Audit 325493

Finding 2023-006 Reporting – Internal Control and Compliance Over Reporting Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-22-MC-06-0555; B-20-MW-06-0555 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): PR29, Cash on Hand Quarterly Reports – PR29 in the Integrated Disbursement and Information System (IDIS) reports the financial status of the grants and cooperative agreement funds and cash transactions using those funds. These reports are required to be submitted to HUD on a quarterly basis, 30 days after the reporting period end date. The due dates of each quarterly report is noted below: Quarterly Project and Expenditure Reports – All metropolitan cities and counties with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, the initial quarterly Project and Expenditure Report covered three calendar quarters from March 3, 2021 to December 31, 2021 was required to be submitted to U.S. Department of the Treasury by January 31, 2022. The subsequent quarterly reports will cover one calendar quarter and must be submitted by the last day of the month following the end of the period covered. The due dates of each quarterly reports is noted below: Condition: During the audit, we noticed that two out of four quarters of PR29 for CDBG and CDBG CV were not filed within the deadline, as shown below: During the audit, we noticed that one out of four quarters of Project and Expenditure Reports for SLFRF was not filed within the deadline, as shown below: Cause: Monitoring controls are inadequate to ensure the timely submission of the required reports. Effect or Potential Effect: The City was not in compliance with the programs’ reporting requirements. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-006. Recommendation: We recommend the City develop policy and procedures to ensure that the reports are prepared and submitted timely. Views of Responsible Officials: Management endeavors to submit all required reports by required deadlines. While acknowledging that this does not always occur, the City has made vast improvements on timeliness of reports, especially PR29’s for CDBG and HOME. The year-end reports (June 30) due by July 30 can be difficult to submit timely if year-end close has not been completed. Regardless management is committed to ensuring all reports are filed within the 30 day timeframe.

Finding 2023-006 Reporting – Internal Control and Compliance Over Reporting Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-22-MC-06-0555; B-20-MW-06-0555 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): PR29, Cash on Hand Quarterly Reports – PR29 in the Integrated Disbursement and Information System (IDIS) reports the financial status of the grants and cooperative agreement funds and cash transactions using those funds. These reports are required to be submitted to HUD on a quarterly basis, 30 days after the reporting period end date. The due dates of each quarterly report is noted below: Quarterly Project and Expenditure Reports – All metropolitan cities and counties with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, the initial quarterly Project and Expenditure Report covered three calendar quarters from March 3, 2021 to December 31, 2021 was required to be submitted to U.S. Department of the Treasury by January 31, 2022. The subsequent quarterly reports will cover one calendar quarter and must be submitted by the last day of the month following the end of the period covered. The due dates of each quarterly reports is noted below: Condition: During the audit, we noticed that two out of four quarters of PR29 for CDBG and CDBG CV were not filed within the deadline, as shown below: During the audit, we noticed that one out of four quarters of Project and Expenditure Reports for SLFRF was not filed within the deadline, as shown below: Cause: Monitoring controls are inadequate to ensure the timely submission of the required reports. Effect or Potential Effect: The City was not in compliance with the programs’ reporting requirements. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-006. Recommendation: We recommend the City develop policy and procedures to ensure that the reports are prepared and submitted timely. Views of Responsible Officials: Management endeavors to submit all required reports by required deadlines. While acknowledging that this does not always occur, the City has made vast improvements on timeliness of reports, especially PR29’s for CDBG and HOME. The year-end reports (June 30) due by July 30 can be difficult to submit timely if year-end close has not been completed. Regardless management is committed to ensuring all reports are filed within the 30 day timeframe.

Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.

Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.

Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.

Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.

Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.

Finding 2023-006 Reporting – Internal Control and Compliance Over Reporting Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-22-MC-06-0555; B-20-MW-06-0555 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): PR29, Cash on Hand Quarterly Reports – PR29 in the Integrated Disbursement and Information System (IDIS) reports the financial status of the grants and cooperative agreement funds and cash transactions using those funds. These reports are required to be submitted to HUD on a quarterly basis, 30 days after the reporting period end date. The due dates of each quarterly report is noted below: Quarterly Project and Expenditure Reports – All metropolitan cities and counties with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, the initial quarterly Project and Expenditure Report covered three calendar quarters from March 3, 2021 to December 31, 2021 was required to be submitted to U.S. Department of the Treasury by January 31, 2022. The subsequent quarterly reports will cover one calendar quarter and must be submitted by the last day of the month following the end of the period covered. The due dates of each quarterly reports is noted below: Condition: During the audit, we noticed that two out of four quarters of PR29 for CDBG and CDBG CV were not filed within the deadline, as shown below: During the audit, we noticed that one out of four quarters of Project and Expenditure Reports for SLFRF was not filed within the deadline, as shown below: Cause: Monitoring controls are inadequate to ensure the timely submission of the required reports. Effect or Potential Effect: The City was not in compliance with the programs’ reporting requirements. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-006. Recommendation: We recommend the City develop policy and procedures to ensure that the reports are prepared and submitted timely. Views of Responsible Officials: Management endeavors to submit all required reports by required deadlines. While acknowledging that this does not always occur, the City has made vast improvements on timeliness of reports, especially PR29’s for CDBG and HOME. The year-end reports (June 30) due by July 30 can be difficult to submit timely if year-end close has not been completed. Regardless management is committed to ensuring all reports are filed within the 30 day timeframe.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-006 Reporting – Internal Control and Compliance Over Reporting Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-22-MC-06-0555; B-20-MW-06-0555 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): PR29, Cash on Hand Quarterly Reports – PR29 in the Integrated Disbursement and Information System (IDIS) reports the financial status of the grants and cooperative agreement funds and cash transactions using those funds. These reports are required to be submitted to HUD on a quarterly basis, 30 days after the reporting period end date. The due dates of each quarterly report is noted below: Quarterly Project and Expenditure Reports – All metropolitan cities and counties with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, the initial quarterly Project and Expenditure Report covered three calendar quarters from March 3, 2021 to December 31, 2021 was required to be submitted to U.S. Department of the Treasury by January 31, 2022. The subsequent quarterly reports will cover one calendar quarter and must be submitted by the last day of the month following the end of the period covered. The due dates of each quarterly reports is noted below: Condition: During the audit, we noticed that two out of four quarters of PR29 for CDBG and CDBG CV were not filed within the deadline, as shown below: During the audit, we noticed that one out of four quarters of Project and Expenditure Reports for SLFRF was not filed within the deadline, as shown below: Cause: Monitoring controls are inadequate to ensure the timely submission of the required reports. Effect or Potential Effect: The City was not in compliance with the programs’ reporting requirements. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-006. Recommendation: We recommend the City develop policy and procedures to ensure that the reports are prepared and submitted timely. Views of Responsible Officials: Management endeavors to submit all required reports by required deadlines. While acknowledging that this does not always occur, the City has made vast improvements on timeliness of reports, especially PR29’s for CDBG and HOME. The year-end reports (June 30) due by July 30 can be difficult to submit timely if year-end close has not been completed. Regardless management is committed to ensuring all reports are filed within the 30 day timeframe.

Finding 2023-006 Reporting – Internal Control and Compliance Over Reporting Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-22-MC-06-0555; B-20-MW-06-0555 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): PR29, Cash on Hand Quarterly Reports – PR29 in the Integrated Disbursement and Information System (IDIS) reports the financial status of the grants and cooperative agreement funds and cash transactions using those funds. These reports are required to be submitted to HUD on a quarterly basis, 30 days after the reporting period end date. The due dates of each quarterly report is noted below: Quarterly Project and Expenditure Reports – All metropolitan cities and counties with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, the initial quarterly Project and Expenditure Report covered three calendar quarters from March 3, 2021 to December 31, 2021 was required to be submitted to U.S. Department of the Treasury by January 31, 2022. The subsequent quarterly reports will cover one calendar quarter and must be submitted by the last day of the month following the end of the period covered. The due dates of each quarterly reports is noted below: Condition: During the audit, we noticed that two out of four quarters of PR29 for CDBG and CDBG CV were not filed within the deadline, as shown below: During the audit, we noticed that one out of four quarters of Project and Expenditure Reports for SLFRF was not filed within the deadline, as shown below: Cause: Monitoring controls are inadequate to ensure the timely submission of the required reports. Effect or Potential Effect: The City was not in compliance with the programs’ reporting requirements. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-006. Recommendation: We recommend the City develop policy and procedures to ensure that the reports are prepared and submitted timely. Views of Responsible Officials: Management endeavors to submit all required reports by required deadlines. While acknowledging that this does not always occur, the City has made vast improvements on timeliness of reports, especially PR29’s for CDBG and HOME. The year-end reports (June 30) due by July 30 can be difficult to submit timely if year-end close has not been completed. Regardless management is committed to ensuring all reports are filed within the 30 day timeframe.

Finding 2023-006 Reporting – Internal Control and Compliance Over Reporting Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-22-MC-06-0555; B-20-MW-06-0555 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): PR29, Cash on Hand Quarterly Reports – PR29 in the Integrated Disbursement and Information System (IDIS) reports the financial status of the grants and cooperative agreement funds and cash transactions using those funds. These reports are required to be submitted to HUD on a quarterly basis, 30 days after the reporting period end date. The due dates of each quarterly report is noted below: Quarterly Project and Expenditure Reports – All metropolitan cities and counties with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, the initial quarterly Project and Expenditure Report covered three calendar quarters from March 3, 2021 to December 31, 2021 was required to be submitted to U.S. Department of the Treasury by January 31, 2022. The subsequent quarterly reports will cover one calendar quarter and must be submitted by the last day of the month following the end of the period covered. The due dates of each quarterly reports is noted below: Condition: During the audit, we noticed that two out of four quarters of PR29 for CDBG and CDBG CV were not filed within the deadline, as shown below: During the audit, we noticed that one out of four quarters of Project and Expenditure Reports for SLFRF was not filed within the deadline, as shown below: Cause: Monitoring controls are inadequate to ensure the timely submission of the required reports. Effect or Potential Effect: The City was not in compliance with the programs’ reporting requirements. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-006. Recommendation: We recommend the City develop policy and procedures to ensure that the reports are prepared and submitted timely. Views of Responsible Officials: Management endeavors to submit all required reports by required deadlines. While acknowledging that this does not always occur, the City has made vast improvements on timeliness of reports, especially PR29’s for CDBG and HOME. The year-end reports (June 30) due by July 30 can be difficult to submit timely if year-end close has not been completed. Regardless management is committed to ensuring all reports are filed within the 30 day timeframe.

Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.

Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.

Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.

Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.

Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.

Finding 2023-006 Reporting – Internal Control and Compliance Over Reporting Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-22-MC-06-0555; B-20-MW-06-0555 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): PR29, Cash on Hand Quarterly Reports – PR29 in the Integrated Disbursement and Information System (IDIS) reports the financial status of the grants and cooperative agreement funds and cash transactions using those funds. These reports are required to be submitted to HUD on a quarterly basis, 30 days after the reporting period end date. The due dates of each quarterly report is noted below: Quarterly Project and Expenditure Reports – All metropolitan cities and counties with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, the initial quarterly Project and Expenditure Report covered three calendar quarters from March 3, 2021 to December 31, 2021 was required to be submitted to U.S. Department of the Treasury by January 31, 2022. The subsequent quarterly reports will cover one calendar quarter and must be submitted by the last day of the month following the end of the period covered. The due dates of each quarterly reports is noted below: Condition: During the audit, we noticed that two out of four quarters of PR29 for CDBG and CDBG CV were not filed within the deadline, as shown below: During the audit, we noticed that one out of four quarters of Project and Expenditure Reports for SLFRF was not filed within the deadline, as shown below: Cause: Monitoring controls are inadequate to ensure the timely submission of the required reports. Effect or Potential Effect: The City was not in compliance with the programs’ reporting requirements. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-006. Recommendation: We recommend the City develop policy and procedures to ensure that the reports are prepared and submitted timely. Views of Responsible Officials: Management endeavors to submit all required reports by required deadlines. While acknowledging that this does not always occur, the City has made vast improvements on timeliness of reports, especially PR29’s for CDBG and HOME. The year-end reports (June 30) due by July 30 can be difficult to submit timely if year-end close has not been completed. Regardless management is committed to ensuring all reports are filed within the 30 day timeframe.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-005 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit over suspension and debarment, we noted that there were no documentation on whether the vendors were checked against the SAM database or obtained required certifications before contract awards. Cause: There were no formal policies or procedures of the verification on the suspension and debarment status of vendors before entering into a federally funded contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 6 out of 6 Federal Transit Cluster vendors selected for testing and 3 out of the 3 CSLFRF vendors selected for testing to show suspension and debarment check was performed prior to contracting. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City update its purchasing policies and related procedures related to suspension and debarment to improve its internal control over compliance for suspension and debarment. Views of Responsible Officials: The City has implemented a new review, tracking and documentation process for all procurements. Staff will check all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive.

Finding 2023-006 Reporting – Internal Control and Compliance Over Reporting Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-22-MC-06-0555; B-20-MW-06-0555 Assistance Listing Number: 21.207 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): PR29, Cash on Hand Quarterly Reports – PR29 in the Integrated Disbursement and Information System (IDIS) reports the financial status of the grants and cooperative agreement funds and cash transactions using those funds. These reports are required to be submitted to HUD on a quarterly basis, 30 days after the reporting period end date. The due dates of each quarterly report is noted below: Quarterly Project and Expenditure Reports – All metropolitan cities and counties with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, the initial quarterly Project and Expenditure Report covered three calendar quarters from March 3, 2021 to December 31, 2021 was required to be submitted to U.S. Department of the Treasury by January 31, 2022. The subsequent quarterly reports will cover one calendar quarter and must be submitted by the last day of the month following the end of the period covered. The due dates of each quarterly reports is noted below: Condition: During the audit, we noticed that two out of four quarters of PR29 for CDBG and CDBG CV were not filed within the deadline, as shown below: During the audit, we noticed that one out of four quarters of Project and Expenditure Reports for SLFRF was not filed within the deadline, as shown below: Cause: Monitoring controls are inadequate to ensure the timely submission of the required reports. Effect or Potential Effect: The City was not in compliance with the programs’ reporting requirements. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-006. Recommendation: We recommend the City develop policy and procedures to ensure that the reports are prepared and submitted timely. Views of Responsible Officials: Management endeavors to submit all required reports by required deadlines. While acknowledging that this does not always occur, the City has made vast improvements on timeliness of reports, especially PR29’s for CDBG and HOME. The year-end reports (June 30) due by July 30 can be difficult to submit timely if year-end close has not been completed. Regardless management is committed to ensuring all reports are filed within the 30 day timeframe.