Audit 343322

FY End
2024-06-30
Total Expended
$26.61M
Findings
2
Programs
10
Organization: City of Chico (CA)
Year: 2024 Accepted: 2025-02-20

Organization Exclusion Status:

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Contacts

Name Title Type
SSGHN8JLDLC7 Barbara Martin Auditee
5308797349 Rich Gonzalez Auditor
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Notes to SEFA

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the modified basis or accrual basis of accounting depending on whether the grant is being reported in a governmental fund or a proprietary fund. 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10 percent de minimis indirect cost rate as covered in 2 CFR §200.414. The accompanying schedule of expenditures of federal awards is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), and presents the activity of all federal awards programs of the City of Chico for the year ended June 30, 2024. Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.
Title: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the Schedule are reported on the modified basis or accrual basis of accounting depending on whether the grant is being reported in a governmental fund or a proprietary fund. 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10 percent de minimis indirect cost rate as covered in 2 CFR §200.414. Expenditures reported on the Schedule are reported on the modified basis or accrual basis of accounting depending on whether the grant is being reported in a governmental fund or a proprietary fund. 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
Title: NOTE 3 ASSISTANCE LISTING NUMBER (ALN) Accounting Policies: Expenditures reported on the Schedule are reported on the modified basis or accrual basis of accounting depending on whether the grant is being reported in a governmental fund or a proprietary fund. 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10 percent de minimis indirect cost rate as covered in 2 CFR §200.414. The Assistance Listing numbers included in this report were determined based on the program name, review of grant or contract information, and the Office of Management and Budget’s Catalog of Federal Domestic Assistance.
Title: NOTE 4 INDIRECT COST RATE Accounting Policies: Expenditures reported on the Schedule are reported on the modified basis or accrual basis of accounting depending on whether the grant is being reported in a governmental fund or a proprietary fund. 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10 percent de minimis indirect cost rate as covered in 2 CFR §200.414. The City did not elect to use the 10 percent de minimis indirect cost rate as covered in 2 CFR §200.414.
Title: NOTE 5 PASS-THROUGH ENTITIES’ IDENTIFYING NUMBER Accounting Policies: Expenditures reported on the Schedule are reported on the modified basis or accrual basis of accounting depending on whether the grant is being reported in a governmental fund or a proprietary fund. 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10 percent de minimis indirect cost rate as covered in 2 CFR §200.414. When federal awards were received from a pass-through entity, the schedule of expenditures of federal awards shows, if available, the identifying number assigned by the pass-through entity. When no identifying number is shown, the City determined that no identifying number is assigned for the program, or the City was unable to obtain an identifying number from the pass-through entity.
Title: NOTE 6 LOANS WITH CONTINUING COMPLIANCE REQUIREMENTS Accounting Policies: Expenditures reported on the Schedule are reported on the modified basis or accrual basis of accounting depending on whether the grant is being reported in a governmental fund or a proprietary fund. 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10 percent de minimis indirect cost rate as covered in 2 CFR §200.414. Outstanding federally-funded program loans, with a continuing compliance requirement, carried balances as of June 30, 2024 as follows:

Finding Details

2024 – 001 Suspension and Disbarment Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control Criteria or Specific Requirement: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Before entering into a covered transaction, the entity must verify that the contractor is not suspended, disbarred, or otherwise excluded from participating in the transaction. Condition: Through our testing we noted that the City was not able to provide documentation supporting suspension and disbarment checks performed for seven vendors. Questioned Costs: None noted. Context: CLA reviewed eight vendors and for seven vendors, proof of suspension and disbarment checks were not available for review. Cause: The City's policies require that departments verify vendors through sam.gov prior to entering into transactions. However, the policy does not include documentation of these checks. Effect: Without checking debarment before engaging services, the City could have entered into an agreement with a vendor that was disbarred from receiving federal funding. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommends the City implement procedures to ensure that federal guidance is followed relating to suspension and disbarment and provide training on these procedures, including maintaining documentation of the reviews performed by the City. Views of responsible officials: There is no disagreement with the audit findings.
2024 – 001 Suspension and Disbarment Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control Criteria or Specific Requirement: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Before entering into a covered transaction, the entity must verify that the contractor is not suspended, disbarred, or otherwise excluded from participating in the transaction. Condition: Through our testing we noted that the City was not able to provide documentation supporting suspension and disbarment checks performed for seven vendors. Questioned Costs: None noted. Context: CLA reviewed eight vendors and for seven vendors, proof of suspension and disbarment checks were not available for review. Cause: The City's policies require that departments verify vendors through sam.gov prior to entering into transactions. However, the policy does not include documentation of these checks. Effect: Without checking debarment before engaging services, the City could have entered into an agreement with a vendor that was disbarred from receiving federal funding. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommends the City implement procedures to ensure that federal guidance is followed relating to suspension and disbarment and provide training on these procedures, including maintaining documentation of the reviews performed by the City. Views of responsible officials: There is no disagreement with the audit findings.