Audit 340881

FY End
2023-06-30
Total Expended
$27.00M
Findings
8
Programs
19
Organization: City of El Monte (CA)
Year: 2023 Accepted: 2025-01-31

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
521006 2023-001 Material Weakness - L
521007 2023-002 Material Weakness Yes I
521008 2023-003 Material Weakness Yes I
521009 2023-004 Material Weakness Yes L
1097448 2023-001 Material Weakness - L
1097449 2023-002 Material Weakness Yes I
1097450 2023-003 Material Weakness Yes I
1097451 2023-004 Material Weakness Yes L

Contacts

Name Title Type
CLB3ME1BNL19 Veronica Alvarez Auditee
6265802029 Linda Narciso Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: The accompanying SEFA is presented using the modified accrual basis of accounting for governmental funds, which is described in Note 1 of the City’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures reported include any property or equipment acquisitions incurred under the federal programs. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (SEFA) presents the activity of all federal financial assistance programs of the City of El Monte, California (the City). For purposes of this schedule, financial awards include federal awards received directly from a federal agency, as well as federal funds received indirectly by the City from a non-federal agency or other organization. Only the portions of program expenditures reimbursable with federal funds are reported in the accompanying schedule. Program expenditures in excess of the maximum reimbursement authorized, if any, or the portion of the program expenditures that were funded with other state, local or other non-federal funds are excluded from the accompanying schedule. The information in the SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the SEFA presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.
Title: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: The accompanying SEFA is presented using the modified accrual basis of accounting for governmental funds, which is described in Note 1 of the City’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures reported include any property or equipment acquisitions incurred under the federal programs. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying SEFA is presented using the modified accrual basis of accounting for governmental funds, which is described in Note 1 of the City’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures reported include any property or equipment acquisitions incurred under the federal programs.
Title: NOTE 3 INDIRECT COST RATE Accounting Policies: The accompanying SEFA is presented using the modified accrual basis of accounting for governmental funds, which is described in Note 1 of the City’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures reported include any property or equipment acquisitions incurred under the federal programs. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The City has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: NOTE 4 RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Accounting Policies: The accompanying SEFA is presented using the modified accrual basis of accounting for governmental funds, which is described in Note 1 of the City’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures reported include any property or equipment acquisitions incurred under the federal programs. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Grant expenditure reports for the year ended June 30, 2023, which have been submitted to grantor agencies, will, in some cases, differ from the amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of the year-end accruals.
Title: NOTE 5 RELATIONSHIP TO ANNUAL COMPREHENSIVE FINANCIAL REPORT Accounting Policies: The accompanying SEFA is presented using the modified accrual basis of accounting for governmental funds, which is described in Note 1 of the City’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures reported include any property or equipment acquisitions incurred under the federal programs. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Amounts reported in the accompanying SEFA agree, in all material respects, to amounts reported within the City’s Annual Comprehensive Financial Report.

Finding Details

Federal Assistance Listing Number: 14.218 Federal Program Title: Community Development Block Grants/ Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Award Period: July 1, 2022 to June 30, 2023 Criteria: Per OMB Compliance Supplement and Compliance and Reporting Guidelines issued by the U.S. Department of Housing and Urban Development for the Community Development Block Grants/Entitlement Grants, the Quarterly Report submission deadlines are as follows:  PR29 - IDIS Cash on Hand Quarterly Report - Due on or before the 30th of the month following the end of each quarter.  Quarterly Performance Report - Due within 10 days of the quarter ending date. Condition: The City was unable to meet the Quarterly Report Timeline of the following reports: Required Report Frequency Period End Due Date Date Submitted Lag in Days Housing Rights Center Quarterly September 30, 2022 10/10/2022 11/10/2022 31 Housing Rights Center Quarterly December 31, 2022 1/10/2023 8/17/2023 219 Housing Rights Center Quarterly March 31, 2023 4/10/2023 8/17/2023 129 Housing Rights Center Quarterly June 30, 2023 7/10/2023 8/17/2023 38 Cause: The vendors were late in submitting reports and invoices. Effect: Delayed/late and non-submission of the report is considered non-compliance with the program requirements. Questioned Costs: None. Repeat Finding: No. Recommendation: We recommend that the City strictly follow the deadline for reporting submission set forth by the U.S. Department of Housing and Urban Development. Views of responsible officials and planned corrective actions: The City hired an additional accountant on July 1, 2023, to oversee all of the Economic Development grants. This accountant is responsible for the review of all reporting and submission.
Federal Assistance Listing Number: 21.027 Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Award Period: July 1, 2022 to June 30, 2023 Criteria or Specific Requirements: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award require that Contracts be awarded to the responsible offeror whose proposal is most advantageous to the non-Federal entity, with price and other factors considered. Condition: Based on our review of subjective scoring sheets completed by members of a selection panel for one request for qualifications (RFQ) process, we noted that the project was awarded to the consultant with the lower cumulative score. Additionally, upon review of the staff report for the project, we noted that the staff report indicated there were 4 members on the selection panel, yet we were provided with 5 scoring sheets. Upon inquiry of why the consultant with the lower score was selected and why fewer members of the selection committee were indicated on the staff report than what was expected (based on the number of scoring sheets provided), we were informed that one scoring sheet was excluded from the staff report because it was considered to be an outlier. The exclusion of this scoring sheet resulted in the consultant selected having a higher cumulative score. We were subsequently informed by management that this is the same contract mentioned in finding 2022-005 in the 2022 Single Audit report. This finding is repeated this year as there were disbursements made from the said contract during the FY 2022-2023. We selected four additional scoring sheets to test and noted that the number of members of the selection panel agrees with the number of scoring sheets provided. Cause: The scoring sheet of one selection panel member was excluded from the RFQ results presented to the City Council. Effect: Incomplete information was presented to the City Council for the selection of the consultant for the project. Questioned Costs: None. Repeat finding: Yes, see Summary Schedule of Prior Year Audit Findings 2022-005. Recommendation: We recommend that unaltered results of RFQ procedures be presented to the City Council. If staff believes there are reasons why a consultant, other than the one with the highest cumulative score should be selected, they may present their recommendation to select the consultant with a lower score to City Council. Views of responsible officials and planned corrective actions: This has been corrected. The Contracts and Procurement Manager reviews all RFPs and RFQs and is present during the evaluation review.
Federal Assistance Listing Number: 21.027 Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Award Period: July 1, 2022 to June 30, 2023 Criteria or Specific Requirements: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award require compliance with the provisions of procurement, suspension, and debarment. The City should have internal controls designed to ensure compliance with those provisions. Condition: The City was unable to provide evidence that the suspension and debarment status of vendors was checked prior to entering into purchasing contracts. Cause: Procedures were not in place to retain evidence of debarment status checks. Effect: The City is unable to prove that debarment checks took place prior to entering into purchasing contracts. Questioned Costs: None. Repeat finding: Yes, see Summary Schedule of Prior Year Audit Findings 2022-006. Recommendation: We recommend that management review its procedures for retaining evidence of debarment status checked prior to entering into purchase agreements. Views of responsible officials and planned corrective actions: As it pertains to purchases supported by Federal funding, each department is required to obtain supporting documentation that the vendor has not been suspended or disbarred prior to the purchase of the product or service.
Federal Assistance Listing Number: 21.027 Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Award Period: July 1, 2022 to June 30, 2023 Criteria: As a best practice, a supervisory-level person, other than the preparer of a report, should review reports to ensure the accuracy and completeness of data and information in the reports. Condition: Program reports were prepared and reviewed by the same individual. Cause: Controls were not properly designed to assign someone other than the preparer of the reports to review them. Effect: Errors in reporting could go undetected. Questioned Costs: None. Repeat finding: Yes, see Summary Schedule of Prior Year Audit Findings 2022-007. Recommendation: We recommend that reports be reviewed by a supervisory-level person who is not the preparer of the reports. Views of responsible officials and planned corrective actions: New procedures have been established to ensure the separation of duties and responsibilities between the individuals who prepare grant reporting and the individuals who review the reports starting FY2024. The accounting manager gathers the data and prepares the grant reporting and then the Finance Director reviews and approves the reporting before it is submitted.
Federal Assistance Listing Number: 14.218 Federal Program Title: Community Development Block Grants/ Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Award Period: July 1, 2022 to June 30, 2023 Criteria: Per OMB Compliance Supplement and Compliance and Reporting Guidelines issued by the U.S. Department of Housing and Urban Development for the Community Development Block Grants/Entitlement Grants, the Quarterly Report submission deadlines are as follows:  PR29 - IDIS Cash on Hand Quarterly Report - Due on or before the 30th of the month following the end of each quarter.  Quarterly Performance Report - Due within 10 days of the quarter ending date. Condition: The City was unable to meet the Quarterly Report Timeline of the following reports: Required Report Frequency Period End Due Date Date Submitted Lag in Days Housing Rights Center Quarterly September 30, 2022 10/10/2022 11/10/2022 31 Housing Rights Center Quarterly December 31, 2022 1/10/2023 8/17/2023 219 Housing Rights Center Quarterly March 31, 2023 4/10/2023 8/17/2023 129 Housing Rights Center Quarterly June 30, 2023 7/10/2023 8/17/2023 38 Cause: The vendors were late in submitting reports and invoices. Effect: Delayed/late and non-submission of the report is considered non-compliance with the program requirements. Questioned Costs: None. Repeat Finding: No. Recommendation: We recommend that the City strictly follow the deadline for reporting submission set forth by the U.S. Department of Housing and Urban Development. Views of responsible officials and planned corrective actions: The City hired an additional accountant on July 1, 2023, to oversee all of the Economic Development grants. This accountant is responsible for the review of all reporting and submission.
Federal Assistance Listing Number: 21.027 Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Award Period: July 1, 2022 to June 30, 2023 Criteria or Specific Requirements: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award require that Contracts be awarded to the responsible offeror whose proposal is most advantageous to the non-Federal entity, with price and other factors considered. Condition: Based on our review of subjective scoring sheets completed by members of a selection panel for one request for qualifications (RFQ) process, we noted that the project was awarded to the consultant with the lower cumulative score. Additionally, upon review of the staff report for the project, we noted that the staff report indicated there were 4 members on the selection panel, yet we were provided with 5 scoring sheets. Upon inquiry of why the consultant with the lower score was selected and why fewer members of the selection committee were indicated on the staff report than what was expected (based on the number of scoring sheets provided), we were informed that one scoring sheet was excluded from the staff report because it was considered to be an outlier. The exclusion of this scoring sheet resulted in the consultant selected having a higher cumulative score. We were subsequently informed by management that this is the same contract mentioned in finding 2022-005 in the 2022 Single Audit report. This finding is repeated this year as there were disbursements made from the said contract during the FY 2022-2023. We selected four additional scoring sheets to test and noted that the number of members of the selection panel agrees with the number of scoring sheets provided. Cause: The scoring sheet of one selection panel member was excluded from the RFQ results presented to the City Council. Effect: Incomplete information was presented to the City Council for the selection of the consultant for the project. Questioned Costs: None. Repeat finding: Yes, see Summary Schedule of Prior Year Audit Findings 2022-005. Recommendation: We recommend that unaltered results of RFQ procedures be presented to the City Council. If staff believes there are reasons why a consultant, other than the one with the highest cumulative score should be selected, they may present their recommendation to select the consultant with a lower score to City Council. Views of responsible officials and planned corrective actions: This has been corrected. The Contracts and Procurement Manager reviews all RFPs and RFQs and is present during the evaluation review.
Federal Assistance Listing Number: 21.027 Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Award Period: July 1, 2022 to June 30, 2023 Criteria or Specific Requirements: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award require compliance with the provisions of procurement, suspension, and debarment. The City should have internal controls designed to ensure compliance with those provisions. Condition: The City was unable to provide evidence that the suspension and debarment status of vendors was checked prior to entering into purchasing contracts. Cause: Procedures were not in place to retain evidence of debarment status checks. Effect: The City is unable to prove that debarment checks took place prior to entering into purchasing contracts. Questioned Costs: None. Repeat finding: Yes, see Summary Schedule of Prior Year Audit Findings 2022-006. Recommendation: We recommend that management review its procedures for retaining evidence of debarment status checked prior to entering into purchase agreements. Views of responsible officials and planned corrective actions: As it pertains to purchases supported by Federal funding, each department is required to obtain supporting documentation that the vendor has not been suspended or disbarred prior to the purchase of the product or service.
Federal Assistance Listing Number: 21.027 Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Award Period: July 1, 2022 to June 30, 2023 Criteria: As a best practice, a supervisory-level person, other than the preparer of a report, should review reports to ensure the accuracy and completeness of data and information in the reports. Condition: Program reports were prepared and reviewed by the same individual. Cause: Controls were not properly designed to assign someone other than the preparer of the reports to review them. Effect: Errors in reporting could go undetected. Questioned Costs: None. Repeat finding: Yes, see Summary Schedule of Prior Year Audit Findings 2022-007. Recommendation: We recommend that reports be reviewed by a supervisory-level person who is not the preparer of the reports. Views of responsible officials and planned corrective actions: New procedures have been established to ensure the separation of duties and responsibilities between the individuals who prepare grant reporting and the individuals who review the reports starting FY2024. The accounting manager gathers the data and prepares the grant reporting and then the Finance Director reviews and approves the reporting before it is submitted.