Finding 391613 (2023-006)

Material Weakness
Requirement
F
Questioned Costs
$1
Year
2023
Accepted
2024-04-01
Audit: 302063
Organization: City of Eureka (CA)

AI Summary

  • Core Issue: The City lacks a proper list and inventory of equipment bought with federal funds, violating tracking requirements.
  • Impacted Requirements: Non-compliance with federal guidelines under 2 CFR 200.313 regarding equipment management and disposition.
  • Recommended Follow-up: Develop and implement policies to maintain accurate records of federally purchased equipment.

Finding Text

Finding – Internal control deficiencies over tracking equipment Identification of the Federal Program: Assistance Listing Number and Title: 14.231, Emergency Solutions Grant Coronavirus Program Federal Grantor Name: U.S. Department of Housing and Urban Development Federal Award/Contract Number: NA Pass-through Entity Name: California Department of Housing and Community Development Pass-through Award/Contract Number: 20-ESGCV-3-00002 Compliance Requirement – Equipment and Real Property Management Condition: The City was unable to produce a list of equipment purchased with federal funds. A physical inventory has not been performed for federally purchased equipment. Criteria: Equipment Use, Management, and Disposition Requirements at 2 CFR 200.313(c), 2 CFR 200.313(d), and 2 CFR 200.313(e); A list of equipment and real property purchased with federal funds should be maintained for tracking purposes as there are specific federal guidelines and requirements regarding these purchases and dispositions. Cause: The City is not maintaining adequate records regarding the use, management, and disposition of equipment purchased with ESG-CV funds. Effect: The City may not be in compliance with the Uniform Guidance if federally acquired equipment has been sold and the proceeds were either not reimbursed to the Federal awarding agency or set aside to be used towards the purchase of similar equipment. Questioned Costs: $199,274 Context: The program requires that for dispositions of equipment acquired under grants with a current per-unit fair market value of $5,000 or more, the Federal awarding agency is to be reimbursed for the Federal portion of the current market value or sales proceeds. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that the City prepare policies and procedures to ensure adequate equipment records are being maintained. Views of responsible officials: Management concurs with the finding.

Corrective Action Plan

Finding – Internal control deficiencies over tracking equipment Name of contact person: Lane Millar, Finance Director Corrective action: Employees tasked with equipment tracking will receive training prior to commencing such assignments. Proposed completion date: March 1, 2024

Categories

Questioned Costs Equipment & Real Property Management

Other Findings in this Audit

  • 391611 2023-004
    Material Weakness
  • 391612 2023-005
    Material Weakness
  • 968053 2023-004
    Material Weakness
  • 968054 2023-005
    Material Weakness
  • 968055 2023-006
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.231 Emergency Solutions Grant Program $711,241
20.205 Highway Planning and Construction $255,820
66.818 Brownfields Assessment and Cleanup Cooperative Agreements $200,405
14.218 Community Development Block Grants/entitlement Grants $78,377
21.027 Coronavirus State and Local Fiscal Recovery Funds $36,444
97.039 Hazard Mitigation Grant $26,960
16.738 Edward Byrne Memorial Justice Assistance Grant Program $15,931
15.657 Endangered Species Conservation Ð Recovery Implementation Funds $10,445
20.600 State and Community Highway Safety $8,007
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $5,228