Finding Text
Finding #SA2022-003 Compliance with Grant Management Deadlines
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: California Water and Wastewater Arrearage Payment Program Guidelines Section F.2.1, Notification of Customer Bill Credits, requires that the City allocate Water Arrearage Program payments as bill credits to customer accounts within 60 days of receiving payment or March 17, 2022, and Appendix A, Section 6.2.1, Notification of Customer Bill Credits, requires that the City allocate Wastewater Arrearage Program payments as bill credits to customer accounts within 60 days of receiving payment or July 7, 2022. In addition, sections F.3 and Appendix A, 6.3, Return of Funds Not Credited to Customers, require that any unexpended funds are to be returned to the grantor within six months of receipt.
Condition: 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, but did not apply the water and wastewater credits to the customer accounts until dates ranging from March 30, 2022 to September 8, 2022. As noted in Finding #SA2022-006, we were not able to confirm the dates on which the credit calculations were based.
In addition, unexpended water funds were due to the grantor by July 15, 2022, but the City did not return the funds to the grantor until October 4, 2022.
Cause: We understand that the delay in posting the credits to customer accounts was caused by the adjustments being entered manually into the system by one staff member, which took much longer than anticipated. However, City staff could not provide documentation that the delay was communicated to the grantor. That delay, in turn, caused the delay in the return of unexpended funds to the grantor for the water program.
Effect: The City is not in compliance with the terms and conditions of payment related to the required program deadlines of the California Arrearage Payment Programs. As a result, the City could have been required to return moneys to the grantor.
Recommendation: Although it does not appear that the grantor disallowed any of the program costs, the City must develop procedures to ensure compliance with grant award terms and conditions of payment, including timely use of grant funds. In the event the City encounters delays that affect timely compliance, the City should communicate with the grantor and retain documentation of any such communications to show that they occurred timely and the grantor was aware of the delay.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.