FAC Explorer

Audit 52521

FY End
2022-06-30
Total Expended
$3.44M
Findings
4
Programs
8
Organization: City of Marysville, California (CA)
Year: 2022 Accepted: 2023-03-30
Auditor: Richardson & Company LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
42654 2022-002 Material Weakness Yes F
42655 2022-003 Significant Deficiency - L
619096 2022-002 Material Weakness Yes F
619097 2022-003 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
20.205 Highway Planning and Construction $2.70M Yes 1
66.458 Capitalization Grants for Clean Water State Revolving Funds $394,491 - 0
14.231 Emergency Solutions Grant Program $35,250 - 1
97.067 Homeland Security Grant Program $32,143 - 0
97.083 Staffing for Adequate Fire and Emergency Response (safer) $31,045 - 0
20.600 State and Community Highway Safety $23,833 - 0
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $20,931 - 0
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $14,603 - 0

Contacts

Name Title Type
Z5JGJENQBU45 Jennifer Styczynski Auditee
5307493903 Ingrid Sheipline Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses/expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The City did not charge indirect costs to its federal programs. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of the City of Marysville, California (the City) under programs of the federal government for 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 for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the Citys operations, it is not intended to be and does not present the financial position, changes in financial position, or cash flows of the City.
Title: PROGRAM COSTS Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses/expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The City did not charge indirect costs to its federal programs. The amounts shown as current year expenses represent only the federal grant portion of the program costs. Entire program costs, including the Citys portion, may be more than shown.
Title: LOAN OUTSTANDING BALANCES Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses/expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The City did not charge indirect costs to its federal programs. The outstanding balances of loan programs were as follows: COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS (14.218) - $1,378,122, and HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - $945,332.
Title: SUBRECIPIENTS Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses/expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The City did not charge indirect costs to its federal programs. Amounts passed-through to subrecipients included $20,931 under Assistance Listing 14.228 that was passed-through to the FREED Center for Independent Living.
Title: CLUSTERS OF PROGRAMS Accounting Policies: Expenses reported on the Schedule are reported on the accrual basis of accounting. Such expenses/expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The City did not charge indirect costs to its federal programs. There were no clusters of the City's federal programs during the year ended June 30, 2022.

Finding Details

Finding 2022-002
Finding 2022-002 ? Tracking of Equipment ? Material Weakness Program: Highway Planning and Construction AL No.: 20.205 Federal Grantor: United States Department of Transportation, Federal Highway Administration Passed-through: State of California, Department of Transportation Award No.: STPL-5009(030) Compliance Requirement: Equipment/ Real Property Management Condition: The City was unable to produce a list of equipment and real property purchased with federal funds. Some capital acquisitions in the year were identified as being grant-reimbursed, but the 5th Street construction project reimbursed by the major program was not identified. A physical inventory has also not been performed for federally purchased equipment and real property. Criteria: A list of equipment and real property purchased with federal funds should be maintained for tracking purposes as there are specific federal guidelines and requirements regarding these purchases and dispositions. Cause: The City did not have procedures in place to ensure all compliance requirements for this program are met. This is largely due to the material weakness finding on capital assets in Finding 2022-001, which was caused by the City not having completed an inventory count for a few years. Effect: The City may not be in compliance with the Uniform Guidance if federally acquired equipment have been sold and the proceeds were either not reimbursed to the Federal awarding agency or set aside to be used towards the purchase of a similar equipment. Work performed on the major program project was not adequately identified in the current year. Context: The program requires that for dispositions of equipment acquired under grants with a current per-unit fair market value of $5,000 or more, the Federal awarding agency is to be reimbursed for the Federal portion of the current market value or sales proceeds. Recommendation: After a full inventory is performed, the City should review all equipment and real property on hand and add an indication of which items are purchased with federal funds or create a separate listing of the ones that were acquired or had improvements made using federal funds. The list should be updated every time a federal purchase is made. City?s Response:
Finding 2022-003
Finding 2022-003 ? Schedule of Expenditures of Federal Awards (SEFA) ? Significant Deficiency Program: All Federal Programs Compliance Requirement: Reporting Condition: The expenses and awards reported on the Schedule of Expenditures of Federal Awards (SEFA) were revised during the single audit. Criteria: Internal controls should be in place that provide reasonable assurance that the SEFA is complete and accurate, prior to the start of the audit. Cause: The SEFA did not include federal awards that were passed through from the County and all assistance listing numbers identified in grant agreements. Effect: The expenses included on the SEFA were revised during the audit, which could have resulted in the auditor not selecting the correct program for testing during the single audit and could have resulted in the single audit not satisfying the requirements of the Uniform Guidance. Context: The City excluded three federal awards from the U.S. Department of Homeland Security as these awards were passed through from Yuba County, and one federal award from the U.S. Department of Housing and Urban Development that was funded from the CARES Act. There were also two U.S. Department of Transportation grants passed through from the State Office of Traffic Safety that were each awarded for two different assistance listing (AL) numbers. The City had reported both grants under one of the AL numbers (20.608), resulting in this program?s expenditures being overstated on the SEFA and the other AL number (20.600) being improperly excluded from the SEFA for major program determination. Recommendation: We recommend that the City consider all grants where the source is federal when reconciling to the SEFA. The City should communicate with pass-through entities and granting agencies to determine if a grant is federal if it is not clear after review of the grant agreement. The City should also document all assistance listing numbers on grants identified as federal. The City should also ensure grant revenue is properly identified as federal versus state when recording revenue in the general ledger. City?s Response:
Finding 2022-002
Finding 2022-002 ? Tracking of Equipment ? Material Weakness Program: Highway Planning and Construction AL No.: 20.205 Federal Grantor: United States Department of Transportation, Federal Highway Administration Passed-through: State of California, Department of Transportation Award No.: STPL-5009(030) Compliance Requirement: Equipment/ Real Property Management Condition: The City was unable to produce a list of equipment and real property purchased with federal funds. Some capital acquisitions in the year were identified as being grant-reimbursed, but the 5th Street construction project reimbursed by the major program was not identified. A physical inventory has also not been performed for federally purchased equipment and real property. Criteria: A list of equipment and real property purchased with federal funds should be maintained for tracking purposes as there are specific federal guidelines and requirements regarding these purchases and dispositions. Cause: The City did not have procedures in place to ensure all compliance requirements for this program are met. This is largely due to the material weakness finding on capital assets in Finding 2022-001, which was caused by the City not having completed an inventory count for a few years. Effect: The City may not be in compliance with the Uniform Guidance if federally acquired equipment have been sold and the proceeds were either not reimbursed to the Federal awarding agency or set aside to be used towards the purchase of a similar equipment. Work performed on the major program project was not adequately identified in the current year. Context: The program requires that for dispositions of equipment acquired under grants with a current per-unit fair market value of $5,000 or more, the Federal awarding agency is to be reimbursed for the Federal portion of the current market value or sales proceeds. Recommendation: After a full inventory is performed, the City should review all equipment and real property on hand and add an indication of which items are purchased with federal funds or create a separate listing of the ones that were acquired or had improvements made using federal funds. The list should be updated every time a federal purchase is made. City?s Response:
Finding 2022-003
Finding 2022-003 ? Schedule of Expenditures of Federal Awards (SEFA) ? Significant Deficiency Program: All Federal Programs Compliance Requirement: Reporting Condition: The expenses and awards reported on the Schedule of Expenditures of Federal Awards (SEFA) were revised during the single audit. Criteria: Internal controls should be in place that provide reasonable assurance that the SEFA is complete and accurate, prior to the start of the audit. Cause: The SEFA did not include federal awards that were passed through from the County and all assistance listing numbers identified in grant agreements. Effect: The expenses included on the SEFA were revised during the audit, which could have resulted in the auditor not selecting the correct program for testing during the single audit and could have resulted in the single audit not satisfying the requirements of the Uniform Guidance. Context: The City excluded three federal awards from the U.S. Department of Homeland Security as these awards were passed through from Yuba County, and one federal award from the U.S. Department of Housing and Urban Development that was funded from the CARES Act. There were also two U.S. Department of Transportation grants passed through from the State Office of Traffic Safety that were each awarded for two different assistance listing (AL) numbers. The City had reported both grants under one of the AL numbers (20.608), resulting in this program?s expenditures being overstated on the SEFA and the other AL number (20.600) being improperly excluded from the SEFA for major program determination. Recommendation: We recommend that the City consider all grants where the source is federal when reconciling to the SEFA. The City should communicate with pass-through entities and granting agencies to determine if a grant is federal if it is not clear after review of the grant agreement. The City should also document all assistance listing numbers on grants identified as federal. The City should also ensure grant revenue is properly identified as federal versus state when recording revenue in the general ledger. City?s Response: