Audit 16299

FY End
2022-06-30
Total Expended
$5.05M
Findings
2
Programs
5
Organization: City of Dunsmuir (CA)
Year: 2022 Accepted: 2023-06-26

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
12193 2022-002 Material Weakness Yes B
588635 2022-002 Material Weakness Yes B

Contacts

Name Title Type
R78MAL382ET1 Blake Michaelsen Auditee
5302354822 Charles W Pillon Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: NOTE ABASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of the City of Dunsmuir (the City) under programs of the federal government for the fiscal year ended June 30, 2022. The information in this Schedule is presented in accordance with the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial net position or changes in net position of the City. NOTE BSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1.Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, when applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Also, when applicable, recognition is following the Uniform Guidance for federal awards granted after December 26, 2014.2.Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. WATER AND WASTE DISPOSAL SYSTEMS FOR RURAL COMMUNITIES (10.760) - Balances outstanding at the end of the audit period were 6131070. During the fiscal year, the Federal award program from the United States Department of Agriculture (USDA), titled Water and Waste Disposal Systems for Rural Communities (10.760), for the construction of the Water Mainline Replacement Project, continued with Federal funding in the form of interim construction loan financing that is considered to be Federal loan financing as it is guaranteed and will be paid off by the RD/RUS USDA loan financing at the completion of construction (See Note 7). The balance of the loan at June 30, 2022, drawn to fund the USDA Federal program expenditures, is $6,131,070. The total Federal expenditures reported on the Schedule is $3,919,970 and the current year loan increase is $3,447,519.
Title: Note C Subrecipients Accounting Policies: NOTE ABASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of the City of Dunsmuir (the City) under programs of the federal government for the fiscal year ended June 30, 2022. The information in this Schedule is presented in accordance with the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial net position or changes in net position of the City. NOTE BSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1.Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, when applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Also, when applicable, recognition is following the Uniform Guidance for federal awards granted after December 26, 2014.2.Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Of the federal expenditures presented in the schedule, the City provided $66,913 of the federal awards to subrecipients.

Finding Details

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