FAC Explorer

Finding 1239758 (2025-002)

Material Weakness Repeat Finding
Requirement
C
Questioned Costs
-
Year
2025
Accepted
2026-10-01
Audit: 414470
Organization: San Diego County Air Pollution Control District (CA)
Auditor: EIDE BAILLY LLP

AI Summary

  • Core Issue: The District lacks proper documentation for the review and approval of payment drawdowns, violating compliance requirements.
  • Impacted Requirements: This finding relates to 2 CFR Section 200.303(a), which mandates effective internal controls over Federal awards.
  • Recommended Follow-up: Revise procedures to ensure documentation of the review and approval process for payment drawdowns is maintained.

Finding Text

Program: Air Pollution Control Program Support and National Clean Diesel Funding Assistance Program Assistance Listing No.: 66.001 and 66.039 Federal Grantor: U.S. Environmental Protection Agency Passed-through: Direct Award Award No.: A00905921 and DE-98T08201 Award Year: 2024 and 2023 Compliance Requirements: Cash Management Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must 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. Condition: For ALN 66.001, three (3) out of three (3) payment drawdowns, the District did not retain evidence to document the individual who reviewed and approved the drawdowns prior to submission. For ALN 66.039, one (1) out of one (1) payment drawdown, the District did not retain evidence to document the individual who reviewed and approved the drawdown prior to submission. Cause: The District’s procedures did not include documenting the review and approval of the payment drawdowns prior to submission. Effect: Ineffective controls over this area of compliance could result in payment drawdowns that are inaccurate being submitted to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: For ALN 66.001, a non-statistical sample of three (3) out of three (3) payment drawdowns were selected for testing. We tested the entire population of three (3) drawdowns during the year. For ALN 66.039, a non-statistical sample of one (1) out of one (1) payment drawdown was selected for testing. We tested the entire population of one (1) drawdown during the year. Repeat Finding from Prior Years: No. Recommendation: We recommend the District revise its procedures to include evidence to document the individual who reviewed and approved payment drawdowns prior to submission. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Corrective Action Plan

Type of Finding: Material Weakness in Internal Control over Compliance Division: Support Services Responsible Official: Chief, Support Services Target Completion Date: June 30, 2026 Status: In Progress 1. Summary of the Finding The FY 2024‑25 Single Audit identified deficiencies in internal controls over the District’s cash management practices for federal grants under ALN 66.001 and 66.039. Specifically, the District did not retain evidence showing that drawdown requests were reviewed and approved by the appropriate individual prior to submission. This control lapse occurred for all tested drawdowns and represents a material weakness in internal control over compliance. 2. Root Cause The District’s procedures for processing payment drawdowns did not require or document review and approval prior to submission. The lack of a formalized and documented approval step resulted in an incomplete audit trail and insufficient compliance documentation. 3. Corrective Action Plan The District will strengthen internal control over federal grant cash management by implementing formal approval, documentation, and oversight requirements for all drawdown submissions. A. Implement Formal Drawdown Review and Approval Procedures B. Establish Documentation and Retention Requirements C. Monitoring and Quality Assurance 4. Monitoring & Verification • The Chief of Support Services will oversee implementation and continuous compliance. • Compliance will be verified through quarterly internal reviews and a year‑end checklist confirming approval documentation for every drawdown. • All results will be retained and made available for future audits. 5. Expected Outcome These corrective actions will: • Ensure drawdown submissions are accurate, reviewed, and compliant with federal requirements. • Establish a complete audit trail documenting proper oversight. • Strengthen internal control over federal cash management and prevent future findings. • Reduce risk of inaccurate or unauthorized drawdowns and ensure sustained compliance with 2 CFR Section 200.303(a).

Categories

Cash Management Material Weakness Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1239757 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
66.001 AIR POLLUTION CONTROL PROGRAM SUPPORT $1.71M
66.039 DIESEL EMISSION REDUCTION ACT (DERA) NATIONAL GRANTS $1.32M
97.091 HOMELAND SECURITY BIOWATCH PROGRAM $797,102
66.312 ENVIRONMENTAL JUSTICE GOVERNMENT-TO-GOVERNMENT (EJG2G) PROGRAM $225,627
66.034 SURVEYS, STUDIES, RESEARCH, INVESTIGATIONS, DEMONSTRATIONS, AND SPECIAL PURPOSE ACTIVITIES RELATING TO THE CLEAN AIR ACT $129,400