Finding 2024-002 – Significant Deficiency
Award No.: Assistance List No. 15.555 and No. 15.074
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation, AL No. 15.074 Passed- Through the Del Puerto Water District
Compliance Requirement: Other compliance requirements.
Condition: The Schedule of Expenditures of Federal Awards (SEFA) was not complete, and expenditures reported on the SEFA were revised during the single audit.
Criteria: 2 CFR Part 200, Subpart F (Uniform Guidance) Section 200.502 states, “The auditee should prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements.” Internal controls over preparation of the SEFA should be in place to ensure accrual basis expenses incurred under each federal program are properly reported as expenses on the SEFA and are properly reported as revenue in the financial statements prior to the start of the single audit.
Cause: SEFA was not fully reconciled and finalized until after the single audit began.
Effect: Expenses were omitted from the SEFA that should have been included and other expenses were included on the SEFA that were not eligible. The SEFA had to be revised for multiple grants over the course of the audit. This delayed the audit testing and major program determination process and could have resulted in the wrong programs being tested as major programs and the single audit not complying with the Uniform Guidance.
Context: The District’s Finance Department was not informed of grant amendments that changed the amount of federal funding available. The expenses reported on the SEFA were revised during the single audit as follows.
• AL No. 15.555 San Joaquin River Restoration Program Poso Canal Bridge Replacement: The District estimated additional reimbursable costs of $30,335 existed for the Poso Canal Bridge Replacement grant under a potential new $990,000 grant amendment that was to be signed by the USBR in 2025. The amendment was not approved for the Poso Canal Bridge Replacement but the District included the additional reimbursable expenses on the SEFA. The expenses on the SEFA had to be reduced to reflect the eligible federal grant maximum reimbursable expenses under the approved grant agreement at year-end.
• AL No. 15.704 Small Surface Water and Groundwater Storage Projects Orestimba Creek Recharge and Recovery Expansion: An additional grant amendment was identified during the single audit that authorized an additional $1,262,928 of federal funding. The District had eligible expenses during the period of performance to fully claim the additional funding, but did not include the expenses on the SEFA.
Recommendation: We recommend additional review procedures be implemented to ensure the SEFA is complete and accurate when the single audit begins, which includes working with program managers to identify each grant awarded, obtain current executed grant agreements and amendments, reconciling all expenses incurred under each federal awards down to the invoice, payroll check and lowest level of any other costs claimed, cutting-off each expense at year-end and claiming the reconciled qualifying expenses within 45 days after quarter end. At year-end, programs should be reviewed for cost adjustments, extensions, and other changes that should be reflected on the SEFA when reconciling expenses for the SEFA. Separate general ledger program codes should be used for each grant on the SEFA that summarizes expenses down to the individual invoice level that should be provided to the auditor for the single audit. If overclaimed amounts are identified, the grantor and/or pass-through agency should be contacted to determine whether to return the funds or apply the overclaimed amounts to future claims.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-002 – Significant Deficiency
Award No.: Assistance List No. 15.555 and No. 15.074
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation, AL No. 15.074 Passed- Through the Del Puerto Water District
Compliance Requirement: Other compliance requirements.
Condition: The Schedule of Expenditures of Federal Awards (SEFA) was not complete, and expenditures reported on the SEFA were revised during the single audit.
Criteria: 2 CFR Part 200, Subpart F (Uniform Guidance) Section 200.502 states, “The auditee should prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements.” Internal controls over preparation of the SEFA should be in place to ensure accrual basis expenses incurred under each federal program are properly reported as expenses on the SEFA and are properly reported as revenue in the financial statements prior to the start of the single audit.
Cause: SEFA was not fully reconciled and finalized until after the single audit began.
Effect: Expenses were omitted from the SEFA that should have been included and other expenses were included on the SEFA that were not eligible. The SEFA had to be revised for multiple grants over the course of the audit. This delayed the audit testing and major program determination process and could have resulted in the wrong programs being tested as major programs and the single audit not complying with the Uniform Guidance.
Context: The District’s Finance Department was not informed of grant amendments that changed the amount of federal funding available. The expenses reported on the SEFA were revised during the single audit as follows.
• AL No. 15.555 San Joaquin River Restoration Program Poso Canal Bridge Replacement: The District estimated additional reimbursable costs of $30,335 existed for the Poso Canal Bridge Replacement grant under a potential new $990,000 grant amendment that was to be signed by the USBR in 2025. The amendment was not approved for the Poso Canal Bridge Replacement but the District included the additional reimbursable expenses on the SEFA. The expenses on the SEFA had to be reduced to reflect the eligible federal grant maximum reimbursable expenses under the approved grant agreement at year-end.
• AL No. 15.704 Small Surface Water and Groundwater Storage Projects Orestimba Creek Recharge and Recovery Expansion: An additional grant amendment was identified during the single audit that authorized an additional $1,262,928 of federal funding. The District had eligible expenses during the period of performance to fully claim the additional funding, but did not include the expenses on the SEFA.
Recommendation: We recommend additional review procedures be implemented to ensure the SEFA is complete and accurate when the single audit begins, which includes working with program managers to identify each grant awarded, obtain current executed grant agreements and amendments, reconciling all expenses incurred under each federal awards down to the invoice, payroll check and lowest level of any other costs claimed, cutting-off each expense at year-end and claiming the reconciled qualifying expenses within 45 days after quarter end. At year-end, programs should be reviewed for cost adjustments, extensions, and other changes that should be reflected on the SEFA when reconciling expenses for the SEFA. Separate general ledger program codes should be used for each grant on the SEFA that summarizes expenses down to the individual invoice level that should be provided to the auditor for the single audit. If overclaimed amounts are identified, the grantor and/or pass-through agency should be contacted to determine whether to return the funds or apply the overclaimed amounts to future claims.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-003 – Material Weakness
Award No.: Assistance List No. 15.555 and No. 15.074
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation. AL No. 15.074 Passed-through
the Del Puerto Water District.
Compliance Requirement: Procurement, Suspension and Debarment. Condition: The following conditions were noted during the single audit:
The District was not able to provide evidence that procurements for the Mendota Pool Fish
Screen and Control Structure Project and Poso Canal Bridge Replacement Project design
contractors under AL 15.555 met the requirements for adequate price competition and was
unable to provide documentation confirming the sole-source solicitations met the
requirements of Uniform Guidance. Specifically the District was unable to provide evidence
it received enough statements of qualification to have adequate price competition or complied
with one or more provisions of Section 200.210(c) that allows a sole source agreement to
occur. It would appear the District would need evidence that the grantor approved the sole
source procurement, but was not able to provide documentation of approvals of sole source
procurements by the grantors. The District also was unable to provide documentation of the
advertisement of the solicitation of requests for qualifications for the Fish Screen and Control
Structure Project.
The District was not able to provide adequate documentation that the Mendota Pool Fish
Screen and Control Structure Project contract under AL 15.555 and Orestimba Creek
Recharge and Recovery Expansion Project contract under AL 15.074 complied with Section
200.327 and appendix II to this part requiring federal contract provisions to be included in the
approved contract. This resulted in the District not having evidence that the contractor
certified it was in compliance with all required federal provisions.
Criteria: Uniform Guidance states the following:
Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to
detail the history of procurement. These records will include, but are not necessarily limited
to, the following: Rationale for the method of procurement, selection of contract type,
contractors selection or rejection, and the basis for the contract price.”
Section 300.320(c) states “There are specific circumstances in which the recipient or
subrecipient may use a noncompetitive procurement method. The noncompetitive
procurement method may only be used if one of the following circumstances applies: (1) The
aggregate amount of the procurement transaction does not exceed the micro-purchase
threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be
fulfilled by a single source; (3) The public exigency or emergency for the requirement will
not permit a delay resulting from providing public notice of a competitive solicitation; (4)
The recipient or subrecipient requests in writing to use a noncompetitive procurement
method, and the Federal agency or pass-through entity provides written approval; or (5) After
soliciting several sources, competition is determined inadequate.
The provisions of the Brooks Act (49 United State Code, Section 1104) require local agencies
to award federally funded engineering and design related contracts, otherwise know as A&E
contracts, on the basis of fair and open competitive negotiations, demonstrated competence,
and professional qualifications (23 Code of Federal Regulations (CFR), Part 172) at a fair and
reasonable price (48 CFR 31.201-3). Both federal regulation and California state law
(Government Code 4525-4529 et a) require selection of A&E consultant services on the basis
of demonstrated competence and professional qualifications. Procurement by noncompetitive
proposals may be used only when the award of a contract is infeasible under small purchase
procedures, sealed bids or competitive proposals, as cited above. Section 200.327 states “The non-federal entity’s contracts must contain the applicable
provisions described in appendix II to this part.” Appendix II contains requirements to
include in federally funded contracts termination for cause and convenience provisions, Equal
Employment Opportunity provisions, Davis-Bacon Act provisions, Contract Work Hours and
Safety Standards Act provisions, Clean Air Act provisions, debarment and suspension
provisions, Byrd Anti-Lobbying Amendment provisions, and other provisions, as applicable.
Cause: The current staff was not able to find procurement documentation prepared before they were
hired.
Effect: The District was unable to provide evidence that it was in compliance with the requirement to
maintain documentation indicating the procurement was in compliance with Uniform Guidance
Sections 200.318 to 200.327 and appendix II to this part.
Context: The original procurement for the consulting firm for the Mendota Pool Fish Screens and
Control Structure project was performed in September 2018 and awarded in late October 2018. This
procurement precedes the current staff. Staff indicated the grantor approved the Mendota Pool Fish
Screen and Control Structure Project sole source procurement and the Board Resolution approving
the agreement indicated the grantor approved the sole source procurement, but staff was not able to
provide proof of written approval by the grantor.
Recommendation: We recommend management implement additional controls over the
procurement process that ensures each procurement complies with Uniform Guidance Section
200.318 to 200.326, including training of staff working on procurements of the documentation
retention and other requirements under the Uniform Guidance. We further recommend the District
establish a procurement folder on its server with subfolder for each individual procurement where
documentation of each procurement is maintained, including advertising of the procurement, requests
for proposals/qualifications with language that satisfies Uniform Guidance requirements, proposals
received, executed contracts, certifications of compliance with federal contracting provisions by the
contractor if not part of the proposal or executed contracts, documented quantitative and qualitative
analysis indicating why the recommended bid was selected for approval, management report to board
recommending which bid should be approved, board resolution approving the winning bid and for
contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid,
including reasons for not selecting the lowest bid if applicable. If a sole source procurement method is
used, documentation showing the sole source procurement is allowable under criteria listed in Section
300.320(c) should be retained.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and
planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-003 – Material Weakness
Award No.: Assistance List No. 15.555 and No. 15.074
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation. AL No. 15.074 Passed-through
the Del Puerto Water District.
Compliance Requirement: Procurement, Suspension and Debarment. Condition: The following conditions were noted during the single audit:
The District was not able to provide evidence that procurements for the Mendota Pool Fish
Screen and Control Structure Project and Poso Canal Bridge Replacement Project design
contractors under AL 15.555 met the requirements for adequate price competition and was
unable to provide documentation confirming the sole-source solicitations met the
requirements of Uniform Guidance. Specifically the District was unable to provide evidence
it received enough statements of qualification to have adequate price competition or complied
with one or more provisions of Section 200.210(c) that allows a sole source agreement to
occur. It would appear the District would need evidence that the grantor approved the sole
source procurement, but was not able to provide documentation of approvals of sole source
procurements by the grantors. The District also was unable to provide documentation of the
advertisement of the solicitation of requests for qualifications for the Fish Screen and Control
Structure Project.
The District was not able to provide adequate documentation that the Mendota Pool Fish
Screen and Control Structure Project contract under AL 15.555 and Orestimba Creek
Recharge and Recovery Expansion Project contract under AL 15.074 complied with Section
200.327 and appendix II to this part requiring federal contract provisions to be included in the
approved contract. This resulted in the District not having evidence that the contractor
certified it was in compliance with all required federal provisions.
Criteria: Uniform Guidance states the following:
Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to
detail the history of procurement. These records will include, but are not necessarily limited
to, the following: Rationale for the method of procurement, selection of contract type,
contractors selection or rejection, and the basis for the contract price.”
Section 300.320(c) states “There are specific circumstances in which the recipient or
subrecipient may use a noncompetitive procurement method. The noncompetitive
procurement method may only be used if one of the following circumstances applies: (1) The
aggregate amount of the procurement transaction does not exceed the micro-purchase
threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be
fulfilled by a single source; (3) The public exigency or emergency for the requirement will
not permit a delay resulting from providing public notice of a competitive solicitation; (4)
The recipient or subrecipient requests in writing to use a noncompetitive procurement
method, and the Federal agency or pass-through entity provides written approval; or (5) After
soliciting several sources, competition is determined inadequate.
The provisions of the Brooks Act (49 United State Code, Section 1104) require local agencies
to award federally funded engineering and design related contracts, otherwise know as A&E
contracts, on the basis of fair and open competitive negotiations, demonstrated competence,
and professional qualifications (23 Code of Federal Regulations (CFR), Part 172) at a fair and
reasonable price (48 CFR 31.201-3). Both federal regulation and California state law
(Government Code 4525-4529 et a) require selection of A&E consultant services on the basis
of demonstrated competence and professional qualifications. Procurement by noncompetitive
proposals may be used only when the award of a contract is infeasible under small purchase
procedures, sealed bids or competitive proposals, as cited above. Section 200.327 states “The non-federal entity’s contracts must contain the applicable
provisions described in appendix II to this part.” Appendix II contains requirements to
include in federally funded contracts termination for cause and convenience provisions, Equal
Employment Opportunity provisions, Davis-Bacon Act provisions, Contract Work Hours and
Safety Standards Act provisions, Clean Air Act provisions, debarment and suspension
provisions, Byrd Anti-Lobbying Amendment provisions, and other provisions, as applicable.
Cause: The current staff was not able to find procurement documentation prepared before they were
hired.
Effect: The District was unable to provide evidence that it was in compliance with the requirement to
maintain documentation indicating the procurement was in compliance with Uniform Guidance
Sections 200.318 to 200.327 and appendix II to this part.
Context: The original procurement for the consulting firm for the Mendota Pool Fish Screens and
Control Structure project was performed in September 2018 and awarded in late October 2018. This
procurement precedes the current staff. Staff indicated the grantor approved the Mendota Pool Fish
Screen and Control Structure Project sole source procurement and the Board Resolution approving
the agreement indicated the grantor approved the sole source procurement, but staff was not able to
provide proof of written approval by the grantor.
Recommendation: We recommend management implement additional controls over the
procurement process that ensures each procurement complies with Uniform Guidance Section
200.318 to 200.326, including training of staff working on procurements of the documentation
retention and other requirements under the Uniform Guidance. We further recommend the District
establish a procurement folder on its server with subfolder for each individual procurement where
documentation of each procurement is maintained, including advertising of the procurement, requests
for proposals/qualifications with language that satisfies Uniform Guidance requirements, proposals
received, executed contracts, certifications of compliance with federal contracting provisions by the
contractor if not part of the proposal or executed contracts, documented quantitative and qualitative
analysis indicating why the recommended bid was selected for approval, management report to board
recommending which bid should be approved, board resolution approving the winning bid and for
contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid,
including reasons for not selecting the lowest bid if applicable. If a sole source procurement method is
used, documentation showing the sole source procurement is allowable under criteria listed in Section
300.320(c) should be retained.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and
planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-003 – Material Weakness
Award No.: Assistance List No. 15.555 and No. 15.074
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation. AL No. 15.074 Passed-through
the Del Puerto Water District.
Compliance Requirement: Procurement, Suspension and Debarment. Condition: The following conditions were noted during the single audit:
The District was not able to provide evidence that procurements for the Mendota Pool Fish
Screen and Control Structure Project and Poso Canal Bridge Replacement Project design
contractors under AL 15.555 met the requirements for adequate price competition and was
unable to provide documentation confirming the sole-source solicitations met the
requirements of Uniform Guidance. Specifically the District was unable to provide evidence
it received enough statements of qualification to have adequate price competition or complied
with one or more provisions of Section 200.210(c) that allows a sole source agreement to
occur. It would appear the District would need evidence that the grantor approved the sole
source procurement, but was not able to provide documentation of approvals of sole source
procurements by the grantors. The District also was unable to provide documentation of the
advertisement of the solicitation of requests for qualifications for the Fish Screen and Control
Structure Project.
The District was not able to provide adequate documentation that the Mendota Pool Fish
Screen and Control Structure Project contract under AL 15.555 and Orestimba Creek
Recharge and Recovery Expansion Project contract under AL 15.074 complied with Section
200.327 and appendix II to this part requiring federal contract provisions to be included in the
approved contract. This resulted in the District not having evidence that the contractor
certified it was in compliance with all required federal provisions.
Criteria: Uniform Guidance states the following:
Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to
detail the history of procurement. These records will include, but are not necessarily limited
to, the following: Rationale for the method of procurement, selection of contract type,
contractors selection or rejection, and the basis for the contract price.”
Section 300.320(c) states “There are specific circumstances in which the recipient or
subrecipient may use a noncompetitive procurement method. The noncompetitive
procurement method may only be used if one of the following circumstances applies: (1) The
aggregate amount of the procurement transaction does not exceed the micro-purchase
threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be
fulfilled by a single source; (3) The public exigency or emergency for the requirement will
not permit a delay resulting from providing public notice of a competitive solicitation; (4)
The recipient or subrecipient requests in writing to use a noncompetitive procurement
method, and the Federal agency or pass-through entity provides written approval; or (5) After
soliciting several sources, competition is determined inadequate.
The provisions of the Brooks Act (49 United State Code, Section 1104) require local agencies
to award federally funded engineering and design related contracts, otherwise know as A&E
contracts, on the basis of fair and open competitive negotiations, demonstrated competence,
and professional qualifications (23 Code of Federal Regulations (CFR), Part 172) at a fair and
reasonable price (48 CFR 31.201-3). Both federal regulation and California state law
(Government Code 4525-4529 et a) require selection of A&E consultant services on the basis
of demonstrated competence and professional qualifications. Procurement by noncompetitive
proposals may be used only when the award of a contract is infeasible under small purchase
procedures, sealed bids or competitive proposals, as cited above. Section 200.327 states “The non-federal entity’s contracts must contain the applicable
provisions described in appendix II to this part.” Appendix II contains requirements to
include in federally funded contracts termination for cause and convenience provisions, Equal
Employment Opportunity provisions, Davis-Bacon Act provisions, Contract Work Hours and
Safety Standards Act provisions, Clean Air Act provisions, debarment and suspension
provisions, Byrd Anti-Lobbying Amendment provisions, and other provisions, as applicable.
Cause: The current staff was not able to find procurement documentation prepared before they were
hired.
Effect: The District was unable to provide evidence that it was in compliance with the requirement to
maintain documentation indicating the procurement was in compliance with Uniform Guidance
Sections 200.318 to 200.327 and appendix II to this part.
Context: The original procurement for the consulting firm for the Mendota Pool Fish Screens and
Control Structure project was performed in September 2018 and awarded in late October 2018. This
procurement precedes the current staff. Staff indicated the grantor approved the Mendota Pool Fish
Screen and Control Structure Project sole source procurement and the Board Resolution approving
the agreement indicated the grantor approved the sole source procurement, but staff was not able to
provide proof of written approval by the grantor.
Recommendation: We recommend management implement additional controls over the
procurement process that ensures each procurement complies with Uniform Guidance Section
200.318 to 200.326, including training of staff working on procurements of the documentation
retention and other requirements under the Uniform Guidance. We further recommend the District
establish a procurement folder on its server with subfolder for each individual procurement where
documentation of each procurement is maintained, including advertising of the procurement, requests
for proposals/qualifications with language that satisfies Uniform Guidance requirements, proposals
received, executed contracts, certifications of compliance with federal contracting provisions by the
contractor if not part of the proposal or executed contracts, documented quantitative and qualitative
analysis indicating why the recommended bid was selected for approval, management report to board
recommending which bid should be approved, board resolution approving the winning bid and for
contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid,
including reasons for not selecting the lowest bid if applicable. If a sole source procurement method is
used, documentation showing the sole source procurement is allowable under criteria listed in Section
300.320(c) should be retained.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and
planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-004 – Significant Deficiency
Award No.: Assistance List No. 15.555
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation.
Compliance Requirement: Reporting.
Condition: The District had a required $15,000 local match for the Poso Bridge Replacement project. The District had eligible expenditures to satisfy the local match, but did not report the local match to the grantor (U.S. Department of the Interior, Bureau of Reclamation) on the required SF-425 Federal Financial Reports.
Criteria: The OMB’s approved Federal Financial Report (SF-425) states in line item instructions for the Federal Financial Report, “10i – Total Recipient Share Required: Enter the total required recipient share for reporting period specified in line 9. The required recipient share should include all matching and cost sharing provided by recipients and third-party providers to meet the level required by the Federal agency.”
Cause: The SF-425 reports submitted by the District did not include the required recipient share on the report.
Effect: The required recipient share was not properly reported to the grantor.
Context: The District submitted the required semi-annual SF-425 Federal Financial Reports to the grantor and did not include the information for the required local share.
Recommendation: We recommend management implement additional controls over the reporting process that ensures each report complies with the reporting requirements outlined in the SF-425 Federal Financial Reports. We further recommend the District establish a policy for internal review and sign-off for each submitted report to ensure clerical accuracy.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-002 – Significant Deficiency
Award No.: Assistance List No. 15.555 and No. 15.074
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation, AL No. 15.074 Passed- Through the Del Puerto Water District
Compliance Requirement: Other compliance requirements.
Condition: The Schedule of Expenditures of Federal Awards (SEFA) was not complete, and expenditures reported on the SEFA were revised during the single audit.
Criteria: 2 CFR Part 200, Subpart F (Uniform Guidance) Section 200.502 states, “The auditee should prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements.” Internal controls over preparation of the SEFA should be in place to ensure accrual basis expenses incurred under each federal program are properly reported as expenses on the SEFA and are properly reported as revenue in the financial statements prior to the start of the single audit.
Cause: SEFA was not fully reconciled and finalized until after the single audit began.
Effect: Expenses were omitted from the SEFA that should have been included and other expenses were included on the SEFA that were not eligible. The SEFA had to be revised for multiple grants over the course of the audit. This delayed the audit testing and major program determination process and could have resulted in the wrong programs being tested as major programs and the single audit not complying with the Uniform Guidance.
Context: The District’s Finance Department was not informed of grant amendments that changed the amount of federal funding available. The expenses reported on the SEFA were revised during the single audit as follows.
• AL No. 15.555 San Joaquin River Restoration Program Poso Canal Bridge Replacement: The District estimated additional reimbursable costs of $30,335 existed for the Poso Canal Bridge Replacement grant under a potential new $990,000 grant amendment that was to be signed by the USBR in 2025. The amendment was not approved for the Poso Canal Bridge Replacement but the District included the additional reimbursable expenses on the SEFA. The expenses on the SEFA had to be reduced to reflect the eligible federal grant maximum reimbursable expenses under the approved grant agreement at year-end.
• AL No. 15.704 Small Surface Water and Groundwater Storage Projects Orestimba Creek Recharge and Recovery Expansion: An additional grant amendment was identified during the single audit that authorized an additional $1,262,928 of federal funding. The District had eligible expenses during the period of performance to fully claim the additional funding, but did not include the expenses on the SEFA.
Recommendation: We recommend additional review procedures be implemented to ensure the SEFA is complete and accurate when the single audit begins, which includes working with program managers to identify each grant awarded, obtain current executed grant agreements and amendments, reconciling all expenses incurred under each federal awards down to the invoice, payroll check and lowest level of any other costs claimed, cutting-off each expense at year-end and claiming the reconciled qualifying expenses within 45 days after quarter end. At year-end, programs should be reviewed for cost adjustments, extensions, and other changes that should be reflected on the SEFA when reconciling expenses for the SEFA. Separate general ledger program codes should be used for each grant on the SEFA that summarizes expenses down to the individual invoice level that should be provided to the auditor for the single audit. If overclaimed amounts are identified, the grantor and/or pass-through agency should be contacted to determine whether to return the funds or apply the overclaimed amounts to future claims.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-002 – Significant Deficiency
Award No.: Assistance List No. 15.555 and No. 15.074
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation, AL No. 15.074 Passed- Through the Del Puerto Water District
Compliance Requirement: Other compliance requirements.
Condition: The Schedule of Expenditures of Federal Awards (SEFA) was not complete, and expenditures reported on the SEFA were revised during the single audit.
Criteria: 2 CFR Part 200, Subpart F (Uniform Guidance) Section 200.502 states, “The auditee should prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements.” Internal controls over preparation of the SEFA should be in place to ensure accrual basis expenses incurred under each federal program are properly reported as expenses on the SEFA and are properly reported as revenue in the financial statements prior to the start of the single audit.
Cause: SEFA was not fully reconciled and finalized until after the single audit began.
Effect: Expenses were omitted from the SEFA that should have been included and other expenses were included on the SEFA that were not eligible. The SEFA had to be revised for multiple grants over the course of the audit. This delayed the audit testing and major program determination process and could have resulted in the wrong programs being tested as major programs and the single audit not complying with the Uniform Guidance.
Context: The District’s Finance Department was not informed of grant amendments that changed the amount of federal funding available. The expenses reported on the SEFA were revised during the single audit as follows.
• AL No. 15.555 San Joaquin River Restoration Program Poso Canal Bridge Replacement: The District estimated additional reimbursable costs of $30,335 existed for the Poso Canal Bridge Replacement grant under a potential new $990,000 grant amendment that was to be signed by the USBR in 2025. The amendment was not approved for the Poso Canal Bridge Replacement but the District included the additional reimbursable expenses on the SEFA. The expenses on the SEFA had to be reduced to reflect the eligible federal grant maximum reimbursable expenses under the approved grant agreement at year-end.
• AL No. 15.704 Small Surface Water and Groundwater Storage Projects Orestimba Creek Recharge and Recovery Expansion: An additional grant amendment was identified during the single audit that authorized an additional $1,262,928 of federal funding. The District had eligible expenses during the period of performance to fully claim the additional funding, but did not include the expenses on the SEFA.
Recommendation: We recommend additional review procedures be implemented to ensure the SEFA is complete and accurate when the single audit begins, which includes working with program managers to identify each grant awarded, obtain current executed grant agreements and amendments, reconciling all expenses incurred under each federal awards down to the invoice, payroll check and lowest level of any other costs claimed, cutting-off each expense at year-end and claiming the reconciled qualifying expenses within 45 days after quarter end. At year-end, programs should be reviewed for cost adjustments, extensions, and other changes that should be reflected on the SEFA when reconciling expenses for the SEFA. Separate general ledger program codes should be used for each grant on the SEFA that summarizes expenses down to the individual invoice level that should be provided to the auditor for the single audit. If overclaimed amounts are identified, the grantor and/or pass-through agency should be contacted to determine whether to return the funds or apply the overclaimed amounts to future claims.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-003 – Material Weakness
Award No.: Assistance List No. 15.555 and No. 15.074
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation. AL No. 15.074 Passed-through
the Del Puerto Water District.
Compliance Requirement: Procurement, Suspension and Debarment. Condition: The following conditions were noted during the single audit:
The District was not able to provide evidence that procurements for the Mendota Pool Fish
Screen and Control Structure Project and Poso Canal Bridge Replacement Project design
contractors under AL 15.555 met the requirements for adequate price competition and was
unable to provide documentation confirming the sole-source solicitations met the
requirements of Uniform Guidance. Specifically the District was unable to provide evidence
it received enough statements of qualification to have adequate price competition or complied
with one or more provisions of Section 200.210(c) that allows a sole source agreement to
occur. It would appear the District would need evidence that the grantor approved the sole
source procurement, but was not able to provide documentation of approvals of sole source
procurements by the grantors. The District also was unable to provide documentation of the
advertisement of the solicitation of requests for qualifications for the Fish Screen and Control
Structure Project.
The District was not able to provide adequate documentation that the Mendota Pool Fish
Screen and Control Structure Project contract under AL 15.555 and Orestimba Creek
Recharge and Recovery Expansion Project contract under AL 15.074 complied with Section
200.327 and appendix II to this part requiring federal contract provisions to be included in the
approved contract. This resulted in the District not having evidence that the contractor
certified it was in compliance with all required federal provisions.
Criteria: Uniform Guidance states the following:
Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to
detail the history of procurement. These records will include, but are not necessarily limited
to, the following: Rationale for the method of procurement, selection of contract type,
contractors selection or rejection, and the basis for the contract price.”
Section 300.320(c) states “There are specific circumstances in which the recipient or
subrecipient may use a noncompetitive procurement method. The noncompetitive
procurement method may only be used if one of the following circumstances applies: (1) The
aggregate amount of the procurement transaction does not exceed the micro-purchase
threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be
fulfilled by a single source; (3) The public exigency or emergency for the requirement will
not permit a delay resulting from providing public notice of a competitive solicitation; (4)
The recipient or subrecipient requests in writing to use a noncompetitive procurement
method, and the Federal agency or pass-through entity provides written approval; or (5) After
soliciting several sources, competition is determined inadequate.
The provisions of the Brooks Act (49 United State Code, Section 1104) require local agencies
to award federally funded engineering and design related contracts, otherwise know as A&E
contracts, on the basis of fair and open competitive negotiations, demonstrated competence,
and professional qualifications (23 Code of Federal Regulations (CFR), Part 172) at a fair and
reasonable price (48 CFR 31.201-3). Both federal regulation and California state law
(Government Code 4525-4529 et a) require selection of A&E consultant services on the basis
of demonstrated competence and professional qualifications. Procurement by noncompetitive
proposals may be used only when the award of a contract is infeasible under small purchase
procedures, sealed bids or competitive proposals, as cited above. Section 200.327 states “The non-federal entity’s contracts must contain the applicable
provisions described in appendix II to this part.” Appendix II contains requirements to
include in federally funded contracts termination for cause and convenience provisions, Equal
Employment Opportunity provisions, Davis-Bacon Act provisions, Contract Work Hours and
Safety Standards Act provisions, Clean Air Act provisions, debarment and suspension
provisions, Byrd Anti-Lobbying Amendment provisions, and other provisions, as applicable.
Cause: The current staff was not able to find procurement documentation prepared before they were
hired.
Effect: The District was unable to provide evidence that it was in compliance with the requirement to
maintain documentation indicating the procurement was in compliance with Uniform Guidance
Sections 200.318 to 200.327 and appendix II to this part.
Context: The original procurement for the consulting firm for the Mendota Pool Fish Screens and
Control Structure project was performed in September 2018 and awarded in late October 2018. This
procurement precedes the current staff. Staff indicated the grantor approved the Mendota Pool Fish
Screen and Control Structure Project sole source procurement and the Board Resolution approving
the agreement indicated the grantor approved the sole source procurement, but staff was not able to
provide proof of written approval by the grantor.
Recommendation: We recommend management implement additional controls over the
procurement process that ensures each procurement complies with Uniform Guidance Section
200.318 to 200.326, including training of staff working on procurements of the documentation
retention and other requirements under the Uniform Guidance. We further recommend the District
establish a procurement folder on its server with subfolder for each individual procurement where
documentation of each procurement is maintained, including advertising of the procurement, requests
for proposals/qualifications with language that satisfies Uniform Guidance requirements, proposals
received, executed contracts, certifications of compliance with federal contracting provisions by the
contractor if not part of the proposal or executed contracts, documented quantitative and qualitative
analysis indicating why the recommended bid was selected for approval, management report to board
recommending which bid should be approved, board resolution approving the winning bid and for
contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid,
including reasons for not selecting the lowest bid if applicable. If a sole source procurement method is
used, documentation showing the sole source procurement is allowable under criteria listed in Section
300.320(c) should be retained.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and
planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-003 – Material Weakness
Award No.: Assistance List No. 15.555 and No. 15.074
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation. AL No. 15.074 Passed-through
the Del Puerto Water District.
Compliance Requirement: Procurement, Suspension and Debarment. Condition: The following conditions were noted during the single audit:
The District was not able to provide evidence that procurements for the Mendota Pool Fish
Screen and Control Structure Project and Poso Canal Bridge Replacement Project design
contractors under AL 15.555 met the requirements for adequate price competition and was
unable to provide documentation confirming the sole-source solicitations met the
requirements of Uniform Guidance. Specifically the District was unable to provide evidence
it received enough statements of qualification to have adequate price competition or complied
with one or more provisions of Section 200.210(c) that allows a sole source agreement to
occur. It would appear the District would need evidence that the grantor approved the sole
source procurement, but was not able to provide documentation of approvals of sole source
procurements by the grantors. The District also was unable to provide documentation of the
advertisement of the solicitation of requests for qualifications for the Fish Screen and Control
Structure Project.
The District was not able to provide adequate documentation that the Mendota Pool Fish
Screen and Control Structure Project contract under AL 15.555 and Orestimba Creek
Recharge and Recovery Expansion Project contract under AL 15.074 complied with Section
200.327 and appendix II to this part requiring federal contract provisions to be included in the
approved contract. This resulted in the District not having evidence that the contractor
certified it was in compliance with all required federal provisions.
Criteria: Uniform Guidance states the following:
Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to
detail the history of procurement. These records will include, but are not necessarily limited
to, the following: Rationale for the method of procurement, selection of contract type,
contractors selection or rejection, and the basis for the contract price.”
Section 300.320(c) states “There are specific circumstances in which the recipient or
subrecipient may use a noncompetitive procurement method. The noncompetitive
procurement method may only be used if one of the following circumstances applies: (1) The
aggregate amount of the procurement transaction does not exceed the micro-purchase
threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be
fulfilled by a single source; (3) The public exigency or emergency for the requirement will
not permit a delay resulting from providing public notice of a competitive solicitation; (4)
The recipient or subrecipient requests in writing to use a noncompetitive procurement
method, and the Federal agency or pass-through entity provides written approval; or (5) After
soliciting several sources, competition is determined inadequate.
The provisions of the Brooks Act (49 United State Code, Section 1104) require local agencies
to award federally funded engineering and design related contracts, otherwise know as A&E
contracts, on the basis of fair and open competitive negotiations, demonstrated competence,
and professional qualifications (23 Code of Federal Regulations (CFR), Part 172) at a fair and
reasonable price (48 CFR 31.201-3). Both federal regulation and California state law
(Government Code 4525-4529 et a) require selection of A&E consultant services on the basis
of demonstrated competence and professional qualifications. Procurement by noncompetitive
proposals may be used only when the award of a contract is infeasible under small purchase
procedures, sealed bids or competitive proposals, as cited above. Section 200.327 states “The non-federal entity’s contracts must contain the applicable
provisions described in appendix II to this part.” Appendix II contains requirements to
include in federally funded contracts termination for cause and convenience provisions, Equal
Employment Opportunity provisions, Davis-Bacon Act provisions, Contract Work Hours and
Safety Standards Act provisions, Clean Air Act provisions, debarment and suspension
provisions, Byrd Anti-Lobbying Amendment provisions, and other provisions, as applicable.
Cause: The current staff was not able to find procurement documentation prepared before they were
hired.
Effect: The District was unable to provide evidence that it was in compliance with the requirement to
maintain documentation indicating the procurement was in compliance with Uniform Guidance
Sections 200.318 to 200.327 and appendix II to this part.
Context: The original procurement for the consulting firm for the Mendota Pool Fish Screens and
Control Structure project was performed in September 2018 and awarded in late October 2018. This
procurement precedes the current staff. Staff indicated the grantor approved the Mendota Pool Fish
Screen and Control Structure Project sole source procurement and the Board Resolution approving
the agreement indicated the grantor approved the sole source procurement, but staff was not able to
provide proof of written approval by the grantor.
Recommendation: We recommend management implement additional controls over the
procurement process that ensures each procurement complies with Uniform Guidance Section
200.318 to 200.326, including training of staff working on procurements of the documentation
retention and other requirements under the Uniform Guidance. We further recommend the District
establish a procurement folder on its server with subfolder for each individual procurement where
documentation of each procurement is maintained, including advertising of the procurement, requests
for proposals/qualifications with language that satisfies Uniform Guidance requirements, proposals
received, executed contracts, certifications of compliance with federal contracting provisions by the
contractor if not part of the proposal or executed contracts, documented quantitative and qualitative
analysis indicating why the recommended bid was selected for approval, management report to board
recommending which bid should be approved, board resolution approving the winning bid and for
contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid,
including reasons for not selecting the lowest bid if applicable. If a sole source procurement method is
used, documentation showing the sole source procurement is allowable under criteria listed in Section
300.320(c) should be retained.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and
planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-003 – Material Weakness
Award No.: Assistance List No. 15.555 and No. 15.074
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation. AL No. 15.074 Passed-through
the Del Puerto Water District.
Compliance Requirement: Procurement, Suspension and Debarment. Condition: The following conditions were noted during the single audit:
The District was not able to provide evidence that procurements for the Mendota Pool Fish
Screen and Control Structure Project and Poso Canal Bridge Replacement Project design
contractors under AL 15.555 met the requirements for adequate price competition and was
unable to provide documentation confirming the sole-source solicitations met the
requirements of Uniform Guidance. Specifically the District was unable to provide evidence
it received enough statements of qualification to have adequate price competition or complied
with one or more provisions of Section 200.210(c) that allows a sole source agreement to
occur. It would appear the District would need evidence that the grantor approved the sole
source procurement, but was not able to provide documentation of approvals of sole source
procurements by the grantors. The District also was unable to provide documentation of the
advertisement of the solicitation of requests for qualifications for the Fish Screen and Control
Structure Project.
The District was not able to provide adequate documentation that the Mendota Pool Fish
Screen and Control Structure Project contract under AL 15.555 and Orestimba Creek
Recharge and Recovery Expansion Project contract under AL 15.074 complied with Section
200.327 and appendix II to this part requiring federal contract provisions to be included in the
approved contract. This resulted in the District not having evidence that the contractor
certified it was in compliance with all required federal provisions.
Criteria: Uniform Guidance states the following:
Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to
detail the history of procurement. These records will include, but are not necessarily limited
to, the following: Rationale for the method of procurement, selection of contract type,
contractors selection or rejection, and the basis for the contract price.”
Section 300.320(c) states “There are specific circumstances in which the recipient or
subrecipient may use a noncompetitive procurement method. The noncompetitive
procurement method may only be used if one of the following circumstances applies: (1) The
aggregate amount of the procurement transaction does not exceed the micro-purchase
threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be
fulfilled by a single source; (3) The public exigency or emergency for the requirement will
not permit a delay resulting from providing public notice of a competitive solicitation; (4)
The recipient or subrecipient requests in writing to use a noncompetitive procurement
method, and the Federal agency or pass-through entity provides written approval; or (5) After
soliciting several sources, competition is determined inadequate.
The provisions of the Brooks Act (49 United State Code, Section 1104) require local agencies
to award federally funded engineering and design related contracts, otherwise know as A&E
contracts, on the basis of fair and open competitive negotiations, demonstrated competence,
and professional qualifications (23 Code of Federal Regulations (CFR), Part 172) at a fair and
reasonable price (48 CFR 31.201-3). Both federal regulation and California state law
(Government Code 4525-4529 et a) require selection of A&E consultant services on the basis
of demonstrated competence and professional qualifications. Procurement by noncompetitive
proposals may be used only when the award of a contract is infeasible under small purchase
procedures, sealed bids or competitive proposals, as cited above. Section 200.327 states “The non-federal entity’s contracts must contain the applicable
provisions described in appendix II to this part.” Appendix II contains requirements to
include in federally funded contracts termination for cause and convenience provisions, Equal
Employment Opportunity provisions, Davis-Bacon Act provisions, Contract Work Hours and
Safety Standards Act provisions, Clean Air Act provisions, debarment and suspension
provisions, Byrd Anti-Lobbying Amendment provisions, and other provisions, as applicable.
Cause: The current staff was not able to find procurement documentation prepared before they were
hired.
Effect: The District was unable to provide evidence that it was in compliance with the requirement to
maintain documentation indicating the procurement was in compliance with Uniform Guidance
Sections 200.318 to 200.327 and appendix II to this part.
Context: The original procurement for the consulting firm for the Mendota Pool Fish Screens and
Control Structure project was performed in September 2018 and awarded in late October 2018. This
procurement precedes the current staff. Staff indicated the grantor approved the Mendota Pool Fish
Screen and Control Structure Project sole source procurement and the Board Resolution approving
the agreement indicated the grantor approved the sole source procurement, but staff was not able to
provide proof of written approval by the grantor.
Recommendation: We recommend management implement additional controls over the
procurement process that ensures each procurement complies with Uniform Guidance Section
200.318 to 200.326, including training of staff working on procurements of the documentation
retention and other requirements under the Uniform Guidance. We further recommend the District
establish a procurement folder on its server with subfolder for each individual procurement where
documentation of each procurement is maintained, including advertising of the procurement, requests
for proposals/qualifications with language that satisfies Uniform Guidance requirements, proposals
received, executed contracts, certifications of compliance with federal contracting provisions by the
contractor if not part of the proposal or executed contracts, documented quantitative and qualitative
analysis indicating why the recommended bid was selected for approval, management report to board
recommending which bid should be approved, board resolution approving the winning bid and for
contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid,
including reasons for not selecting the lowest bid if applicable. If a sole source procurement method is
used, documentation showing the sole source procurement is allowable under criteria listed in Section
300.320(c) should be retained.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and
planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-004 – Significant Deficiency
Award No.: Assistance List No. 15.555
Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation.
Compliance Requirement: Reporting.
Condition: The District had a required $15,000 local match for the Poso Bridge Replacement project. The District had eligible expenditures to satisfy the local match, but did not report the local match to the grantor (U.S. Department of the Interior, Bureau of Reclamation) on the required SF-425 Federal Financial Reports.
Criteria: The OMB’s approved Federal Financial Report (SF-425) states in line item instructions for the Federal Financial Report, “10i – Total Recipient Share Required: Enter the total required recipient share for reporting period specified in line 9. The required recipient share should include all matching and cost sharing provided by recipients and third-party providers to meet the level required by the Federal agency.”
Cause: The SF-425 reports submitted by the District did not include the required recipient share on the report.
Effect: The required recipient share was not properly reported to the grantor.
Context: The District submitted the required semi-annual SF-425 Federal Financial Reports to the grantor and did not include the information for the required local share.
Recommendation: We recommend management implement additional controls over the reporting process that ensures each report complies with the reporting requirements outlined in the SF-425 Federal Financial Reports. We further recommend the District establish a policy for internal review and sign-off for each submitted report to ensure clerical accuracy.
Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.