Finding 387811 (2023-003)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-03-28
Audit: 299850
Organization: City of Temecula (CA)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The City failed to document who reviewed certified payrolls for construction work, leading to a material weakness in internal controls.
  • Impacted Requirements: This affects compliance with wage rate requirements as outlined in 2 CFR 200.303.
  • Recommended Follow-up: The City should implement procedures to ensure that reviews of certified payrolls are properly documented.

Finding Text

2023-003 Program: Nationally Significant Freight and Highway Projects Financial Assistance Listing Number: 20.934 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: 2019 Grant Award Number: INFRALUL-5459(031) Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303, 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. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We identified nine (9) instances in which the City did not retain evidence to document the individual who reviewed the certified payroll for each week in which work was performed by construction contractors. Cause: The City’s procedures did not include documenting the review of the certified payroll received. Effect: Ineffective controls over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The population consisted of forty-nine (49) certified payrolls required during the fiscal year. A sample of nine (9) were selected for testwork. Repeat Finding from the Prior Year(s): No. Recommendation: The City should establish controls to ensure there are procedures in place requiring the documented review of the certified payroll submitted by the construction contractors. View of Responsible Official and Planned Corrective Actions See separate corrective action plan.

Corrective Action Plan

Program: Nationally Significant Freight and Highway Projects Financial Assistance Listing Number: 20.934 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: 2019 Grant Award Number: INFRALUL-5459(031) Compliance Requirements: Special Tests and Provisions - Wage Rate Requirements Views of Responsible Officials and Corrective Action: We concur with the finding. The City will implement controls to ensure there are procedures in place requiring the documented review of the certified payroll submitted by the construction contractors. Name of Responsible Person: Jennifer Hennessey, Director of Finance Projected Implementation Date: June 30, 2024

Categories

Special Tests & Provisions Material Weakness Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 387792 2023-001
    Material Weakness
  • 387793 2023-002
    Material Weakness
  • 387794 2023-001
    Material Weakness
  • 387795 2023-002
    Material Weakness
  • 387796 2023-001
    Material Weakness
  • 387797 2023-002
    Material Weakness
  • 387798 2023-001
    Material Weakness
  • 387799 2023-002
    Material Weakness
  • 387800 2023-001
    Material Weakness
  • 387801 2023-002
    Material Weakness
  • 387802 2023-001
    Material Weakness
  • 387803 2023-002
    Material Weakness
  • 387804 2023-001
    Material Weakness
  • 387805 2023-002
    Material Weakness
  • 387806 2023-001
    Material Weakness
  • 387807 2023-001
    Material Weakness
  • 387808 2023-001
    Material Weakness
  • 387809 2023-001
    Material Weakness
  • 387810 2023-001
    Material Weakness
  • 387812 2023-004
    Material Weakness
  • 964234 2023-001
    Material Weakness
  • 964235 2023-002
    Material Weakness
  • 964236 2023-001
    Material Weakness
  • 964237 2023-002
    Material Weakness
  • 964238 2023-001
    Material Weakness
  • 964239 2023-002
    Material Weakness
  • 964240 2023-001
    Material Weakness
  • 964241 2023-002
    Material Weakness
  • 964242 2023-001
    Material Weakness
  • 964243 2023-002
    Material Weakness
  • 964244 2023-001
    Material Weakness
  • 964245 2023-002
    Material Weakness
  • 964246 2023-001
    Material Weakness
  • 964247 2023-002
    Material Weakness
  • 964248 2023-001
    Material Weakness
  • 964249 2023-001
    Material Weakness
  • 964250 2023-001
    Material Weakness
  • 964251 2023-001
    Material Weakness
  • 964252 2023-001
    Material Weakness
  • 964253 2023-003
    Material Weakness
  • 964254 2023-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $7.04M
20.934 Nationally Significant Freight and Highway Projects $2.77M
14.218 Covid-19 Community Development Block Grants/entitlement Grants $277,239
14.218 Community Development Block Grants/entitlement Grants $175,481
97.067 Homeland Security Grant Program $12,894
20.205 Highway Planning and Construction $869