Finding 371206 (2023-001)

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Requirement
C
Questioned Costs
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Year
2023
Accepted
2024-02-29
Audit: 292898
Organization: City of Santa Clara (CA)

AI Summary

  • Core Issue: Santa Clara is at risk of non-compliance with the 1.5 performance standard for the third year in a row.
  • Impacted Requirements: The City’s adjusted line of credit balance has significantly exceeded the annual grant, increasing from 1.90 to 3.07 times over three years.
  • Recommended Follow-Up: Monitor the upcoming 60-day test on May 2, 2024, to ensure compliance and address any potential issues proactively.

Finding Text

The U.S. Department of Housing and Urban Development San Francisco Regional Office reviewed Santa Clara’s compliance with requirements for carrying out a CDBG Program in a timely manner and noticed the City of the following conditions: • Prior to the next 60-day test to be conducted on May 2, 2024, it was calculated that the City’s community has an adjusted line of credit balance of 3.07 times its annual grant. • The last 60-day test conducted on May 2, 2023, indicated an adjusted line of credit balance of 2.38 times its annual grant. • On May 2, 2022, the City had an adjusted line of credit balance of 1.90 times its annual grant. Therefore, the Office notified the City that it is at risk of non-compliance with the 1.5 performance standard for the third consecutive year.

Corrective Action Plan

The City has taken the appropriate actions to correct the issues related to the finding. In the City’s 2024-25 HUD Annual Action Plan, the City proposes the following activities to meet the HUD Timeliness Test at the beginning of May 2025: • Continue to maximize spending on public service projects in Fiscal Year 2024-2025 (approximately $150,000) • Increase the allocation for the Neighborhood Conservation and Improvement Program (NCIP) major single family home repair program from $352,000 to $500,000. With pandemic fears subsiding, residents are now open to having workers in their home. The NCIP now has a waitlist of residents wanting work completed on their home. NCIP major repair loans have historically been an efficient way to spend CDBG capital dollars. • Increase the allocation for the NCIP minor single family home repair program from $100,000 to $150,000 due to the program’s rising demand. • Allocate $600,000 for the construction of ADA curb ramps in partnership with the Department of Public Works. In addition to the above actions, staff will continue to push forward the following four capital projects that are already in progress with the goal of distributing at least $1 million by the beginning of May 2025: • Liberty Tower two elevator upgrades (funded for $850,000) • Bill Wilson Center elevator upgrade (funded for $266,000) • Silicon Valley Independent Living Center – affordable housing rehabilitation (funded for $56,000) • Riverwood Grove Affordable Housing – electrical panel upgrades (funded for $350,000) The above actions are intended to bring the City into compliance with expenditures through April 30, 2025 just before the next HUD Timeliness Test at the beginning of May 2025.

Categories

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Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.218 Community Development Block Grants/entitlement Grants $937,490
14.239 Home Investment Partnerships Program $604,344
20.205 Highway Planning and Construction $529,409
97.067 Homeland Security Grant Program $444,307
97.044 Assistance to Firefighters Grant $190,293
97.025 National Urban Search and Rescue (us&r) Response System $48,539
16.922 Equitable Sharing Program $44,953
97.042 Emergency Management Performance Grants $34,734
20.600 State and Community Highway Safety $19,154
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $4,364