Audit 299850

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-003 Program: Nationally Significant Freight and Highway Projects Financial Assistance Listing Number: 20.934 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: 2019 Grant Award Number: INFRALUL-5459(031) Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We identified nine (9) instances in which the City did not retain evidence to document the individual who reviewed the certified payroll for each week in which work was performed by construction contractors. Cause: The City’s procedures did not include documenting the review of the certified payroll received. Effect: Ineffective controls over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The population consisted of forty-nine (49) certified payrolls required during the fiscal year. A sample of nine (9) were selected for testwork. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish controls to ensure there are procedures in place requiring the documented review of the certified payroll submitted by the construction contractors. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-004 Program: Nationally Significant Freight and Highway Projects Financial Assistance Listing Number: 20.934 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: 2019 Grant Award Number: INFRALUL-5459(031) Compliance Requirements: Cash Management / Matching, Earmarking, Level of Effort Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over preparation of reimbursement requests. Condition: We identified two (2) instances in which the City did not retain evidence to document the individual who reviewed and approved reimbursement requests and matching percentages prior to being submitted to the granting agency. We noted one individual prepares the reimbursement request, calculates the matching percentages, and submits the reimbursements requests. Cause: The City's procedures did not include documenting the management review and approval of the reimbursement requests and matching percentages prior to submission to the granting agency. Effect: Ineffective internal controls over these areas of compliance could result in reimbursement requests being inaccurate or incomplete prior to submission to the granting agency. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was not used. We selected all reimbursement requests (3) for testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed the reimbursement requests prior to submission. View of Responsible Official and Planned Corrective Actions: See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-002 Program: Community Development Block Grants/Entitlement Grants Cluster Financial Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Award Year: All Grant Award Number: All Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed and approved the required reports prior to submission. This consisted of two (2) financial reports and one (1) special report for the Federal Funding Accountability and Transparency Act (FFATA). Cause: The City's procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: FFATA - Sampling was not used. We selected all FFATA reports (1) for testing. The condition noted above was identified during our procedures over reporting testing. Cash on Hand Reports - Sampling was used. We selected two (2) of four (4) Cash on Hand reports for testing. The condition noted above was identified during our procedures over reporting testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-001 Program: CDBG - Entitlement Grants Cluster / Highway Planning and Construction / Nationally Significant Freight and Highway Project Funds Federal Financial Assistance Listing No.: 14.218 / 20.205 / 20.934 Federal Agency: U.S. Department of Housing and Urban Development / U.S. Department of Transportation Direct Award: U.S. Department of Housing and Urban Development Pass-through: California Department of Transportation in relation to the Highway Planning and Construction and Nationally Significant Freight and Highway Project Funds Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the City) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the City must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the CDBG - Entitlement Grants Cluster, Highway Planning and Construction, and Nationally Significant Freight and Highway Project Funds, we noted the following: 1. The City did not properly identify the amount expended for the CDBG - Entitlement Grants Cluster, AL No. 14.218. The expenditures reported by the City were understated by $154,071. 2. The City did not properly identify the amount expended for the Highway Planning and Construction, AL No. 20.205. The expenditures reported by the City were overstated by $5,098,179. 3. The City did not properly classify the amount expended for the Nationally Significant Freight and Highway Project Funds, AL No. 20.934. The expenditures reported by the City were understated by $2,769,610. Cause: As a result, the City lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the City’s processes for recording and tracking expenditures of federal awards are not designed so that expenditures are identified when incurred and assigned to the correct program name or cluster in a complete and timely manner. Effect: The SEFA, as originally presented, was overstated by $2,174,498. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish policies and implement internal controls to ensure all federal expenditures are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-003 Program: Nationally Significant Freight and Highway Projects Financial Assistance Listing Number: 20.934 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: 2019 Grant Award Number: INFRALUL-5459(031) Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We identified nine (9) instances in which the City did not retain evidence to document the individual who reviewed the certified payroll for each week in which work was performed by construction contractors. Cause: The City’s procedures did not include documenting the review of the certified payroll received. Effect: Ineffective controls over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The population consisted of forty-nine (49) certified payrolls required during the fiscal year. A sample of nine (9) were selected for testwork. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish controls to ensure there are procedures in place requiring the documented review of the certified payroll submitted by the construction contractors. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

2023-004 Program: Nationally Significant Freight and Highway Projects Financial Assistance Listing Number: 20.934 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: 2019 Grant Award Number: INFRALUL-5459(031) Compliance Requirements: Cash Management / Matching, Earmarking, Level of Effort Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over preparation of reimbursement requests. Condition: We identified two (2) instances in which the City did not retain evidence to document the individual who reviewed and approved reimbursement requests and matching percentages prior to being submitted to the granting agency. We noted one individual prepares the reimbursement request, calculates the matching percentages, and submits the reimbursements requests. Cause: The City's procedures did not include documenting the management review and approval of the reimbursement requests and matching percentages prior to submission to the granting agency. Effect: Ineffective internal controls over these areas of compliance could result in reimbursement requests being inaccurate or incomplete prior to submission to the granting agency. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was not used. We selected all reimbursement requests (3) for testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed the reimbursement requests prior to submission. View of Responsible Official and Planned Corrective Actions: See separate corrective action plan.