FAC Explorer

Audit 46535

FY End
2022-06-30
Total Expended
$18.17M
Findings
4
Programs
9
Organization: City of Downey (CA)
Year: 2022 Accepted: 2023-03-28
Auditor: Lance Soll & Lunghard CPAS LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
45488 2022-002 Significant Deficiency Yes A
45489 2022-002 Significant Deficiency Yes A
621930 2022-002 Significant Deficiency Yes A
621931 2022-002 Significant Deficiency Yes A

Programs

ALN Program Spent Major Findings
14.239 Home Investment Partnerships Program $5.22M Yes 1
20.205 Highway Planning and Construction $3.59M - 0
14.218 Community Development Block Grants/entitlement Grants $2.08M Yes 1
21.027 Coronavirus State and Local Fiscal Recovery Funds $479,921 Yes 0
20.600 State and Community Highway Safety $298,884 Yes 0
97.067 Homeland Security Grant Program $202,424 - 0
59.075 Shuttered Venue Operators Grant Program $152,659 - 0
16.738 Edward Byrne Memorial Justice Assistance Grant Program $77,122 - 0
16.922 Equitable Sharing Program $18,154 - 0

Contacts

Name Title Type
LHPAGVTZTY47 Francesca Navarro Auditee
5622996658 Ryan Domino Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: Note 1:Summary of Significant Accounting Policies Applicable to the Schedule of Expenditures of Federal Awards a.Scope of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the City of Downey, California (the City) under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.b.Basis of Accounting Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized, as applicable, under the cost principles contained in the Uniform Guidance and OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The City has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS (14.218) - Balances outstanding at the end of the audit period were 416925. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 4899577.

Finding Details

Finding 2022-002
Finding 2022-02: Loan Continuing Compliance Requirements Noncompliance/Significant Deficiency Federal Award Information Assistance Listing Number: 14.218 Program Title: Community Development Block Grant Federal Award Number: B-18-MC-06-0516; B-19-MC-06-0516; B-20-MW-06-0516; B-20-MC-06-0516; B21MC060516; B22MC060516 Federal Award Year: 2018; 2019; 2020; 2021; 2022 Name of Federal Agency: U.S. Department Housing and Urban Development Assistance Listing Number: 14.239 Program Title: Home Investment Partnerships Federal Award Number: M-15-MC-06-0541; M-16-MC-06-0541; M-17-MC-06-0541; M-18-MC-06-0541; M-20-MC-060541 Federal Award Year: 2015; 2016; 2017; 2018; 2020 Name of Federal Agency: U.S. Department Housing and Urban Development Criteria or Specific Requirement Per the loan agreements between the residents and the City, the homeowners are required to maintain the property as their primary residence or repayment is due on the loan. The City is required to review the outstanding loans and ensure residents are in compliance with the loan agreement. The City will need to verify through support, such as utility or insurance payment, that the residence is the primary address under the loan holder. Condition While the City did not have any new loans within the fiscal year, the City has not performed continuing compliance checks on the loans reported on the SEFA. Cause of the Condition The Housing Department at the City has not documented the insurance documents it received for the loan continuing compliance requirements or perform follow up checks to ensure principal residence. Effect or Possible Effect Failure to timely document continuing loan compliance checks has resulted in noncompliance. Questioned Costs No questioned costs were identified ($0). Context The City of Downey does receive insurance notification of expiring insurance then the Housing Department would check for loan compliance. Repeat Finding This is a repeat finding. Refer to Finding 2021-002 in the Schedule of Findings and Questioned Costs for fiscal year ended June 30, 2021. Recommendation We recommend that the City implement controls to document the insurance that is received by the City and the name listed is the homeowner of the loan. Management Response and Corrective Action The City implemented a monitoring process for existing first-time homebuyer assistance program (HAP) outstanding loans and continues working on a process to review all loans. The City will complete implementation of a monitoring process in the following fiscal year which includes sending out notices to existing loan recipients.
Finding 2022-002
Finding 2022-02: Loan Continuing Compliance Requirements Noncompliance/Significant Deficiency Federal Award Information Assistance Listing Number: 14.218 Program Title: Community Development Block Grant Federal Award Number: B-18-MC-06-0516; B-19-MC-06-0516; B-20-MW-06-0516; B-20-MC-06-0516; B21MC060516; B22MC060516 Federal Award Year: 2018; 2019; 2020; 2021; 2022 Name of Federal Agency: U.S. Department Housing and Urban Development Assistance Listing Number: 14.239 Program Title: Home Investment Partnerships Federal Award Number: M-15-MC-06-0541; M-16-MC-06-0541; M-17-MC-06-0541; M-18-MC-06-0541; M-20-MC-060541 Federal Award Year: 2015; 2016; 2017; 2018; 2020 Name of Federal Agency: U.S. Department Housing and Urban Development Criteria or Specific Requirement Per the loan agreements between the residents and the City, the homeowners are required to maintain the property as their primary residence or repayment is due on the loan. The City is required to review the outstanding loans and ensure residents are in compliance with the loan agreement. The City will need to verify through support, such as utility or insurance payment, that the residence is the primary address under the loan holder. Condition While the City did not have any new loans within the fiscal year, the City has not performed continuing compliance checks on the loans reported on the SEFA. Cause of the Condition The Housing Department at the City has not documented the insurance documents it received for the loan continuing compliance requirements or perform follow up checks to ensure principal residence. Effect or Possible Effect Failure to timely document continuing loan compliance checks has resulted in noncompliance. Questioned Costs No questioned costs were identified ($0). Context The City of Downey does receive insurance notification of expiring insurance then the Housing Department would check for loan compliance. Repeat Finding This is a repeat finding. Refer to Finding 2021-002 in the Schedule of Findings and Questioned Costs for fiscal year ended June 30, 2021. Recommendation We recommend that the City implement controls to document the insurance that is received by the City and the name listed is the homeowner of the loan. Management Response and Corrective Action The City implemented a monitoring process for existing first-time homebuyer assistance program (HAP) outstanding loans and continues working on a process to review all loans. The City will complete implementation of a monitoring process in the following fiscal year which includes sending out notices to existing loan recipients.
Finding 2022-002
Finding 2022-02: Loan Continuing Compliance Requirements Noncompliance/Significant Deficiency Federal Award Information Assistance Listing Number: 14.218 Program Title: Community Development Block Grant Federal Award Number: B-18-MC-06-0516; B-19-MC-06-0516; B-20-MW-06-0516; B-20-MC-06-0516; B21MC060516; B22MC060516 Federal Award Year: 2018; 2019; 2020; 2021; 2022 Name of Federal Agency: U.S. Department Housing and Urban Development Assistance Listing Number: 14.239 Program Title: Home Investment Partnerships Federal Award Number: M-15-MC-06-0541; M-16-MC-06-0541; M-17-MC-06-0541; M-18-MC-06-0541; M-20-MC-060541 Federal Award Year: 2015; 2016; 2017; 2018; 2020 Name of Federal Agency: U.S. Department Housing and Urban Development Criteria or Specific Requirement Per the loan agreements between the residents and the City, the homeowners are required to maintain the property as their primary residence or repayment is due on the loan. The City is required to review the outstanding loans and ensure residents are in compliance with the loan agreement. The City will need to verify through support, such as utility or insurance payment, that the residence is the primary address under the loan holder. Condition While the City did not have any new loans within the fiscal year, the City has not performed continuing compliance checks on the loans reported on the SEFA. Cause of the Condition The Housing Department at the City has not documented the insurance documents it received for the loan continuing compliance requirements or perform follow up checks to ensure principal residence. Effect or Possible Effect Failure to timely document continuing loan compliance checks has resulted in noncompliance. Questioned Costs No questioned costs were identified ($0). Context The City of Downey does receive insurance notification of expiring insurance then the Housing Department would check for loan compliance. Repeat Finding This is a repeat finding. Refer to Finding 2021-002 in the Schedule of Findings and Questioned Costs for fiscal year ended June 30, 2021. Recommendation We recommend that the City implement controls to document the insurance that is received by the City and the name listed is the homeowner of the loan. Management Response and Corrective Action The City implemented a monitoring process for existing first-time homebuyer assistance program (HAP) outstanding loans and continues working on a process to review all loans. The City will complete implementation of a monitoring process in the following fiscal year which includes sending out notices to existing loan recipients.
Finding 2022-002
Finding 2022-02: Loan Continuing Compliance Requirements Noncompliance/Significant Deficiency Federal Award Information Assistance Listing Number: 14.218 Program Title: Community Development Block Grant Federal Award Number: B-18-MC-06-0516; B-19-MC-06-0516; B-20-MW-06-0516; B-20-MC-06-0516; B21MC060516; B22MC060516 Federal Award Year: 2018; 2019; 2020; 2021; 2022 Name of Federal Agency: U.S. Department Housing and Urban Development Assistance Listing Number: 14.239 Program Title: Home Investment Partnerships Federal Award Number: M-15-MC-06-0541; M-16-MC-06-0541; M-17-MC-06-0541; M-18-MC-06-0541; M-20-MC-060541 Federal Award Year: 2015; 2016; 2017; 2018; 2020 Name of Federal Agency: U.S. Department Housing and Urban Development Criteria or Specific Requirement Per the loan agreements between the residents and the City, the homeowners are required to maintain the property as their primary residence or repayment is due on the loan. The City is required to review the outstanding loans and ensure residents are in compliance with the loan agreement. The City will need to verify through support, such as utility or insurance payment, that the residence is the primary address under the loan holder. Condition While the City did not have any new loans within the fiscal year, the City has not performed continuing compliance checks on the loans reported on the SEFA. Cause of the Condition The Housing Department at the City has not documented the insurance documents it received for the loan continuing compliance requirements or perform follow up checks to ensure principal residence. Effect or Possible Effect Failure to timely document continuing loan compliance checks has resulted in noncompliance. Questioned Costs No questioned costs were identified ($0). Context The City of Downey does receive insurance notification of expiring insurance then the Housing Department would check for loan compliance. Repeat Finding This is a repeat finding. Refer to Finding 2021-002 in the Schedule of Findings and Questioned Costs for fiscal year ended June 30, 2021. Recommendation We recommend that the City implement controls to document the insurance that is received by the City and the name listed is the homeowner of the loan. Management Response and Corrective Action The City implemented a monitoring process for existing first-time homebuyer assistance program (HAP) outstanding loans and continues working on a process to review all loans. The City will complete implementation of a monitoring process in the following fiscal year which includes sending out notices to existing loan recipients.