FAC Explorer

Audit 6555

FY End
2021-06-30
Total Expended
$10.70M
Findings
8
Programs
10
Organization: City of Turlock (CA)
Year: 2021 Accepted: 2023-12-13
Auditor: Maze & Associates

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
4251 2021-002 Material Weakness - BL
4252 2021-002 Material Weakness - BL
4253 2021-003 Material Weakness - I
4254 2021-003 Material Weakness - I
580693 2021-002 Material Weakness - BL
580694 2021-002 Material Weakness - BL
580695 2021-003 Material Weakness - I
580696 2021-003 Material Weakness - I

Programs

ALN Program Spent Major Findings
20.507 Federal Transit_formula Grants $2.56M Yes 1
21.019 Coronavirus Relief Fund $1.76M Yes 1
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $1.58M - 0
14.239 Home Investment Partnerships Program $759,925 - 0
20.526 Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs $630,653 Yes 1
20.205 Highway Planning and Construction $214,554 Yes 0
16.034 Coronavirus Emergency Supplemental Funding Program $84,351 - 0
16.710 Public Safety Partnership and Community Policing Grants $47,348 - 0
20.600 State and Community Highway Safety $24,874 - 0
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $3,068 - 0

Contacts

Name Title Type
JDYXAB12QLG1 Michael Lenhardt Auditee
2096685570 Amy Meyer Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 – 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 fiduciary 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: N/A The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for the City of Turlock, California, and its component units as disclosed in the notes to the Basic Financial Statements.
Title: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 fiduciary 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: N/A 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 fiduciary funds are accounted for using the accrual basis of accounting. Expenditures of Federal Awards reported on the Schedule are recognized when incurred.
Title: NOTE 3 – INDIRECT COST ELECTION 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 fiduciary 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: N/A The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
Title: NOTE 4 – FEDERAL TRANSIT CLUSTER (AL# 20.507 AND 20.526) 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 fiduciary 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: N/A As discussed in Finding SA2021-002, the City drew down grant funding from the incorrect Federal Transit Cluster grant award (AL#20.507, rather than AL#20.526) during fiscal year 2021. Since the costs incurred drawn from a grant award with AL# 20.507 were intended to be drawn from a grant award with AL# 20.526, and the City is working with the grantor to move the grant drawdown to the correct grant award, the amounts reported on the Schedule are reported as the City intended them to be drawn from the grantor.
Title: NOTE 5 – CORONAVIRUS RELIEF PROGRAM (AL# 21.019) 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 fiduciary 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: N/A The Schedule for the year ended June 30, 2021 includes expenditures for the Coronavirus Relief Program (AL# 21.019) for the period of March 1, 2020 to June 30, 2021. The period of performance for the grant passed through the State of California Department of Finance was March 1, 2020 to December 31, 2020, and the period of performance for the grant passed through Stanislaus County was March 1, 2020 to December 31, 2021. However, to receive the funding from the State of California Department of Finance, the City was required to file a certification with the State Department of Finance by July 10, 2020 stating that the City would use the funds consistent with federal requirements, adhere to health orders and directives, return unspent funds, and repay any disallowed costs, among other compliance certifications. The City’s certification was filed on July 6, 2020.

Finding Details

Finding 2021-002
Finding Reference Number: SA2021-002 - Grant Drawdowns and Accurate Reimbursement Requests Assistance Listing Numbers: 20.507, 20.526 Assistance Listing Title: COVID-19 – Federal Transit Cluster Name of Federal Agency: Department of Transportation Federal Award Identification Number: CA-2019-111-01, CA-2020-141-00 Criteria: When the City has multiple active grant agreements, City staff should ensure that grant drawdowns are made from the correct grant agreement and in accordance with the reimbursement rates of the grant award. Condition: During fiscal year 2021, the City had two active grant awards related to the Federal Transit Cluster under which expenditures were incurred. The CA-2019-111-01 grant award was for both capital and operating costs, while CA-2020-141-00 was for operating costs related to COVID-19. Since the CA-2020-141-00 grant covered 100% of eligible operating costs, we understand the City only intended to use CA-2019-111-01 for eligible costs related to the purchase of two busses. Grant award CA-2019-111-01 was available to reimburse the City for up to 80% of eligible capital costs. When the City requested reimbursement for the bus-related capital costs, the costs were drawn from grant award CA-2020-141-00 in error. When we made inquiries of City staff and they determined the error in the drawdown, City staff began working with the grantor to determine how the issue could be remedied. In addition, when the City requested reimbursement for the bus-related capital costs from grant award CA-2020-141-00, the amount reimbursed was $630,653. That amount is comprised of the bus purchase of $626,490, which is 50.58% of the $1,238,715 of the cost of the busses, plus 100% of other related costs that totaled $4,163. As noted above, grant award CA-2019-111-01 only reimburses 80% of the City’s capital costs, so the other related costs should have been claimed in the amount of $3,330, a difference of $832. Questioned Costs: Although the City did draw the capital costs from the operating grant, we are not questioning those costs, because they were eligible to the program as a whole. We do, however, question costs in the amount of $833, which represent the difference between the capital costs drawn down and the eligible maximum amount of 80% of the capital costs incurred. Effect: The City is not in compliance with the allowable costs and matching requirements of the grant program. Cause: We understand the error was caused by staff oversight when filing the grant drawdown in the FTA ECHO drawdown system. Recommendation: The City must develop procedures to ensure that grant drawdowns are made from the correct grant award and continue to work with the grantor to make corrections to the erroneous grant drawdowns. In addition, the City should work with the grantor to determine if the drawdown in excess of eligible costs needs to be returned to the grantor or if it can be adjusted in a future drawdown, as well as to determine whether interest on the excess funds drawn needs to be paid to the grantor. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding 2021-002
Finding Reference Number: SA2021-002 - Grant Drawdowns and Accurate Reimbursement Requests Assistance Listing Numbers: 20.507, 20.526 Assistance Listing Title: COVID-19 – Federal Transit Cluster Name of Federal Agency: Department of Transportation Federal Award Identification Number: CA-2019-111-01, CA-2020-141-00 Criteria: When the City has multiple active grant agreements, City staff should ensure that grant drawdowns are made from the correct grant agreement and in accordance with the reimbursement rates of the grant award. Condition: During fiscal year 2021, the City had two active grant awards related to the Federal Transit Cluster under which expenditures were incurred. The CA-2019-111-01 grant award was for both capital and operating costs, while CA-2020-141-00 was for operating costs related to COVID-19. Since the CA-2020-141-00 grant covered 100% of eligible operating costs, we understand the City only intended to use CA-2019-111-01 for eligible costs related to the purchase of two busses. Grant award CA-2019-111-01 was available to reimburse the City for up to 80% of eligible capital costs. When the City requested reimbursement for the bus-related capital costs, the costs were drawn from grant award CA-2020-141-00 in error. When we made inquiries of City staff and they determined the error in the drawdown, City staff began working with the grantor to determine how the issue could be remedied. In addition, when the City requested reimbursement for the bus-related capital costs from grant award CA-2020-141-00, the amount reimbursed was $630,653. That amount is comprised of the bus purchase of $626,490, which is 50.58% of the $1,238,715 of the cost of the busses, plus 100% of other related costs that totaled $4,163. As noted above, grant award CA-2019-111-01 only reimburses 80% of the City’s capital costs, so the other related costs should have been claimed in the amount of $3,330, a difference of $832. Questioned Costs: Although the City did draw the capital costs from the operating grant, we are not questioning those costs, because they were eligible to the program as a whole. We do, however, question costs in the amount of $833, which represent the difference between the capital costs drawn down and the eligible maximum amount of 80% of the capital costs incurred. Effect: The City is not in compliance with the allowable costs and matching requirements of the grant program. Cause: We understand the error was caused by staff oversight when filing the grant drawdown in the FTA ECHO drawdown system. Recommendation: The City must develop procedures to ensure that grant drawdowns are made from the correct grant award and continue to work with the grantor to make corrections to the erroneous grant drawdowns. In addition, the City should work with the grantor to determine if the drawdown in excess of eligible costs needs to be returned to the grantor or if it can be adjusted in a future drawdown, as well as to determine whether interest on the excess funds drawn needs to be paid to the grantor. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding 2021-003
Finding Reference Number: SA2021-003 - Suspension and Debarment for Contracts and Subcontracts Assistance Listing Numbers: 21.019 Assistance Listing Title: COVID-19 – Coronavirus Relief Fund Name of Federal Agency: Department of Treasury Pass Through Entity: State of California Department of Finance Stanislaus County Federal Award Identification Number: 163 SLT0163 Criteria: Exhibit A – Federal Requirements in the City’s CARES Coronavirus Relief Fund (CRF) Subrecipient Agreement with Stanislaus County requires that the City comply with OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower tier covered transactions (contracts and subcontracts described in 2 C.F.R. Part 180, subpart C) that the award is subject to 2 C.F.R. Part 180. Condition: We selected forty transactions for testing and although some were exempt from the suspension and debarment procurement requirements, we understand that the City did not verify that the contractors, subrecipients and small business grant recipients were not suspended, debarred, or otherwise excluded prior to entering into the agreements. We did note that City staff determined that as of December 7, 2023, none of the 152 small business grant recipients were included on the exclusions list on SAM.gov. Cause: We understand that staff responsible for performing the suspension and debarment reviews are no longer with the City and City staff cannot find documentation that it was performed. The former City Manager did sign certifications in December 2020 and January 2021 indicating that the small business grant recipients met “required criteria,” but it was not specific to suspension and debarment, and again, documentation of compliance with the grant agreement requirements was not retained. Effect: The City is not in compliance with the subrecipient agreement terms and conditions. Recommendation: The City should develop procedures to ensure compliance with debarment and suspension provisions of the Subrecipient Agreement prior to making disbursements to contractors, subrecipients or small businesses. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding 2021-003
Finding Reference Number: SA2021-003 - Suspension and Debarment for Contracts and Subcontracts Assistance Listing Numbers: 21.019 Assistance Listing Title: COVID-19 – Coronavirus Relief Fund Name of Federal Agency: Department of Treasury Pass Through Entity: State of California Department of Finance Stanislaus County Federal Award Identification Number: 163 SLT0163 Criteria: Exhibit A – Federal Requirements in the City’s CARES Coronavirus Relief Fund (CRF) Subrecipient Agreement with Stanislaus County requires that the City comply with OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower tier covered transactions (contracts and subcontracts described in 2 C.F.R. Part 180, subpart C) that the award is subject to 2 C.F.R. Part 180. Condition: We selected forty transactions for testing and although some were exempt from the suspension and debarment procurement requirements, we understand that the City did not verify that the contractors, subrecipients and small business grant recipients were not suspended, debarred, or otherwise excluded prior to entering into the agreements. We did note that City staff determined that as of December 7, 2023, none of the 152 small business grant recipients were included on the exclusions list on SAM.gov. Cause: We understand that staff responsible for performing the suspension and debarment reviews are no longer with the City and City staff cannot find documentation that it was performed. The former City Manager did sign certifications in December 2020 and January 2021 indicating that the small business grant recipients met “required criteria,” but it was not specific to suspension and debarment, and again, documentation of compliance with the grant agreement requirements was not retained. Effect: The City is not in compliance with the subrecipient agreement terms and conditions. Recommendation: The City should develop procedures to ensure compliance with debarment and suspension provisions of the Subrecipient Agreement prior to making disbursements to contractors, subrecipients or small businesses. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding 2021-002
Finding Reference Number: SA2021-002 - Grant Drawdowns and Accurate Reimbursement Requests Assistance Listing Numbers: 20.507, 20.526 Assistance Listing Title: COVID-19 – Federal Transit Cluster Name of Federal Agency: Department of Transportation Federal Award Identification Number: CA-2019-111-01, CA-2020-141-00 Criteria: When the City has multiple active grant agreements, City staff should ensure that grant drawdowns are made from the correct grant agreement and in accordance with the reimbursement rates of the grant award. Condition: During fiscal year 2021, the City had two active grant awards related to the Federal Transit Cluster under which expenditures were incurred. The CA-2019-111-01 grant award was for both capital and operating costs, while CA-2020-141-00 was for operating costs related to COVID-19. Since the CA-2020-141-00 grant covered 100% of eligible operating costs, we understand the City only intended to use CA-2019-111-01 for eligible costs related to the purchase of two busses. Grant award CA-2019-111-01 was available to reimburse the City for up to 80% of eligible capital costs. When the City requested reimbursement for the bus-related capital costs, the costs were drawn from grant award CA-2020-141-00 in error. When we made inquiries of City staff and they determined the error in the drawdown, City staff began working with the grantor to determine how the issue could be remedied. In addition, when the City requested reimbursement for the bus-related capital costs from grant award CA-2020-141-00, the amount reimbursed was $630,653. That amount is comprised of the bus purchase of $626,490, which is 50.58% of the $1,238,715 of the cost of the busses, plus 100% of other related costs that totaled $4,163. As noted above, grant award CA-2019-111-01 only reimburses 80% of the City’s capital costs, so the other related costs should have been claimed in the amount of $3,330, a difference of $832. Questioned Costs: Although the City did draw the capital costs from the operating grant, we are not questioning those costs, because they were eligible to the program as a whole. We do, however, question costs in the amount of $833, which represent the difference between the capital costs drawn down and the eligible maximum amount of 80% of the capital costs incurred. Effect: The City is not in compliance with the allowable costs and matching requirements of the grant program. Cause: We understand the error was caused by staff oversight when filing the grant drawdown in the FTA ECHO drawdown system. Recommendation: The City must develop procedures to ensure that grant drawdowns are made from the correct grant award and continue to work with the grantor to make corrections to the erroneous grant drawdowns. In addition, the City should work with the grantor to determine if the drawdown in excess of eligible costs needs to be returned to the grantor or if it can be adjusted in a future drawdown, as well as to determine whether interest on the excess funds drawn needs to be paid to the grantor. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding 2021-002
Finding Reference Number: SA2021-002 - Grant Drawdowns and Accurate Reimbursement Requests Assistance Listing Numbers: 20.507, 20.526 Assistance Listing Title: COVID-19 – Federal Transit Cluster Name of Federal Agency: Department of Transportation Federal Award Identification Number: CA-2019-111-01, CA-2020-141-00 Criteria: When the City has multiple active grant agreements, City staff should ensure that grant drawdowns are made from the correct grant agreement and in accordance with the reimbursement rates of the grant award. Condition: During fiscal year 2021, the City had two active grant awards related to the Federal Transit Cluster under which expenditures were incurred. The CA-2019-111-01 grant award was for both capital and operating costs, while CA-2020-141-00 was for operating costs related to COVID-19. Since the CA-2020-141-00 grant covered 100% of eligible operating costs, we understand the City only intended to use CA-2019-111-01 for eligible costs related to the purchase of two busses. Grant award CA-2019-111-01 was available to reimburse the City for up to 80% of eligible capital costs. When the City requested reimbursement for the bus-related capital costs, the costs were drawn from grant award CA-2020-141-00 in error. When we made inquiries of City staff and they determined the error in the drawdown, City staff began working with the grantor to determine how the issue could be remedied. In addition, when the City requested reimbursement for the bus-related capital costs from grant award CA-2020-141-00, the amount reimbursed was $630,653. That amount is comprised of the bus purchase of $626,490, which is 50.58% of the $1,238,715 of the cost of the busses, plus 100% of other related costs that totaled $4,163. As noted above, grant award CA-2019-111-01 only reimburses 80% of the City’s capital costs, so the other related costs should have been claimed in the amount of $3,330, a difference of $832. Questioned Costs: Although the City did draw the capital costs from the operating grant, we are not questioning those costs, because they were eligible to the program as a whole. We do, however, question costs in the amount of $833, which represent the difference between the capital costs drawn down and the eligible maximum amount of 80% of the capital costs incurred. Effect: The City is not in compliance with the allowable costs and matching requirements of the grant program. Cause: We understand the error was caused by staff oversight when filing the grant drawdown in the FTA ECHO drawdown system. Recommendation: The City must develop procedures to ensure that grant drawdowns are made from the correct grant award and continue to work with the grantor to make corrections to the erroneous grant drawdowns. In addition, the City should work with the grantor to determine if the drawdown in excess of eligible costs needs to be returned to the grantor or if it can be adjusted in a future drawdown, as well as to determine whether interest on the excess funds drawn needs to be paid to the grantor. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding 2021-003
Finding Reference Number: SA2021-003 - Suspension and Debarment for Contracts and Subcontracts Assistance Listing Numbers: 21.019 Assistance Listing Title: COVID-19 – Coronavirus Relief Fund Name of Federal Agency: Department of Treasury Pass Through Entity: State of California Department of Finance Stanislaus County Federal Award Identification Number: 163 SLT0163 Criteria: Exhibit A – Federal Requirements in the City’s CARES Coronavirus Relief Fund (CRF) Subrecipient Agreement with Stanislaus County requires that the City comply with OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower tier covered transactions (contracts and subcontracts described in 2 C.F.R. Part 180, subpart C) that the award is subject to 2 C.F.R. Part 180. Condition: We selected forty transactions for testing and although some were exempt from the suspension and debarment procurement requirements, we understand that the City did not verify that the contractors, subrecipients and small business grant recipients were not suspended, debarred, or otherwise excluded prior to entering into the agreements. We did note that City staff determined that as of December 7, 2023, none of the 152 small business grant recipients were included on the exclusions list on SAM.gov. Cause: We understand that staff responsible for performing the suspension and debarment reviews are no longer with the City and City staff cannot find documentation that it was performed. The former City Manager did sign certifications in December 2020 and January 2021 indicating that the small business grant recipients met “required criteria,” but it was not specific to suspension and debarment, and again, documentation of compliance with the grant agreement requirements was not retained. Effect: The City is not in compliance with the subrecipient agreement terms and conditions. Recommendation: The City should develop procedures to ensure compliance with debarment and suspension provisions of the Subrecipient Agreement prior to making disbursements to contractors, subrecipients or small businesses. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding 2021-003
Finding Reference Number: SA2021-003 - Suspension and Debarment for Contracts and Subcontracts Assistance Listing Numbers: 21.019 Assistance Listing Title: COVID-19 – Coronavirus Relief Fund Name of Federal Agency: Department of Treasury Pass Through Entity: State of California Department of Finance Stanislaus County Federal Award Identification Number: 163 SLT0163 Criteria: Exhibit A – Federal Requirements in the City’s CARES Coronavirus Relief Fund (CRF) Subrecipient Agreement with Stanislaus County requires that the City comply with OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower tier covered transactions (contracts and subcontracts described in 2 C.F.R. Part 180, subpart C) that the award is subject to 2 C.F.R. Part 180. Condition: We selected forty transactions for testing and although some were exempt from the suspension and debarment procurement requirements, we understand that the City did not verify that the contractors, subrecipients and small business grant recipients were not suspended, debarred, or otherwise excluded prior to entering into the agreements. We did note that City staff determined that as of December 7, 2023, none of the 152 small business grant recipients were included on the exclusions list on SAM.gov. Cause: We understand that staff responsible for performing the suspension and debarment reviews are no longer with the City and City staff cannot find documentation that it was performed. The former City Manager did sign certifications in December 2020 and January 2021 indicating that the small business grant recipients met “required criteria,” but it was not specific to suspension and debarment, and again, documentation of compliance with the grant agreement requirements was not retained. Effect: The City is not in compliance with the subrecipient agreement terms and conditions. Recommendation: The City should develop procedures to ensure compliance with debarment and suspension provisions of the Subrecipient Agreement prior to making disbursements to contractors, subrecipients or small businesses. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.