and procedures to monitor and ensure timely filing of the quarterly FFRs. Effect or Potential Effect: Delay in filing the reports resulted in non-compliance with the compliance requirements.
2019-001 Reporting- Internal Control and Compliance over Reporting Condition: The City did not submit the required Federal Financial Reports in a timely manner. The quarterly FFRs for the reporting periods ended September 30, 2018, December 31, 2018, and March 31, 2019 were submitted on July 30, 2019. Furthermore, the quarterly FFR for the reporting period ended June 30, 2019 was submitted on October I, 2019. Recommendation: We recommend that the City establish comprehensive policies and procedures to monitor the reporting requirements. Status: Not implemented, see finding 2020-001. 2020-001 Reporting - Internal Control and Compliance over Reporting Condition and Context: The City did not submit the required Federal Financial Reports in a timely manner. The quarterly FFRs for the reporting periods ended September 30, 2019 and December 31, 2019 were submitted on March 2, 2020 and March 9, 2020, respectively. Recommendation: We recommend that the City implement procedures to ensure timely filing of quarterly reports. Corrective Action Plan: John Downs, the City's Director of Finance, has implemented procedures to monitor the filing of the reports. Implementation reflects from quarter three of the fiscal year ended June 30, 2020.
2019-001
FAC accepted this audit on March 18, 2020 — management decision was due September 18, 2020.
The City did not submit the required Federal Financial Reports in a timely manner. The quarterly FFRs for the reporting periods ended September 30, 2018, December 31, 2018, and March 31, 2019 were submitted on July 30, 2019. Furthermore, the quarterly FFR for the reporting period ended June 30, 2019 was submitted on October 1, 2019. Cause: The City did not have policies and procedures in place to monitor the filing of reports to ensure a timely filing. Effect or Potential Effect: Delay in filing the report resulted in non-compliance with the compliance requirements. Questioned Cost: None Context: See condition above for context of the finding. Identification as a Repeat finding, If Applicable: Repeated finding from prior year finding 2018-006. Recommendation: We recommend that the City establish comprehensive policies and procedures to monitor the reporting requirements. Views of Responsible Officials and Planned Corrective Actions: The City?s Finance Director has established policies monitoring control over reporting requirements an designed staff in filing Federal Financial Report during fiscal year ending June 30, 2020.
Show full finding ▾Hide full finding ▴2019-001 Reporting ? Internal Control and Compliance over Reporting Catalog of Federal Domestic Assistance (CFDA?) Number: 14.218 CDFA Title: Community Development Block Grants / Entitlement Grants Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-15-MC-06-0559, B-16-MC-06-0559 and B-17-MC-06-0559 and B-18-MC-06-0559 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to the OMB June 2016 Compliance Requirements for CFDA 14.218 Community Development Block Grants / Entitlement Grants - Performance Reporting, HUD 60002, Section 3 Summary Report, Economic Opportunities for Low-and Very Low ? Income Persons, (OMB No. 2529-004)3 ? Each recipient that administers covered public and Indian housing assistance, regardless of the amount expended, and each recipient that administers covered housing and community development assistance in excess of $200,000 in a program year must submit HUD 60002 information using the automated Section 3 Performance Evaluation and Registry (?SPEARS?)System (24 CFR sections 135.3(a)(1) and 135.90). Pursuant to the U.S. Department of Housing and Urban Development Schedule for Submission of 2015 Section 3 Reports, Form HUD 60002, Public Housing Authorities must submit Section 3 Reports by January 10th of each year following the completion of their agency?s fiscal cycle or calendar year. All other HUD grantees must submit Section 3 Reports at the same time they submit annual performance reports. For example, entitlement communities that receive CDBG, HOME, ESG, etc., Section 3 reports should be submitted in SPEARS at the same time they submit CAPERS, (i.e., 90-days after the end of their program year). All Section 3 reports must be submitted electronically via SPEARS. Paper copies, pdf attachments or other methods of transmitting Form HUD 60002 will not be accepted. In accordance with the Guide to Equitable Sharing for State & Local Law, the submission must be submitted within 60 days of the end of Agency?s fiscal year. This Document must be signed and submitted electronically. Electronic submission constitutes submission to the Department of Justice and the Department of the Treasury. Pursuant to the Federal Financial Report (?FFR?) Instructions: 1) The submission of interim FFRs will be on a quarterly, semi-annual, or annual basis, as directed by the Federal agency. A final FFR shall be submitted at the completion of the award agreement. The following reporting period end dates shall be used for interim reports: 3/31, 6/30, 9/30, or 12/31. For final FFRs, the reporting period end date shall be the end date of the project or grant period. 2) Quarterly and semi-annual interim reports shall be submitted no later than 30 days after the end of each reporting period. Annual reports shall be submitted no later than 90 days after the end of each reporting period. Final reports shall be submitted no later than 90 days after the project or grant period end date. Condition: The City did not submit the required Federal Financial Reports in a timely manner. The quarterly FFRs for the reporting periods ended September 30, 2018, December 31, 2018, and March 31, 2019 were submitted on July 30, 2019. Furthermore, the quarterly FFR for the reporting period ended June 30, 2019 was submitted on October 1, 2019. Cause: The City did not have policies and procedures in place to monitor the filing of reports to ensure a timely filing. Effect or Potential Effect: Delay in filing the report resulted in non-compliance with the compliance requirements. Questioned Cost: None Context: See condition above for context of the finding. Identification as a Repeat finding, If Applicable: Repeated finding from prior year finding 2018-006. Recommendation: We recommend that the City establish comprehensive policies and procedures to monitor the reporting requirements. Views of Responsible Officials and Planned Corrective Actions: The City?s Finance Director has established policies monitoring control over reporting requirements an designed staff in filing Federal Financial Report during fiscal year ending June 30, 2020.
2019-001 Reporting ? Internal Control and compliance over Reporting City?s Corrective Action Plan: The City?s Finance Director has established policies monitoring control over reporting requirements and assigned staff in filing Federal Financial Report during fiscal year ending 2020. Contact person responsible for corrective action: John Downs, Finance Director Anticipated completion date: Fiscal year ending June 30, 2020.
2018-006
FAC accepted this audit on July 30, 2019 — management decision was due January 30, 2020.
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2017-010
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2017-014
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2017-015
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2017-013
FAC accepted this audit on February 18, 2019 — management decision was due August 18, 2019.
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2016-008
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2016-009
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2016-010
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2016-011
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FAC accepted this audit on March 29, 2017 — management decision was due September 29, 2017.
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