Audit 353604

FY End
2024-06-30
Total Expended
$300.66M
Findings
2
Programs
16
Year: 2024 Accepted: 2025-04-14
Auditor: Davis Farr LLP

Organization Exclusion Status:

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Contacts

Name Title Type
CF3XG46HAWE8 Sandi Craig Auditee
6196996998 Jennifer Farr Auditor
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Notes to SEFA

Title: Scope of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: SANDAG did not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal grant activity of SANDAG under federal government programs for the year ended June 30, 2024. The information in this schedule 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 Schedule presents only a selected portion of the operations of SANDAG, it is not intended to and does not present the financial position, changes in net position or cash flows of SANDAG.
Title: Scope of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: SANDAG did not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance. SANDAG did not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance.
Title: Basis of Accounting Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: SANDAG did not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards wherein certain types of expenditures are not allowable or are limited as to reimbursement. SANDAG utilizes local funds when federal funds are not received in a timely manner. Upon receipt of federal funds, SANDAG reimburses local funds that were utilized for expenditures for federal programs. Reimbursements are shown as credit balances in the Schedule. Expenditures incurred before a federal grant is executed are included on the Schedule in the year the grant was executed.
Title: Transportation Infrastructure Finance and Innovation Act (TIFIA) Program Loan Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: SANDAG did not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance. On June 27, 2017, the Commission entered into a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan agreement with the United States Department of Transportation to finance the Commission’s continued implementation of the TransNet program for up to $537,484,439 of costs to complete the Mid-Coast Corridor Transit Project. Under terms of the agreement, the Commission will pay an interest rate of 2.72 percent. The Commission’s plan was to issue short-term financing during the period of project construction and use the TIFIA loan proceeds to repay the short-term borrowing. On January 14, 2021, the Commission renegotiated the terms of the loan with the U.S. Department of Transportation to reduce the annual interest rate from 2.72 percent to 1.75 percent. On September 15, 2022, the Commission disbursed $537,484,439 of loan proceeds to repay the 2021 Series A short-term notes. There were no additional TIFIA draws or expenditures made during the fiscal year ended June 30, 2024. As of June 30, 2024, the outstanding amount due on the TIFIA Loan including accrued interest was $554,516,468.

Finding Details

Criteria: Per the grant requirements, the Grantee is required to submit one completed progress report quarterly (totaling four annually), in the form/format provided by the Federal Railroad Administration (FRA). For the duration of the Project Performance Period, the Grantee must report for the periods of: January 1 - March 31; April 1 - June 30; July 1 - September 30; and October 1 - December 31. The Grantee should furnish one copy of the completed progress report to the assigned FRA Grant Manager on or before the thirtieth (30th) calendar day of the month following the end of the quarter for which the report is submitted. Condition: During our audit, we noted two instances of non-compliance regarding the timeliness of required quarterly reporting for the Federal-State Partnership for Intercity Passenger Rail Program grant. The instances of non-compliance are as follows: Quarter 3 Report - Due April 30, 2024, submitted May 1, 2024; Quarter 4 Report - Due July 30, 2024, submitted August 31, 2024. Questioned Costs: No questioned costs were identifed as a result of our procedures. Effect: As a result of the untimely submission of required quarterly reports for the Federal-State Partnership for Intercity Passenger Rail Program grant, compliance with federal grant reporting requirements were not met. Cause: The delays in reporting were due to weaknesses in SANDAG's internal controls for tracking and ensuring timely submission of grant-related reports. The existing system did not sufficiently flag the required reporting deadlines, leading to missed timelines. Recommendation: We recommend SANDAG enhance the system of internal controls for tracking reporting requirements to ensure timely reporting as required by the grant agreements.
Criteria: Per the grant requirements, the Grantee is required to submit one completed progress report quarterly (totaling four annually), in the form/format provided by the Federal Railroad Administration (FRA). For the duration of the Project Performance Period, the Grantee must report for the periods of: January 1 - March 31; April 1 - June 30; July 1 - September 30; and October 1 - December 31. The Grantee should furnish one copy of the completed progress report to the assigned FRA Grant Manager on or before the thirtieth (30th) calendar day of the month following the end of the quarter for which the report is submitted. Condition: During our audit, we noted two instances of non-compliance regarding the timeliness of required quarterly reporting for the Federal-State Partnership for Intercity Passenger Rail Program grant. The instances of non-compliance are as follows: Quarter 3 Report - Due April 30, 2024, submitted May 1, 2024; Quarter 4 Report - Due July 30, 2024, submitted August 31, 2024. Questioned Costs: No questioned costs were identifed as a result of our procedures. Effect: As a result of the untimely submission of required quarterly reports for the Federal-State Partnership for Intercity Passenger Rail Program grant, compliance with federal grant reporting requirements were not met. Cause: The delays in reporting were due to weaknesses in SANDAG's internal controls for tracking and ensuring timely submission of grant-related reports. The existing system did not sufficiently flag the required reporting deadlines, leading to missed timelines. Recommendation: We recommend SANDAG enhance the system of internal controls for tracking reporting requirements to ensure timely reporting as required by the grant agreements.