Finding Text
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Cluster -
Direct Award
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles.
Condition: The District’s internal controls over compliance requirements did not identify ineligible costs
applied to two separate Federal Transit Administration (FTA) grants as follows.
Section 5307 Grant Award CA-2020-173-01: The District overclaimed Sacramento fixed route
operating expenses beyond the amount apportioned for these routes in the grant agreement, resulting in
ineligible costs of $183,848 being charged to the program.
Questioned Costs: $183,548
Section 5307 Grant Award CA-2023-122-01: The District overclaimed Woodland fixed route
operating expenses beyond the amount apportioned for these routes in the grant agreement, resulting in
ineligible costs of $175,143 being charged to the program.
Questioned Costs: $175,143.
In addition to these ineligible costs, there were substantial changes to the Schedule of Expenditures of Federal
Awards (SEFA) and federal grant revenue reported in the general ledger (GL) during the course of the audit.
These changes and issues are as follows.
There was a total of $302,813 removed from the SEFA and GL for claims prepared for expenses
incurred after the period of performance end date specified in the grant for the relevant project and
therefore would have been ineligible if the claim was submitted to the grantor. These claims were
prepared for paratransit and microtransit operating assistance.
There was a total of $243,823 removed from the SEFA and GL for claims prepared for an FTA direct
program grant that is already past the end date of the period of performance and therefore would have
been ineligible if the claim was submitted to the grantor. These claims were drafted for Woodland
microtransit operating assistance. There was a total of $354,429 added to the SEFA for federal grant revenues recorded in the GL but not
initially included on the SEFA. These claims are for the Yolo County Bike and Pedestrian Trail
Network Planning Project and the Yolo 80 Managed Lanes Tolling Advance Planning project.
There was a total of $1,106,389 of expenses reported on the SEFA but not recognized as revenue in the
GL for amounts previously overclaimed for ineligible expenses but reclaimed and approved for
eligible expenses in the current period.
Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity
must: (a) 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.”
Cause:. Grant management procedures are not documented and a schedule of all available grants was not
prepared by the District to use when reconciling expenses for inclusion on the SEFA and accruing grant
revenue. The errors on the SEFA were not captured by the District’s review procedures due to recent staff
turnover, lack of documented procedures on grant management, and/or lack of training.
Effect: Expenses were omitted from the SEFA that should have been included and other expenses were
included on the SEFA that were not eligible. The SEFA had to be revised for multiple grants over the course of
the audit, which delayed the audit testing and major program determination process.
Context: The number of grants has increased since the pandemic due to new pandemic related grants becoming
available that delayed the use of the District’s regular federal grants. This caused grants to be combined by
grantors with different allowable expenses, areas of service, and periods of performance and caused grants to be
extended, causing complexity. The District confirmed that there will be no other federal grants used for
reimbursement of the expenses that were removed from the SEFA during the audit.
Recommendation: We recommend the District develop written procedures to allocate expenses to routes and
purposes under federal grants that document the timing of the preparation and review of the allocation schedule.
A summary tab should be added to the allocation schedule to reconcile amounts for each route/purpose to total
operating expenses, preventive maintenance, insurance, communications and other expenses allocated to the
population of expenses in the general ledger. We also recommend the District develop a schedule to summarize
all approved and pending grants that includes the amounts available under each grant, each route/purpose within
each grant, periods of performance for each amount available, the last date to submit invoices, and amounts
claimed and still available for each grant by route/purpose. The District should re-evaluate budgets if changes or
delays occur to federal grants and ensure a new federal or local funding source is identified and claimed for the
expenses. The SEFA should be prepared after expenses are reconciled to the GL at the invoice level by
route/purpose and the allocation schedule is thoroughly reviewed. The SEFA should be reviewed by a
knowledgeable member of management to ensure completeness and accuracy. We also recommend the District
claim expenses more quickly to allow the granting agency time to review and approve the claims before the
audit begins. We recommend the District reconcile expenses within 30 days of quarter end and prepare claims
within 45 days of quarter end. If the District is unsure about the period of performance dates or other restrictions
on a grant, staff should contact the granting agency for clarification. Finally, we recommend the District discuss
the overclaimed amounts of $183,548 and $175,143 described above with the FTA to determine whether these
overclaimed funds must be returned or whether they may be used to claim future expenses.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.