FAC Explorer

Audit 292753

FY End
2023-06-30
Total Expended
$6.35M
Findings
4
Programs
10
Organization: City of Redmond, Oregon (OR)
Year: 2023 Accepted: 2024-02-28
Auditor: Dickey and Tremper LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
371109 2023-001 Significant Deficiency - L
371110 2023-002 Significant Deficiency - J
947551 2023-001 Significant Deficiency - L
947552 2023-002 Significant Deficiency - J

Programs

ALN Program Spent Major Findings
20.106 Airport Improvement Program $2.03M Yes 0
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $227,648 - 0
16.922 Equitable Sharing Program $53,455 - 0
14.218 Community Development Block Grants/entitlement Grants $40,707 Yes 0
20.616 National Priority Safety Programs $5,703 - 0
15.904 Historic Preservation Fund Grants-in-Aid $5,059 - 0
16.607 Bulletproof Vest Partnership Program $4,400 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $2,750 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $2,630 - 0
20.600 State and Community Highway Safety $2,453 - 0

Contacts

Name Title Type
KH85VH1PD513 James Wood Auditee
5419237735 Robert Tremper Auditor
No contacts on file

Notes to SEFA

Title: Relationship to Federal Financial Reports Accounting Policies: The schedule above is prepared on the accrual basis of accounting and is presented in accordance with the requirements of OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some of the amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimus indirect cost rate allowed under the Uniform Guidance. The regulations and guidelines governing the preparation of Federal financial reports vary by Federal agency and among programs administered by the same agency. Accordingly, the amounts reported in the Federal financial reports do not necessarily agree with the amounts reported in the accompanying Schedule which is prepared on the basis explained in Note 1.
Title: Loans Receivable Accounting Policies: The schedule above is prepared on the accrual basis of accounting and is presented in accordance with the requirements of OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some of the amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimus indirect cost rate allowed under the Uniform Guidance. The City had the following net activity on loan balances receivable from current and prior year Federal expenditures as of June 30, 2023: CDBG/State's Program and Non-Entitlement Grants in Hawaii CFDA 14.228 - Loans Receivable at 6/30/22 was $350,830, Loans Repaid was ($20,465), Loans Receivable at 6/30/23 was $330,365.
Title: Program Income Accounting Policies: The schedule above is prepared on the accrual basis of accounting and is presented in accordance with the requirements of OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some of the amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimus indirect cost rate allowed under the Uniform Guidance. The City received program income from the repayment of Federally funded loans receivable, net proceeds of Federally funded rental activity or sales of Federally funded real property which accounts for a portion of Federal expenditures for the associated Federal CFDA number. The City has $21,195 remaining in Program Income as of June 30, 2023 with the CDBG/Entitlement Grants program CFDA 14.218.
Title: Outstanding Loans Accounting Policies: The schedule above is prepared on the accrual basis of accounting and is presented in accordance with the requirements of OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some of the amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimus indirect cost rate allowed under the Uniform Guidance. The City has the following net activity on loan balances payable as of June 30, 2023, of which at least a portion are Federal funds: Capitalization Grants for Clean Water State Revolving Funds #R76072 - Loans Payable at 6/30/22 $4,206,727, repaid ($442,481), Loans Payable at 6/30/23 $3,764,246; Capitalization Grants for Clean Water State Revolving Funds #R76074 - Loans Payable at 6/30/22 $1,849,305, issued $2,142,085, Loans Payable at 6/30/23 $3,991,390. There is no federal portion to Loan R76074 as of June 30, 2023.

Finding Details

Finding 2023-001
Condition and criteria: In the Consolidated Annual Performance and Evaluation Report (CAPER) required by HUD, there were differences in amounts reported for available funds and expense in the narrative sections of the goals and outcomes and resources and investments. Similar differences were reported in the expected resources in the Annual Action Plan. In addition, the PR26 Financial Summary Report should list the beginning unexpended CDBG funds so that the report does not show a negative available amount at year end. The City has also not been entering amounts in the cash disbursed line in the report, causing the report to show cash on hand that should be zero at fiscal year end. Cause: IDIS does not allow negative amounts, so the report is prepared on the cash basis for revenues and the City has to supplement reporting with remarks detailing status. Context and effect: Adjustments, narratives, and remarks are needed to detail the status of the programs. Auditor's recommendation: We recommend that the City continue to work with HUD and the instruction manual on IDIS reporting and to fill out all applicable sections to alleviate negative amounts and to ensure that the reports are accurately presented. Management response: Management agrees with the auditor's recommendation. Since the audit, the City has made strides to improve its HUD grant reporting with the IDIS system that can better meet the needs of all stakeholders.
Finding 2023-002
Condition and criteria: The CDBG manual states that program income must be disbursed prior to the drawdown of additional funds of the treasury and there were some drawdowns of additional funds even though there is program income on hand. Program income also includes interest on cash on hand, but the City has not been allocating interest to the CDBG program. Cause: The City sets up activities for each project and program income is allocated as the funding source and when draws are done, they either go against program income or as a request for funds based on the particular project. If a project was set up later and does not have program income allocated as a funding source to spent out first, there will be a request for additional funds, even if there is program income on hand. Context and effect: The City has under $25,000 of program income remaining at fiscal year end, thus it is not considered material non-compliance. There is also an exception for allocating interest to program income when the total from all sources for the program is less than $25,000 but would be required if excess income exceeds that amount. Auditor's recommendation: We recommend that the City perform procedures at year end to determine whether it has excess program income on hand, calculate interest on cash on hand if applicable, and return any excess funds to its line of credit. Management response: Management agrees with the auditor's recommendation. The City has currently exhausted all program income on-hand and will perform year-end testing/monitoring around program income going forward.
Finding 2023-001
Condition and criteria: In the Consolidated Annual Performance and Evaluation Report (CAPER) required by HUD, there were differences in amounts reported for available funds and expense in the narrative sections of the goals and outcomes and resources and investments. Similar differences were reported in the expected resources in the Annual Action Plan. In addition, the PR26 Financial Summary Report should list the beginning unexpended CDBG funds so that the report does not show a negative available amount at year end. The City has also not been entering amounts in the cash disbursed line in the report, causing the report to show cash on hand that should be zero at fiscal year end. Cause: IDIS does not allow negative amounts, so the report is prepared on the cash basis for revenues and the City has to supplement reporting with remarks detailing status. Context and effect: Adjustments, narratives, and remarks are needed to detail the status of the programs. Auditor's recommendation: We recommend that the City continue to work with HUD and the instruction manual on IDIS reporting and to fill out all applicable sections to alleviate negative amounts and to ensure that the reports are accurately presented. Management response: Management agrees with the auditor's recommendation. Since the audit, the City has made strides to improve its HUD grant reporting with the IDIS system that can better meet the needs of all stakeholders.
Finding 2023-002
Condition and criteria: The CDBG manual states that program income must be disbursed prior to the drawdown of additional funds of the treasury and there were some drawdowns of additional funds even though there is program income on hand. Program income also includes interest on cash on hand, but the City has not been allocating interest to the CDBG program. Cause: The City sets up activities for each project and program income is allocated as the funding source and when draws are done, they either go against program income or as a request for funds based on the particular project. If a project was set up later and does not have program income allocated as a funding source to spent out first, there will be a request for additional funds, even if there is program income on hand. Context and effect: The City has under $25,000 of program income remaining at fiscal year end, thus it is not considered material non-compliance. There is also an exception for allocating interest to program income when the total from all sources for the program is less than $25,000 but would be required if excess income exceeds that amount. Auditor's recommendation: We recommend that the City perform procedures at year end to determine whether it has excess program income on hand, calculate interest on cash on hand if applicable, and return any excess funds to its line of credit. Management response: Management agrees with the auditor's recommendation. The City has currently exhausted all program income on-hand and will perform year-end testing/monitoring around program income going forward.