FAC Explorer

Audit 299391

FY End
2023-06-30
Total Expended
$5.93M
Findings
4
Programs
13
Organization: Cit of Richmond (CA)
Year: 2023 Accepted: 2024-03-28
Auditor: Ahmed Badawi

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
387073 2023-001 Significant Deficiency - I
387074 2023-002 Significant Deficiency - L
963515 2023-001 Significant Deficiency - I
963516 2023-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.44M Yes 1
12.612 Community Base Reuse Plans, Project Grant/cooperative Agreement $504,575 - 0
17.277 Workforce Investment Act (wia) National Emergency Grants $458,623 - 0
17.258 Wia Adult Program $313,062 Yes 0
17.259 Wia Youth Activities $240,186 Yes 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $210,368 - 0
17.274 Youthbuild $168,185 - 0
66.815 Environmental Workforce Development and Job Training Cooperative Agreements $75,498 - 0
84.002A Workforce Innovation and Opportunity $50,944 - 0
17.278 Wia Dislocated Worker Formula Grants $42,518 Yes 0
15.904 Historic Preservation Fund Grants-in-Aid $17,500 - 0
32.009 Emergency Connectivity Fund Program $14,033 - 0
20.205 Highway Planning and Construction $1,932 - 0

Contacts

Name Title Type
W856SVG77LP8 Jerry Chak Auditee
5106206569 Ahmed Badawi Auditor
No contacts on file

Notes to SEFA

Title: Reporting Entity Accounting Policies: Funds received under the various grant programs have been recorded within the general, special revenue, capital projects, and enterprise funds of the City. The City utilizes the modified accrual basis of accounting for the general, special revenue, and capital project funds. The accrual basis of accounting is used for the enterprise fund. The accompanying Schedule of Expenditures of Federal Awards (Schedule) is presented in accordance with the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis indirect cost rate. The financial reporting entity, as defined by Governmental Accounting Standards Board (GASB), consists of the primary government, which is the City of Richmond (City), organizations for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for the City and its component units as disclosed in the notes to the Basic Financial Statements, except for federal awards of the Richmond Housing Authority. Federal awards expended by this entity, if any, are excluded from the Schedule and are subject to a separate Single Audit.
Title: Summary of Significant Accounting Policies Accounting Policies: Funds received under the various grant programs have been recorded within the general, special revenue, capital projects, and enterprise funds of the City. The City utilizes the modified accrual basis of accounting for the general, special revenue, and capital project funds. The accrual basis of accounting is used for the enterprise fund. The accompanying Schedule of Expenditures of Federal Awards (Schedule) is presented in accordance with the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis indirect cost rate. Basis of Accounting - Funds received under the various grant programs have been recorded within the general, special revenue, capital projects, and enterprise funds of the City. The City utilizes the modified accrual basis of accounting for the general, special revenue, and capital project funds. The accrual basis of accounting is used for the enterprise fund. The accompanying Schedule of Expenditures of Federal Awards (Schedule) is presented in accordance with the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Schedule of Expenditures of Federal Awards - The accompanying Schedule presents the activity of all Federal financial assistance programs of the City. Federal financial assistance received directly from Federal agencies as well as Federal financial assistance passed through the State of California and other agencies are included in the Schedule. The Schedule of Expenditures of Federal Awards was prepared from only the accounts of various grant programs and, therefore, does not present the financial position or results of operations of the City.
Title: Indirect Costs Accounting Policies: Funds received under the various grant programs have been recorded within the general, special revenue, capital projects, and enterprise funds of the City. The City utilizes the modified accrual basis of accounting for the general, special revenue, and capital project funds. The accrual basis of accounting is used for the enterprise fund. The accompanying Schedule of Expenditures of Federal Awards (Schedule) is presented in accordance with the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis indirect cost rate. The City did not elect to use the 10% de minimis indirect cost rate.

Finding Details

Finding 2023-001
SA2023-001: Lack of Verification for Suspension or Debarment Assistance Listing Numbers: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: U.S. Department of Treasury Criteria: Per 2 CFR section 180.300, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition: The City failed to provide evidence demonstrating the verification of HR&A Advisors, Inc's eligibility before entering into a procurement contract. Cause: The absence of proof indicating the verification of HR&A Advisors, Inc's eligibility for participation in the transaction can be attributed to inadequate internal controls and oversight mechanisms within the City's procurement processes. It appears that the City's procedures did not sufficiently address the requirement for verifying the suspension or debarment status of potential contractors. Context and Effect: Without verification process in place, the City may inadvertently enter into contracts with ineligible parties. Recommendation: The City should strengthen internal controls and procedural guidelines related to procurement processes to explicitly include the verification of suspension or debarment status for potential contractors, aligning with the requirements of 2 CFR section 180.300. Management Response:
Finding 2023-002
SA2023-002: Failure to Comply with Reporting Requirements Assistance Listing Numbers: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: U.S. Department of Treasury Criteria: The grant requires the submitted quarterly reports to be agreed to the City’s accounting records, ensuring the accuracy and completeness of the reports. Condition: On the Project and Expenditure Report for Q2 2023 (April-June), the North Richmond Pump Station total cumulative expenditures cannot be traced to the City’s accounting records. Cause: The City modified the allocation of the funds subsequent to the submission the report. Context and Effect: The discrepancy between the report and the accounting record introduces a risk of misrepresentation and misinterpretation of financial data. The modified use of funds without corresponding adjustments in accounting records may lead to misunderstandings in the oversight entities. Recommendation: We recommend the City update the report timely to reflect the revised allocation of the funds, ensuring the consistency between the Project and Expenditure Report and the financial records. Management Response: The City will address the misalignment by reporting the revised and accurate information in the upcoming quarterly report.
Finding 2023-001
SA2023-001: Lack of Verification for Suspension or Debarment Assistance Listing Numbers: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: U.S. Department of Treasury Criteria: Per 2 CFR section 180.300, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition: The City failed to provide evidence demonstrating the verification of HR&A Advisors, Inc's eligibility before entering into a procurement contract. Cause: The absence of proof indicating the verification of HR&A Advisors, Inc's eligibility for participation in the transaction can be attributed to inadequate internal controls and oversight mechanisms within the City's procurement processes. It appears that the City's procedures did not sufficiently address the requirement for verifying the suspension or debarment status of potential contractors. Context and Effect: Without verification process in place, the City may inadvertently enter into contracts with ineligible parties. Recommendation: The City should strengthen internal controls and procedural guidelines related to procurement processes to explicitly include the verification of suspension or debarment status for potential contractors, aligning with the requirements of 2 CFR section 180.300. Management Response:
Finding 2023-002
SA2023-002: Failure to Comply with Reporting Requirements Assistance Listing Numbers: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: U.S. Department of Treasury Criteria: The grant requires the submitted quarterly reports to be agreed to the City’s accounting records, ensuring the accuracy and completeness of the reports. Condition: On the Project and Expenditure Report for Q2 2023 (April-June), the North Richmond Pump Station total cumulative expenditures cannot be traced to the City’s accounting records. Cause: The City modified the allocation of the funds subsequent to the submission the report. Context and Effect: The discrepancy between the report and the accounting record introduces a risk of misrepresentation and misinterpretation of financial data. The modified use of funds without corresponding adjustments in accounting records may lead to misunderstandings in the oversight entities. Recommendation: We recommend the City update the report timely to reflect the revised allocation of the funds, ensuring the consistency between the Project and Expenditure Report and the financial records. Management Response: The City will address the misalignment by reporting the revised and accurate information in the upcoming quarterly report.