Finding Reference Number: SA 2021-002 Accurate Financial Reporting in the Annual PR26 Report and Quarterly PR29 Reports
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: OMB No. 2506-0077 requires all grantees to submit a PR26 – CDBG Financial Summary Report for the CDBG entitlement Program within 90 days after the year end of the grantee’s program year. The PR26 – CDBG Financial Summary Report is a report that contains summary information from the Integrated Disbursement Information System (IDIS) for the grantee’s program year.
The City is also required to file a C04PR29 Cash on Hand Quarterly Report in the IDIS system within 30 days of the end of each quarter. The report details cash drawdowns and expenditures made during each quarter.
Finally, the City is required to file the PR29, CDBG-CV Cash on Hand Quarterly Report within 10 days after the end of each calendar quarter. The report details cash drawdowns and expenditures made during each quarter.
Condition: During our review of the Program Year 2020 (fiscal year 2021) PR26 report for fiscal year 2021 for the CDBG program, we noted that the data in the PR26 report was inconsistent with the data extracted from IDIS and the Consolidated Annual Performance and Evaluation Report (CAPER) and the City’s general ledger. The exceptions noted were:
• Line 01 - Unexpended CDBG funds at end of previous program year was reported as zero, but the ending unexpended balance in the Program Year 2019 PR26 report was $821,153.
• Line 02 - the entitlement grant included in the PR26 report was $743,872, but it should have been $743,986, which affected other amounts and calculations reported.
• Line 05 – included program income of $165,537, but the City did not have program income during fiscal year 2021. This amount also affects other amounts and calculations reported.
• Line 15 – Total expenditures in the PR26 of $544,405 could not be reconciled to the program expenditures on the SEFA of $485,210.
For the PR26 report for the CDBG-CV program, we understand that the IDIS program does not generate the report by program year, which means the report includes expenditures to the date the report is generated. However, City staff was unable to reconcile the total expenditures on Line 08 of $725,171 to the fiscal year 2021 program expenditures on the SEFA of $414,828.
During our review of the four C04PR29 Cash on Hand Quarterly Reports for fiscal year 2021, we noted that the City was not able to reconcile the cash disbursed total of $723,288 to the program expenditures reported on the SEFA of $485,210 and was not able to reconcile the ending cash balance in the “Summary for 4 Quarters” of $336,748 to the June 30, 2021 general ledger cash balance of $177,768. It was also unclear why the ending cash balance in the Summary of 4 Quarters total of $336,374 did not agree to the cash balance in the fourth quarter report ending balance of $168,374. In addition, the quarterly reports included current year program income of $168,374, although as noted above the City did not receive any program income during fiscal year 2021.
During our review of the PR29, CDBG-CV Cash on Hand Quarterly Reports for fiscal year 2021, City staff was not able to reconcile the cash disbursed total of $254,474 to the program expenditures reported on the SEFA of $414,828.
Effect: The City is not in compliance with the performance reporting requirements of the CDBG program.
Cause: We understand the errors were due to staff oversight.
Recommendation: The City should develop procedures to ensure that all financial reports are reviewed for accuracy prior to submission. In addition, the City should work with the grantor to determine if the City should submit corrected Program Year 2020 PR26 report and fiscal year 2021 Cash on Hand Quarterly Reports, or if the reports can be corrected on a prospective basis during the next reporting period.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-003 Cash Management
AL Number: 14.218, 14.239
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
HOME Investment Partnerships Program
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
M18-MC060237, M19-MC060237, M20-MC060237
Criteria: 24 CFR 570.902 indicates that the Department of Housing and Urban Development will review the performance of each entitlement, HUD-administered small cities, and Insular Areas recipient to determine whether each recipient is carrying out its CDBG-assisted activities in a timely manner. One of the factors in determining timeliness is the timing of the use of entitlement grant funds and the amount of undisbursed entitlement grant funds that remain in the Integrated Disbursement Information System (IDIS).
Therefore, the City should submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred. Those drawdown requests should be completed at least quarterly, depending on the volume of program activity, to improve the cash management for the program and to match expenditures with associated revenues throughout the fiscal year.
Although the HOME Investment Partnerships Program does not appear to have a timeliness requirement, other than 24 CFR 92.500(d) requirement to commit funds within 24 months of the grant award and the eight-year period of performance, the City should also submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred.
Condition: During our testing of CDBG grant drawdown requests during fiscal year 2021, we noted that a drawdown made in April 2021 was for December 2020 expenditures, the drawdown made in May 2021 was for August 2020 expenditures, the drawdown made in June 2021 was for December 2020 expenditures and the drawdown made in September 2022 was for February 2021 to June 2021 expenditures. The City submitted the drawdown requests in the IDIS well over three months after the program expenditures were incurred. We also noted that the City did not submit drawdowns for fiscal year 2021 program expenditures we tested totaling $710.
During our testing of HOME program grant drawdown requests during fiscal year 2021, we noted that two drawdowns made in June 2022 were for November 2020, January 2021, March 2021 and June 2021 expenditures, and one drawdown made in September 2022 was for March, April, May and July 2021 expenditures.
Effect: The City is not matching expenditures with associated revenues throughout the fiscal year as expenditures are incurred and is at risk of being out of compliance with the provisions of 24 CFR 570.902.
Cause: We understand that the drawdowns were delayed due to staff turnover.
Recommendation: The City should develop procedures to ensure that drawdown requests are submitted more frequently, at least on a quarterly basis, and should requests reimbursement for the program expenditures noted above as soon as possible.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-004 Federal Funding Accountability and Transparency Act (FFATA) Reporting
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252 that are codified in 2 CFR Part 170, direct recipients of grants are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subawards that are entered into the FSRS System should be maintained so that any amendments to the subawards are also reflected in the system.
Condition: We selected three of the City’s subawards for testing of the reporting on the FSRS. The three subawards tested were comprised of two vendor contracts and one subgrant that were all more than $30,000. Although we noted that two of the contracts tested were included in the FSRS, one of the contracts in the amount of $198,760 was not reported in FSRS. We understand the City did not report that contract in the FSRS until March 10, 2024.
Effect: The City is not in compliance with the FFATA reporting requirements.
Cause: We understand the contract was not included in the FSRS due to City staff oversight.
Recommendation: Although the City provided documentation that the FSRS was updated on March 10, 2024 to include the $198,760 contract, the City should develop procedures to ensure that FFATA reporting is accurate at all times and reflects any contract amendments and final subaward funding amounts.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-005 Duplication of Benefits Compliance Documentation
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: All CDBG-CV grantees are required to establish and maintain adequate procedures to prevent any duplication of benefits for assisted activities (as discussed in Section III.B.9. of the CDBG-CV Notice). To demonstrate that no financial assistance has been received or is available to pay costs charged to a CDBG-CV grant, a grantee may demonstrate that no other funds are available for an activity by maintaining records of compliance with mandatory duplication of benefits requirements described in Section III.B.9.
Condition: It appears the City did develop a policy to address duplication of benefits per our review of the City's Duplication of Benefits Policy & Procedures document that includes a certification form to be used for applicable projects. We requested a copy of the certification for the Davis Emergency Shelter project funded by the CDBG-CV funding and City staff was unable to locate the certification.
Effect: The City is not in compliance with the duplication of benefits documentation requirements to ensure no financial assistance has been received or is available to pay costs charged to a CDBG-CV grant.
Cause: We understand that City staff in charge of the project are no longer with the City, so current City staff are unable to determine whether the duplication of benefits certification required by the City’s policy was completed.
Recommendation: City staff should develop procedures to ensure that CDBG-CV grant-funded projects documentation includes the duplication of benefits certification.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-002 Accurate Financial Reporting in the Annual PR26 Report and Quarterly PR29 Reports
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: OMB No. 2506-0077 requires all grantees to submit a PR26 – CDBG Financial Summary Report for the CDBG entitlement Program within 90 days after the year end of the grantee’s program year. The PR26 – CDBG Financial Summary Report is a report that contains summary information from the Integrated Disbursement Information System (IDIS) for the grantee’s program year.
The City is also required to file a C04PR29 Cash on Hand Quarterly Report in the IDIS system within 30 days of the end of each quarter. The report details cash drawdowns and expenditures made during each quarter.
Finally, the City is required to file the PR29, CDBG-CV Cash on Hand Quarterly Report within 10 days after the end of each calendar quarter. The report details cash drawdowns and expenditures made during each quarter.
Condition: During our review of the Program Year 2020 (fiscal year 2021) PR26 report for fiscal year 2021 for the CDBG program, we noted that the data in the PR26 report was inconsistent with the data extracted from IDIS and the Consolidated Annual Performance and Evaluation Report (CAPER) and the City’s general ledger. The exceptions noted were:
• Line 01 - Unexpended CDBG funds at end of previous program year was reported as zero, but the ending unexpended balance in the Program Year 2019 PR26 report was $821,153.
• Line 02 - the entitlement grant included in the PR26 report was $743,872, but it should have been $743,986, which affected other amounts and calculations reported.
• Line 05 – included program income of $165,537, but the City did not have program income during fiscal year 2021. This amount also affects other amounts and calculations reported.
• Line 15 – Total expenditures in the PR26 of $544,405 could not be reconciled to the program expenditures on the SEFA of $485,210.
For the PR26 report for the CDBG-CV program, we understand that the IDIS program does not generate the report by program year, which means the report includes expenditures to the date the report is generated. However, City staff was unable to reconcile the total expenditures on Line 08 of $725,171 to the fiscal year 2021 program expenditures on the SEFA of $414,828.
During our review of the four C04PR29 Cash on Hand Quarterly Reports for fiscal year 2021, we noted that the City was not able to reconcile the cash disbursed total of $723,288 to the program expenditures reported on the SEFA of $485,210 and was not able to reconcile the ending cash balance in the “Summary for 4 Quarters” of $336,748 to the June 30, 2021 general ledger cash balance of $177,768. It was also unclear why the ending cash balance in the Summary of 4 Quarters total of $336,374 did not agree to the cash balance in the fourth quarter report ending balance of $168,374. In addition, the quarterly reports included current year program income of $168,374, although as noted above the City did not receive any program income during fiscal year 2021.
During our review of the PR29, CDBG-CV Cash on Hand Quarterly Reports for fiscal year 2021, City staff was not able to reconcile the cash disbursed total of $254,474 to the program expenditures reported on the SEFA of $414,828.
Effect: The City is not in compliance with the performance reporting requirements of the CDBG program.
Cause: We understand the errors were due to staff oversight.
Recommendation: The City should develop procedures to ensure that all financial reports are reviewed for accuracy prior to submission. In addition, the City should work with the grantor to determine if the City should submit corrected Program Year 2020 PR26 report and fiscal year 2021 Cash on Hand Quarterly Reports, or if the reports can be corrected on a prospective basis during the next reporting period.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-003 Cash Management
AL Number: 14.218, 14.239
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
HOME Investment Partnerships Program
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
M18-MC060237, M19-MC060237, M20-MC060237
Criteria: 24 CFR 570.902 indicates that the Department of Housing and Urban Development will review the performance of each entitlement, HUD-administered small cities, and Insular Areas recipient to determine whether each recipient is carrying out its CDBG-assisted activities in a timely manner. One of the factors in determining timeliness is the timing of the use of entitlement grant funds and the amount of undisbursed entitlement grant funds that remain in the Integrated Disbursement Information System (IDIS).
Therefore, the City should submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred. Those drawdown requests should be completed at least quarterly, depending on the volume of program activity, to improve the cash management for the program and to match expenditures with associated revenues throughout the fiscal year.
Although the HOME Investment Partnerships Program does not appear to have a timeliness requirement, other than 24 CFR 92.500(d) requirement to commit funds within 24 months of the grant award and the eight-year period of performance, the City should also submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred.
Condition: During our testing of CDBG grant drawdown requests during fiscal year 2021, we noted that a drawdown made in April 2021 was for December 2020 expenditures, the drawdown made in May 2021 was for August 2020 expenditures, the drawdown made in June 2021 was for December 2020 expenditures and the drawdown made in September 2022 was for February 2021 to June 2021 expenditures. The City submitted the drawdown requests in the IDIS well over three months after the program expenditures were incurred. We also noted that the City did not submit drawdowns for fiscal year 2021 program expenditures we tested totaling $710.
During our testing of HOME program grant drawdown requests during fiscal year 2021, we noted that two drawdowns made in June 2022 were for November 2020, January 2021, March 2021 and June 2021 expenditures, and one drawdown made in September 2022 was for March, April, May and July 2021 expenditures.
Effect: The City is not matching expenditures with associated revenues throughout the fiscal year as expenditures are incurred and is at risk of being out of compliance with the provisions of 24 CFR 570.902.
Cause: We understand that the drawdowns were delayed due to staff turnover.
Recommendation: The City should develop procedures to ensure that drawdown requests are submitted more frequently, at least on a quarterly basis, and should requests reimbursement for the program expenditures noted above as soon as possible.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-004 Federal Funding Accountability and Transparency Act (FFATA) Reporting
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252 that are codified in 2 CFR Part 170, direct recipients of grants are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subawards that are entered into the FSRS System should be maintained so that any amendments to the subawards are also reflected in the system.
Condition: We selected three of the City’s subawards for testing of the reporting on the FSRS. The three subawards tested were comprised of two vendor contracts and one subgrant that were all more than $30,000. Although we noted that two of the contracts tested were included in the FSRS, one of the contracts in the amount of $198,760 was not reported in FSRS. We understand the City did not report that contract in the FSRS until March 10, 2024.
Effect: The City is not in compliance with the FFATA reporting requirements.
Cause: We understand the contract was not included in the FSRS due to City staff oversight.
Recommendation: Although the City provided documentation that the FSRS was updated on March 10, 2024 to include the $198,760 contract, the City should develop procedures to ensure that FFATA reporting is accurate at all times and reflects any contract amendments and final subaward funding amounts.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-005 Duplication of Benefits Compliance Documentation
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: All CDBG-CV grantees are required to establish and maintain adequate procedures to prevent any duplication of benefits for assisted activities (as discussed in Section III.B.9. of the CDBG-CV Notice). To demonstrate that no financial assistance has been received or is available to pay costs charged to a CDBG-CV grant, a grantee may demonstrate that no other funds are available for an activity by maintaining records of compliance with mandatory duplication of benefits requirements described in Section III.B.9.
Condition: It appears the City did develop a policy to address duplication of benefits per our review of the City's Duplication of Benefits Policy & Procedures document that includes a certification form to be used for applicable projects. We requested a copy of the certification for the Davis Emergency Shelter project funded by the CDBG-CV funding and City staff was unable to locate the certification.
Effect: The City is not in compliance with the duplication of benefits documentation requirements to ensure no financial assistance has been received or is available to pay costs charged to a CDBG-CV grant.
Cause: We understand that City staff in charge of the project are no longer with the City, so current City staff are unable to determine whether the duplication of benefits certification required by the City’s policy was completed.
Recommendation: City staff should develop procedures to ensure that CDBG-CV grant-funded projects documentation includes the duplication of benefits certification.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-003 Cash Management
AL Number: 14.218, 14.239
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
HOME Investment Partnerships Program
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
M18-MC060237, M19-MC060237, M20-MC060237
Criteria: 24 CFR 570.902 indicates that the Department of Housing and Urban Development will review the performance of each entitlement, HUD-administered small cities, and Insular Areas recipient to determine whether each recipient is carrying out its CDBG-assisted activities in a timely manner. One of the factors in determining timeliness is the timing of the use of entitlement grant funds and the amount of undisbursed entitlement grant funds that remain in the Integrated Disbursement Information System (IDIS).
Therefore, the City should submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred. Those drawdown requests should be completed at least quarterly, depending on the volume of program activity, to improve the cash management for the program and to match expenditures with associated revenues throughout the fiscal year.
Although the HOME Investment Partnerships Program does not appear to have a timeliness requirement, other than 24 CFR 92.500(d) requirement to commit funds within 24 months of the grant award and the eight-year period of performance, the City should also submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred.
Condition: During our testing of CDBG grant drawdown requests during fiscal year 2021, we noted that a drawdown made in April 2021 was for December 2020 expenditures, the drawdown made in May 2021 was for August 2020 expenditures, the drawdown made in June 2021 was for December 2020 expenditures and the drawdown made in September 2022 was for February 2021 to June 2021 expenditures. The City submitted the drawdown requests in the IDIS well over three months after the program expenditures were incurred. We also noted that the City did not submit drawdowns for fiscal year 2021 program expenditures we tested totaling $710.
During our testing of HOME program grant drawdown requests during fiscal year 2021, we noted that two drawdowns made in June 2022 were for November 2020, January 2021, March 2021 and June 2021 expenditures, and one drawdown made in September 2022 was for March, April, May and July 2021 expenditures.
Effect: The City is not matching expenditures with associated revenues throughout the fiscal year as expenditures are incurred and is at risk of being out of compliance with the provisions of 24 CFR 570.902.
Cause: We understand that the drawdowns were delayed due to staff turnover.
Recommendation: The City should develop procedures to ensure that drawdown requests are submitted more frequently, at least on a quarterly basis, and should requests reimbursement for the program expenditures noted above as soon as possible.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA2021-001 Triennial Review Deficiencies
AL Number: 20.507 and 20.526
Assistance Listing Title: COVID-19 - Federal Transit Cluster
Federal Agency: Department of Transportation
Federal Award Identification Number: CA-2017-016-01, CA-2016-101-01, CA-2020-242-00, CA-2020-214-00, CA-2019-107-00, CA-2017-126-00, CA-2017-004-00, and CA-2016-101-00
Criteria: The City of Davis went through a triennial review of its Federal Transit Administration Grants by the U.S. Department of Transportation Federal Transit Administration (FTA) during fiscal year 2021
Condition: During the triennial review, the FTA found a several issues and had five findings in the areas of Financial Management and Capacity, Technical Capacity - Program Management and Subrecipient Oversight, Procurement, and Americans with Disabilities Act-General. Although the triennial review is not an audit, it is an assessment of the City’s compliance with federal requirements.
Effect: The City is not in compliance with the federal requirements noted above for the FTA grants.
Cause: We understand the noncompliance issues were due to staff oversight, staff turnover and the effects of the COVID-19 pandemic on staff resources.
Recommendation: The City must implement the required changes to comply with the FTA requirements.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA2021-001 Triennial Review Deficiencies
AL Number: 20.507 and 20.526
Assistance Listing Title: COVID-19 - Federal Transit Cluster
Federal Agency: Department of Transportation
Federal Award Identification Number: CA-2017-016-01, CA-2016-101-01, CA-2020-242-00, CA-2020-214-00, CA-2019-107-00, CA-2017-126-00, CA-2017-004-00, and CA-2016-101-00
Criteria: The City of Davis went through a triennial review of its Federal Transit Administration Grants by the U.S. Department of Transportation Federal Transit Administration (FTA) during fiscal year 2021
Condition: During the triennial review, the FTA found a several issues and had five findings in the areas of Financial Management and Capacity, Technical Capacity - Program Management and Subrecipient Oversight, Procurement, and Americans with Disabilities Act-General. Although the triennial review is not an audit, it is an assessment of the City’s compliance with federal requirements.
Effect: The City is not in compliance with the federal requirements noted above for the FTA grants.
Cause: We understand the noncompliance issues were due to staff oversight, staff turnover and the effects of the COVID-19 pandemic on staff resources.
Recommendation: The City must implement the required changes to comply with the FTA requirements.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA2021-001 Triennial Review Deficiencies
AL Number: 20.507 and 20.526
Assistance Listing Title: COVID-19 - Federal Transit Cluster
Federal Agency: Department of Transportation
Federal Award Identification Number: CA-2017-016-01, CA-2016-101-01, CA-2020-242-00, CA-2020-214-00, CA-2019-107-00, CA-2017-126-00, CA-2017-004-00, and CA-2016-101-00
Criteria: The City of Davis went through a triennial review of its Federal Transit Administration Grants by the U.S. Department of Transportation Federal Transit Administration (FTA) during fiscal year 2021
Condition: During the triennial review, the FTA found a several issues and had five findings in the areas of Financial Management and Capacity, Technical Capacity - Program Management and Subrecipient Oversight, Procurement, and Americans with Disabilities Act-General. Although the triennial review is not an audit, it is an assessment of the City’s compliance with federal requirements.
Effect: The City is not in compliance with the federal requirements noted above for the FTA grants.
Cause: We understand the noncompliance issues were due to staff oversight, staff turnover and the effects of the COVID-19 pandemic on staff resources.
Recommendation: The City must implement the required changes to comply with the FTA requirements.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA2021-001 Triennial Review Deficiencies
AL Number: 20.507 and 20.526
Assistance Listing Title: COVID-19 - Federal Transit Cluster
Federal Agency: Department of Transportation
Federal Award Identification Number: CA-2017-016-01, CA-2016-101-01, CA-2020-242-00, CA-2020-214-00, CA-2019-107-00, CA-2017-126-00, CA-2017-004-00, and CA-2016-101-00
Criteria: The City of Davis went through a triennial review of its Federal Transit Administration Grants by the U.S. Department of Transportation Federal Transit Administration (FTA) during fiscal year 2021
Condition: During the triennial review, the FTA found a several issues and had five findings in the areas of Financial Management and Capacity, Technical Capacity - Program Management and Subrecipient Oversight, Procurement, and Americans with Disabilities Act-General. Although the triennial review is not an audit, it is an assessment of the City’s compliance with federal requirements.
Effect: The City is not in compliance with the federal requirements noted above for the FTA grants.
Cause: We understand the noncompliance issues were due to staff oversight, staff turnover and the effects of the COVID-19 pandemic on staff resources.
Recommendation: The City must implement the required changes to comply with the FTA requirements.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-006 Timely Reporting and Return of Unspent Grant Advance
AL Number: 21.019
Assistance Listing Title: COVID-19 – Coronavirus Relief Fund
Federal Agency: Department of Treasury
Pass Through Entity: Yolo County, California Department of Finance
Federal Award Identification Number: Unavailable (Yolo County) and 607 (California Department of Finance)
Criteria: Attachment 1 to the City’s CARES Homeless Assistance Grant and Attachment 1 to the City’s CARES Business Assistance Grant with Yolo County both require the City to file a final a statement of cumulative costs incurred, including cost sharing, with the County’s Financial Contact no later than 30 days after the project period end date, or January 29, 2021. We also noted that Attachment 4 to each of the grants indicated a different due date for the final report, which is within 60 days after the end of the period of performance, or February 28, 2021. Finally, Attachment 1 of each grant also indicate that any unspent proceeds associated with the grants of December 30, 2020 was to be returned to the County no later than January 15, 2021.
Condition: The City filed the final report for the CARES Homeless Assistance Grant with the County on March 11, 2021 and did not return the unspent grant advance of $27,617 to the County until March 29, 2021.
The City filed the final report for the CARES Business Assistance Grant with the County on March 8, 2021 and did not return the unspent grant advance of $222 to the County until January 21, 2021.
Effect: The City is not in compliance with the timely reporting and timely return of unspent funds requirements of the grant award agreements.
Cause: We understand the delays in filing the reports returning the unspent grant funds timely were due to staff turnover.
Recommendation: The City should ensure grant reports are filed timely in accordance with grant agreement reporting deadlines and grant agreements should be reviewed for other compliance requirements, such as deadlines for the return of unexpended grant funds. In addition, City staff should clarify with grantors if there are conflicting reporting deadlines within the grant agreement.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-006 Timely Reporting and Return of Unspent Grant Advance
AL Number: 21.019
Assistance Listing Title: COVID-19 – Coronavirus Relief Fund
Federal Agency: Department of Treasury
Pass Through Entity: Yolo County, California Department of Finance
Federal Award Identification Number: Unavailable (Yolo County) and 607 (California Department of Finance)
Criteria: Attachment 1 to the City’s CARES Homeless Assistance Grant and Attachment 1 to the City’s CARES Business Assistance Grant with Yolo County both require the City to file a final a statement of cumulative costs incurred, including cost sharing, with the County’s Financial Contact no later than 30 days after the project period end date, or January 29, 2021. We also noted that Attachment 4 to each of the grants indicated a different due date for the final report, which is within 60 days after the end of the period of performance, or February 28, 2021. Finally, Attachment 1 of each grant also indicate that any unspent proceeds associated with the grants of December 30, 2020 was to be returned to the County no later than January 15, 2021.
Condition: The City filed the final report for the CARES Homeless Assistance Grant with the County on March 11, 2021 and did not return the unspent grant advance of $27,617 to the County until March 29, 2021.
The City filed the final report for the CARES Business Assistance Grant with the County on March 8, 2021 and did not return the unspent grant advance of $222 to the County until January 21, 2021.
Effect: The City is not in compliance with the timely reporting and timely return of unspent funds requirements of the grant award agreements.
Cause: We understand the delays in filing the reports returning the unspent grant funds timely were due to staff turnover.
Recommendation: The City should ensure grant reports are filed timely in accordance with grant agreement reporting deadlines and grant agreements should be reviewed for other compliance requirements, such as deadlines for the return of unexpended grant funds. In addition, City staff should clarify with grantors if there are conflicting reporting deadlines within the grant agreement.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-002 Accurate Financial Reporting in the Annual PR26 Report and Quarterly PR29 Reports
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: OMB No. 2506-0077 requires all grantees to submit a PR26 – CDBG Financial Summary Report for the CDBG entitlement Program within 90 days after the year end of the grantee’s program year. The PR26 – CDBG Financial Summary Report is a report that contains summary information from the Integrated Disbursement Information System (IDIS) for the grantee’s program year.
The City is also required to file a C04PR29 Cash on Hand Quarterly Report in the IDIS system within 30 days of the end of each quarter. The report details cash drawdowns and expenditures made during each quarter.
Finally, the City is required to file the PR29, CDBG-CV Cash on Hand Quarterly Report within 10 days after the end of each calendar quarter. The report details cash drawdowns and expenditures made during each quarter.
Condition: During our review of the Program Year 2020 (fiscal year 2021) PR26 report for fiscal year 2021 for the CDBG program, we noted that the data in the PR26 report was inconsistent with the data extracted from IDIS and the Consolidated Annual Performance and Evaluation Report (CAPER) and the City’s general ledger. The exceptions noted were:
• Line 01 - Unexpended CDBG funds at end of previous program year was reported as zero, but the ending unexpended balance in the Program Year 2019 PR26 report was $821,153.
• Line 02 - the entitlement grant included in the PR26 report was $743,872, but it should have been $743,986, which affected other amounts and calculations reported.
• Line 05 – included program income of $165,537, but the City did not have program income during fiscal year 2021. This amount also affects other amounts and calculations reported.
• Line 15 – Total expenditures in the PR26 of $544,405 could not be reconciled to the program expenditures on the SEFA of $485,210.
For the PR26 report for the CDBG-CV program, we understand that the IDIS program does not generate the report by program year, which means the report includes expenditures to the date the report is generated. However, City staff was unable to reconcile the total expenditures on Line 08 of $725,171 to the fiscal year 2021 program expenditures on the SEFA of $414,828.
During our review of the four C04PR29 Cash on Hand Quarterly Reports for fiscal year 2021, we noted that the City was not able to reconcile the cash disbursed total of $723,288 to the program expenditures reported on the SEFA of $485,210 and was not able to reconcile the ending cash balance in the “Summary for 4 Quarters” of $336,748 to the June 30, 2021 general ledger cash balance of $177,768. It was also unclear why the ending cash balance in the Summary of 4 Quarters total of $336,374 did not agree to the cash balance in the fourth quarter report ending balance of $168,374. In addition, the quarterly reports included current year program income of $168,374, although as noted above the City did not receive any program income during fiscal year 2021.
During our review of the PR29, CDBG-CV Cash on Hand Quarterly Reports for fiscal year 2021, City staff was not able to reconcile the cash disbursed total of $254,474 to the program expenditures reported on the SEFA of $414,828.
Effect: The City is not in compliance with the performance reporting requirements of the CDBG program.
Cause: We understand the errors were due to staff oversight.
Recommendation: The City should develop procedures to ensure that all financial reports are reviewed for accuracy prior to submission. In addition, the City should work with the grantor to determine if the City should submit corrected Program Year 2020 PR26 report and fiscal year 2021 Cash on Hand Quarterly Reports, or if the reports can be corrected on a prospective basis during the next reporting period.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-003 Cash Management
AL Number: 14.218, 14.239
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
HOME Investment Partnerships Program
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
M18-MC060237, M19-MC060237, M20-MC060237
Criteria: 24 CFR 570.902 indicates that the Department of Housing and Urban Development will review the performance of each entitlement, HUD-administered small cities, and Insular Areas recipient to determine whether each recipient is carrying out its CDBG-assisted activities in a timely manner. One of the factors in determining timeliness is the timing of the use of entitlement grant funds and the amount of undisbursed entitlement grant funds that remain in the Integrated Disbursement Information System (IDIS).
Therefore, the City should submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred. Those drawdown requests should be completed at least quarterly, depending on the volume of program activity, to improve the cash management for the program and to match expenditures with associated revenues throughout the fiscal year.
Although the HOME Investment Partnerships Program does not appear to have a timeliness requirement, other than 24 CFR 92.500(d) requirement to commit funds within 24 months of the grant award and the eight-year period of performance, the City should also submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred.
Condition: During our testing of CDBG grant drawdown requests during fiscal year 2021, we noted that a drawdown made in April 2021 was for December 2020 expenditures, the drawdown made in May 2021 was for August 2020 expenditures, the drawdown made in June 2021 was for December 2020 expenditures and the drawdown made in September 2022 was for February 2021 to June 2021 expenditures. The City submitted the drawdown requests in the IDIS well over three months after the program expenditures were incurred. We also noted that the City did not submit drawdowns for fiscal year 2021 program expenditures we tested totaling $710.
During our testing of HOME program grant drawdown requests during fiscal year 2021, we noted that two drawdowns made in June 2022 were for November 2020, January 2021, March 2021 and June 2021 expenditures, and one drawdown made in September 2022 was for March, April, May and July 2021 expenditures.
Effect: The City is not matching expenditures with associated revenues throughout the fiscal year as expenditures are incurred and is at risk of being out of compliance with the provisions of 24 CFR 570.902.
Cause: We understand that the drawdowns were delayed due to staff turnover.
Recommendation: The City should develop procedures to ensure that drawdown requests are submitted more frequently, at least on a quarterly basis, and should requests reimbursement for the program expenditures noted above as soon as possible.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-004 Federal Funding Accountability and Transparency Act (FFATA) Reporting
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252 that are codified in 2 CFR Part 170, direct recipients of grants are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subawards that are entered into the FSRS System should be maintained so that any amendments to the subawards are also reflected in the system.
Condition: We selected three of the City’s subawards for testing of the reporting on the FSRS. The three subawards tested were comprised of two vendor contracts and one subgrant that were all more than $30,000. Although we noted that two of the contracts tested were included in the FSRS, one of the contracts in the amount of $198,760 was not reported in FSRS. We understand the City did not report that contract in the FSRS until March 10, 2024.
Effect: The City is not in compliance with the FFATA reporting requirements.
Cause: We understand the contract was not included in the FSRS due to City staff oversight.
Recommendation: Although the City provided documentation that the FSRS was updated on March 10, 2024 to include the $198,760 contract, the City should develop procedures to ensure that FFATA reporting is accurate at all times and reflects any contract amendments and final subaward funding amounts.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-005 Duplication of Benefits Compliance Documentation
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: All CDBG-CV grantees are required to establish and maintain adequate procedures to prevent any duplication of benefits for assisted activities (as discussed in Section III.B.9. of the CDBG-CV Notice). To demonstrate that no financial assistance has been received or is available to pay costs charged to a CDBG-CV grant, a grantee may demonstrate that no other funds are available for an activity by maintaining records of compliance with mandatory duplication of benefits requirements described in Section III.B.9.
Condition: It appears the City did develop a policy to address duplication of benefits per our review of the City's Duplication of Benefits Policy & Procedures document that includes a certification form to be used for applicable projects. We requested a copy of the certification for the Davis Emergency Shelter project funded by the CDBG-CV funding and City staff was unable to locate the certification.
Effect: The City is not in compliance with the duplication of benefits documentation requirements to ensure no financial assistance has been received or is available to pay costs charged to a CDBG-CV grant.
Cause: We understand that City staff in charge of the project are no longer with the City, so current City staff are unable to determine whether the duplication of benefits certification required by the City’s policy was completed.
Recommendation: City staff should develop procedures to ensure that CDBG-CV grant-funded projects documentation includes the duplication of benefits certification.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-002 Accurate Financial Reporting in the Annual PR26 Report and Quarterly PR29 Reports
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: OMB No. 2506-0077 requires all grantees to submit a PR26 – CDBG Financial Summary Report for the CDBG entitlement Program within 90 days after the year end of the grantee’s program year. The PR26 – CDBG Financial Summary Report is a report that contains summary information from the Integrated Disbursement Information System (IDIS) for the grantee’s program year.
The City is also required to file a C04PR29 Cash on Hand Quarterly Report in the IDIS system within 30 days of the end of each quarter. The report details cash drawdowns and expenditures made during each quarter.
Finally, the City is required to file the PR29, CDBG-CV Cash on Hand Quarterly Report within 10 days after the end of each calendar quarter. The report details cash drawdowns and expenditures made during each quarter.
Condition: During our review of the Program Year 2020 (fiscal year 2021) PR26 report for fiscal year 2021 for the CDBG program, we noted that the data in the PR26 report was inconsistent with the data extracted from IDIS and the Consolidated Annual Performance and Evaluation Report (CAPER) and the City’s general ledger. The exceptions noted were:
• Line 01 - Unexpended CDBG funds at end of previous program year was reported as zero, but the ending unexpended balance in the Program Year 2019 PR26 report was $821,153.
• Line 02 - the entitlement grant included in the PR26 report was $743,872, but it should have been $743,986, which affected other amounts and calculations reported.
• Line 05 – included program income of $165,537, but the City did not have program income during fiscal year 2021. This amount also affects other amounts and calculations reported.
• Line 15 – Total expenditures in the PR26 of $544,405 could not be reconciled to the program expenditures on the SEFA of $485,210.
For the PR26 report for the CDBG-CV program, we understand that the IDIS program does not generate the report by program year, which means the report includes expenditures to the date the report is generated. However, City staff was unable to reconcile the total expenditures on Line 08 of $725,171 to the fiscal year 2021 program expenditures on the SEFA of $414,828.
During our review of the four C04PR29 Cash on Hand Quarterly Reports for fiscal year 2021, we noted that the City was not able to reconcile the cash disbursed total of $723,288 to the program expenditures reported on the SEFA of $485,210 and was not able to reconcile the ending cash balance in the “Summary for 4 Quarters” of $336,748 to the June 30, 2021 general ledger cash balance of $177,768. It was also unclear why the ending cash balance in the Summary of 4 Quarters total of $336,374 did not agree to the cash balance in the fourth quarter report ending balance of $168,374. In addition, the quarterly reports included current year program income of $168,374, although as noted above the City did not receive any program income during fiscal year 2021.
During our review of the PR29, CDBG-CV Cash on Hand Quarterly Reports for fiscal year 2021, City staff was not able to reconcile the cash disbursed total of $254,474 to the program expenditures reported on the SEFA of $414,828.
Effect: The City is not in compliance with the performance reporting requirements of the CDBG program.
Cause: We understand the errors were due to staff oversight.
Recommendation: The City should develop procedures to ensure that all financial reports are reviewed for accuracy prior to submission. In addition, the City should work with the grantor to determine if the City should submit corrected Program Year 2020 PR26 report and fiscal year 2021 Cash on Hand Quarterly Reports, or if the reports can be corrected on a prospective basis during the next reporting period.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-003 Cash Management
AL Number: 14.218, 14.239
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
HOME Investment Partnerships Program
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
M18-MC060237, M19-MC060237, M20-MC060237
Criteria: 24 CFR 570.902 indicates that the Department of Housing and Urban Development will review the performance of each entitlement, HUD-administered small cities, and Insular Areas recipient to determine whether each recipient is carrying out its CDBG-assisted activities in a timely manner. One of the factors in determining timeliness is the timing of the use of entitlement grant funds and the amount of undisbursed entitlement grant funds that remain in the Integrated Disbursement Information System (IDIS).
Therefore, the City should submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred. Those drawdown requests should be completed at least quarterly, depending on the volume of program activity, to improve the cash management for the program and to match expenditures with associated revenues throughout the fiscal year.
Although the HOME Investment Partnerships Program does not appear to have a timeliness requirement, other than 24 CFR 92.500(d) requirement to commit funds within 24 months of the grant award and the eight-year period of performance, the City should also submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred.
Condition: During our testing of CDBG grant drawdown requests during fiscal year 2021, we noted that a drawdown made in April 2021 was for December 2020 expenditures, the drawdown made in May 2021 was for August 2020 expenditures, the drawdown made in June 2021 was for December 2020 expenditures and the drawdown made in September 2022 was for February 2021 to June 2021 expenditures. The City submitted the drawdown requests in the IDIS well over three months after the program expenditures were incurred. We also noted that the City did not submit drawdowns for fiscal year 2021 program expenditures we tested totaling $710.
During our testing of HOME program grant drawdown requests during fiscal year 2021, we noted that two drawdowns made in June 2022 were for November 2020, January 2021, March 2021 and June 2021 expenditures, and one drawdown made in September 2022 was for March, April, May and July 2021 expenditures.
Effect: The City is not matching expenditures with associated revenues throughout the fiscal year as expenditures are incurred and is at risk of being out of compliance with the provisions of 24 CFR 570.902.
Cause: We understand that the drawdowns were delayed due to staff turnover.
Recommendation: The City should develop procedures to ensure that drawdown requests are submitted more frequently, at least on a quarterly basis, and should requests reimbursement for the program expenditures noted above as soon as possible.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-004 Federal Funding Accountability and Transparency Act (FFATA) Reporting
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252 that are codified in 2 CFR Part 170, direct recipients of grants are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subawards that are entered into the FSRS System should be maintained so that any amendments to the subawards are also reflected in the system.
Condition: We selected three of the City’s subawards for testing of the reporting on the FSRS. The three subawards tested were comprised of two vendor contracts and one subgrant that were all more than $30,000. Although we noted that two of the contracts tested were included in the FSRS, one of the contracts in the amount of $198,760 was not reported in FSRS. We understand the City did not report that contract in the FSRS until March 10, 2024.
Effect: The City is not in compliance with the FFATA reporting requirements.
Cause: We understand the contract was not included in the FSRS due to City staff oversight.
Recommendation: Although the City provided documentation that the FSRS was updated on March 10, 2024 to include the $198,760 contract, the City should develop procedures to ensure that FFATA reporting is accurate at all times and reflects any contract amendments and final subaward funding amounts.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-005 Duplication of Benefits Compliance Documentation
AL Number: 14.218
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
Criteria: All CDBG-CV grantees are required to establish and maintain adequate procedures to prevent any duplication of benefits for assisted activities (as discussed in Section III.B.9. of the CDBG-CV Notice). To demonstrate that no financial assistance has been received or is available to pay costs charged to a CDBG-CV grant, a grantee may demonstrate that no other funds are available for an activity by maintaining records of compliance with mandatory duplication of benefits requirements described in Section III.B.9.
Condition: It appears the City did develop a policy to address duplication of benefits per our review of the City's Duplication of Benefits Policy & Procedures document that includes a certification form to be used for applicable projects. We requested a copy of the certification for the Davis Emergency Shelter project funded by the CDBG-CV funding and City staff was unable to locate the certification.
Effect: The City is not in compliance with the duplication of benefits documentation requirements to ensure no financial assistance has been received or is available to pay costs charged to a CDBG-CV grant.
Cause: We understand that City staff in charge of the project are no longer with the City, so current City staff are unable to determine whether the duplication of benefits certification required by the City’s policy was completed.
Recommendation: City staff should develop procedures to ensure that CDBG-CV grant-funded projects documentation includes the duplication of benefits certification.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-003 Cash Management
AL Number: 14.218, 14.239
Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG)
HOME Investment Partnerships Program
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037
M18-MC060237, M19-MC060237, M20-MC060237
Criteria: 24 CFR 570.902 indicates that the Department of Housing and Urban Development will review the performance of each entitlement, HUD-administered small cities, and Insular Areas recipient to determine whether each recipient is carrying out its CDBG-assisted activities in a timely manner. One of the factors in determining timeliness is the timing of the use of entitlement grant funds and the amount of undisbursed entitlement grant funds that remain in the Integrated Disbursement Information System (IDIS).
Therefore, the City should submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred. Those drawdown requests should be completed at least quarterly, depending on the volume of program activity, to improve the cash management for the program and to match expenditures with associated revenues throughout the fiscal year.
Although the HOME Investment Partnerships Program does not appear to have a timeliness requirement, other than 24 CFR 92.500(d) requirement to commit funds within 24 months of the grant award and the eight-year period of performance, the City should also submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred.
Condition: During our testing of CDBG grant drawdown requests during fiscal year 2021, we noted that a drawdown made in April 2021 was for December 2020 expenditures, the drawdown made in May 2021 was for August 2020 expenditures, the drawdown made in June 2021 was for December 2020 expenditures and the drawdown made in September 2022 was for February 2021 to June 2021 expenditures. The City submitted the drawdown requests in the IDIS well over three months after the program expenditures were incurred. We also noted that the City did not submit drawdowns for fiscal year 2021 program expenditures we tested totaling $710.
During our testing of HOME program grant drawdown requests during fiscal year 2021, we noted that two drawdowns made in June 2022 were for November 2020, January 2021, March 2021 and June 2021 expenditures, and one drawdown made in September 2022 was for March, April, May and July 2021 expenditures.
Effect: The City is not matching expenditures with associated revenues throughout the fiscal year as expenditures are incurred and is at risk of being out of compliance with the provisions of 24 CFR 570.902.
Cause: We understand that the drawdowns were delayed due to staff turnover.
Recommendation: The City should develop procedures to ensure that drawdown requests are submitted more frequently, at least on a quarterly basis, and should requests reimbursement for the program expenditures noted above as soon as possible.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA2021-001 Triennial Review Deficiencies
AL Number: 20.507 and 20.526
Assistance Listing Title: COVID-19 - Federal Transit Cluster
Federal Agency: Department of Transportation
Federal Award Identification Number: CA-2017-016-01, CA-2016-101-01, CA-2020-242-00, CA-2020-214-00, CA-2019-107-00, CA-2017-126-00, CA-2017-004-00, and CA-2016-101-00
Criteria: The City of Davis went through a triennial review of its Federal Transit Administration Grants by the U.S. Department of Transportation Federal Transit Administration (FTA) during fiscal year 2021
Condition: During the triennial review, the FTA found a several issues and had five findings in the areas of Financial Management and Capacity, Technical Capacity - Program Management and Subrecipient Oversight, Procurement, and Americans with Disabilities Act-General. Although the triennial review is not an audit, it is an assessment of the City’s compliance with federal requirements.
Effect: The City is not in compliance with the federal requirements noted above for the FTA grants.
Cause: We understand the noncompliance issues were due to staff oversight, staff turnover and the effects of the COVID-19 pandemic on staff resources.
Recommendation: The City must implement the required changes to comply with the FTA requirements.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA2021-001 Triennial Review Deficiencies
AL Number: 20.507 and 20.526
Assistance Listing Title: COVID-19 - Federal Transit Cluster
Federal Agency: Department of Transportation
Federal Award Identification Number: CA-2017-016-01, CA-2016-101-01, CA-2020-242-00, CA-2020-214-00, CA-2019-107-00, CA-2017-126-00, CA-2017-004-00, and CA-2016-101-00
Criteria: The City of Davis went through a triennial review of its Federal Transit Administration Grants by the U.S. Department of Transportation Federal Transit Administration (FTA) during fiscal year 2021
Condition: During the triennial review, the FTA found a several issues and had five findings in the areas of Financial Management and Capacity, Technical Capacity - Program Management and Subrecipient Oversight, Procurement, and Americans with Disabilities Act-General. Although the triennial review is not an audit, it is an assessment of the City’s compliance with federal requirements.
Effect: The City is not in compliance with the federal requirements noted above for the FTA grants.
Cause: We understand the noncompliance issues were due to staff oversight, staff turnover and the effects of the COVID-19 pandemic on staff resources.
Recommendation: The City must implement the required changes to comply with the FTA requirements.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA2021-001 Triennial Review Deficiencies
AL Number: 20.507 and 20.526
Assistance Listing Title: COVID-19 - Federal Transit Cluster
Federal Agency: Department of Transportation
Federal Award Identification Number: CA-2017-016-01, CA-2016-101-01, CA-2020-242-00, CA-2020-214-00, CA-2019-107-00, CA-2017-126-00, CA-2017-004-00, and CA-2016-101-00
Criteria: The City of Davis went through a triennial review of its Federal Transit Administration Grants by the U.S. Department of Transportation Federal Transit Administration (FTA) during fiscal year 2021
Condition: During the triennial review, the FTA found a several issues and had five findings in the areas of Financial Management and Capacity, Technical Capacity - Program Management and Subrecipient Oversight, Procurement, and Americans with Disabilities Act-General. Although the triennial review is not an audit, it is an assessment of the City’s compliance with federal requirements.
Effect: The City is not in compliance with the federal requirements noted above for the FTA grants.
Cause: We understand the noncompliance issues were due to staff oversight, staff turnover and the effects of the COVID-19 pandemic on staff resources.
Recommendation: The City must implement the required changes to comply with the FTA requirements.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA2021-001 Triennial Review Deficiencies
AL Number: 20.507 and 20.526
Assistance Listing Title: COVID-19 - Federal Transit Cluster
Federal Agency: Department of Transportation
Federal Award Identification Number: CA-2017-016-01, CA-2016-101-01, CA-2020-242-00, CA-2020-214-00, CA-2019-107-00, CA-2017-126-00, CA-2017-004-00, and CA-2016-101-00
Criteria: The City of Davis went through a triennial review of its Federal Transit Administration Grants by the U.S. Department of Transportation Federal Transit Administration (FTA) during fiscal year 2021
Condition: During the triennial review, the FTA found a several issues and had five findings in the areas of Financial Management and Capacity, Technical Capacity - Program Management and Subrecipient Oversight, Procurement, and Americans with Disabilities Act-General. Although the triennial review is not an audit, it is an assessment of the City’s compliance with federal requirements.
Effect: The City is not in compliance with the federal requirements noted above for the FTA grants.
Cause: We understand the noncompliance issues were due to staff oversight, staff turnover and the effects of the COVID-19 pandemic on staff resources.
Recommendation: The City must implement the required changes to comply with the FTA requirements.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-006 Timely Reporting and Return of Unspent Grant Advance
AL Number: 21.019
Assistance Listing Title: COVID-19 – Coronavirus Relief Fund
Federal Agency: Department of Treasury
Pass Through Entity: Yolo County, California Department of Finance
Federal Award Identification Number: Unavailable (Yolo County) and 607 (California Department of Finance)
Criteria: Attachment 1 to the City’s CARES Homeless Assistance Grant and Attachment 1 to the City’s CARES Business Assistance Grant with Yolo County both require the City to file a final a statement of cumulative costs incurred, including cost sharing, with the County’s Financial Contact no later than 30 days after the project period end date, or January 29, 2021. We also noted that Attachment 4 to each of the grants indicated a different due date for the final report, which is within 60 days after the end of the period of performance, or February 28, 2021. Finally, Attachment 1 of each grant also indicate that any unspent proceeds associated with the grants of December 30, 2020 was to be returned to the County no later than January 15, 2021.
Condition: The City filed the final report for the CARES Homeless Assistance Grant with the County on March 11, 2021 and did not return the unspent grant advance of $27,617 to the County until March 29, 2021.
The City filed the final report for the CARES Business Assistance Grant with the County on March 8, 2021 and did not return the unspent grant advance of $222 to the County until January 21, 2021.
Effect: The City is not in compliance with the timely reporting and timely return of unspent funds requirements of the grant award agreements.
Cause: We understand the delays in filing the reports returning the unspent grant funds timely were due to staff turnover.
Recommendation: The City should ensure grant reports are filed timely in accordance with grant agreement reporting deadlines and grant agreements should be reviewed for other compliance requirements, such as deadlines for the return of unexpended grant funds. In addition, City staff should clarify with grantors if there are conflicting reporting deadlines within the grant agreement.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2021-006 Timely Reporting and Return of Unspent Grant Advance
AL Number: 21.019
Assistance Listing Title: COVID-19 – Coronavirus Relief Fund
Federal Agency: Department of Treasury
Pass Through Entity: Yolo County, California Department of Finance
Federal Award Identification Number: Unavailable (Yolo County) and 607 (California Department of Finance)
Criteria: Attachment 1 to the City’s CARES Homeless Assistance Grant and Attachment 1 to the City’s CARES Business Assistance Grant with Yolo County both require the City to file a final a statement of cumulative costs incurred, including cost sharing, with the County’s Financial Contact no later than 30 days after the project period end date, or January 29, 2021. We also noted that Attachment 4 to each of the grants indicated a different due date for the final report, which is within 60 days after the end of the period of performance, or February 28, 2021. Finally, Attachment 1 of each grant also indicate that any unspent proceeds associated with the grants of December 30, 2020 was to be returned to the County no later than January 15, 2021.
Condition: The City filed the final report for the CARES Homeless Assistance Grant with the County on March 11, 2021 and did not return the unspent grant advance of $27,617 to the County until March 29, 2021.
The City filed the final report for the CARES Business Assistance Grant with the County on March 8, 2021 and did not return the unspent grant advance of $222 to the County until January 21, 2021.
Effect: The City is not in compliance with the timely reporting and timely return of unspent funds requirements of the grant award agreements.
Cause: We understand the delays in filing the reports returning the unspent grant funds timely were due to staff turnover.
Recommendation: The City should ensure grant reports are filed timely in accordance with grant agreement reporting deadlines and grant agreements should be reviewed for other compliance requirements, such as deadlines for the return of unexpended grant funds. In addition, City staff should clarify with grantors if there are conflicting reporting deadlines within the grant agreement.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.