FAC Explorer

Audit 51516

FY End
2022-06-30
Total Expended
$7.18M
Findings
2
Programs
12
Organization: City of Milpitas (CA)
Year: 2022 Accepted: 2023-03-05
Auditor: Maze & Associates

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
44417 2022-001 - - A
620859 2022-001 - - A

Programs

ALN Program Spent Major Findings
14.218 Community Development Block Grants/entitlement Grants $1.28M Yes 1
20.205 Highway Planning and Construction $1.01M - 0
97.083 Staffing for Adequate Fire and Emergency Response (safer) $862,663 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $248,048 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $126,335 - 0
97.067 Homeland Security Grant Program $106,837 - 0
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $25,195 - 0
97.042 Emergency Management Performance Grants $16,569 - 0
17.225 Unemployment Insurance $14,625 - 0
20.600 State and Community Highway Safety $13,479 - 0
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $11,999 - 0
93.053 Nutrition Services Incentive Program $3,667 - 0

Contacts

Name Title Type
EZ77RK2NWKC8 Gabrielle Tsang Auditee
4085863131 Grace Zhang Auditor
No contacts on file

Notes to SEFA

Title: Reporting Entity Accounting Policies: Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the measurement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting. All proprietary funds and agency funds are accounted for using the accrual basis of accounting. Expenditures of Federal Awards reported on the Schedule are recognized when incurred. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The schedule of expenditure of Federal Awards (The Schedule) includes expenditures of federal awards for the City of Milpitas, California, and its component units as disclosed in the notes to the Basic Financial Statements, except for federal awards of Terrace Gardens, Inc. Federal awards expended by the Terrace Gardens, Inc., if any, are excluded from the Schedule and are subject to a Single Audit performed by other auditors.

Finding Details

Finding 2022-001
Section 105(a)(8) of the HCDA and 24 CFR 570.201(e) of the CDBG entitlement regulations clarify the 15 percent limitation for public services activities. If the City does not adhere to the requirements for eligible activities, costs incurred under the program may be deemed ineligible and need to be returned to the grantor. Based on the grantor?s preliminary review for the fiscal year 2021 Consolidated Annual Performance and Evaluation Report (CAPER), it?s noted that the percent of funds obligated for public service activities was reported at 28.66%, which was over the 15% cap by $118,138.19 in the PR26 Part IV Public Service Cap Calculation section. This coverage appears to be caused by $158,746.65 expended for a coronavirus-related public service activity. These expenditures are not exempt from the public services cap because the CARES act stipulated that only 2019 and 2020 funds expended for the prevention, preparation, or response to coronavirus are exempt from the public service cap, however, this portion of activity was funded with 2021 grant funds. The preliminary finding states the city exceeded the 15% public service cap by $118,138.19, which upon the finalization of the CAPER review, would need to be repaid to HUD with non-federal funds. Staff should review and update policies and procedures to ensure compliance specifically with Section 105(a)(8) of the HCDA and 24 CFR 570.201(e) of the CDBG entitlement regulations.
Finding 2022-001
Section 105(a)(8) of the HCDA and 24 CFR 570.201(e) of the CDBG entitlement regulations clarify the 15 percent limitation for public services activities. If the City does not adhere to the requirements for eligible activities, costs incurred under the program may be deemed ineligible and need to be returned to the grantor. Based on the grantor?s preliminary review for the fiscal year 2021 Consolidated Annual Performance and Evaluation Report (CAPER), it?s noted that the percent of funds obligated for public service activities was reported at 28.66%, which was over the 15% cap by $118,138.19 in the PR26 Part IV Public Service Cap Calculation section. This coverage appears to be caused by $158,746.65 expended for a coronavirus-related public service activity. These expenditures are not exempt from the public services cap because the CARES act stipulated that only 2019 and 2020 funds expended for the prevention, preparation, or response to coronavirus are exempt from the public service cap, however, this portion of activity was funded with 2021 grant funds. The preliminary finding states the city exceeded the 15% public service cap by $118,138.19, which upon the finalization of the CAPER review, would need to be repaid to HUD with non-federal funds. Staff should review and update policies and procedures to ensure compliance specifically with Section 105(a)(8) of the HCDA and 24 CFR 570.201(e) of the CDBG entitlement regulations.