Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The City should have internal controls designed to ensure compliance with those provisions.
Condition: During our testing, we noted the City did not perform the suspension and debarment verification.
Questioned Costs: None.
Context: The City did not perform suspension and debarment verification for five out of the five samples tested.
Cause: The department was not aware of the compliance requirement.
Effect: There is a potential the City could contract with a disbarred or suspended entity if the verification is not performed.
Repeat Finding: This is a repeat of a finding from the immediately prior year, finding number 2023 002.
Recommendation: We recommend the City perform suspension and debarment procedures on all vendors with which it plans to enter into a covered transaction.
View of Responsible Officials: There is no disagreement with the audit finding.
Criteria or Specific Requirement: There are three types of procurement methods described in 2 CFR 200.320 that the City is required to follow under the Uniform Guidance: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods.
Condition: There are specific circumstances under the Uniform Guidance in which the City may use a noncompetitive procurement method. During our testing, we noted the City's use of the noncompetitive procurement method was inappropriate.
Questioned Costs: None.
Context: For one out of five samples tested, the City did not properly follow the procurement methods described in CFR 200.320. The City's municipal code allows for exceptions to the bidding requirements of the City's purchasing policy for engineering services. However, it is not one of the circumstances under the Uniform Guidance in which noncompetitive procurement can be used.
Cause: The department was not aware of the Uniform Guidance procurement requirements.
Effect: The City is not in compliance with the procurement requirements of the Uniform Guidance.
Recommendation: We recommend the City implement controls and procedures to ensure procurements with federal funds follow the Uniform Guidance requirements.
View of Responsible Officials: There is no disagreement with the audit finding.
Criteria or Specific Requirement: Tier I day care homes are those operated by providers whose own household meets the income standards for free or reduced price meals, or those located in low-income areas. A low-income area is one where at least 50% of the children are eligible for free or reduced price school meals. Sponsoring organizations may use school enrollment data or census data to determine if a home is located in a low-income area.
Condition: During our testing, we noted the City incorrectly determined two-day care homes as tier II instead of tier I.
Questioned Costs: None.
Context: Two out of the 35 samples tested for day care home tier determinations were based on school enrollment data that was superseded as of the date the determination was performed.
Cause: The program staff that performed the tier determination on May 11, 2023, and May 12, 2023, was new at the time and was unaware of when the school enrollment data was revised by the California Department of Education (CDE). The FY 21-22 school enrollment data was utilized instead of the FY 22-23 school enrollment data, which was available as of April 4, 2023, on CDE's website.
Effect: The two-day care home providers received less reimbursements than they were eligible for and the City reported less federal expenditures than they would have using the correct tier pricing.
Recommendation: We recommend the City implement controls and procedures to ensure the most current school enrollment data at the time the tier determination is performed is utilized as the basis of the determination.
View of Responsible Officials: There is no disagreement with the audit finding.
Criteria or Specific Requirement: According to 7 CFR 226.16 (d)(4)(iii), the City must review each day care home three times each year and not more than six months may elapse between reviews.
Condition: During our testing, we noted more than six months elapsed between the City's monitoring reviews.
Questioned Costs: None.
Context: For five out of the fourteen day care homes selected for testing, more than six months had elapsed between the City's monitoring reviews.
Cause: The department's monitoring personnel was out on disability leave and subsequently retired, leaving the department with insufficient staffing to monitor all of the day care homes in accordance to the requirements.
Effect: Day care homes were not monitored in accordance with the program requirements.
Recommendation: We recommend the City implement controls and procedures to track when day care homes are reviewed to ensure that no more than six months elapses between review s of each day care home..
View of Responsible Officials: There is no disagreement with the audit finding.
Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The City should have internal controls designed to ensure compliance with those provisions.
Condition: During our testing, we noted the City did not perform the suspension and debarment verification.
Questioned Costs: None.
Context: The City did not perform suspension and debarment verification for five out of the five samples tested.
Cause: The department was not aware of the compliance requirement.
Effect: There is a potential the City could contract with a disbarred or suspended entity if the verification is not performed.
Repeat Finding: This is a repeat of a finding from the immediately prior year, finding number 2023 002.
Recommendation: We recommend the City perform suspension and debarment procedures on all vendors with which it plans to enter into a covered transaction.
View of Responsible Officials: There is no disagreement with the audit finding.
Criteria or Specific Requirement: There are three types of procurement methods described in 2 CFR 200.320 that the City is required to follow under the Uniform Guidance: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods.
Condition: There are specific circumstances under the Uniform Guidance in which the City may use a noncompetitive procurement method. During our testing, we noted the City's use of the noncompetitive procurement method was inappropriate.
Questioned Costs: None.
Context: For one out of five samples tested, the City did not properly follow the procurement methods described in CFR 200.320. The City's municipal code allows for exceptions to the bidding requirements of the City's purchasing policy for engineering services. However, it is not one of the circumstances under the Uniform Guidance in which noncompetitive procurement can be used.
Cause: The department was not aware of the Uniform Guidance procurement requirements.
Effect: The City is not in compliance with the procurement requirements of the Uniform Guidance.
Recommendation: We recommend the City implement controls and procedures to ensure procurements with federal funds follow the Uniform Guidance requirements.
View of Responsible Officials: There is no disagreement with the audit finding.
Criteria or Specific Requirement: Tier I day care homes are those operated by providers whose own household meets the income standards for free or reduced price meals, or those located in low-income areas. A low-income area is one where at least 50% of the children are eligible for free or reduced price school meals. Sponsoring organizations may use school enrollment data or census data to determine if a home is located in a low-income area.
Condition: During our testing, we noted the City incorrectly determined two-day care homes as tier II instead of tier I.
Questioned Costs: None.
Context: Two out of the 35 samples tested for day care home tier determinations were based on school enrollment data that was superseded as of the date the determination was performed.
Cause: The program staff that performed the tier determination on May 11, 2023, and May 12, 2023, was new at the time and was unaware of when the school enrollment data was revised by the California Department of Education (CDE). The FY 21-22 school enrollment data was utilized instead of the FY 22-23 school enrollment data, which was available as of April 4, 2023, on CDE's website.
Effect: The two-day care home providers received less reimbursements than they were eligible for and the City reported less federal expenditures than they would have using the correct tier pricing.
Recommendation: We recommend the City implement controls and procedures to ensure the most current school enrollment data at the time the tier determination is performed is utilized as the basis of the determination.
View of Responsible Officials: There is no disagreement with the audit finding.
Criteria or Specific Requirement: According to 7 CFR 226.16 (d)(4)(iii), the City must review each day care home three times each year and not more than six months may elapse between reviews.
Condition: During our testing, we noted more than six months elapsed between the City's monitoring reviews.
Questioned Costs: None.
Context: For five out of the fourteen day care homes selected for testing, more than six months had elapsed between the City's monitoring reviews.
Cause: The department's monitoring personnel was out on disability leave and subsequently retired, leaving the department with insufficient staffing to monitor all of the day care homes in accordance to the requirements.
Effect: Day care homes were not monitored in accordance with the program requirements.
Recommendation: We recommend the City implement controls and procedures to track when day care homes are reviewed to ensure that no more than six months elapses between review s of each day care home..
View of Responsible Officials: There is no disagreement with the audit finding.