City of Pico Rivera

Federal agency: U.S. Department of Transportation Federal program title: Highway Planning and Construction, Highway Planning and Construction Cluster CFDA Number: 20.205 Pass-Through Agency: California Department of Transportation Pass-Through Number(s): ATPL-5351(032), HSIPL-5351(035), ER-32L0(531) Award Period: July 1, 2019 through June 30, 2020 Type of Finding: Significant Deficiency in Internal Control over Financial Reporting and Other Matter Criteria or specific requirement: Uniform Guidance section 200.320 requires the following for procurement: (a) micro-purchases ($3,500 or less) may be awarded without soliciting competitive quotations, (b) small purchases ($3,500 to $150,000) require price or rate quotations from an adequate number of qualified sources, and (c) sealed bids required for purchases in excess of $150,000. Condition: The City's purchasing policy is less restrictive than the Uniform Guidance in that the policy only requires quotes for expenditures in excess of $25,000, which is higher than the $3,500 limit required by the Uniform Guidance. No issues were noted as a result of testing only that the policies have not been updated for the Uniform Guidance. The City did not have the above written policies. Questioned costs: None noted. Context: The City?s procurement policy is subject to Uniform Guidance standards. Cause: The City did not realize written procedures were required for the Uniform Guidance. Effect: The City was not in compliance with requirements of the Uniform Guidance for written procedures. Repeat Finding: This is a repeat finding of 2019-003 and 2019-004. Recommendation: We recommend that the City establish written policies and procedures in line with the requirements of the Uniform Guidance.

U.S. Department of Transportation 2020 ? 003 Highway Planning and Construction ? CFDA No. 20.205 Recommendation: The City's purchasing policy is less restrictive than the Uniform Guidance in that the policy only requires quotes for expenditures in excess of $25,000, which is higher than the $3,500 limit required by the Uniform Guidance. No issues were noted as a result of testing only that the policies have not been updated for the Uniform Guidance. The City did not have the above written policies. We recommend that the City establish written policies and procedures in line with the requirements of the Uniform Guidance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management agrees with these recommendations. Management is reviewing the City?s current Purchasing Policy and will be amending it as needed to comply with the Uniform Guidance in any instance that it does not clearly spell out the guidelines. The City does comply with the Uniform Guidance for all grant requirements.

2019-003, 2019-004

Major Program United States Department of Housing and Urban Development: Direct Assistance, Section 8 Housing Choice Vouchers Program, CA117 (CDFA No. 14.871) Criteria Uniform Guidance section 200.320 requires the following for procurement: (a) micro-purchases ($3,500 or less) may be awarded without soliciting competitive quotations, (b) small purchases ($3,500 to $150,000) require price or rate quotations from an adequate number of qualified sources, and (c) sealed bids required for purchases in excess of $150,000. Questioned Costs None noted. Condition The City's purchasing policy is less restrictive than the Uniform Guidance in that the policy only requires quotes for expenditures in excess of $5,000, which is higher than the $3,500 limit required by the Uniform Guidance. Cause The City did not realize written procedures were required for the Uniform Guidance. Effect The City was not in compliance with requirements of the Uniform Guidance for written procedures. Recommendation We recommend that the City establish written policies and procedures in line with the requirements of the Uniform Guidance.

Management is reviewing the City?s current Purchasing Policy and will be amending it as needed to comply with the Uniform Guidance in any instance that it does not clearly spell out the guidelines. The City does comply with the Uniform Guidance for all grant requirements.