Audit 362784

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance Uniform Guidance, recipients of federal funds must establish and maintain effective internal controls over cash management to ensure that federal funds are properly drawn down, and expenditures are accurately recorded and reported. Cash drawdowns should be supported by accurate documentation, authorized by appropriate officials, and reconciled to grant expenditures. A strong internal control environment should include formal policies and procedures for cash management, clear communication between departments involved in grant management, and a system for tracking grant expenditures and drawdowns. Condition: During the audit of cash management procedures for the Federal Transit Cluster, we noted that one out of six drawdown submitted for reimbursement was not consistently reviewed or approved by the City Manager prior to submission. Additionally, three out of six drawdowns contained corrections to the amounts being charged to the grants due to errors identified after submission. Cause: The City lacks formal policies and procedures governing the review, approval, and reconciliation of cash management for federal grants. Furthermore, there is no formal process for tracking grant expenditures and drawdowns, and insufficient communication exists between the Transit Department and the Finance Department, leading to correction in drawdown requests. Effect or Potential Effect: The absence of formal cash management procedures and ineffective communication between departments increase the risk of inaccurate drawdowns, which may result in overdrawn funds, questioned costs, or noncompliance with federal requirements. Additionally, not properly reviewing and approving all drawdowns increases the risk of errors or unauthorized drawdowns. Questioned Costs: None noted. Context: See condition above for the context of the cash management finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City develop and implement formal policies and procedures for cash management of federal grants, including establishing a clear process for preparing, reviewing, and approving grant drawdowns, ensuring that all drawdowns are reviewed and authorized by a designated official, such as the City Manager, prior to submission. Further, we recommend the City implement a tracking system for grant expenditures and drawdowns to ensure accuracy and compliance with grant requirements and enhance communication between the Transportation Department and Finance Department to ensure that all grant expenditures are accurately recorded and reported. We also recommend the City provide training to staff involved in grant management to ensure a clear understanding of federal cash management requirements and internal control procedures. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance Uniform Guidance, recipients of federal funds must establish and maintain effective internal controls over cash management to ensure that federal funds are properly drawn down, and expenditures are accurately recorded and reported. Cash drawdowns should be supported by accurate documentation, authorized by appropriate officials, and reconciled to grant expenditures. A strong internal control environment should include formal policies and procedures for cash management, clear communication between departments involved in grant management, and a system for tracking grant expenditures and drawdowns. Condition: During the audit of cash management procedures for the Federal Transit Cluster, we noted that one out of six drawdown submitted for reimbursement was not consistently reviewed or approved by the City Manager prior to submission. Additionally, three out of six drawdowns contained corrections to the amounts being charged to the grants due to errors identified after submission. Cause: The City lacks formal policies and procedures governing the review, approval, and reconciliation of cash management for federal grants. Furthermore, there is no formal process for tracking grant expenditures and drawdowns, and insufficient communication exists between the Transit Department and the Finance Department, leading to correction in drawdown requests. Effect or Potential Effect: The absence of formal cash management procedures and ineffective communication between departments increase the risk of inaccurate drawdowns, which may result in overdrawn funds, questioned costs, or noncompliance with federal requirements. Additionally, not properly reviewing and approving all drawdowns increases the risk of errors or unauthorized drawdowns. Questioned Costs: None noted. Context: See condition above for the context of the cash management finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City develop and implement formal policies and procedures for cash management of federal grants, including establishing a clear process for preparing, reviewing, and approving grant drawdowns, ensuring that all drawdowns are reviewed and authorized by a designated official, such as the City Manager, prior to submission. Further, we recommend the City implement a tracking system for grant expenditures and drawdowns to ensure accuracy and compliance with grant requirements and enhance communication between the Transportation Department and Finance Department to ensure that all grant expenditures are accurately recorded and reported. We also recommend the City provide training to staff involved in grant management to ensure a clear understanding of federal cash management requirements and internal control procedures. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance Uniform Guidance, recipients of federal funds must establish and maintain effective internal controls over cash management to ensure that federal funds are properly drawn down, and expenditures are accurately recorded and reported. Cash drawdowns should be supported by accurate documentation, authorized by appropriate officials, and reconciled to grant expenditures. A strong internal control environment should include formal policies and procedures for cash management, clear communication between departments involved in grant management, and a system for tracking grant expenditures and drawdowns. Condition: During the audit of cash management procedures for the Federal Transit Cluster, we noted that one out of six drawdown submitted for reimbursement was not consistently reviewed or approved by the City Manager prior to submission. Additionally, three out of six drawdowns contained corrections to the amounts being charged to the grants due to errors identified after submission. Cause: The City lacks formal policies and procedures governing the review, approval, and reconciliation of cash management for federal grants. Furthermore, there is no formal process for tracking grant expenditures and drawdowns, and insufficient communication exists between the Transit Department and the Finance Department, leading to correction in drawdown requests. Effect or Potential Effect: The absence of formal cash management procedures and ineffective communication between departments increase the risk of inaccurate drawdowns, which may result in overdrawn funds, questioned costs, or noncompliance with federal requirements. Additionally, not properly reviewing and approving all drawdowns increases the risk of errors or unauthorized drawdowns. Questioned Costs: None noted. Context: See condition above for the context of the cash management finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City develop and implement formal policies and procedures for cash management of federal grants, including establishing a clear process for preparing, reviewing, and approving grant drawdowns, ensuring that all drawdowns are reviewed and authorized by a designated official, such as the City Manager, prior to submission. Further, we recommend the City implement a tracking system for grant expenditures and drawdowns to ensure accuracy and compliance with grant requirements and enhance communication between the Transportation Department and Finance Department to ensure that all grant expenditures are accurately recorded and reported. We also recommend the City provide training to staff involved in grant management to ensure a clear understanding of federal cash management requirements and internal control procedures. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance Uniform Guidance, recipients of federal funds must establish and maintain effective internal controls over cash management to ensure that federal funds are properly drawn down, and expenditures are accurately recorded and reported. Cash drawdowns should be supported by accurate documentation, authorized by appropriate officials, and reconciled to grant expenditures. A strong internal control environment should include formal policies and procedures for cash management, clear communication between departments involved in grant management, and a system for tracking grant expenditures and drawdowns. Condition: During the audit of cash management procedures for the Federal Transit Cluster, we noted that one out of six drawdown submitted for reimbursement was not consistently reviewed or approved by the City Manager prior to submission. Additionally, three out of six drawdowns contained corrections to the amounts being charged to the grants due to errors identified after submission. Cause: The City lacks formal policies and procedures governing the review, approval, and reconciliation of cash management for federal grants. Furthermore, there is no formal process for tracking grant expenditures and drawdowns, and insufficient communication exists between the Transit Department and the Finance Department, leading to correction in drawdown requests. Effect or Potential Effect: The absence of formal cash management procedures and ineffective communication between departments increase the risk of inaccurate drawdowns, which may result in overdrawn funds, questioned costs, or noncompliance with federal requirements. Additionally, not properly reviewing and approving all drawdowns increases the risk of errors or unauthorized drawdowns. Questioned Costs: None noted. Context: See condition above for the context of the cash management finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City develop and implement formal policies and procedures for cash management of federal grants, including establishing a clear process for preparing, reviewing, and approving grant drawdowns, ensuring that all drawdowns are reviewed and authorized by a designated official, such as the City Manager, prior to submission. Further, we recommend the City implement a tracking system for grant expenditures and drawdowns to ensure accuracy and compliance with grant requirements and enhance communication between the Transportation Department and Finance Department to ensure that all grant expenditures are accurately recorded and reported. We also recommend the City provide training to staff involved in grant management to ensure a clear understanding of federal cash management requirements and internal control procedures. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance Uniform Guidance, recipients of federal funds must establish and maintain effective internal controls over cash management to ensure that federal funds are properly drawn down, and expenditures are accurately recorded and reported. Cash drawdowns should be supported by accurate documentation, authorized by appropriate officials, and reconciled to grant expenditures. A strong internal control environment should include formal policies and procedures for cash management, clear communication between departments involved in grant management, and a system for tracking grant expenditures and drawdowns. Condition: During the audit of cash management procedures for the Federal Transit Cluster, we noted that one out of six drawdown submitted for reimbursement was not consistently reviewed or approved by the City Manager prior to submission. Additionally, three out of six drawdowns contained corrections to the amounts being charged to the grants due to errors identified after submission. Cause: The City lacks formal policies and procedures governing the review, approval, and reconciliation of cash management for federal grants. Furthermore, there is no formal process for tracking grant expenditures and drawdowns, and insufficient communication exists between the Transit Department and the Finance Department, leading to correction in drawdown requests. Effect or Potential Effect: The absence of formal cash management procedures and ineffective communication between departments increase the risk of inaccurate drawdowns, which may result in overdrawn funds, questioned costs, or noncompliance with federal requirements. Additionally, not properly reviewing and approving all drawdowns increases the risk of errors or unauthorized drawdowns. Questioned Costs: None noted. Context: See condition above for the context of the cash management finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City develop and implement formal policies and procedures for cash management of federal grants, including establishing a clear process for preparing, reviewing, and approving grant drawdowns, ensuring that all drawdowns are reviewed and authorized by a designated official, such as the City Manager, prior to submission. Further, we recommend the City implement a tracking system for grant expenditures and drawdowns to ensure accuracy and compliance with grant requirements and enhance communication between the Transportation Department and Finance Department to ensure that all grant expenditures are accurately recorded and reported. We also recommend the City provide training to staff involved in grant management to ensure a clear understanding of federal cash management requirements and internal control procedures. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance Uniform Guidance, recipients of federal funds must establish and maintain effective internal controls over cash management to ensure that federal funds are properly drawn down, and expenditures are accurately recorded and reported. Cash drawdowns should be supported by accurate documentation, authorized by appropriate officials, and reconciled to grant expenditures. A strong internal control environment should include formal policies and procedures for cash management, clear communication between departments involved in grant management, and a system for tracking grant expenditures and drawdowns. Condition: During the audit of cash management procedures for the Federal Transit Cluster, we noted that one out of six drawdown submitted for reimbursement was not consistently reviewed or approved by the City Manager prior to submission. Additionally, three out of six drawdowns contained corrections to the amounts being charged to the grants due to errors identified after submission. Cause: The City lacks formal policies and procedures governing the review, approval, and reconciliation of cash management for federal grants. Furthermore, there is no formal process for tracking grant expenditures and drawdowns, and insufficient communication exists between the Transit Department and the Finance Department, leading to correction in drawdown requests. Effect or Potential Effect: The absence of formal cash management procedures and ineffective communication between departments increase the risk of inaccurate drawdowns, which may result in overdrawn funds, questioned costs, or noncompliance with federal requirements. Additionally, not properly reviewing and approving all drawdowns increases the risk of errors or unauthorized drawdowns. Questioned Costs: None noted. Context: See condition above for the context of the cash management finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City develop and implement formal policies and procedures for cash management of federal grants, including establishing a clear process for preparing, reviewing, and approving grant drawdowns, ensuring that all drawdowns are reviewed and authorized by a designated official, such as the City Manager, prior to submission. Further, we recommend the City implement a tracking system for grant expenditures and drawdowns to ensure accuracy and compliance with grant requirements and enhance communication between the Transportation Department and Finance Department to ensure that all grant expenditures are accurately recorded and reported. We also recommend the City provide training to staff involved in grant management to ensure a clear understanding of federal cash management requirements and internal control procedures. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance Uniform Guidance, recipients of federal funds must establish and maintain effective internal controls over cash management to ensure that federal funds are properly drawn down, and expenditures are accurately recorded and reported. Cash drawdowns should be supported by accurate documentation, authorized by appropriate officials, and reconciled to grant expenditures. A strong internal control environment should include formal policies and procedures for cash management, clear communication between departments involved in grant management, and a system for tracking grant expenditures and drawdowns. Condition: During the audit of cash management procedures for the Federal Transit Cluster, we noted that one out of six drawdown submitted for reimbursement was not consistently reviewed or approved by the City Manager prior to submission. Additionally, three out of six drawdowns contained corrections to the amounts being charged to the grants due to errors identified after submission. Cause: The City lacks formal policies and procedures governing the review, approval, and reconciliation of cash management for federal grants. Furthermore, there is no formal process for tracking grant expenditures and drawdowns, and insufficient communication exists between the Transit Department and the Finance Department, leading to correction in drawdown requests. Effect or Potential Effect: The absence of formal cash management procedures and ineffective communication between departments increase the risk of inaccurate drawdowns, which may result in overdrawn funds, questioned costs, or noncompliance with federal requirements. Additionally, not properly reviewing and approving all drawdowns increases the risk of errors or unauthorized drawdowns. Questioned Costs: None noted. Context: See condition above for the context of the cash management finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City develop and implement formal policies and procedures for cash management of federal grants, including establishing a clear process for preparing, reviewing, and approving grant drawdowns, ensuring that all drawdowns are reviewed and authorized by a designated official, such as the City Manager, prior to submission. Further, we recommend the City implement a tracking system for grant expenditures and drawdowns to ensure accuracy and compliance with grant requirements and enhance communication between the Transportation Department and Finance Department to ensure that all grant expenditures are accurately recorded and reported. We also recommend the City provide training to staff involved in grant management to ensure a clear understanding of federal cash management requirements and internal control procedures. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance Uniform Guidance, recipients of federal funds must establish and maintain effective internal controls over cash management to ensure that federal funds are properly drawn down, and expenditures are accurately recorded and reported. Cash drawdowns should be supported by accurate documentation, authorized by appropriate officials, and reconciled to grant expenditures. A strong internal control environment should include formal policies and procedures for cash management, clear communication between departments involved in grant management, and a system for tracking grant expenditures and drawdowns. Condition: During the audit of cash management procedures for the Federal Transit Cluster, we noted that one out of six drawdown submitted for reimbursement was not consistently reviewed or approved by the City Manager prior to submission. Additionally, three out of six drawdowns contained corrections to the amounts being charged to the grants due to errors identified after submission. Cause: The City lacks formal policies and procedures governing the review, approval, and reconciliation of cash management for federal grants. Furthermore, there is no formal process for tracking grant expenditures and drawdowns, and insufficient communication exists between the Transit Department and the Finance Department, leading to correction in drawdown requests. Effect or Potential Effect: The absence of formal cash management procedures and ineffective communication between departments increase the risk of inaccurate drawdowns, which may result in overdrawn funds, questioned costs, or noncompliance with federal requirements. Additionally, not properly reviewing and approving all drawdowns increases the risk of errors or unauthorized drawdowns. Questioned Costs: None noted. Context: See condition above for the context of the cash management finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City develop and implement formal policies and procedures for cash management of federal grants, including establishing a clear process for preparing, reviewing, and approving grant drawdowns, ensuring that all drawdowns are reviewed and authorized by a designated official, such as the City Manager, prior to submission. Further, we recommend the City implement a tracking system for grant expenditures and drawdowns to ensure accuracy and compliance with grant requirements and enhance communication between the Transportation Department and Finance Department to ensure that all grant expenditures are accurately recorded and reported. We also recommend the City provide training to staff involved in grant management to ensure a clear understanding of federal cash management requirements and internal control procedures. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance Uniform Guidance, recipients of federal funds must establish and maintain effective internal controls over cash management to ensure that federal funds are properly drawn down, and expenditures are accurately recorded and reported. Cash drawdowns should be supported by accurate documentation, authorized by appropriate officials, and reconciled to grant expenditures. A strong internal control environment should include formal policies and procedures for cash management, clear communication between departments involved in grant management, and a system for tracking grant expenditures and drawdowns. Condition: During the audit of cash management procedures for the Federal Transit Cluster, we noted that one out of six drawdown submitted for reimbursement was not consistently reviewed or approved by the City Manager prior to submission. Additionally, three out of six drawdowns contained corrections to the amounts being charged to the grants due to errors identified after submission. Cause: The City lacks formal policies and procedures governing the review, approval, and reconciliation of cash management for federal grants. Furthermore, there is no formal process for tracking grant expenditures and drawdowns, and insufficient communication exists between the Transit Department and the Finance Department, leading to correction in drawdown requests. Effect or Potential Effect: The absence of formal cash management procedures and ineffective communication between departments increase the risk of inaccurate drawdowns, which may result in overdrawn funds, questioned costs, or noncompliance with federal requirements. Additionally, not properly reviewing and approving all drawdowns increases the risk of errors or unauthorized drawdowns. Questioned Costs: None noted. Context: See condition above for the context of the cash management finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City develop and implement formal policies and procedures for cash management of federal grants, including establishing a clear process for preparing, reviewing, and approving grant drawdowns, ensuring that all drawdowns are reviewed and authorized by a designated official, such as the City Manager, prior to submission. Further, we recommend the City implement a tracking system for grant expenditures and drawdowns to ensure accuracy and compliance with grant requirements and enhance communication between the Transportation Department and Finance Department to ensure that all grant expenditures are accurately recorded and reported. We also recommend the City provide training to staff involved in grant management to ensure a clear understanding of federal cash management requirements and internal control procedures. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance Uniform Guidance, recipients of federal funds must establish and maintain effective internal controls over cash management to ensure that federal funds are properly drawn down, and expenditures are accurately recorded and reported. Cash drawdowns should be supported by accurate documentation, authorized by appropriate officials, and reconciled to grant expenditures. A strong internal control environment should include formal policies and procedures for cash management, clear communication between departments involved in grant management, and a system for tracking grant expenditures and drawdowns. Condition: During the audit of cash management procedures for the Federal Transit Cluster, we noted that one out of six drawdown submitted for reimbursement was not consistently reviewed or approved by the City Manager prior to submission. Additionally, three out of six drawdowns contained corrections to the amounts being charged to the grants due to errors identified after submission. Cause: The City lacks formal policies and procedures governing the review, approval, and reconciliation of cash management for federal grants. Furthermore, there is no formal process for tracking grant expenditures and drawdowns, and insufficient communication exists between the Transit Department and the Finance Department, leading to correction in drawdown requests. Effect or Potential Effect: The absence of formal cash management procedures and ineffective communication between departments increase the risk of inaccurate drawdowns, which may result in overdrawn funds, questioned costs, or noncompliance with federal requirements. Additionally, not properly reviewing and approving all drawdowns increases the risk of errors or unauthorized drawdowns. Questioned Costs: None noted. Context: See condition above for the context of the cash management finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City develop and implement formal policies and procedures for cash management of federal grants, including establishing a clear process for preparing, reviewing, and approving grant drawdowns, ensuring that all drawdowns are reviewed and authorized by a designated official, such as the City Manager, prior to submission. Further, we recommend the City implement a tracking system for grant expenditures and drawdowns to ensure accuracy and compliance with grant requirements and enhance communication between the Transportation Department and Finance Department to ensure that all grant expenditures are accurately recorded and reported. We also recommend the City provide training to staff involved in grant management to ensure a clear understanding of federal cash management requirements and internal control procedures. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.