FAC Explorer

Audit 302059

FY End
2023-06-30
Total Expended
$8.96M
Findings
2
Programs
6
Organization: City of La Verne (CA)
Year: 2023 Accepted: 2024-04-01
Auditor: Badawi & Associates CPAS

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
391598 2023-001 Significant Deficiency - L
968040 2023-001 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
95.001 High Intensity Drug Trafficking Areas Program $5.93M Yes 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.46M Yes 1
16.922 Equitable Sharing Program $1.30M - 0
21.016 Equitable Sharing $149,545 - 0
97.067 Homeland Security Grant Program $86,634 - 0
14.218 Community Development Block Grants/entitlement Grants $21,653 - 0

Contacts

Name Title Type
ES5SZUG8ZHL8 Christy Lopez Auditee
9095968762 Ahmed Badawi Auditor
No contacts on file

Notes to SEFA

Title: Reporting Entity Accounting Policies: Funds received under the various grant programs have been recorded within the special revenue, internal service, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the special and capital projects funds and full accrual basis for internal service fund. Expenditures of federal awards reported on the Schedule of Expenditures of Federal Awards (Schedule) are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis indirect cost rate. The financial reporting entity, as defined by Governmental Accounting Standards Board (GASB), consists of the primary government, which is the City of La Verne (City), organizations for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for the City as disclosed in the notes to the Basic Financial Statements.
Title: Basis of Accounting Accounting Policies: Funds received under the various grant programs have been recorded within the special revenue, internal service, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the special and capital projects funds and full accrual basis for internal service fund. Expenditures of federal awards reported on the Schedule of Expenditures of Federal Awards (Schedule) are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis indirect cost rate. Funds received under the various grant programs have been recorded within the special revenue, internal service, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the special and capital projects funds and full accrual basis for internal service fund. Expenditures of federal awards reported on the Schedule of Expenditures of Federal Awards (Schedule) are recognized when incurred.
Title: Relationship of Schedule of Expenditures of Federal Awards to Financial Statements Accounting Policies: Funds received under the various grant programs have been recorded within the special revenue, internal service, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the special and capital projects funds and full accrual basis for internal service fund. Expenditures of federal awards reported on the Schedule of Expenditures of Federal Awards (Schedule) are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis indirect cost rate. The accompanying Schedule presents the activity of all federal financial assistance programs of the City. Federal financial assistance received directly from federal agencies as well as federal financial assistance passed through the State of California is included in the Schedule. The Schedule was prepared only from the accounts of various grant programs and, therefore, does not present the financial position or results of operations of the City.
Title: Pass-Through Entities’ Identifying Number Accounting Policies: Funds received under the various grant programs have been recorded within the special revenue, internal service, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the special and capital projects funds and full accrual basis for internal service fund. Expenditures of federal awards reported on the Schedule of Expenditures of Federal Awards (Schedule) are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis indirect cost rate. When federal awards were received from a pass-through entity, the Schedule 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: Indirect Costs Accounting Policies: Funds received under the various grant programs have been recorded within the special revenue, internal service, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the special and capital projects funds and full accrual basis for internal service fund. Expenditures of federal awards reported on the Schedule of Expenditures of Federal Awards (Schedule) are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis indirect cost rate. The City did not elect to use the 10% de minimis indirect cost rate.
Title: Subrecipients Accounting Policies: Funds received under the various grant programs have been recorded within the special revenue, internal service, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the special and capital projects funds and full accrual basis for internal service fund. Expenditures of federal awards reported on the Schedule of Expenditures of Federal Awards (Schedule) are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis indirect cost rate. During the fiscal year ended June 30, 2023, the City disbursed $8,000 of federal awards to a subrecipient for the Community Development Block Grants/Entitlement Grants (ALN No. 14.218).

Finding Details

Finding 2023-001
Criteria: Per the State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, Project and Expenditure Reports (P&E Reports) required by the program include providing cumulative obligations and expenditures. Internal controls over reporting compliance should ensure accurate, complete, and timely submission of all required reports. Condition: The City did not submit the annual project and expenditure report timely. Cause: The City experienced technical issues in accessing the Department of Treasury system to submit the required report. The City contacted the Department of Treasury regarding the issue but it was not resolved prior to the due date of the report. Effect: The City is not in compliance with the reporting requirement of the grant Recommendation: The City should address those technical issues early to ensure the report is submitted timely. Management’s Response: Regarding the failure to file the required report timely for the Coronavirus State And Local Fiscal Recovery Funds, the City acknowledges the compliance issue and its potential impact on our obligations under the federal award program. The City has rectified the issue by ensuring that current employees are listed as contacts. When the lack of access was discovered, the City made efforts to seek assistance, including sending emails to three separate contact addresses before receiving a response roughly 6 weeks later. No phone numbers were available, and email was the only form of contact. To prevent similar occurrences, the City will take proactive measures to address technical issues that may impede timely submissions. Additionally, we will update contacts within the necessary agency promptly when staffing changes occur and work closely with relevant federal agencies to resolve technical issues and ensure compliance with reporting requirements.
Finding 2023-001
Criteria: Per the State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, Project and Expenditure Reports (P&E Reports) required by the program include providing cumulative obligations and expenditures. Internal controls over reporting compliance should ensure accurate, complete, and timely submission of all required reports. Condition: The City did not submit the annual project and expenditure report timely. Cause: The City experienced technical issues in accessing the Department of Treasury system to submit the required report. The City contacted the Department of Treasury regarding the issue but it was not resolved prior to the due date of the report. Effect: The City is not in compliance with the reporting requirement of the grant Recommendation: The City should address those technical issues early to ensure the report is submitted timely. Management’s Response: Regarding the failure to file the required report timely for the Coronavirus State And Local Fiscal Recovery Funds, the City acknowledges the compliance issue and its potential impact on our obligations under the federal award program. The City has rectified the issue by ensuring that current employees are listed as contacts. When the lack of access was discovered, the City made efforts to seek assistance, including sending emails to three separate contact addresses before receiving a response roughly 6 weeks later. No phone numbers were available, and email was the only form of contact. To prevent similar occurrences, the City will take proactive measures to address technical issues that may impede timely submissions. Additionally, we will update contacts within the necessary agency promptly when staffing changes occur and work closely with relevant federal agencies to resolve technical issues and ensure compliance with reporting requirements.