Audit 32485

FY End
2022-06-30
Total Expended
$8.44M
Findings
18
Programs
5
Organization: City of Yreka (CA)
Year: 2022 Accepted: 2023-03-29

Organization Exclusion Status:

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Contacts

Name Title Type
NW6EWPZR1516 Emily Aldrich Auditee
5308412323 Norman Newell, CPA Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: 1.REPORTING ENTITY The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Yreka, 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. 2.BASIS OF ACCOUNTING 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. 3.INDIRECT COST RATE The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. 4.RELATIONSHIP TO FEDERAL FINANCIAL REPORTS 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. 5.RELATIONSHIP TO BASIC FINANCIAL STATEMENTS 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. 6.PASS-THROUGH ENTITIES IDENTIFYING NUMBER 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. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. 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 $318,012.

Finding Details

Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 10.760 14.228 Federal Grantor: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Other Criteria Internal control over the Schedule of Expenditures of Federal Awards (SEFA) required that the City provide accurate Federal expenditure information to the City Auditor in a timely manner. Condition During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above. Cause The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit. Effect Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729. Questioned Cost No questioned costs were identified as a result of our procedures. Context The condition noted above was identified during our procedures related to reconciling federal expenidtures to the SEFA. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City reconcile federal expenditures claimed to the City's general ledger and SEFA. 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.
Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 10.760 14.228 Federal Grantor: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Other Criteria Internal control over the Schedule of Expenditures of Federal Awards (SEFA) required that the City provide accurate Federal expenditure information to the City Auditor in a timely manner. Condition During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above. Cause The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit. Effect Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729. Questioned Cost No questioned costs were identified as a result of our procedures. Context The condition noted above was identified during our procedures related to reconciling federal expenidtures to the SEFA. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City reconcile federal expenditures claimed to the City's general ledger and SEFA. 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.
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 Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The loan documents require that recipients of CDBG loans continue to own and reside in their homes that were acquired using CDBG funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the homeowners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with CDBG funding was missing. We noted one of the loan recipients did not have proof of fire and flood insurance on file. 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 Information was not available to determine if the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context Not applicable. Repeat Finding This is not a repeat finding. 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.
Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 10.760 14.228 Federal Grantor: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Other Criteria Internal control over the Schedule of Expenditures of Federal Awards (SEFA) required that the City provide accurate Federal expenditure information to the City Auditor in a timely manner. Condition During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above. Cause The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit. Effect Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729. Questioned Cost No questioned costs were identified as a result of our procedures. Context The condition noted above was identified during our procedures related to reconciling federal expenidtures to the SEFA. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City reconcile federal expenditures claimed to the City's general ledger and SEFA. 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.
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 Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The loan documents require that recipients of CDBG loans continue to own and reside in their homes that were acquired using CDBG funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the homeowners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with CDBG funding was missing. We noted one of the loan recipients did not have proof of fire and flood insurance on file. 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 Information was not available to determine if the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context Not applicable. Repeat Finding This is not a repeat finding. 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.
Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 10.760 14.228 Federal Grantor: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Other Criteria Internal control over the Schedule of Expenditures of Federal Awards (SEFA) required that the City provide accurate Federal expenditure information to the City Auditor in a timely manner. Condition During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above. Cause The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit. Effect Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729. Questioned Cost No questioned costs were identified as a result of our procedures. Context The condition noted above was identified during our procedures related to reconciling federal expenidtures to the SEFA. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City reconcile federal expenditures claimed to the City's general ledger and SEFA. 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.
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 Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The loan documents require that recipients of CDBG loans continue to own and reside in their homes that were acquired using CDBG funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the homeowners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with CDBG funding was missing. We noted one of the loan recipients did not have proof of fire and flood insurance on file. 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 Information was not available to determine if the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context Not applicable. Repeat Finding This is not a repeat finding. 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.
Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 10.760 14.228 Federal Grantor: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Other Criteria Internal control over the Schedule of Expenditures of Federal Awards (SEFA) required that the City provide accurate Federal expenditure information to the City Auditor in a timely manner. Condition During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above. Cause The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit. Effect Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729. Questioned Cost No questioned costs were identified as a result of our procedures. Context The condition noted above was identified during our procedures related to reconciling federal expenidtures to the SEFA. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City reconcile federal expenditures claimed to the City's general ledger and SEFA. 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.
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 Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The loan documents require that recipients of CDBG loans continue to own and reside in their homes that were acquired using CDBG funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the homeowners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with CDBG funding was missing. We noted one of the loan recipients did not have proof of fire and flood insurance on file. 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 Information was not available to determine if the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context Not applicable. Repeat Finding This is not a repeat finding. 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.
Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 10.760 14.228 Federal Grantor: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Other Criteria Internal control over the Schedule of Expenditures of Federal Awards (SEFA) required that the City provide accurate Federal expenditure information to the City Auditor in a timely manner. Condition During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above. Cause The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit. Effect Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729. Questioned Cost No questioned costs were identified as a result of our procedures. Context The condition noted above was identified during our procedures related to reconciling federal expenidtures to the SEFA. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City reconcile federal expenditures claimed to the City's general ledger and SEFA. 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.
Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 10.760 14.228 Federal Grantor: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Other Criteria Internal control over the Schedule of Expenditures of Federal Awards (SEFA) required that the City provide accurate Federal expenditure information to the City Auditor in a timely manner. Condition During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above. Cause The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit. Effect Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729. Questioned Cost No questioned costs were identified as a result of our procedures. Context The condition noted above was identified during our procedures related to reconciling federal expenidtures to the SEFA. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City reconcile federal expenditures claimed to the City's general ledger and SEFA. 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.
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 Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The loan documents require that recipients of CDBG loans continue to own and reside in their homes that were acquired using CDBG funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the homeowners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with CDBG funding was missing. We noted one of the loan recipients did not have proof of fire and flood insurance on file. 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 Information was not available to determine if the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context Not applicable. Repeat Finding This is not a repeat finding. 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.
Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 10.760 14.228 Federal Grantor: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Other Criteria Internal control over the Schedule of Expenditures of Federal Awards (SEFA) required that the City provide accurate Federal expenditure information to the City Auditor in a timely manner. Condition During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above. Cause The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit. Effect Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729. Questioned Cost No questioned costs were identified as a result of our procedures. Context The condition noted above was identified during our procedures related to reconciling federal expenidtures to the SEFA. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City reconcile federal expenditures claimed to the City's general ledger and SEFA. 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.
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 Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The loan documents require that recipients of CDBG loans continue to own and reside in their homes that were acquired using CDBG funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the homeowners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with CDBG funding was missing. We noted one of the loan recipients did not have proof of fire and flood insurance on file. 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 Information was not available to determine if the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context Not applicable. Repeat Finding This is not a repeat finding. 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.
Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 10.760 14.228 Federal Grantor: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Other Criteria Internal control over the Schedule of Expenditures of Federal Awards (SEFA) required that the City provide accurate Federal expenditure information to the City Auditor in a timely manner. Condition During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above. Cause The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit. Effect Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729. Questioned Cost No questioned costs were identified as a result of our procedures. Context The condition noted above was identified during our procedures related to reconciling federal expenidtures to the SEFA. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City reconcile federal expenditures claimed to the City's general ledger and SEFA. 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.
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 Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The loan documents require that recipients of CDBG loans continue to own and reside in their homes that were acquired using CDBG funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the homeowners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with CDBG funding was missing. We noted one of the loan recipients did not have proof of fire and flood insurance on file. 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 Information was not available to determine if the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context Not applicable. Repeat Finding This is not a repeat finding. 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.
Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 10.760 14.228 Federal Grantor: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Other Criteria Internal control over the Schedule of Expenditures of Federal Awards (SEFA) required that the City provide accurate Federal expenditure information to the City Auditor in a timely manner. Condition During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above. Cause The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit. Effect Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729. Questioned Cost No questioned costs were identified as a result of our procedures. Context The condition noted above was identified during our procedures related to reconciling federal expenidtures to the SEFA. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City reconcile federal expenditures claimed to the City's general ledger and SEFA. 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.
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 Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The loan documents require that recipients of CDBG loans continue to own and reside in their homes that were acquired using CDBG funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the homeowners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with CDBG funding was missing. We noted one of the loan recipients did not have proof of fire and flood insurance on file. 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 Information was not available to determine if the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context Not applicable. Repeat Finding This is not a repeat finding. 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.