Audit 36865

FY End
2022-06-30
Total Expended
$3.14M
Findings
2
Programs
6
Organization: City of McFarland (CA)
Year: 2022 Accepted: 2023-07-23

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
34747 2022-006 Significant Deficiency - I
611189 2022-006 Significant Deficiency - I

Contacts

Name Title Type
QCFVLPC1QNF1 Diego Viramontes Auditee
6617923091 Rich Gonzalez Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. COMMUNITY FACILITIES LOANS AND GRANTS (10.766) - Balances outstanding at the end of the audit period were 664188. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 709906.
Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) presents the activity of all federal awards programs of the City of McFarland (the City) for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.
Title: Assistance Listing Numbers Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The program titles and Assistance Listing Numbers were obtained from the federal or passthrough grantor.
Title: Pass-through Entities' Identifying Number Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. When federal awards were received from a pass-through entity, the Schedule of Expenditures of Federal Awards shows, if available, the identifying number assigned by the pass-through entity. When no identifying number is shown, the City determined that no identifying number is assigned for the program or the City was unable to obtain an identifying number from the pass-through entity.
Title: COPS Universal Hiring Grant Prior Year Expenditures Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The City had federal expenditures in the amount of $268,503 for the COPS Universal Hiring Grant that were not included on the SEFA in a prior year. These amounts have beenreported in the current year SEFA in addition to the $511,193 of current year expenditures.

Finding Details

2022 ? 006 Federal agency: U.S. Department of Treasury Federal program title: Covid -19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: QCFVLPC1QNF1, FY 2021-2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Condition: We noted three vendors received disbursements of Federal Funding without going through the bid process. In addition, debarment checks for two vendors were not performed. Criteria or Specific Requirement: Recipients may use award funds to enter into contracts with vendors who are not debarred to procure goods and services necessary to implement eligible purposes which are outlined by Treasury's Interim Final Rule. Effect: Without checking debarment before engaging services, the City could have entered into an agreement with a vendor that was disbarred from receiving federal funding. Context: Two of the four items tested did not have debarment procedures performed prior to the commencement of work. In addition the bid process wasn't followed for three of the items tested because expenditures had been previously approved within the City budget. Cause: State and Local Fiscal Recovery Funds related to the coronavirus relief funding was received in advance as emergency funding. The City did not follow all required compliance in using the funding in response to the emergency. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommends that City implement procedures to ensure that federal guidance is followed relating to procurement and debarment. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding. The City will provide additional training to individuals responsible for procurement and related debarment requirements.
2022 ? 006 Federal agency: U.S. Department of Treasury Federal program title: Covid -19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: QCFVLPC1QNF1, FY 2021-2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Condition: We noted three vendors received disbursements of Federal Funding without going through the bid process. In addition, debarment checks for two vendors were not performed. Criteria or Specific Requirement: Recipients may use award funds to enter into contracts with vendors who are not debarred to procure goods and services necessary to implement eligible purposes which are outlined by Treasury's Interim Final Rule. Effect: Without checking debarment before engaging services, the City could have entered into an agreement with a vendor that was disbarred from receiving federal funding. Context: Two of the four items tested did not have debarment procedures performed prior to the commencement of work. In addition the bid process wasn't followed for three of the items tested because expenditures had been previously approved within the City budget. Cause: State and Local Fiscal Recovery Funds related to the coronavirus relief funding was received in advance as emergency funding. The City did not follow all required compliance in using the funding in response to the emergency. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommends that City implement procedures to ensure that federal guidance is followed relating to procurement and debarment. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding. The City will provide additional training to individuals responsible for procurement and related debarment requirements.