FAC Explorer

Audit 303493

FY End
2023-06-30
Total Expended
$3.82M
Findings
6
Programs
4
Organization: City of Dinuba (CA)
Year: 2023 Accepted: 2024-04-15
Auditor: Badawi & Associates CPAS

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
393173 2023-001 Significant Deficiency - I
393174 2023-001 Significant Deficiency - I
393175 2023-001 Significant Deficiency - I
969615 2023-001 Significant Deficiency - I
969616 2023-001 Significant Deficiency - I
969617 2023-001 Significant Deficiency - I

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $2.65M Yes 0
20.205 Highway Planning and Construction $694,116 Yes 1
14.239 Home Investment Partnerships Program $2,344 - 0
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $10 - 0

Contacts

Name Title Type
JC5EX7DJSTZ9 Karina Solis Auditee
5595915900 Ahmed Badawi Auditor
No contacts on file

Notes to SEFA

Title: Reporting Entity Accounting Policies: Funds received under the various grant programs have been recorded within the general, special revenue, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the general, special revenue, and capital projects funds. 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 of Dinuba is a political subdivision provided for by the General Law of the State of California and, as such, can exercise the powers specified by the Constitution and laws of the State of California. The City was incorporated in 1906 as a general law city. On June 4, 1994, the voters of the City approved a Charter which gives the City Council greater self-rule, and the Charter was accepted by the Secretary of State on July 7, 1994. The City operates under a council-manager form of government. The City of Dinuba is a municipal corporation governed by an elected five-member City Council who, in turn, elects one of its members to serve as the Mayor. As required by accounting principles generally accepted in the United States of America, these financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data from these units are combined with data of the City. The blended component units have a June 30 fiscal year end to coincide with the City's. Blended Component Unit - In addition, in May 1994, the Dinuba Financing Authority (Authority) was formed in order to provide a funding vehicle for necessary street improvements within the City. The governing board of the Dinuba Financing Authority is the City Council, and the City Manager acts as Executive Director. A separate financial report is not being issued for the Dinuba Financing Authority. The activity of the Authority is reported in the Financing Authority Debt Service Fund of the City.
Title: Basis of Accounting Accounting Policies: Funds received under the various grant programs have been recorded within the general, special revenue, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the general, special revenue, and capital projects funds. 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 general, special revenue, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the general, special revenue, and capital projects funds. 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 general, special revenue, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the general, special revenue, and capital projects funds. 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 general, special revenue, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the general, special revenue, and capital projects funds. 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 general, special revenue, and capital projects funds of the City. The City utilizes the modified accrual basis of accounting for the general, special revenue, and capital projects funds. 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.

Finding Details

Finding 2023-001
Criteria: The City is responsible for the fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. An effective internal control system over financial closing and reporting provides reasonable assurance for the safeguarding of assets, the reliability of financial information, and compliance with laws and regulations. Condition: The City restated its previously issued financial statements to correct several accounting errors relating to capital assets, OPEB and unreconciled opening balances in the enterprise funds. Cause: The City’s internal controls over financial reporting did not identify the misstatements in a timely manner resulting in restatements. Effect: The City’s previously issued financial statements were not fairly stated in conformity with accounting principles generally accepted in the United States of America. Accounting records may be inaccurate, incomplete, or not adequately supported. Issued financial statements may be inaccurate and may require restatements in the future. Recommendation: We recommend that the City enhance its internal control over financial reporting to ensure complete and accurate financial reporting. The City can accomplish this by expanding its year-end closing procedures to ensure that all non-routine and nonsystematic transactions are accounted for, the appropriate accounting standards are applied, and transactions are accounted for in the proper period. In addition, we recommend that the City develop procedures to ensure that journal entries are effectively reviewed and supported and that closing procedures incorporate all needed closing entries. Management Response: The City has recorded prior period adjustments to properly account for financial transactions in the correct reporting period, particularly in entries related to Capital Assets. The City recognizes the need for these transactions to be recorded in the appropriate period; however, in order to accurately record the transactions, prior period adjustments were necessary. Staff will take into careful consideration future prior period adjustments and will issue them only as absolutely necessary for accurate reporting.
Finding 2023-001
Criteria: The City is responsible for the fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. An effective internal control system over financial closing and reporting provides reasonable assurance for the safeguarding of assets, the reliability of financial information, and compliance with laws and regulations. Condition: The City restated its previously issued financial statements to correct several accounting errors relating to capital assets, OPEB and unreconciled opening balances in the enterprise funds. Cause: The City’s internal controls over financial reporting did not identify the misstatements in a timely manner resulting in restatements. Effect: The City’s previously issued financial statements were not fairly stated in conformity with accounting principles generally accepted in the United States of America. Accounting records may be inaccurate, incomplete, or not adequately supported. Issued financial statements may be inaccurate and may require restatements in the future. Recommendation: We recommend that the City enhance its internal control over financial reporting to ensure complete and accurate financial reporting. The City can accomplish this by expanding its year-end closing procedures to ensure that all non-routine and nonsystematic transactions are accounted for, the appropriate accounting standards are applied, and transactions are accounted for in the proper period. In addition, we recommend that the City develop procedures to ensure that journal entries are effectively reviewed and supported and that closing procedures incorporate all needed closing entries. Management Response: The City has recorded prior period adjustments to properly account for financial transactions in the correct reporting period, particularly in entries related to Capital Assets. The City recognizes the need for these transactions to be recorded in the appropriate period; however, in order to accurately record the transactions, prior period adjustments were necessary. Staff will take into careful consideration future prior period adjustments and will issue them only as absolutely necessary for accurate reporting.
Finding 2023-001
Criteria: The City is responsible for the fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. An effective internal control system over financial closing and reporting provides reasonable assurance for the safeguarding of assets, the reliability of financial information, and compliance with laws and regulations. Condition: The City restated its previously issued financial statements to correct several accounting errors relating to capital assets, OPEB and unreconciled opening balances in the enterprise funds. Cause: The City’s internal controls over financial reporting did not identify the misstatements in a timely manner resulting in restatements. Effect: The City’s previously issued financial statements were not fairly stated in conformity with accounting principles generally accepted in the United States of America. Accounting records may be inaccurate, incomplete, or not adequately supported. Issued financial statements may be inaccurate and may require restatements in the future. Recommendation: We recommend that the City enhance its internal control over financial reporting to ensure complete and accurate financial reporting. The City can accomplish this by expanding its year-end closing procedures to ensure that all non-routine and nonsystematic transactions are accounted for, the appropriate accounting standards are applied, and transactions are accounted for in the proper period. In addition, we recommend that the City develop procedures to ensure that journal entries are effectively reviewed and supported and that closing procedures incorporate all needed closing entries. Management Response: The City has recorded prior period adjustments to properly account for financial transactions in the correct reporting period, particularly in entries related to Capital Assets. The City recognizes the need for these transactions to be recorded in the appropriate period; however, in order to accurately record the transactions, prior period adjustments were necessary. Staff will take into careful consideration future prior period adjustments and will issue them only as absolutely necessary for accurate reporting.
Finding 2023-001
Criteria: The City is responsible for the fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. An effective internal control system over financial closing and reporting provides reasonable assurance for the safeguarding of assets, the reliability of financial information, and compliance with laws and regulations. Condition: The City restated its previously issued financial statements to correct several accounting errors relating to capital assets, OPEB and unreconciled opening balances in the enterprise funds. Cause: The City’s internal controls over financial reporting did not identify the misstatements in a timely manner resulting in restatements. Effect: The City’s previously issued financial statements were not fairly stated in conformity with accounting principles generally accepted in the United States of America. Accounting records may be inaccurate, incomplete, or not adequately supported. Issued financial statements may be inaccurate and may require restatements in the future. Recommendation: We recommend that the City enhance its internal control over financial reporting to ensure complete and accurate financial reporting. The City can accomplish this by expanding its year-end closing procedures to ensure that all non-routine and nonsystematic transactions are accounted for, the appropriate accounting standards are applied, and transactions are accounted for in the proper period. In addition, we recommend that the City develop procedures to ensure that journal entries are effectively reviewed and supported and that closing procedures incorporate all needed closing entries. Management Response: The City has recorded prior period adjustments to properly account for financial transactions in the correct reporting period, particularly in entries related to Capital Assets. The City recognizes the need for these transactions to be recorded in the appropriate period; however, in order to accurately record the transactions, prior period adjustments were necessary. Staff will take into careful consideration future prior period adjustments and will issue them only as absolutely necessary for accurate reporting.
Finding 2023-001
Criteria: The City is responsible for the fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. An effective internal control system over financial closing and reporting provides reasonable assurance for the safeguarding of assets, the reliability of financial information, and compliance with laws and regulations. Condition: The City restated its previously issued financial statements to correct several accounting errors relating to capital assets, OPEB and unreconciled opening balances in the enterprise funds. Cause: The City’s internal controls over financial reporting did not identify the misstatements in a timely manner resulting in restatements. Effect: The City’s previously issued financial statements were not fairly stated in conformity with accounting principles generally accepted in the United States of America. Accounting records may be inaccurate, incomplete, or not adequately supported. Issued financial statements may be inaccurate and may require restatements in the future. Recommendation: We recommend that the City enhance its internal control over financial reporting to ensure complete and accurate financial reporting. The City can accomplish this by expanding its year-end closing procedures to ensure that all non-routine and nonsystematic transactions are accounted for, the appropriate accounting standards are applied, and transactions are accounted for in the proper period. In addition, we recommend that the City develop procedures to ensure that journal entries are effectively reviewed and supported and that closing procedures incorporate all needed closing entries. Management Response: The City has recorded prior period adjustments to properly account for financial transactions in the correct reporting period, particularly in entries related to Capital Assets. The City recognizes the need for these transactions to be recorded in the appropriate period; however, in order to accurately record the transactions, prior period adjustments were necessary. Staff will take into careful consideration future prior period adjustments and will issue them only as absolutely necessary for accurate reporting.
Finding 2023-001
Criteria: The City is responsible for the fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. An effective internal control system over financial closing and reporting provides reasonable assurance for the safeguarding of assets, the reliability of financial information, and compliance with laws and regulations. Condition: The City restated its previously issued financial statements to correct several accounting errors relating to capital assets, OPEB and unreconciled opening balances in the enterprise funds. Cause: The City’s internal controls over financial reporting did not identify the misstatements in a timely manner resulting in restatements. Effect: The City’s previously issued financial statements were not fairly stated in conformity with accounting principles generally accepted in the United States of America. Accounting records may be inaccurate, incomplete, or not adequately supported. Issued financial statements may be inaccurate and may require restatements in the future. Recommendation: We recommend that the City enhance its internal control over financial reporting to ensure complete and accurate financial reporting. The City can accomplish this by expanding its year-end closing procedures to ensure that all non-routine and nonsystematic transactions are accounted for, the appropriate accounting standards are applied, and transactions are accounted for in the proper period. In addition, we recommend that the City develop procedures to ensure that journal entries are effectively reviewed and supported and that closing procedures incorporate all needed closing entries. Management Response: The City has recorded prior period adjustments to properly account for financial transactions in the correct reporting period, particularly in entries related to Capital Assets. The City recognizes the need for these transactions to be recorded in the appropriate period; however, in order to accurately record the transactions, prior period adjustments were necessary. Staff will take into careful consideration future prior period adjustments and will issue them only as absolutely necessary for accurate reporting.