Internal Controls and Compliance over Allowable Costs/Cost Principles and Period of Performance Identification of Federal Program: Coronavirus Relief Fund – Assistance Listing No. 21.019 Criteria: 2 CFR Part 200 requires that the City and its Contractor, a non-federal entity establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The provisions of the Coronavirus Relief Fund (CRF), as stipulated by the U.S. Treasury and subject to restrictions outlines in the guidance set forth in Section 601(d) of the Social Security Act, as added by Section 5001 of the “CARES” Act, restrict use of the funding for allowable costs and activities. Pursuant to Code of Federal Regulation (CFR) 200.403, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: (a) Be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian Tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also CFR 200.306(b). (g) Be adequately documented. See also CFR 200.300 – 200.309. (h) Cost must be incurred during the approved budget period. The federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to CFR 200.308(e)(3). Cause/Condition: During our testing of the Coronavirus Relief Fund program, we noted that the City, through its contracted employee services, failed to establish and adhere to an effective internal control structure that would facilitate its use of Coronavirus Relief Funding, comply with regulations and terms of the federal award and take prompt action when instances of noncompliance were identified. As a result, the City was not in compliance with certain provisions of the grant. Results of testing also indicated unallowable and questioned use of the grant funding. The results of testwork performed and correspondence with City management noted the following: • No backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed CRF funding was available or maintained by City personnel. Online applications were submitted, but there was inadequate documentation and an absence of evidence of a functioning internal control structure for the disbursement of funding used for the City’s Small Business Relief Program. • Approximately $4.25 million use of the funding was disbursed to grantees as part of the City’s Small Business Relief Program. As there was no backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed CRF funding and because there were individuals responsible for selecting grantees that were potentially involved in a fraudulent scheme, all amounts tested within our sample of eighty-one (81) were determined to be questioned costs, which amounted to $3,070,900. Based on our sample of eighty-one (81) grantees tested, $196,250 was confirmed by the grantees as amounts requested and/or directed by former City representatives to be remitted to outside entities for marketing services. Such services were potentially a part of a fraudulent scheme under direction by former City Officials and later prosecuted. Such questioned amounts would not tie into delivery or performance of allowable services. • During our testing of CRF expenditures, we sampled twenty-one (21) disbursements made for public health costs incurred as a response to the pandemic, which are an allowable use of funding. We noted one (1) payment made in the amount of $3,500 for which no copy or check or disbursement was able to be provided. In addition, we noted that the disbursement for $3,500 as well as an additional disbursement of $12,000 were both paid to a City vendor that employed two former contracted City staff. Both amounts totaling $15,500 were determined to be questioned costs. • During our testing of CRF expenditures, we sampled nine (9) payments made to contractors, organizations and special services procured with CRF funding. We noted one (1) payment made in the amount of $50,000 for which no copy or check or disbursement was able to be provided. In addition, such contractors, organizations, and special services procured with the funding were noted to have bypassed City procurement protocol and eight (8) of the payments, totaling $163,500, were for services outside of the initial period of performance of the grant. As a result, the total tested disbursements of $213,500 were determined to be questioned costs. Effects or Potential Effects: Noncompliance with CFR related to allowable costs and period of performance results in an increased risk that charges to the grant do not represent actual costs incurred. Internal control deficiencies surrounding the grant result in an increased risk that noncompliance may not be detected or corrected timely. Questioned Costs: Known questioned costs amounted to $3,299,900. Likely questioned costs amounted to $5,896,456. Recommendation: We recommend that incoming City management strengthen its internal control structure surrounding its designation, use and disbursement of grants as well as implement and adhere to policies and procedures for the retention and safeguarding of original source documents to properly substantiate charges made to grants. Auditee’s Response: DeKalb County was given $125 million directly from the federal government. Of that amount, and through an intergovernmental agreement dated August 10, 2020, $32.6 million was distributed to the County’s municipalities on a per capita basis. The City of Stonecrest received $6,227,098. The City was to administer and distribute the funds in accordance with the federal program requirements to combat the public health emergency and resulting economic impact related to the COVID-19 pandemic. The City was also charged with maintaining through and accurate records regarding expenditure of the funds. Following the execution of the agreement with DeKalb County, the City Council adopted a resolution on September 28, 2020 calling for the Stonecrest CARES Act Funding plan. The City Council assigned contractor staff to set up protocols to manage the program. The City Manager, who was not on staff at the time, or designee was authorized to employ an administrator for the Small Business Support Program, to develop an education component and to create a CARES Act Relief Fund Committee to vet and select a program administrator. The Stonecrest COVID CARES Act Relief Fund was created as the umbrella group that would have oversite over the programs. The Committee was later renamed the Aaron Matthew Allen COVID Small Business Relief/Stonecrest Cares Committee to honor a local resident. The Committee was organized by contractor staff and included two members of City Council, several Contractor staff and consultants who were later paid to assist with the program. The Committee met four times between November 4, 2020 and December 22, 2020, however, there is no evidence that the program management plan, as outlined in the September 28, 2020 resolution was executed in accordance with the resolution. Contractor staff reported to other Committee members on activities and events related to the use of CARES Act funds, and the other committee members had no functional roles in CARES Act fund program. The updates included the naming of consultants involved in the program, but did not disclose that consultant contracts had been executed by contractor staff using the emergency procurement section of the City’s Purchasing Policy. There appears to be no factual basis or authority for use of emergency procurement procedures or execution of contracts by the contractor staff. Significantly, on October 30, 2020, a contract was signed by a City contractor staff with a recently organized not-for-profit organization to prepare disbursements to organizations using CARES Act funds based on notifications by the City Contractor staff. There were duties related to records and accounting but no other performance requirements. Other contracts were executed by contractor City staff who had no authority to enter contracts on the City’s behalf. That process should have included the City Purchasing agent, also a contractor staff, City Attorney and City Council reviews and approvals. The City was successful in obtaining records from the program contractors primarily related to bank statements, program grant application documents, check copies, front and back, however no backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed funds was available or maintained by the City. The contractor was in full control of the operation of the CARES Act program. The City contends that established internal control procedures were not followed by employees assigned by the private government services contractor retained to provide management and operations services in a manner sufficient to prevent, detect, and/or correct various issues related to the City’s CARES Program. The City concedes that City employed staff did not timely submit reports to DeKalb County pursuant to terms of the Intergovernmental Agreement.Like the response by Mayor and City Council with the purchasing card findings, the City Attorney was engaged to investigate the CARES Act program organization and operation. Pursuant to those findings, federal and local law enforcement agencies were notified, and criminal charges were prosecuted and convictions secured. Based on those prosecution, the City received restitutions that will be reimbursed to DeKalb County. In addition, the City has made a claim as part of the January 31, 2023, filed Complaint for damages and other relief to be indemnified by the contractor for any claims by DeKalb County, including questioned unallowable costs, for reimbursement of Cares Act funds.
Internal Controls and Compliance over Allowable Costs/Cost Principles and Period of Performance Identification of Federal Program: Coronavirus Relief Fund – Assistance Listing No. 21.019 Criteria: 2 CFR Part 200 requires that the City and its Contractor, a non-federal entity establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The provisions of the Coronavirus Relief Fund (CRF), as stipulated by the U.S. Treasury and subject to restrictions outlines in the guidance set forth in Section 601(d) of the Social Security Act, as added by Section 5001 of the “CARES” Act, restrict use of the funding for allowable costs and activities. Pursuant to Code of Federal Regulation (CFR) 200.403, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: (a) Be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian Tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also CFR 200.306(b). (g) Be adequately documented. See also CFR 200.300 – 200.309. (h) Cost must be incurred during the approved budget period. The federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to CFR 200.308(e)(3). Cause/Condition: During our testing of the Coronavirus Relief Fund program, we noted that the City, through its contracted employee services, failed to establish and adhere to an effective internal control structure that would facilitate its use of Coronavirus Relief Funding, comply with regulations and terms of the federal award and take prompt action when instances of noncompliance were identified. As a result, the City was not in compliance with certain provisions of the grant. Results of testing also indicated unallowable and questioned use of the grant funding. The results of testwork performed and correspondence with City management noted the following: • No backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed CRF funding was available or maintained by City personnel. Online applications were submitted, but there was inadequate documentation and an absence of evidence of a functioning internal control structure for the disbursement of funding used for the City’s Small Business Relief Program. • Approximately $4.25 million use of the funding was disbursed to grantees as part of the City’s Small Business Relief Program. As there was no backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed CRF funding and because there were individuals responsible for selecting grantees that were potentially involved in a fraudulent scheme, all amounts tested within our sample of eighty-one (81) were determined to be questioned costs, which amounted to $3,070,900. Based on our sample of eighty-one (81) grantees tested, $196,250 was confirmed by the grantees as amounts requested and/or directed by former City representatives to be remitted to outside entities for marketing services. Such services were potentially a part of a fraudulent scheme under direction by former City Officials and later prosecuted. Such questioned amounts would not tie into delivery or performance of allowable services. • During our testing of CRF expenditures, we sampled twenty-one (21) disbursements made for public health costs incurred as a response to the pandemic, which are an allowable use of funding. We noted one (1) payment made in the amount of $3,500 for which no copy or check or disbursement was able to be provided. In addition, we noted that the disbursement for $3,500 as well as an additional disbursement of $12,000 were both paid to a City vendor that employed two former contracted City staff. Both amounts totaling $15,500 were determined to be questioned costs. • During our testing of CRF expenditures, we sampled nine (9) payments made to contractors, organizations and special services procured with CRF funding. We noted one (1) payment made in the amount of $50,000 for which no copy or check or disbursement was able to be provided. In addition, such contractors, organizations, and special services procured with the funding were noted to have bypassed City procurement protocol and eight (8) of the payments, totaling $163,500, were for services outside of the initial period of performance of the grant. As a result, the total tested disbursements of $213,500 were determined to be questioned costs. Effects or Potential Effects: Noncompliance with CFR related to allowable costs and period of performance results in an increased risk that charges to the grant do not represent actual costs incurred. Internal control deficiencies surrounding the grant result in an increased risk that noncompliance may not be detected or corrected timely. Questioned Costs: Known questioned costs amounted to $3,299,900. Likely questioned costs amounted to $5,896,456. Recommendation: We recommend that incoming City management strengthen its internal control structure surrounding its designation, use and disbursement of grants as well as implement and adhere to policies and procedures for the retention and safeguarding of original source documents to properly substantiate charges made to grants. Auditee’s Response: DeKalb County was given $125 million directly from the federal government. Of that amount, and through an intergovernmental agreement dated August 10, 2020, $32.6 million was distributed to the County’s municipalities on a per capita basis. The City of Stonecrest received $6,227,098. The City was to administer and distribute the funds in accordance with the federal program requirements to combat the public health emergency and resulting economic impact related to the COVID-19 pandemic. The City was also charged with maintaining through and accurate records regarding expenditure of the funds. Following the execution of the agreement with DeKalb County, the City Council adopted a resolution on September 28, 2020 calling for the Stonecrest CARES Act Funding plan. The City Council assigned contractor staff to set up protocols to manage the program. The City Manager, who was not on staff at the time, or designee was authorized to employ an administrator for the Small Business Support Program, to develop an education component and to create a CARES Act Relief Fund Committee to vet and select a program administrator. The Stonecrest COVID CARES Act Relief Fund was created as the umbrella group that would have oversite over the programs. The Committee was later renamed the Aaron Matthew Allen COVID Small Business Relief/Stonecrest Cares Committee to honor a local resident. The Committee was organized by contractor staff and included two members of City Council, several Contractor staff and consultants who were later paid to assist with the program. The Committee met four times between November 4, 2020 and December 22, 2020, however, there is no evidence that the program management plan, as outlined in the September 28, 2020 resolution was executed in accordance with the resolution. Contractor staff reported to other Committee members on activities and events related to the use of CARES Act funds, and the other committee members had no functional roles in CARES Act fund program. The updates included the naming of consultants involved in the program, but did not disclose that consultant contracts had been executed by contractor staff using the emergency procurement section of the City’s Purchasing Policy. There appears to be no factual basis or authority for use of emergency procurement procedures or execution of contracts by the contractor staff. Significantly, on October 30, 2020, a contract was signed by a City contractor staff with a recently organized not-for-profit organization to prepare disbursements to organizations using CARES Act funds based on notifications by the City Contractor staff. There were duties related to records and accounting but no other performance requirements. Other contracts were executed by contractor City staff who had no authority to enter contracts on the City’s behalf. That process should have included the City Purchasing agent, also a contractor staff, City Attorney and City Council reviews and approvals. The City was successful in obtaining records from the program contractors primarily related to bank statements, program grant application documents, check copies, front and back, however no backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed funds was available or maintained by the City. The contractor was in full control of the operation of the CARES Act program. The City contends that established internal control procedures were not followed by employees assigned by the private government services contractor retained to provide management and operations services in a manner sufficient to prevent, detect, and/or correct various issues related to the City’s CARES Program. The City concedes that City employed staff did not timely submit reports to DeKalb County pursuant to terms of the Intergovernmental Agreement.Like the response by Mayor and City Council with the purchasing card findings, the City Attorney was engaged to investigate the CARES Act program organization and operation. Pursuant to those findings, federal and local law enforcement agencies were notified, and criminal charges were prosecuted and convictions secured. Based on those prosecution, the City received restitutions that will be reimbursed to DeKalb County. In addition, the City has made a claim as part of the January 31, 2023, filed Complaint for damages and other relief to be indemnified by the contractor for any claims by DeKalb County, including questioned unallowable costs, for reimbursement of Cares Act funds.
Criteria: The requirements for matching are contained in 2 CFR Section 200.306, This states that any matching costs meet certain criteria including that they be verifiable from the entity’s records. Per the terms and conditions of the award, it is understood and agreed that PAX must provide the minimum amount of cost sharing as stipulated in the budget approved by the Grants Officer. PAX must maintain written records to support all allowable costs which are claimed as being its contribution to cost participation. Condition: Per the terms of the award, PAX agreed to expend a share of the total program cost financed by PAX and/or others from non-federal funds in accordance with 2 CFR 200.306. PAX’s books and records did not contain the necessary information to verify whether this matching requirement was met. Citation: 2 CFR 200.306 Cause: PAX did not have an effective internal control system in place for monitoring that the cost sharing requirement was being met. Effect: The accounting team did not allocate the expenses related to the cost share in the books and records throughout the year. However, they provided schedules that detailed the expenses related to the cost share after year-end as part of the audit process. Questioned Costs: None. Context: This sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: Yes Recommendation: We recommend that an internal control system be established to monitor PAX’s share of the award costs. This system should include tracking these expenses in a separate cost center in the books and records and reconciling to the amount reported to the grantor as well as the budget. View of Responsible Officials: See Corrective Action Plan attached.
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable costs $96,145. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).
Criteria: The requirements for matching are contained in 2 CFR Section 200.306, This states that any matching costs meet certain criteria including that they be verifiable from the entity’s records. Per the terms and conditions of the award, it is understood and agreed that PAX must provide the minimum amount of cost sharing as stipulated in the budget approved by the Grants Officer. PAX must maintain written records to support all allowable costs which are claimed as being its contribution to cost participation. Condition: Per the terms of the award, PAX agreed to expend a share of the total program cost financed by PAX and/or others from non-federal funds in accordance with 2 CFR 200.306. PAX’s books and records did not contain the necessary information to verify whether this matching requirement was met. Citation: 2 CFR 200.306 Cause: PAX did not have an effective internal control system in place for monitoring that the cost sharing requirement was being met. Effect: The accounting team did not allocate the expenses related to the cost share in the books and records throughout the year. However, they provided schedules that detailed the expenses related to the cost share after year-end as part of the audit process. Questioned Costs: None. Context: This was a universal matter that impacted the entity as a whole. Repeat Finding: Yes Recommendation: We recommend that an internal control system be established to monitor PAX’s share of the award costs. This system should include tracking these expenses in a separate cost center in the books and records and reconciling to the amount reported to the grantor as well as the budget. View of Responsible Officials: See Corrective Action Plan attached.
Finding No.: 2019-006 Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) Award Number: 6U79SM062447-04M001 and 6U79SM062447-04M004 Area: Matching, Level of Effort, Earmarking Questioned Costs: $-0- Criteria: In accordance with 2 CFR Subpart 200.306, for all Federal awards, any shared costs or matching funds and all contributions, including cash and third-party in-kind contributions, must be accepted as part of the non-Federal entity's cost sharing or matching when such contributions meet all of the following criteria: 1. Are verifiable from the non-Federal entity's records; 2. Are not included as contributions for any other Federal award; 3. Are necessary and reasonable for accomplishment of project or program objectives; 4. Are allowable under subpart E of this part; 5. Are not paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs; 6. Are provided for in the approved budget when required by the Federal awarding agency; and 7. Conform to other provisions of this part, as applicable. Condition: Support for the non-federal match for Business Units H71040 and H81040 were not provided. Cause: CHCC did not enforce internal controls over recordkeeping and monitoring controls to substantiate compliance with matching requirements. Effect: CHCC is in noncompliance with applicable matching requirements. No questioned costs are presented as we are unable to quantify the extent of noncompliance. Finding No.: 2019-006, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) Award Number: 6U79SM062447-04M001 and 6U79SM062447-04M004 Area: Matching, Level of Effort, Earmarking Questioned Costs: $-0- Identification as a Repeat Finding: Finding No. 2018-012. Recommendation: Responsible CHCC personnel should establish recordkeeping system whereby underlying support for matching requirements is substantiated and filed. Views of Responsible Officials: CHCC’s Corrective Action Plan provides a detailed rationale for disagreement with the finding. Auditor Response: Underlying accounting records supporting the non-federal match were not provided. In addition, initial draft reports were provided to CHCC on 09/06/24 and 09/24/24. It was also agreed during the 09/06/24 and 10/04/24 meetings for CHCC to provide corresponding underlying accounting records to resolve the finding; however, no documentations were provided within the agreed timeline. Accordingly, finding is sustained.
Finding No.: 2019-006 Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) Award Number: 6U79SM062447-04M001 and 6U79SM062447-04M004 Area: Matching, Level of Effort, Earmarking Questioned Costs: $-0- Criteria: In accordance with 2 CFR Subpart 200.306, for all Federal awards, any shared costs or matching funds and all contributions, including cash and third-party in-kind contributions, must be accepted as part of the non-Federal entity's cost sharing or matching when such contributions meet all of the following criteria: 1. Are verifiable from the non-Federal entity's records; 2. Are not included as contributions for any other Federal award; 3. Are necessary and reasonable for accomplishment of project or program objectives; 4. Are allowable under subpart E of this part; 5. Are not paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs; 6. Are provided for in the approved budget when required by the Federal awarding agency; and 7. Conform to other provisions of this part, as applicable. Condition: Support for the non-federal match for Business Units H71040 and H81040 were not provided. Cause: CHCC did not enforce internal controls over recordkeeping and monitoring controls to substantiate compliance with matching requirements. Effect: CHCC is in noncompliance with applicable matching requirements. No questioned costs are presented as we are unable to quantify the extent of noncompliance. Finding No.: 2019-006, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) Award Number: 6U79SM062447-04M001 and 6U79SM062447-04M004 Area: Matching, Level of Effort, Earmarking Questioned Costs: $-0- Identification as a Repeat Finding: Finding No. 2018-012. Recommendation: Responsible CHCC personnel should establish recordkeeping system whereby underlying support for matching requirements is substantiated and filed. Views of Responsible Officials: CHCC’s Corrective Action Plan provides a detailed rationale for disagreement with the finding. Auditor Response: Underlying accounting records supporting the non-federal match were not provided. In addition, initial draft reports were provided to CHCC on 09/06/24 and 09/24/24. It was also agreed during the 09/06/24 and 10/04/24 meetings for CHCC to provide corresponding underlying accounting records to resolve the finding; however, no documentations were provided within the agreed timeline. Accordingly, finding is sustained.
Criteria: The requirements for matching are contained in 2 CFR Section 200.306, This states that any matching costs meet certain criteria including that they be verifiable from the entity’s records. Per the terms and conditions of the award, it is understood and agreed that PAX must provide the minimum amount of cost sharing as stipulated in the budget approved by the Grants Officer. PAX must maintain written records to support all allowable costs which are claimed as being its contribution to cost participation. Condition: Per the terms of the award, PAX agreed to expend an amount not less than $365,986 of the total program cost for financing by the PAX and/or others from non-federal funds in accordance with 2 CFR 200.306. PAX’s books and records did not contain the necessary information to verify whether this matching requirement was met. Citation: 2 CFR 200.306 Cause: PAX did not have an effective internal control system in place for monitoring that the cost sharing requirement was being met. Effect: The accounting team did not allocate the expenses related to the cost share in the books and records throughout the year. However, they provided schedules that detailed the expenses related to the cost share after year-end as part of the audit process. Questioned Costs: None. Context: This was a universal matter that impacted the entity as a whole. Repeat Finding: Yes Recommendation: We recommend that an internal control system be established to monitor PAX’s share of the award costs. This system should include tracking these expenses in a separate cost center in the books and records and reconciles to the amount reported to the grantor as well as the budget. View of Responsible Officials: See Corrective Action Plan attached.