2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction
Financial Assistance Listing Number: 20.205
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Instance of
Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) (40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326).
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not
document their review and approval of certified payroll submission. In addition, for two (2) out
of eight (8) weeks of certified payroll selected for testing, we noted the contractor or
subcontractor did not submit the certified payroll in a timely manner.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the
contractor’s and subcontractor’s timely submittal of certified payroll.
Effect:
Ineffective procedures over this area of compliance could result in noncompliance with the
wage rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction
Financial Assistance Listing Number: 20.205
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Instance of
Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) (40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326).
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not
document their review and approval of certified payroll submission. In addition, for two (2) out
of eight (8) weeks of certified payroll selected for testing, we noted the contractor or
subcontractor did not submit the certified payroll in a timely manner.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the
contractor’s and subcontractor’s timely submittal of certified payroll.
Effect:
Ineffective procedures over this area of compliance could result in noncompliance with the
wage rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction
Financial Assistance Listing Number: 20.205
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Instance of
Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) (40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326).
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not
document their review and approval of certified payroll submission. In addition, for two (2) out
of eight (8) weeks of certified payroll selected for testing, we noted the contractor or
subcontractor did not submit the certified payroll in a timely manner.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the
contractor’s and subcontractor’s timely submittal of certified payroll.
Effect:
Ineffective procedures over this area of compliance could result in noncompliance with the
wage rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction
Financial Assistance Listing Number: 20.205
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Instance of
Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) (40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326).
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not
document their review and approval of certified payroll submission. In addition, for two (2) out
of eight (8) weeks of certified payroll selected for testing, we noted the contractor or
subcontractor did not submit the certified payroll in a timely manner.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the
contractor’s and subcontractor’s timely submittal of certified payroll.
Effect:
Ineffective procedures over this area of compliance could result in noncompliance with the
wage rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction
Financial Assistance Listing Number: 20.205
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Instance of
Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) (40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326).
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not
document their review and approval of certified payroll submission. In addition, for two (2) out
of eight (8) weeks of certified payroll selected for testing, we noted the contractor or
subcontractor did not submit the certified payroll in a timely manner.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the
contractor’s and subcontractor’s timely submittal of certified payroll.
Effect:
Ineffective procedures over this area of compliance could result in noncompliance with the
wage rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-003 Program: Nationally Significant Freight and Highway Projects
Financial Assistance Listing Number: 20.934
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance
of Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) 40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326.
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
In March 2024, the City implemented procedural changes to their certified payroll review
process. Until February 2024, the City did not retain evidence to document the individual who
reviewed the certified payroll for each week in which work was performed by construction
contractors and subcontractors. Due to backlog, the City was not able to catch up on
certifications until August 2024 which was after the fiscal year had ended.
For fifty-four (54) of sixty (60) weeks of certified payroll submissions selected for testing, we
noted that the City did not review the contractors’ submissions of certified payroll in a timely
manner.
For six (6) out of sixty (60) weeks of certified payroll submissions selected, we noted that a
statement of non-performance was submitted. However, the tracking spreadsheet provided to
the City by its 3rd party project manager indicated that work had been performed.
For nineteen (19) out of sixty (60) weeks of certified payroll submissions selected, we noted that
the contractor or subcontractor had not submitted the weekly certified payroll in a timely
manner. The contractor had submitted their certified payroll several weeks after the week of
work performed.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the accuracy
of the tracking of work weeks being performed as well as the contractor’s and subcontractor’s
timely submittal of certified payroll.
Effect:
Ineffective controls over this area of compliance could result in noncompliance with the wage
rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected sixty (60) out of all weeks indicated as work weeks for the City’s
project for testing. However, due to the condition noted above, the population of work weeks
could not be verified.
Repeat Finding from the Prior Year(s):
Yes, 2023-003.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-002 Program: CDBG – Entitlement/Special Purpose Grants Cluster
Financial Assistance Listing Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: All
Grant Award Number: All
Compliance Requirements: Reporting
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
preparer and approver of required reports.
Condition:
We identified one (1) instance in which the City did not retain evidence to document the
individual who reviewed and approved the required reports prior to submission. This consisted
of one (1) financial report.
Cause:
The City's procedures did not include documenting the review and approval of the reports prior
to submission.
Effect:
Ineffective controls over this area of compliance could result in reports that are inaccurate or
incomplete being submitted or disclosed to the granting agency.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A nonstatistical sample of two (2) out of four (4) cash on hand reports were selected for
reporting testing.
Repeat Finding from the Prior Year(s):
Yes.
Recommendation:
The City has implemented the appropriate changes subsequent to the end of fiscal year 2024.
During fiscal year 2024, the City had not fully implemented corrective actions. We recommend
the City continue performing the corrective actions they made.
Views of Responsible Official:
The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction
Financial Assistance Listing Number: 20.205
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Instance of
Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) (40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326).
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not
document their review and approval of certified payroll submission. In addition, for two (2) out
of eight (8) weeks of certified payroll selected for testing, we noted the contractor or
subcontractor did not submit the certified payroll in a timely manner.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the
contractor’s and subcontractor’s timely submittal of certified payroll.
Effect:
Ineffective procedures over this area of compliance could result in noncompliance with the
wage rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction
Financial Assistance Listing Number: 20.205
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Instance of
Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) (40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326).
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not
document their review and approval of certified payroll submission. In addition, for two (2) out
of eight (8) weeks of certified payroll selected for testing, we noted the contractor or
subcontractor did not submit the certified payroll in a timely manner.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the
contractor’s and subcontractor’s timely submittal of certified payroll.
Effect:
Ineffective procedures over this area of compliance could result in noncompliance with the
wage rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction
Financial Assistance Listing Number: 20.205
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Instance of
Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) (40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326).
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not
document their review and approval of certified payroll submission. In addition, for two (2) out
of eight (8) weeks of certified payroll selected for testing, we noted the contractor or
subcontractor did not submit the certified payroll in a timely manner.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the
contractor’s and subcontractor’s timely submittal of certified payroll.
Effect:
Ineffective procedures over this area of compliance could result in noncompliance with the
wage rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction
Financial Assistance Listing Number: 20.205
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Instance of
Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) (40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326).
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not
document their review and approval of certified payroll submission. In addition, for two (2) out
of eight (8) weeks of certified payroll selected for testing, we noted the contractor or
subcontractor did not submit the certified payroll in a timely manner.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the
contractor’s and subcontractor’s timely submittal of certified payroll.
Effect:
Ineffective procedures over this area of compliance could result in noncompliance with the
wage rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction
Financial Assistance Listing Number: 20.205
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Instance of
Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) (40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326).
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not
document their review and approval of certified payroll submission. In addition, for two (2) out
of eight (8) weeks of certified payroll selected for testing, we noted the contractor or
subcontractor did not submit the certified payroll in a timely manner.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the
contractor’s and subcontractor’s timely submittal of certified payroll.
Effect:
Ineffective procedures over this area of compliance could result in noncompliance with the
wage rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.
2024-003 Program: Nationally Significant Freight and Highway Projects
Financial Assistance Listing Number: 20.934
Federal Agency: U.S. Department of Transportation
Pass-through: California Department of Transportation
Award Year: Multiple
Grant Award Number: Multiple
Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements
Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance
of Noncompliance
Criteria:
All laborers and mechanics employed by contractors or subcontractors to work on construction
contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less
than those established for the locality of the project (prevailing wage rates) by the Department
of Labor (DOL) 40 USC 3141–3144, 3146, and 3147.
Nonfederal entities shall include in their construction contracts subject to the Wage Rate
Requirements a provision that the contractor or subcontractor comply with those requirements
and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts
Governing Federally Financed and Assisted Construction). This includes a requirement for the
contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which
any contract work is performed, a copy of the payroll and a statement of compliance (certified
payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular
A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR
section 200.326.
2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the
receipt and review of certified payrolls.
Condition:
In March 2024, the City implemented procedural changes to their certified payroll review
process. Until February 2024, the City did not retain evidence to document the individual who
reviewed the certified payroll for each week in which work was performed by construction
contractors and subcontractors. Due to backlog, the City was not able to catch up on
certifications until August 2024 which was after the fiscal year had ended.
For fifty-four (54) of sixty (60) weeks of certified payroll submissions selected for testing, we
noted that the City did not review the contractors’ submissions of certified payroll in a timely
manner.
For six (6) out of sixty (60) weeks of certified payroll submissions selected, we noted that a
statement of non-performance was submitted. However, the tracking spreadsheet provided to
the City by its 3rd party project manager indicated that work had been performed.
For nineteen (19) out of sixty (60) weeks of certified payroll submissions selected, we noted that
the contractor or subcontractor had not submitted the weekly certified payroll in a timely
manner. The contractor had submitted their certified payroll several weeks after the week of
work performed.
Cause:
The City’s procedures did not include documenting the review of the certified payroll received.
In addition, the City did not have the necessary internal controls in place to ensure the accuracy
of the tracking of work weeks being performed as well as the contractor’s and subcontractor’s
timely submittal of certified payroll.
Effect:
Ineffective controls over this area of compliance could result in noncompliance with the wage
rate compliance requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
Sampling was used. We selected sixty (60) out of all weeks indicated as work weeks for the City’s
project for testing. However, due to the condition noted above, the population of work weeks
could not be verified.
Repeat Finding from the Prior Year(s):
Yes, 2023-003.
Recommendation:
We recommend that the City strengthen its internal controls to ensure that timely reviews of
certified payroll submissions are being performed by the City. This could include performing
procedures to ensure that information being provided to the City by its consultant project
managers is accurate and that the required certified payroll is being submitted by contractors
and subcontractors in a timely manner.
View of Responsible Official and Planned Corrective Actions
The City concurs with the finding. See separate corrective action plan.