FAC Explorer

Audit 349915

FY End
2024-06-30
Total Expended
$38.53M
Findings
2
Programs
17
Organization: City of Santa Monica (CA)
Year: 2024 Accepted: 2025-03-28
Auditor: Lsl LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
539383 2024-001 Significant Deficiency - AB
1115825 2024-001 Significant Deficiency - AB

Programs

ALN Program Spent Major Findings
14.267 Continuum of Care Program $3.90M - 0
20.205 Highway Planning and Construction $3.62M - 0
97.067 Homeland Security Grant Program $2.23M - 0
14.871 Section 8 Housing Choice Vouchers $1.19M Yes 0
93.493 Congressional Directives $1.12M Yes 0
14.239 Home Investment Partnerships Program $670,504 - 0
20.507 Federal Transit Formula Grants $628,371 - 0
14.218 Community Development Block Grants/entitlement Grants $466,702 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $455,475 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $372,947 Yes 1
20.600 State and Community Highway Safety $323,055 - 0
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $183,428 - 0
20.530 Public Transportation Innovation $161,520 - 0
97.044 Assistance to Firefighters Grant $101,818 - 0
16.738 Edward Byrne Memorial Justice Assistance Grant Program $97,491 - 0
97.039 Hazard Mitigation Grant $22,461 - 0
16.607 Bulletproof Vest Partnership Program $3,254 - 0

Contacts

Name Title Type
Q35KCJJNN3J3 Randy Chow Auditee
3104588285 Ryan Domino Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES APPLICABLE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Accounting Policies: A. Scope of Presentation The accompanying schedule presents only the expenditures incurred by the City of Santa Monica, California (the City), that are reimbursable under federal programs of federal financial assistance. For the purposes of this schedule, federal awards include both federal financial assistances 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 portion of program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with state, local or other non-federal funds are excluded from the accompanying schedule. B. Basis of Accounting The expenditures included in the accompanying schedule were reported on the modified accrual basis of accounting. Under the modified accrual basis of accounting, expenditures are incurred when the City becomes obligated for payment as a result of the receipt of the related goods and services. Expenditures reported included any property or equipment acquisitions incurred under the federal program. 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. A. Scope of Presentation The accompanying schedule presents only the expenditures incurred by the City of Santa Monica, California (the City), that are reimbursable under federal programs of federal financial assistance. For the purposes of this schedule, federal awards include both federal financial assistances 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 portion of program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with state, local or other non-federal funds are excluded from the accompanying schedule. B. Basis of Accounting The expenditures included in the accompanying schedule were reported on the modified accrual basis of accounting. Under the modified accrual basis of accounting, expenditures are incurred when the City becomes obligated for payment as a result of the receipt of the related goods and services. Expenditures reported included any property or equipment acquisitions incurred under the federal program. C. Indirect Cost Rate The City has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: NOTE 2: LOAN PROGRAMS WITH CONTINUING COMPLIANCE REQUIREMENTS Accounting Policies: A. Scope of Presentation The accompanying schedule presents only the expenditures incurred by the City of Santa Monica, California (the City), that are reimbursable under federal programs of federal financial assistance. For the purposes of this schedule, federal awards include both federal financial assistances 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 portion of program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with state, local or other non-federal funds are excluded from the accompanying schedule. B. Basis of Accounting The expenditures included in the accompanying schedule were reported on the modified accrual basis of accounting. Under the modified accrual basis of accounting, expenditures are incurred when the City becomes obligated for payment as a result of the receipt of the related goods and services. Expenditures reported included any property or equipment acquisitions incurred under the federal program. 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 loans listed below are administered directly by the City, and balances and transactions relating to these programs are included in the City’s basic financial statements. Loans made during the fiscal year, if any, are included in the federal expenditures presented in the Schedule of Expenditures of Federal Awards. The balance of loans outstanding at June 30, 2024, consists of:

Finding Details

Finding 2024-001
Evaluation of Finding Significant Deficiency Criteria Management is responsible for ensuring compliance with the California Water and Wastewater Arrearages Payment Program Guidelines and the Uniform Guidance, including the timely allocation of funds as bill credits within 60 days of receipt. This includes the design, implementation, and maintenance of effective internal controls to ensure that arrearages are allocated in accordance with the program’s requirements. Failure to allocate the Water and Wastewater Arrearages within the required timeframe could result in non-compliance with both state and federal regulations. Recipients of federal awards must maintain accurate records and documentation to support the proper allocation of funds, in line with 2 CFR 200.302, and take corrective actions if allocations are delayed. Condition During the single audit, we found that Wastewater Arrearages claimed were not allocated as bill credits within 60 days of receipt of funds requested in accordance with the California Water and Wastewater Arrearages Payment Program Guidelines. Cause of Condition The delay in allocating the wastewater arrearages within the required 60-day period was due to challenges in the internal controls and monitoring processes that impacted the timely allocation. The tracking systems in place did not fully support the prompt allocation in accordance with the California Water and Wastewater Arrearages Payment Program Guidelines. Additionally, there were delays in ensuring that the 60-day requirement was consistently met. As a result, the allocation did not occur within the required timeframe, leading to a non-compliance issue with both state and federal regulations. Effect or Potential Effect of Condition The delay in allocating the wastewater arrearages within the required 60-day period may lead to non-compliance with both state and federal regulations, which could result in the disallowance of the funds. This could also impact the agency’s eligibility for future funding or support under the program and may result in increased scrutiny during future audits or reviews. Questioned Costs None Context The City applied the funding properly for the purpose of the program, but due to the previously mentioned causes, missed the 60-day timeframe to apply the customer credits. We do not believe this to be indicative of a systemic noncompliance in the program, when taken as a whole, and is likely not to be repeated in future years. Repeat Finding No Recommendation To prevent future occurrences of the deficiency, it is recommended that the City implement a more robust tracking system for monitoring the receipt and allocation of funds under the California Water and Wastewater Arrearages Payment Program. Given that this is a one-time grant program, the City should also ensure that all staff involved fully understand the specific requirements and deadlines unique to such programs. This can be achieved by providing targeted training on one-time grant programs and establishing clear procedures to ensure compliance with time-sensitive allocations. Regular reviews should be conducted to ensure ongoing understanding of program requirements and reinforce accountability. These measures will help ensure prompt and compliant fund allocation for both current and future one-time programs.
Finding 2024-001
Evaluation of Finding Significant Deficiency Criteria Management is responsible for ensuring compliance with the California Water and Wastewater Arrearages Payment Program Guidelines and the Uniform Guidance, including the timely allocation of funds as bill credits within 60 days of receipt. This includes the design, implementation, and maintenance of effective internal controls to ensure that arrearages are allocated in accordance with the program’s requirements. Failure to allocate the Water and Wastewater Arrearages within the required timeframe could result in non-compliance with both state and federal regulations. Recipients of federal awards must maintain accurate records and documentation to support the proper allocation of funds, in line with 2 CFR 200.302, and take corrective actions if allocations are delayed. Condition During the single audit, we found that Wastewater Arrearages claimed were not allocated as bill credits within 60 days of receipt of funds requested in accordance with the California Water and Wastewater Arrearages Payment Program Guidelines. Cause of Condition The delay in allocating the wastewater arrearages within the required 60-day period was due to challenges in the internal controls and monitoring processes that impacted the timely allocation. The tracking systems in place did not fully support the prompt allocation in accordance with the California Water and Wastewater Arrearages Payment Program Guidelines. Additionally, there were delays in ensuring that the 60-day requirement was consistently met. As a result, the allocation did not occur within the required timeframe, leading to a non-compliance issue with both state and federal regulations. Effect or Potential Effect of Condition The delay in allocating the wastewater arrearages within the required 60-day period may lead to non-compliance with both state and federal regulations, which could result in the disallowance of the funds. This could also impact the agency’s eligibility for future funding or support under the program and may result in increased scrutiny during future audits or reviews. Questioned Costs None Context The City applied the funding properly for the purpose of the program, but due to the previously mentioned causes, missed the 60-day timeframe to apply the customer credits. We do not believe this to be indicative of a systemic noncompliance in the program, when taken as a whole, and is likely not to be repeated in future years. Repeat Finding No Recommendation To prevent future occurrences of the deficiency, it is recommended that the City implement a more robust tracking system for monitoring the receipt and allocation of funds under the California Water and Wastewater Arrearages Payment Program. Given that this is a one-time grant program, the City should also ensure that all staff involved fully understand the specific requirements and deadlines unique to such programs. This can be achieved by providing targeted training on one-time grant programs and establishing clear procedures to ensure compliance with time-sensitive allocations. Regular reviews should be conducted to ensure ongoing understanding of program requirements and reinforce accountability. These measures will help ensure prompt and compliant fund allocation for both current and future one-time programs.