Finding 2023-003 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to four separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed
route operating expenses that should have been reimbursed by a local match as required by other FTA
grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the
program.
Questioned Costs: $1,073,260.
Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed
route operating expenses that should have been reimbursed by a local match as the wrong federal
percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the
program.
Questioned Costs: $33,129.
Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for
Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the
program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine
overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and
conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.”
Cause: Several federal grants applied to these routes had local match requirements that were not captured by
the District’s review procedures due to recent staff turnover and lack of documented procedures to track
expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and
tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants
for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses
charged to programs to make sure the total expenses allocated agree to the total population of expenses
allocated.
Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied,
resulting in the overclaimed amounts cited above.
Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital
costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for
capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different
grants. There were potentially additional operating expenses under Paratransit services that could have offset
some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a
budget revision to allow for capital funding under the two related awards and is currently pending FTA
approval.
Recommendation: We recommend the District develop written procedures for allocating expenses to routes
and purposes used to claim expenses under federal grants and to track the different funding sources applied. A
summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate
tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance,
insurance, communications and other expenses allocated to the population of expenses in the general ledger.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-003 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to four separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed
route operating expenses that should have been reimbursed by a local match as required by other FTA
grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the
program.
Questioned Costs: $1,073,260.
Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed
route operating expenses that should have been reimbursed by a local match as the wrong federal
percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the
program.
Questioned Costs: $33,129.
Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for
Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the
program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine
overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and
conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.”
Cause: Several federal grants applied to these routes had local match requirements that were not captured by
the District’s review procedures due to recent staff turnover and lack of documented procedures to track
expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and
tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants
for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses
charged to programs to make sure the total expenses allocated agree to the total population of expenses
allocated.
Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied,
resulting in the overclaimed amounts cited above.
Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital
costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for
capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different
grants. There were potentially additional operating expenses under Paratransit services that could have offset
some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a
budget revision to allow for capital funding under the two related awards and is currently pending FTA
approval.
Recommendation: We recommend the District develop written procedures for allocating expenses to routes
and purposes used to claim expenses under federal grants and to track the different funding sources applied. A
summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate
tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance,
insurance, communications and other expenses allocated to the population of expenses in the general ledger.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-004 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award.
Compliance Requirement: Procurement, Suspension and Debarment.
Condition: The District was unable to provide documentation that the procurement of the CNG tank
replacement project for five Orion buses exceeding the simplified acquisition threshold of $250,000 was
approved by the Board. There is documentation that an invitation for bid (IFB) was released for the project, but
only one bid was received and the District awarded the contract to the sole bidder. Missing documentation
includes support of the rationale to approve the contract absent evidence of full and open competition. The
District was also not able to provide the request for proposal for review.
Criteria: 2 CFR Part 200 Subpart E (Uniform Guidance) states the following:
Section 200.318(a) states that “The non-federal entity must have and use documented procurement
procedures, consistent with State, local, and tribal laws and regulations and the standards of this
section, for the acquisition of property or service required under a Federal award or subaward. The
non-Federal entity’s documented procurement procedures must conform to the procurement standards
identified in Sections 200.317 through 200.327.”
Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to detail the
history of procurement. These records will include, but are not necessarily limited to, the following:
Rationale for the method of procurement, selection of contract type, contractor selection or rejection,
and the basis for the contract price.”
Section 200.320(c) states that “There are specific circumstances in which noncompetitive procurement
can be used. Noncompetitive procurement can only be awarded if one or more of the following
circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which
does not exceed the micro-purchase threshold…; (2) The item is available only from a single source;
(3) The public exigency or emergency for the retirement will not permit a delay resulting from
publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity
expressly authorizes a noncompetitive procurement in response to a written request from the non-
Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate.”
Section 200.324(a) states that “The non-Federal entity must perform a cost or price analysis in
connection with every procurement action in excess of the Simplified Acquisition Threshold including
contract modifications. The method and degree of analysis is dependent on the facts surrounding the
particular procurement situation, but as a starting point, the non-Federal entity must make independent
estimates before receiving bids or proposals.” Cause: Staff turnover at the District and the need for the project to be completed by a certain date to avoid the
buses losing certification led to the lack of adequate records being maintained.
Effect: The District was unable to prove it was in compliance with the Uniform Guidance regarding open
competition on procurements.
Context: The CNG tank replacement needed to be completed by a certain timeframe in order for the buses to
be operational, so not every step was documented. The awarded contract was signed on the date of a Board
meeting, but the Board minutes did not document that this contract was reviewed nor approved by the Board.
Recommendation: We recommend the District establish a procurement folder on its server with subfolders for
each individual procurement where documentation of each procurement is maintained, including advertising of
the procurement, requests for proposals, proposals received, analysis of reasons for selecting the winning bid,
executed contract, certifications by contractor if not part of proposal or executed contract, management report to
board recommending which bid should be approved, board resolution approving the winning bid and for
contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid, including
reasons for not selecting the lowest bid if applicable. We also recommend training be provided to staff that
work on procurements of the requirements under Uniform Guidance Section 2 CFR 200.318 to 200.326.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-003 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to four separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed
route operating expenses that should have been reimbursed by a local match as required by other FTA
grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the
program.
Questioned Costs: $1,073,260.
Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed
route operating expenses that should have been reimbursed by a local match as the wrong federal
percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the
program.
Questioned Costs: $33,129.
Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for
Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the
program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine
overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and
conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.”
Cause: Several federal grants applied to these routes had local match requirements that were not captured by
the District’s review procedures due to recent staff turnover and lack of documented procedures to track
expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and
tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants
for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses
charged to programs to make sure the total expenses allocated agree to the total population of expenses
allocated.
Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied,
resulting in the overclaimed amounts cited above.
Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital
costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for
capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different
grants. There were potentially additional operating expenses under Paratransit services that could have offset
some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a
budget revision to allow for capital funding under the two related awards and is currently pending FTA
approval.
Recommendation: We recommend the District develop written procedures for allocating expenses to routes
and purposes used to claim expenses under federal grants and to track the different funding sources applied. A
summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate
tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance,
insurance, communications and other expenses allocated to the population of expenses in the general ledger.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-003 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to four separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed
route operating expenses that should have been reimbursed by a local match as required by other FTA
grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the
program.
Questioned Costs: $1,073,260.
Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed
route operating expenses that should have been reimbursed by a local match as the wrong federal
percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the
program.
Questioned Costs: $33,129.
Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for
Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the
program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine
overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and
conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.”
Cause: Several federal grants applied to these routes had local match requirements that were not captured by
the District’s review procedures due to recent staff turnover and lack of documented procedures to track
expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and
tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants
for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses
charged to programs to make sure the total expenses allocated agree to the total population of expenses
allocated.
Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied,
resulting in the overclaimed amounts cited above.
Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital
costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for
capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different
grants. There were potentially additional operating expenses under Paratransit services that could have offset
some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a
budget revision to allow for capital funding under the two related awards and is currently pending FTA
approval.
Recommendation: We recommend the District develop written procedures for allocating expenses to routes
and purposes used to claim expenses under federal grants and to track the different funding sources applied. A
summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate
tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance,
insurance, communications and other expenses allocated to the population of expenses in the general ledger.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-003 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to four separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed
route operating expenses that should have been reimbursed by a local match as required by other FTA
grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the
program.
Questioned Costs: $1,073,260.
Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed
route operating expenses that should have been reimbursed by a local match as the wrong federal
percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the
program.
Questioned Costs: $33,129.
Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for
Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the
program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine
overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and
conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.”
Cause: Several federal grants applied to these routes had local match requirements that were not captured by
the District’s review procedures due to recent staff turnover and lack of documented procedures to track
expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and
tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants
for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses
charged to programs to make sure the total expenses allocated agree to the total population of expenses
allocated.
Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied,
resulting in the overclaimed amounts cited above.
Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital
costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for
capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different
grants. There were potentially additional operating expenses under Paratransit services that could have offset
some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a
budget revision to allow for capital funding under the two related awards and is currently pending FTA
approval.
Recommendation: We recommend the District develop written procedures for allocating expenses to routes
and purposes used to claim expenses under federal grants and to track the different funding sources applied. A
summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate
tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance,
insurance, communications and other expenses allocated to the population of expenses in the general ledger.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-003 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to four separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed
route operating expenses that should have been reimbursed by a local match as required by other FTA
grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the
program.
Questioned Costs: $1,073,260.
Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed
route operating expenses that should have been reimbursed by a local match as the wrong federal
percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the
program.
Questioned Costs: $33,129.
Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for
Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the
program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine
overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and
conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.”
Cause: Several federal grants applied to these routes had local match requirements that were not captured by
the District’s review procedures due to recent staff turnover and lack of documented procedures to track
expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and
tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants
for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses
charged to programs to make sure the total expenses allocated agree to the total population of expenses
allocated.
Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied,
resulting in the overclaimed amounts cited above.
Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital
costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for
capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different
grants. There were potentially additional operating expenses under Paratransit services that could have offset
some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a
budget revision to allow for capital funding under the two related awards and is currently pending FTA
approval.
Recommendation: We recommend the District develop written procedures for allocating expenses to routes
and purposes used to claim expenses under federal grants and to track the different funding sources applied. A
summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate
tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance,
insurance, communications and other expenses allocated to the population of expenses in the general ledger.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-003 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to four separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed
route operating expenses that should have been reimbursed by a local match as required by other FTA
grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the
program.
Questioned Costs: $1,073,260.
Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed
route operating expenses that should have been reimbursed by a local match as the wrong federal
percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the
program.
Questioned Costs: $33,129.
Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for
Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the
program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine
overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and
conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.”
Cause: Several federal grants applied to these routes had local match requirements that were not captured by
the District’s review procedures due to recent staff turnover and lack of documented procedures to track
expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and
tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants
for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses
charged to programs to make sure the total expenses allocated agree to the total population of expenses
allocated.
Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied,
resulting in the overclaimed amounts cited above.
Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital
costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for
capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different
grants. There were potentially additional operating expenses under Paratransit services that could have offset
some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a
budget revision to allow for capital funding under the two related awards and is currently pending FTA
approval.
Recommendation: We recommend the District develop written procedures for allocating expenses to routes
and purposes used to claim expenses under federal grants and to track the different funding sources applied. A
summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate
tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance,
insurance, communications and other expenses allocated to the population of expenses in the general ledger.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-004 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award.
Compliance Requirement: Procurement, Suspension and Debarment.
Condition: The District was unable to provide documentation that the procurement of the CNG tank
replacement project for five Orion buses exceeding the simplified acquisition threshold of $250,000 was
approved by the Board. There is documentation that an invitation for bid (IFB) was released for the project, but
only one bid was received and the District awarded the contract to the sole bidder. Missing documentation
includes support of the rationale to approve the contract absent evidence of full and open competition. The
District was also not able to provide the request for proposal for review.
Criteria: 2 CFR Part 200 Subpart E (Uniform Guidance) states the following:
Section 200.318(a) states that “The non-federal entity must have and use documented procurement
procedures, consistent with State, local, and tribal laws and regulations and the standards of this
section, for the acquisition of property or service required under a Federal award or subaward. The
non-Federal entity’s documented procurement procedures must conform to the procurement standards
identified in Sections 200.317 through 200.327.”
Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to detail the
history of procurement. These records will include, but are not necessarily limited to, the following:
Rationale for the method of procurement, selection of contract type, contractor selection or rejection,
and the basis for the contract price.”
Section 200.320(c) states that “There are specific circumstances in which noncompetitive procurement
can be used. Noncompetitive procurement can only be awarded if one or more of the following
circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which
does not exceed the micro-purchase threshold…; (2) The item is available only from a single source;
(3) The public exigency or emergency for the retirement will not permit a delay resulting from
publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity
expressly authorizes a noncompetitive procurement in response to a written request from the non-
Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate.”
Section 200.324(a) states that “The non-Federal entity must perform a cost or price analysis in
connection with every procurement action in excess of the Simplified Acquisition Threshold including
contract modifications. The method and degree of analysis is dependent on the facts surrounding the
particular procurement situation, but as a starting point, the non-Federal entity must make independent
estimates before receiving bids or proposals.” Cause: Staff turnover at the District and the need for the project to be completed by a certain date to avoid the
buses losing certification led to the lack of adequate records being maintained.
Effect: The District was unable to prove it was in compliance with the Uniform Guidance regarding open
competition on procurements.
Context: The CNG tank replacement needed to be completed by a certain timeframe in order for the buses to
be operational, so not every step was documented. The awarded contract was signed on the date of a Board
meeting, but the Board minutes did not document that this contract was reviewed nor approved by the Board.
Recommendation: We recommend the District establish a procurement folder on its server with subfolders for
each individual procurement where documentation of each procurement is maintained, including advertising of
the procurement, requests for proposals, proposals received, analysis of reasons for selecting the winning bid,
executed contract, certifications by contractor if not part of proposal or executed contract, management report to
board recommending which bid should be approved, board resolution approving the winning bid and for
contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid, including
reasons for not selecting the lowest bid if applicable. We also recommend training be provided to staff that
work on procurements of the requirements under Uniform Guidance Section 2 CFR 200.318 to 200.326.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-003 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to four separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed
route operating expenses that should have been reimbursed by a local match as required by other FTA
grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the
program.
Questioned Costs: $1,073,260.
Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed
route operating expenses that should have been reimbursed by a local match as the wrong federal
percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the
program.
Questioned Costs: $33,129.
Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for
Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the
program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine
overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and
conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.”
Cause: Several federal grants applied to these routes had local match requirements that were not captured by
the District’s review procedures due to recent staff turnover and lack of documented procedures to track
expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and
tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants
for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses
charged to programs to make sure the total expenses allocated agree to the total population of expenses
allocated.
Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied,
resulting in the overclaimed amounts cited above.
Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital
costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for
capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different
grants. There were potentially additional operating expenses under Paratransit services that could have offset
some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a
budget revision to allow for capital funding under the two related awards and is currently pending FTA
approval.
Recommendation: We recommend the District develop written procedures for allocating expenses to routes
and purposes used to claim expenses under federal grants and to track the different funding sources applied. A
summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate
tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance,
insurance, communications and other expenses allocated to the population of expenses in the general ledger.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-003 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to four separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed
route operating expenses that should have been reimbursed by a local match as required by other FTA
grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the
program.
Questioned Costs: $1,073,260.
Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed
route operating expenses that should have been reimbursed by a local match as the wrong federal
percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the
program.
Questioned Costs: $33,129.
Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for
Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the
program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine
overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and
conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.”
Cause: Several federal grants applied to these routes had local match requirements that were not captured by
the District’s review procedures due to recent staff turnover and lack of documented procedures to track
expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and
tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants
for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses
charged to programs to make sure the total expenses allocated agree to the total population of expenses
allocated.
Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied,
resulting in the overclaimed amounts cited above.
Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital
costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for
capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different
grants. There were potentially additional operating expenses under Paratransit services that could have offset
some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a
budget revision to allow for capital funding under the two related awards and is currently pending FTA
approval.
Recommendation: We recommend the District develop written procedures for allocating expenses to routes
and purposes used to claim expenses under federal grants and to track the different funding sources applied. A
summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate
tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance,
insurance, communications and other expenses allocated to the population of expenses in the general ledger.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.
Finding 2023-003 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to four separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed
route operating expenses that should have been reimbursed by a local match as required by other FTA
grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the
program.
Questioned Costs: $1,073,260.
Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed
route operating expenses that should have been reimbursed by a local match as the wrong federal
percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the
program.
Questioned Costs: $33,129.
Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for
Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the
program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine
overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and
conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program.
Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part
200, Subpart F (Uniform Guidance), Section 200.516.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.”
Cause: Several federal grants applied to these routes had local match requirements that were not captured by
the District’s review procedures due to recent staff turnover and lack of documented procedures to track
expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and
tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants
for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses
charged to programs to make sure the total expenses allocated agree to the total population of expenses
allocated.
Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied,
resulting in the overclaimed amounts cited above.
Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital
costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for
capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different
grants. There were potentially additional operating expenses under Paratransit services that could have offset
some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a
budget revision to allow for capital funding under the two related awards and is currently pending FTA
approval.
Recommendation: We recommend the District develop written procedures for allocating expenses to routes
and purposes used to claim expenses under federal grants and to track the different funding sources applied. A
summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate
tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance,
insurance, communications and other expenses allocated to the population of expenses in the general ledger.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.