FAC Explorer

Audit 300780

FY End
2023-06-30
Total Expended
$35.89M
Findings
2
Programs
8
Organization: City of Pittsburg (CA)
Year: 2023 Accepted: 2024-03-29
Auditor: Maze & Associates Accountancy Corporation

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
389895 2023-001 Significant Deficiency - L
966337 2023-001 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $23.28M Yes 1
21.027 Coronavirus State and Local Fiscal Recovery Funds $11.05M Yes 0
66.818 Brownfields Assessment and Cleanup Cooperative Agreements $248,769 - 0
14.218 Community Development Block Grants/entitlement Grants $180,529 - 0
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $72,532 - 0
20.205 Highway Planning and Construction $61,069 - 0
16.738 Edward Byrne Memorial Justice Assistance Grant Program $33,623 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $32,781 - 0

Contacts

Name Title Type
R442N7RAVF96 Laura Mendez Auditee
9252524872 Vikki Rodriguez Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 – REPORTING ENTITY Accounting Policies: Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the measurement focus applied. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. The proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Expenditures of Federal Awards reported on the Schedule are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for the City of Pittsburg, California (City) and its component units as disclosed in the notes to the Basic Financial Statements. The City was incorporated under the General Laws of the State of California and enjoys all the rights and privileges pertaining to such “General Law” cities. The City uses the Council/Manager form of government. The financial reporting entity consists of (a) the primary government, the City, (b) organizations for which the primary government is financially accountable, and (c) other organizations for which the primary government is not accountable, but for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the primary government’s exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The following component units are included in the basic financial statements of the City: o Housing Authority o Public Infrastructure Financing Authority o Pittsburg Power Company o Pittsburg Arts & Community Foundation o Southwest Pittsburg GHAD II
Title: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the measurement focus applied. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. The proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Expenditures of Federal Awards reported on the Schedule are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the measurement focus applied. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. The proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Expenditures of Federal Awards reported on the Schedule are recognized when incurred.
Title: NOTE 3 – INDIRECT COST ELECTION Accounting Policies: Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the measurement focus applied. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. The proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Expenditures of Federal Awards reported on the Schedule are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
Title: NOTE 4 – LOAN AND/OR LOAN GUARANTEE PROGRAM Accounting Policies: Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the measurement focus applied. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. The proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Expenditures of Federal Awards reported on the Schedule are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The following loan program balance and transaction relating to these programs are included in City’s basic financial statements. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding at June 30, 2023 consists of the following: Assistance Listing Number 14.218 - Community Development Block Grants/Entitlement Grants - Outstanding Balance at June 30, 2023 is $235,800.

Finding Details

Finding 2023-001
Criteria: 24 CFR Section 982 requires recipients of Section 8 Housing Choice Vouchers to submit data on monthly leasing activities and costs for the program via mandatory Public Housing Authority (PHA) reporting through the Voucher Management System (VMS). The Department of Housing and Urban Development (HUD) reviews VMS data and uses the data for a variety of major functions, including budget formulation, utilization analysis and funding allocations. Condition: During the current year, the City underwent a monitoring review by the grantor related to the VMS data submitted by the City to HUD for the City’s Section 8 Housing Choice Voucher Program (Program) for the time period of December 1, 2021 through November 30, 2022. The purpose of the review was to validate the Unit Months Leased (UML) and related Housing Assistance Payment (HAP) expenses certified as accurate by the PHA. The grantor issued a letter dated March 6, 2023 detailing the results of the review. The monitoring review results included one finding and three concerns: Finding 1: Multiple HAP and unit months leased (UML) categories could not be validated, adversely affecting validation of total HAP and total UML. Concern 1: The portable vouchers administered UML and HAP could not be validated. Concern 2: Vouchers issued but not under HAP contract on the last day of the month could not be validated. Concern 3: The PHA did not report the number of project-based vouchers (PBVs) under an agreement to enter into a HAP contract and not under a HAP contract. Concern 4: The number of PBVs under HAP contract and leased/not leased; and the total PBV HAP expenses could not be validated. Effect: The Housing Authority is not in compliance with the requirements set forth by 24 CFR Section 982 regarding VMS reporting. Cause: The Housing Authority’s re-inspection delays discussed above were due to understaffing at the Housing Authority during fiscal years 2022 and 2023. Furthermore, the Housing Authority converted its Housing software during fiscal year 2022. During the data migration process, certain leasing and contract documents did not transfer into the new Housing software and the Housing Authority no longer had access to certain leasing and contract documents. Recommendation: Although the City responded to the findings in its April 6, 2023 letter to the grantor with corrective action plans, the City should revise its policies and procedures, where applicable, to ensure that all VMS reporting is in compliance with the grant requirements and CFR. In addition, the City should continue to work with HUD to ensure compliance with all goals identified in the corrective action plan provided to HUD. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding 2023-001
Criteria: 24 CFR Section 982 requires recipients of Section 8 Housing Choice Vouchers to submit data on monthly leasing activities and costs for the program via mandatory Public Housing Authority (PHA) reporting through the Voucher Management System (VMS). The Department of Housing and Urban Development (HUD) reviews VMS data and uses the data for a variety of major functions, including budget formulation, utilization analysis and funding allocations. Condition: During the current year, the City underwent a monitoring review by the grantor related to the VMS data submitted by the City to HUD for the City’s Section 8 Housing Choice Voucher Program (Program) for the time period of December 1, 2021 through November 30, 2022. The purpose of the review was to validate the Unit Months Leased (UML) and related Housing Assistance Payment (HAP) expenses certified as accurate by the PHA. The grantor issued a letter dated March 6, 2023 detailing the results of the review. The monitoring review results included one finding and three concerns: Finding 1: Multiple HAP and unit months leased (UML) categories could not be validated, adversely affecting validation of total HAP and total UML. Concern 1: The portable vouchers administered UML and HAP could not be validated. Concern 2: Vouchers issued but not under HAP contract on the last day of the month could not be validated. Concern 3: The PHA did not report the number of project-based vouchers (PBVs) under an agreement to enter into a HAP contract and not under a HAP contract. Concern 4: The number of PBVs under HAP contract and leased/not leased; and the total PBV HAP expenses could not be validated. Effect: The Housing Authority is not in compliance with the requirements set forth by 24 CFR Section 982 regarding VMS reporting. Cause: The Housing Authority’s re-inspection delays discussed above were due to understaffing at the Housing Authority during fiscal years 2022 and 2023. Furthermore, the Housing Authority converted its Housing software during fiscal year 2022. During the data migration process, certain leasing and contract documents did not transfer into the new Housing software and the Housing Authority no longer had access to certain leasing and contract documents. Recommendation: Although the City responded to the findings in its April 6, 2023 letter to the grantor with corrective action plans, the City should revise its policies and procedures, where applicable, to ensure that all VMS reporting is in compliance with the grant requirements and CFR. In addition, the City should continue to work with HUD to ensure compliance with all goals identified in the corrective action plan provided to HUD. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.