FAC Explorer

Audit 300908

FY End
2023-06-30
Total Expended
$8.27M
Findings
4
Programs
5
Organization: City of Willows (CA)
Year: 2023 Accepted: 2024-03-29
Auditor: Smith and Newell CPAS

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
390054 2023-002 - Yes J
390055 2023-001 - Yes J
966496 2023-002 - Yes J
966497 2023-001 - Yes J

Programs

ALN Program Spent Major Findings
14.239 Home Investment Partnerships Program $5.08M Yes 1
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $2.01M Yes 1
97.044 Assistance to Firefighters Grant $763,848 Yes 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $282,130 - 0
10.766 Community Facilities Loans and Grants $33,154 - 0

Contacts

Name Title Type
KHFZM43KRD53 Marti Brown Auditee
5309347041 Norman Newell, CPA Auditor
No contacts on file

Notes to SEFA

Title: 1. REPORTING ENTITY Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Willows, California (City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the Schedule of Expenditures of Federal Awards. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Willows, California (City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the Schedule of Expenditures of Federal Awards. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the City.
Title: 2. BASIS OF ACCOUNTING Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Willows, California (City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the Schedule of Expenditures of Federal Awards. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. 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 accompanying Schedule of Expenditures of Federal Awards, is presented using the modified accrual basis of accounting for grants accounted for in the governmental fund types and the accrual basis of accounting for grants accounted for in the proprietary fund types, as described in the notes to the City financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursements. In addition, the outstanding balance of prior years’ loans that have significant continuing compliance requirements have been included in total federal expenditures.
Title: 3. INDIRECT COST RATE Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Willows, California (City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the Schedule of Expenditures of Federal Awards. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: 4. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Willows, California (City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the Schedule of Expenditures of Federal Awards. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The amounts reported in the accompanying Schedule of Expenditures of Federal Awards agree or can be reconciled with amounts reported in the related federal financial assistance reports.
Title: 5. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Willows, California (City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the Schedule of Expenditures of Federal Awards. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The amounts reported in the accompanying Schedule of Expenditures of Federal Awards agree or can be reconciled with amounts reported in the City’s basic financial statements.
Title: 6. PASS-THROUGH ENTITIES' INDENTIFYING NUMBER Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Willows, California (City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the Schedule of Expenditures of Federal Awards. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. When federal awards were received from a pass-through entity, the Schedule of Expenditures of Federal Awards shows, if available, the identifying number assigned by the pass-through entity. When no identifying number is shown, the City determined that no identifying number is assigned for the program or the City was unable to obtain an identifying number from the pass-through entity.
Title: 7. LOANS WITH CONTINUING COMPLIANCE REQUIREMENTS Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Willows, California (City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the Schedule of Expenditures of Federal Awards. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The City participates in certain federal award programs that sponsor revolving loan programs, which are administered by the City. These programs require servicing arrangements with the City. The funds are returned to the programs upon repayment of the principal and interest. In accordance with Section 200.510 of the Uniform Guidance, the City has reported the outstanding balance of loans from previous years that have significant continuing compliance requirements as of June 30, 2022, along with the value of total outstanding and new loans made during the current year. The programs listed below had the following aggregate, federally funded loans outstanding at June 30, 2023: COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII (14.228) - Balances outstanding at the end of the audit period were $1,933,452. HOME PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were $5,076,601.

Finding Details

Finding 2023-002
Name: Community Development Block Grant/State's Program and Non-Entitlement Grants in Hawaii CFDA #: 14.228 Federal Grantor: U.S. Department of Housing and Urban Development Pass-Through: State Department of Housing and Community Development Award No.: Various Year: 2022/2023 Compliance Requirement: Program Income Criteria: The CDBG Annual Performance Report was required to be filed with the State Department of Housing and Community Development by September 30, 2023. Condition: The City has not filed the CDBG Annual Performance Report by the required date. Cause: There was not adequate monitoring of CDBG filing requirements related to the CDBG Annual Performance Report to ensure that it was filed by the required due date. Effect: The City did not file the CDBG Annual Performance Report by the required due date. Questioned Costs: No questioned costs were identified as a result of our procedures. Context: The CDBG Annual Performance Report was unavailable for review. Repeat Finding: This is a repeat of prior year finding 2022-002. Recommendation: We recommend that the City develop procedures to ensure that the CDBG Annual Performance Report is filed by the required due date. Views of Responsible Officials and Planned Corrective Action: Refer to separate Management's Corrective Action Plan for views of responsible officials and management's responses.
Finding 2023-001
Name: Home Investment Partnership Program CFDA #: 14.239 Federal Grantor: U.S. Department of Housing and Urban Development Pass-Through: State Department of Housing and Community Development Award No.: Various Year: 2022/2023 Compliance Requirement: Program Income Criteria: The loan documents require that recipients of HOME loans continue to own and reside in their homes that were acquired using HOME funding. Condition: During our test of loan monitoring procedures, we noted that all of the home loans tested did not include verification documentation regarding loan recipients were the home owners during the 2022-2023 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with HOME funding was missing. Cause: The City did not have formalized loan monitoring policies and procedures in place to ensure that loans were monitored on an annual basis in accordance with the loan agreements. Effect: Documentation was not provided to verify that the loan recipients were in compliance with the requirements of their loan agreements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context: We randomly selected one of the two HOME loan recipients to test loan monitoring procedures. Sampling was a statistically valid sample. We noted that the recipient was not in compliance with the HOME loan agreements. Repeat Finding: This is a repeat of prior year finding 2022-001. Recommendation: We recommend that the City develop and maintain policies and procedures regarding loan monitoring and ensure that all documentation of loan monitoring be maintained on an annual basis. Views of Responsible Officials and Planned Corrective Action: Refer to separate Management's Corrective Action Plan for views of responsible officials and management's responses.
Finding 2023-002
Name: Community Development Block Grant/State's Program and Non-Entitlement Grants in Hawaii CFDA #: 14.228 Federal Grantor: U.S. Department of Housing and Urban Development Pass-Through: State Department of Housing and Community Development Award No.: Various Year: 2022/2023 Compliance Requirement: Program Income Criteria: The CDBG Annual Performance Report was required to be filed with the State Department of Housing and Community Development by September 30, 2023. Condition: The City has not filed the CDBG Annual Performance Report by the required date. Cause: There was not adequate monitoring of CDBG filing requirements related to the CDBG Annual Performance Report to ensure that it was filed by the required due date. Effect: The City did not file the CDBG Annual Performance Report by the required due date. Questioned Costs: No questioned costs were identified as a result of our procedures. Context: The CDBG Annual Performance Report was unavailable for review. Repeat Finding: This is a repeat of prior year finding 2022-002. Recommendation: We recommend that the City develop procedures to ensure that the CDBG Annual Performance Report is filed by the required due date. Views of Responsible Officials and Planned Corrective Action: Refer to separate Management's Corrective Action Plan for views of responsible officials and management's responses.
Finding 2023-001
Name: Home Investment Partnership Program CFDA #: 14.239 Federal Grantor: U.S. Department of Housing and Urban Development Pass-Through: State Department of Housing and Community Development Award No.: Various Year: 2022/2023 Compliance Requirement: Program Income Criteria: The loan documents require that recipients of HOME loans continue to own and reside in their homes that were acquired using HOME funding. Condition: During our test of loan monitoring procedures, we noted that all of the home loans tested did not include verification documentation regarding loan recipients were the home owners during the 2022-2023 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with HOME funding was missing. Cause: The City did not have formalized loan monitoring policies and procedures in place to ensure that loans were monitored on an annual basis in accordance with the loan agreements. Effect: Documentation was not provided to verify that the loan recipients were in compliance with the requirements of their loan agreements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context: We randomly selected one of the two HOME loan recipients to test loan monitoring procedures. Sampling was a statistically valid sample. We noted that the recipient was not in compliance with the HOME loan agreements. Repeat Finding: This is a repeat of prior year finding 2022-001. Recommendation: We recommend that the City develop and maintain policies and procedures regarding loan monitoring and ensure that all documentation of loan monitoring be maintained on an annual basis. Views of Responsible Officials and Planned Corrective Action: Refer to separate Management's Corrective Action Plan for views of responsible officials and management's responses.