FAC Explorer

Audit 298535

FY End
2023-06-30
Total Expended
$10.67M
Findings
4
Programs
9
Organization: City of Westminster (CA)
Year: 2023 Accepted: 2024-03-27
Auditor: Cliftonlarsenallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
386129 2023-001 Significant Deficiency - L
386130 2023-002 Material Weakness - A
962571 2023-001 Significant Deficiency - L
962572 2023-002 Material Weakness - A

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $5.35M Yes 0
20.205 Highway Planning and Construction $2.60M Yes 0
14.218 Community Development Block Grants/entitlement Grants $1.88M Yes 2
93.556 Promoting Safe and Stable Families $522,699 - 0
16.922 Equitable Sharing Program $216,506 - 0
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $41,908 - 0
20.600 State and Community Highway Safety $35,069 - 0
16.738 Edward Byrne Memorial Justice Assistance Grant Program $11,513 - 0
14.239 Home Investment Partnerships Program $7,845 - 0

Contacts

Name Title Type
M3QQN2CCJ7P7 Kassie Radermacher Auditee
7147955382 Kassie Radermacher Auditor
No contacts on file

Notes to SEFA

Title: Note 1 Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported using the modified accrual basis of accounting for governmental funds and the accrual basis for proprietary funds, which is described in Note 1 of the notes to the City’s financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the City of Westminster (the City) under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the 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 statements of the City. The City’s reporting entity is defined in Note 1 of the notes to the City’s financial statements.
Title: Note 2 Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the Schedule are reported using the modified accrual basis of accounting for governmental funds and the accrual basis for proprietary funds, which is described in Note 1 of the notes to the City’s financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported using the modified accrual basis of accounting for governmental funds and the accrual basis for proprietary funds, which is described in Note 1 of the notes to the City’s financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Note 3 Indirect Cost Rate Accounting Policies: Expenditures reported on the Schedule are reported using the modified accrual basis of accounting for governmental funds and the accrual basis for proprietary funds, which is described in Note 1 of the notes to the City’s financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-001
Federal Program Name: CDBG Entitlement Grants Cluster: Community Development Block Grant (CDBG) Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-21-MC-06-0509; B-22-MC-06-0509; Award Years 2021 and 2022 Award Period: Fiscal Year 2022-2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance (Reporting) • Other Matter (Reporting) Criteria or Specific Requirement: Reporting: PR29 (SF-425) reports are due to HUD quarterly and should reflect the amount of federal funds on hand as of the beginning and end of the quarter. The reports should also include the quarter's drawdowns, program income received, and federal expenditures that utilized this funding. Amounts should agree to the City's general ledger and supporting schedules. Condition: The PR29 (SF-425) quarterly reports contained the following errors as compared to the general ledger detail and other supporting schedules: See chart in pdf for this report. Questioned Costs: None noted. Context: All four of the CDBG quarterly PR29 (SF-425) reports contained errors as noted in the condition section above. Cause: The City did not utilize the appropriate reports and supporting schedules to prepare the quarterly PR29 (SF-425) reports. Effect: The PR29 (SF-425) quarterly reports filed with HUD were inaccurate and did not show federal cash on hand. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City implement revised policies and procedures when preparing the CDBG PR29 (SF-425) quarterly reports to ensure proper reporting of program income on hand and the appropriate federal expenditures utilizing both federal grant and program income.
Finding 2023-002
Federal Program Name: CDBG Entitlement Grants Cluster: Community Development Block Grant (CDBG) Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-21-MC-06-0509; B-22-MC-06-0509; COVID-19 CDBG, Award Years 2021 and 2022 Award Period: Fiscal Year 2022-2023 Type of Finding: • Material Weakness in Internal Control over Compliance (Allowable Costs) • Other Matter (Allowable Costs) Criteria or Specific Requirement: Allowable Costs: Uniform Guidance Title 2, Subtitle A, Chapter II, Part 200, Subpart E, §200.430 requires payroll records to support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The City had incorrectly identified themselves as a subrecipient for four projects: Senior Outreach, Project SHUE, Summer Youth, and Family Resource Center. The monthly/quarterly invoices from the City that charged CDBG for these project costs included City employee payroll costs. The City employees did not document time spent on these projects on their City timesheets. Therefore, we were unable to verify the allowability of the hours charged to CDBG for these projects. Questioned Costs: $144,219 of payroll and benefit costs. Context: Each of the four City projects (Senior Outreach, Project SHUE, Summer Youth, and Family Resource Center) had monthly or quarterly invoices including payroll costs. All monthly or quarterly invoices were inspected and payroll costs were aggregated and included as questioned costs. Cause: The City believed that these projects were subrecipients and that payroll charges did not require the same supporting documentation as City employees that directly charge their hours to CDBG throughout the year. Effect: The amount of payroll charges relating to these projects may be overstated. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City implement policies and procedures to ensure that the City itself is not identified as a subrecipient and that all City payroll charges be supported by timesheets and other supporting documentation as required by the Uniform Guidance.
Finding 2023-001
Federal Program Name: CDBG Entitlement Grants Cluster: Community Development Block Grant (CDBG) Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-21-MC-06-0509; B-22-MC-06-0509; Award Years 2021 and 2022 Award Period: Fiscal Year 2022-2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance (Reporting) • Other Matter (Reporting) Criteria or Specific Requirement: Reporting: PR29 (SF-425) reports are due to HUD quarterly and should reflect the amount of federal funds on hand as of the beginning and end of the quarter. The reports should also include the quarter's drawdowns, program income received, and federal expenditures that utilized this funding. Amounts should agree to the City's general ledger and supporting schedules. Condition: The PR29 (SF-425) quarterly reports contained the following errors as compared to the general ledger detail and other supporting schedules: See chart in pdf for this report. Questioned Costs: None noted. Context: All four of the CDBG quarterly PR29 (SF-425) reports contained errors as noted in the condition section above. Cause: The City did not utilize the appropriate reports and supporting schedules to prepare the quarterly PR29 (SF-425) reports. Effect: The PR29 (SF-425) quarterly reports filed with HUD were inaccurate and did not show federal cash on hand. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City implement revised policies and procedures when preparing the CDBG PR29 (SF-425) quarterly reports to ensure proper reporting of program income on hand and the appropriate federal expenditures utilizing both federal grant and program income.
Finding 2023-002
Federal Program Name: CDBG Entitlement Grants Cluster: Community Development Block Grant (CDBG) Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-21-MC-06-0509; B-22-MC-06-0509; COVID-19 CDBG, Award Years 2021 and 2022 Award Period: Fiscal Year 2022-2023 Type of Finding: • Material Weakness in Internal Control over Compliance (Allowable Costs) • Other Matter (Allowable Costs) Criteria or Specific Requirement: Allowable Costs: Uniform Guidance Title 2, Subtitle A, Chapter II, Part 200, Subpart E, §200.430 requires payroll records to support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The City had incorrectly identified themselves as a subrecipient for four projects: Senior Outreach, Project SHUE, Summer Youth, and Family Resource Center. The monthly/quarterly invoices from the City that charged CDBG for these project costs included City employee payroll costs. The City employees did not document time spent on these projects on their City timesheets. Therefore, we were unable to verify the allowability of the hours charged to CDBG for these projects. Questioned Costs: $144,219 of payroll and benefit costs. Context: Each of the four City projects (Senior Outreach, Project SHUE, Summer Youth, and Family Resource Center) had monthly or quarterly invoices including payroll costs. All monthly or quarterly invoices were inspected and payroll costs were aggregated and included as questioned costs. Cause: The City believed that these projects were subrecipients and that payroll charges did not require the same supporting documentation as City employees that directly charge their hours to CDBG throughout the year. Effect: The amount of payroll charges relating to these projects may be overstated. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City implement policies and procedures to ensure that the City itself is not identified as a subrecipient and that all City payroll charges be supported by timesheets and other supporting documentation as required by the Uniform Guidance.