FAC Explorer

Audit 324399

FY End
2023-06-30
Total Expended
$3.91M
Findings
4
Programs
3
Organization: City of Hughson (CA)
Year: 2023 Accepted: 2024-10-10
Auditor: Moss Levy & Hartzheim LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
502366 2023-001 Material Weakness - L
502367 2023-001 Material Weakness - L
1078808 2023-001 Material Weakness - L
1078809 2023-001 Material Weakness - L

Programs

ALN Program Spent Major Findings
66.468 Drinking Water State Revolving Fund $3.22M Yes 1
21.027 Coronavirus State and Local Fiscal Recovery Funds $667,147 Yes 1
20.205 Highway Planning and Construction $21,623 - 0

Contacts

Name Title Type
TJ7DLDN67KM8 Kim Weimer Auditee
2098834054 Bin Zeng Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit 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). De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The City charged no indirect costs to federal programs this fiscal year. The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal award activity of the City of Duarte (City) under programs of the federal government for the fiscal year ended June 30, 2023. 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 or results of the City’s operations.
Title: Note 2 - Summary of Significant Accounting Policies Accounting Policies: conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit 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). De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The City charged no indirect costs to federal programs this fiscal year. Basis of Accounting The accompanying Schedule is presented using the modified accrual basis of accounting for governmental funds, which is described in Note 1 of the notes to the City’s financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rates The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The City charged no indirect costs to federal programs this fiscal year.
Title: Note 3 - Program Descriptions Accounting Policies: conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit 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). De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The City charged no indirect costs to federal programs this fiscal year. U.S. Department of Housing and Urban Development Community Development Block Grant (CDBG) The Community Development Block Grant (CDBG) Program was authorized under Title I of the Housing and Community Development Act of 1974. The primary objective of the CDBG Program is the development of viable urban communities, including adequate housing, a suitable living environment, and expansion of economic opportunities principally for persons of low to moderate income. Under this program, the Department of Housing and Urban Development (HUD) distributes funds based upon approved applications to eligible local governmental units for the purpose of community improvement and betterment. The City uses CDBG funds for ADA Improvement Projects. U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds The program allows units of local governments to respond to the COVID-19 public health emergency or its negative economic impact including to provide assistance to households, small business, nonprofits, and impacted industries, such as tourism, travel, and hospitality; respond to workers performing essential work during the COVID-19 pandemic by providing premium pay to eligible workers of the State, territory, tribal government, metropolitan city, county, or nonentitlement units of local government performing essential work or by providing grants to eligible employers that have eligible workers; provide government services, to the extent of the reduction of revenue due to COVID-19 relative to revenues collected in the most recent full fiscal year of the State, territory, tribal government, metropolitan city, county, or nonentitlement units of local government; or make necessary investments in water, sewer, or broadband infrastructure. U.S. Department of Agriculture Emergency Watershed Protection Program The program objective is to assist sponsors, landowners, and operators in implementing emergency recovery measures for runoff retardation and erosion prevention to relieve imminent hazards to life and property created by a natural disaster that causes a sudden impairment of a watershed. The project included mobilization, K-rail, channel clearing, and safety measures.
Title: Note 4 - Amounts Provided to Subrecipients Accounting Policies: conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit 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). De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The City charged no indirect costs to federal programs this fiscal year. For the fiscal year ended June 30, 2023, the City passed through $0 to other agencies.

Finding Details

Finding 2023-001
Finding – Delinquent Single Audit Reporting Condition: During our review of internal control over compliance, it was noted that the single audit was not filed in a timely manner in accordance with the audit 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). Criteria: The audit 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) state the Single Audit must be completed and the reporting required must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a different period is specified in a program-specific audit guide. Effect: The City is not in compliance with the audit 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). Recommendation: We recommend that the City implement policies and procedures to ensure compliance with Single Audit requirements in future fiscal periods. Management Response: For fiscal year 2022-23 the City of Hughson had expenditures over $750,000. This is the threshold that triggers the requirement for a single audit. The City did not meet this requirement for the past two fiscal years. The monies spent from the Coronavirus State and Local Fiscal Recovery Funds (Fund 380) totaled $667,147, the monies spent from the Transportation Street Projects (Fund 420) totaled $450 and Public Works Street Projects (Fund 425) totaled $21,173. The total for these expenditures was $688,770. Initially management categorized expenditures for the replacement of Well #7 as state-funded, under the California State Water Board. However, in April of 2024 management became aware that the portion of the funding for this project considered a loan is federally funded. Armed with this new information, management directed Moss-Levy to perform a single audit for FY22-23 for the City of Hughson. Future funding for the City of Hughson will be thoroughly vetted to determine if there are any federal funds included in the monies to be received. Each new source of funding will be documented as to the source of the funding and the restrictions on its use. A thorough review of these funds will be made at year end to determine if the City has met the $750,000 threshold to request a single audit in a timely manner.
Finding 2023-001
Finding – Delinquent Single Audit Reporting Condition: During our review of internal control over compliance, it was noted that the single audit was not filed in a timely manner in accordance with the audit 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). Criteria: The audit 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) state the Single Audit must be completed and the reporting required must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a different period is specified in a program-specific audit guide. Effect: The City is not in compliance with the audit 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). Recommendation: We recommend that the City implement policies and procedures to ensure compliance with Single Audit requirements in future fiscal periods. Management Response: For fiscal year 2022-23 the City of Hughson had expenditures over $750,000. This is the threshold that triggers the requirement for a single audit. The City did not meet this requirement for the past two fiscal years. The monies spent from the Coronavirus State and Local Fiscal Recovery Funds (Fund 380) totaled $667,147, the monies spent from the Transportation Street Projects (Fund 420) totaled $450 and Public Works Street Projects (Fund 425) totaled $21,173. The total for these expenditures was $688,770. Initially management categorized expenditures for the replacement of Well #7 as state-funded, under the California State Water Board. However, in April of 2024 management became aware that the portion of the funding for this project considered a loan is federally funded. Armed with this new information, management directed Moss-Levy to perform a single audit for FY22-23 for the City of Hughson. Future funding for the City of Hughson will be thoroughly vetted to determine if there are any federal funds included in the monies to be received. Each new source of funding will be documented as to the source of the funding and the restrictions on its use. A thorough review of these funds will be made at year end to determine if the City has met the $750,000 threshold to request a single audit in a timely manner.
Finding 2023-001
Finding – Delinquent Single Audit Reporting Condition: During our review of internal control over compliance, it was noted that the single audit was not filed in a timely manner in accordance with the audit 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). Criteria: The audit 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) state the Single Audit must be completed and the reporting required must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a different period is specified in a program-specific audit guide. Effect: The City is not in compliance with the audit 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). Recommendation: We recommend that the City implement policies and procedures to ensure compliance with Single Audit requirements in future fiscal periods. Management Response: For fiscal year 2022-23 the City of Hughson had expenditures over $750,000. This is the threshold that triggers the requirement for a single audit. The City did not meet this requirement for the past two fiscal years. The monies spent from the Coronavirus State and Local Fiscal Recovery Funds (Fund 380) totaled $667,147, the monies spent from the Transportation Street Projects (Fund 420) totaled $450 and Public Works Street Projects (Fund 425) totaled $21,173. The total for these expenditures was $688,770. Initially management categorized expenditures for the replacement of Well #7 as state-funded, under the California State Water Board. However, in April of 2024 management became aware that the portion of the funding for this project considered a loan is federally funded. Armed with this new information, management directed Moss-Levy to perform a single audit for FY22-23 for the City of Hughson. Future funding for the City of Hughson will be thoroughly vetted to determine if there are any federal funds included in the monies to be received. Each new source of funding will be documented as to the source of the funding and the restrictions on its use. A thorough review of these funds will be made at year end to determine if the City has met the $750,000 threshold to request a single audit in a timely manner.
Finding 2023-001
Finding – Delinquent Single Audit Reporting Condition: During our review of internal control over compliance, it was noted that the single audit was not filed in a timely manner in accordance with the audit 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). Criteria: The audit 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) state the Single Audit must be completed and the reporting required must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a different period is specified in a program-specific audit guide. Effect: The City is not in compliance with the audit 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). Recommendation: We recommend that the City implement policies and procedures to ensure compliance with Single Audit requirements in future fiscal periods. Management Response: For fiscal year 2022-23 the City of Hughson had expenditures over $750,000. This is the threshold that triggers the requirement for a single audit. The City did not meet this requirement for the past two fiscal years. The monies spent from the Coronavirus State and Local Fiscal Recovery Funds (Fund 380) totaled $667,147, the monies spent from the Transportation Street Projects (Fund 420) totaled $450 and Public Works Street Projects (Fund 425) totaled $21,173. The total for these expenditures was $688,770. Initially management categorized expenditures for the replacement of Well #7 as state-funded, under the California State Water Board. However, in April of 2024 management became aware that the portion of the funding for this project considered a loan is federally funded. Armed with this new information, management directed Moss-Levy to perform a single audit for FY22-23 for the City of Hughson. Future funding for the City of Hughson will be thoroughly vetted to determine if there are any federal funds included in the monies to be received. Each new source of funding will be documented as to the source of the funding and the restrictions on its use. A thorough review of these funds will be made at year end to determine if the City has met the $750,000 threshold to request a single audit in a timely manner.