Finding Text
Finding #SA2022-006 Compliance with Grant Documentation Requirements
Assistance Listing Number: 21.027
Assistance Listing Title: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
Name of Federal Agency: Department of Treasury
Pass Through Entity: California State Water Resources Control Board
Federal Award Identification Number: 68-0281986
Criteria: The California Water and Wastewater Arrearage Payment Program Guidelines include the following requirements:
• Section F.2.1, Notification of Customer Bill Credits, and Appendix A, Section 6.2.1, Notification of Customer Bill Credits require that the City notify water and wastewater customers, respectively, in writing of the amount credited. The acknowledgement must state that the credited amount is being provided through the California Water and Wastewater Arrearage Payment Program through funding from the State Water Resources Control Board using federal ARPA funds.
• Section F.2.2, Payment Plans, requires that the City offer any residential and commercial water customers with remaining balances after the credits have been applied the option to enroll in a payment plan. The notice offering the payment plan must provide the customer with 30 days to enroll in the plan from the date of the notice.
Condition: We selected forty-one customer credits (water and wastewater) for testing of the documentation of the date the credit was calculated and whether the notification included the required elements noted in the Guidelines. Although we understand the City calculated the customer arrearages and credits to be applied based on the total amount due from March 4, 2020 to June 15, 2021, City staff was unable to locate documentation to show the actual dates the credits were calculated for each customer and how the credits applied were calculated. We did note that the customers we tested had amounts due during the eligible period in excess of the credits applied.
As for the notifications to the customers, City staff could not provide the notifications sent to the customers selected for testing. City staff did provide an example notification for a different water customer credit dated April 28, 2022 that included the required Notification and Payment Plan elements noted above.
Cause: We understand that the documentation of how the customer credits were calculated, including the period covered by the credit, could not be located due to staff turnover and due to the approach of the adjustments being entered manually into the system by one staff member. In addition, we understand the notification letters to the individual customers were not retained – only the one example letter was retained in the City’s files.
Questioned Costs: We question costs of $735,218, which consists of the amounts charged to the Arrearage Program, because we were unable to verify the dates the credits were calculated.
Effect: The City is not in compliance with the terms and conditions of the California Arrearage Payment Programs related to Notification of Customer Credits and Payment Plans.
Recommendation: The City should determine if reports can be generated from the utility billing system to show the amounts due from the customers during the eligible period of March 4, 2020 to June 15, 2021 and how the customer credits were calculated. In addition, the City must develop procedures to ensure compliance with all grant award terms and conditions and retain documentation to demonstrate such compliance until the grantor has closed-out the grant award program.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.