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Finding #SA2024-005: Performance Audit Deficiencies Assistance Listing Number: 21.027 Assistance Listing Title: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of the Treasury Pass Through Entity: County of San Mateo Federal Award Identification Number: SFLRP0201 Criteria: The City went through a performance audit of the Opportunity Coastside Center grant by the County of San Mateo for the period January 31, 2023 through September 30, 2025 in May 2026. Condition: During the performance audit, the County found several issues and had seven findings. Of those findings, six were related to activities during the year ended June 30, 2024. Those six findings included the areas of internal controls over federal compliance, suspension and debarment noncompliance, subrecipient monitoring procedures not established, unsupported and potentially unallowable participant stipend costs of $926, inadequate review of subrecipient payroll and time allocation documentation, and approval of ARPA funded activities not aligned with federal program requirements. Effect: The City is not in compliance with key compliance areas including procurement, suspension and debarment verification, subrecipient monitoring, documentation of participant stipends, review of subrecipient invoices, and evaluation of allowable uses were not adequately designed or implemented. Cause: We understand the noncompliance issues were due to staff oversight and City staff not being aware of the subrecipient monitoring requirements of the Uniform Guidance. In addition, City staff had not identified three vendors as subrecipients. Recommendation: The City must implement policies and procedures to comply with the requirements of the Uniform Guidance as well as the agreement with the grantor. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.