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HomeMy WebLinkAboutItem 06 - Receive and file the Single Audit Report for the Fiscal Year Ended June 30, 2022Finance and Management Services www.santa-ana.org/finance Item # 6 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report May 2, 2023 TOPIC: Receive and file the Single Audit Report for the Fiscal Year Ended June 30, 2022 AGENDA TITLE Receive and File Single Audit Report for the Fiscal Year Ended June 30, 2022 RECOMMENDED ACTION Receive and file Single Audit Report for the Fiscal Year Ended June 30, 2022. DISCUSSION All non -Federal entities that expend $750,000 or more of Federal awards each fiscal year are required to obtain a Single Audit to comply with the regulations of the Federal Office of Management and Budget (OMB). The Single Audit for the fiscal year ended June 30, 2022 has been completed by the City's independent auditor, Clifton Larson Allen LLP. During the fiscal year 2021-22, the City administered twenty-six (26) Federal grant programs and expended $105.8 million, representing an increase of $0.2 million from the prior fiscal year. The expenditures remained relatively consistent with the prior year due to continued funding in response to the COVID-19 pandemic. Of the twenty-six (26) programs administered by the City, the auditors identified four major programs for the audit: Housing Voucher Cluster ($46.5 million), HOME Investment Partnerships Program ($2.1 million), Coronavirus State and Local Fiscal Recovery ($13.3 million), and the Emergency Rental Assistance Program ($21.7 million). The Finance and Management Services Agency is pleased to report that the City received an unmodified opinion commonly known as a clean opinion; which is considered the most favorable conclusion for the audit. The unmodified opinion indicates that the City has complied, in all material respects, with the compliance requirements for the fiscal year ended June 30, 2022. However, the auditors disclosed one finding related to Coronavirus State and Local Fiscal Recovery Fund program for not meeting requirements to check the federal database to confirm that selected vendors have not been suspended or debarred from participating in federally funded programs. There were no instances of noncompliance, Receive and file the Single Audit Report for the Fiscal Year Ended June 30, 2022 May 2, 2023 Page 2 but for some contracts, the grant managing departments did not maintain supporting documentation to prove that staff queried the federal database. The City's Purchasing Policies and Procedures (Policy) require the grant managing departments to adhere to procurement standards for federal grant management including suspension and debarment. Program staff will follow the Policy to ensure adequate documentation of verifications is maintained to prevent future findings. The report (Exhibit 1) is posted and available on the City's website (https://www.santa- ana.org/financial-reports along with prior fiscal years. In addition, the report has been submitted for certification as part of the Single Audit Data Collection Form process. The Single Audit Report is required to be submitted by March 31. FISCAL IMPACT There is no fiscal impact associated with this action. EXHIBIT 1. FY 2021-22 Single Audit Report Submitted By: Kathryn Downs, FMSA Executive Director Approved By: Kristine Ridge, City Manager EXHIBIT 1 CITY OF SANTAANA, CALIFORNIA SINGLE AUDIT OF FEDERAL AWARDS AND OTHER FINANCIAL INFORMATION JUNE 30, 2022 CPAs I CONSULTANTS I WEALTH ADVISORS C LAconnect.com CITY OF SANTAANA, CALIFORNIA JUNE 30, 2022 TABLE OF CONTENTS Page Number Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 1 - 2 Independent Auditors' Report on Compliance for Each Major Federal Program, Report on Internal Control over Compliance, Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance, Schedule of Expenditures of State Awards Required by the State of California, and Housing Authority of the City of Santa Ana Financial Data Schedules Required by the US Department of Housing and Urban Development 3-6 Schedule of Expenditures of Federal Awards Schedule of Expenditures of State Awards 7-10 11 Notes to the Schedules of Expenditures of Federal and State Awards 12 Housing Authority of the City of Santa Ana Financial Data Schedules: Financial Data Schedule of Assets, Liabilities, and Equity as of June 30, 2022 13 Financial Data Schedule of Revenues, Expenses, and Changes in Equity for the Fiscal Year Ended June 30, 2022 14 Schedule of Findings and Questioned Costs 15 - 16 Summary Schedule of Prior -Year Audit Findings 17 Clifton LarsonAllen LLP . CLAconnect.com INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable City Council of the City of Santa Ana Santa Ana, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Santa Ana, California (the City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City's basic financial statements and have issued our report thereon dated December 28, 2022. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Globc, CLAglobal.com/disclaimer 1 Honorable City Council of the City of Santa Ana Santa Ana, California Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Clifton LarsonAllen LLP Irvine, California December 28, 2022 2 0 Clifton LarsonAllen LLP CLAconnect.com INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER COMPLIANCE, REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE, SCHEDULE OF EXPENDITURES OF STATE AWARDS REQUIRED BY THE STATE OF CALIFORNIA, AND HOUSING AUTHORITY OF THE CITY OF SANTA ANA FINANCIAL DATA SCHEDULES REQUIRED BY THE US DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Honorable City Council of the City of Santa Ana Santa Ana, California Report on Compliance for Each Major Federal Program Opinion on the Major Federal Program We have audited the City of Santa Ana's (the City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended June 30, 2022. The City's major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2022. Basis for Opinion on each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditors' Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for the major federal program. Our audit does not provide a legal determination of the City's compliance requirements referred to above. CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Globc, CLAglobal.com/disclaimer 3 Honorable City Council of the City of Santa Ana Santa Ana, California Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City's federal programs. Auditor's Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omission, misrepresentations, or override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City's compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we: exercise professional judgment and maintain professional skepticism throughout the audit. identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. obtain an understanding of the City's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on Internal Control Over Compliance Our consideration of internal control over compliance was for the limited purpose described in the Auditors' Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, as discussed below, we did identify a certain deficiency in internal control over compliance that we consider to be a significant deficiency. .19 Honorable City Council of the City of Santa Ana Santa Ana, California A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiency in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2022-001 to be a significant deficiency. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. Government Auditing Standards requires the auditor to perform limited procedures on the City's response to the internal control over compliance findings identified in our audit described in the accompanying schedule of findings and questioned costs. The City's response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance, the Schedule of Expenditures of State Awards Required by the State of California, and the Housing Authority of the City of Santa Ana Financial Data Schedules Required by the US Department of Housing and Urban Development We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Santa Ana as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated December 28, 2022, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards, the Schedule of Expenditures of State Awards, and the Housing Authority of the City of Santa Ana Financial Data Schedules are presented for purposes of additional analysis as required by the Uniform Guidance, the State of California, and the US Department of Housing and Urban Development, respectively, and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Honorable City Council of the City of Santa Ana Santa Ana, California The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards, the Schedule of Expenditures of State Awards, and the Housing Authority of the City of Santa Ana Financial Data Schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. Clifton LarsonAllen LLP Irvine, California March 28, 2023 roll CITY OF SANTA ANA, CALIFORNIA Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2022 Federal Federal Grantor / Assistance Pass -Through Total Passed Pass -Through Grantor / Listing Entity Identifying Federal Through to Program / Cluster Title Number Number Expenditures Subrecipients U.S. Department of Housing and Urban Development Direct Programs: Community Development Block Grants - Entitlement Grants Cluster: Community Development Block Grants 14.218 N/A $ 4,964,158 $ 1,024,514 COVID-19 - Community Development Block Grants 14.218 N/A 716,437 222,608 Neighborhood Stabilization Program 1 14.218 N/A 3,975 - Neighborhood Stabilization Program 3 14.218 N/A 3,937 Subtotal Community Development Block Grants - Entitlement Grants Cluster 5,688,507 1,247,122 Emergency Solutions Grant Program 14.231 N/A 508,071 378,877 COVID-19 - Emergency Solutions Grant Program 14.231 N/A 6,517,376 5,280,487 Subtotal Emergency Solutions Grant Program 7,025,447 5,659,364 Housing Voucher Cluster: Section 8 Housing Choice Vouchers 14.871 COVID-19 - Emergency Housing Voucher Rental Assistance (ARP/ 14.871 COVID-19 - Emergency HSG Voucher Rental Assist-Admin (ARPA 14.871 Subtotal Section 8 Housing Choice Vouchers Mainstream Vouchers 14.879 COVID-19 - Mainstream Vouchers - CARES Act - Admin Fees 14.879 Subtotal Mainstream Vouchers Subtotal Housing Voucher Cluster Family Self -Sufficiency Program 14.896 Family Self -Sufficiency Program 14.896 Subtotal Family Self -Sufficiency Program HOME Investment Partnerships Program 14.239 COVID-19 - HOME - American Rescue Plan Program 14.239 Subtotal HOME Investment Partnerships Program ARRA - Neighborhood Stabilization Program 2 14.256 Total U.S. Department of Housing and Urban Development U.S. Department of Justice Direct Programs: Equitable Sharing Program (Asset Forfeiture) 16.922 Public Safety Partnership and Community Policing Grants 16.710 Body Worn Camera Policy and Implementation 16.835 Passed through County of Orange Sheriffs Department: Edward Byrne Memorial Justice Assistance Grant Program: Byrne Justice Assistance Grant 2020 16.738 Byrne Justice Assistance Grant 2021 16.738 Subtotal Edward Byrne Memorial Justice Assistance Grant Program Passed through Human Options: Culturally and Linguistically Specific Services Program 16.016 Total U.S. Department of Justice N/A 43,986,581 N/A 132,291 N/A 83,252 44,202,124 N/A 2,276,351 N/A 4,852 2,281,203 46,483,327 N/A 54,659 N/A 33,199 87,858 N/A 2,132,926 N/A 16,817 2,149,743 17 - 61,434,899 6,906,486 N/A 430,124 - N/A 731,634 N/A 28,598 2020-DJ-BX-0773 82,577 15PBJA-2I-GG-01188-JAGX 6,640 89,217 2016-WE-AX-0054 78,240 1,357,813 (Continued) See accompanying Notes to the Schedules of Expenditures of Federal and State Awards. 7 CITY OF SANTA ANA, CALIFORNIA Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2022 (Continued) Federal Grantor / Pass -Through Grantor / Program / Cluster Title U.S. Department of Labor Workforce Innovation and Opportunity Act (WIOA) Cluster: Passed through CA Employment Development Department: WIOA Adult Program WIOA Adult Program Subtotal WIOA Adult Activities WIOA Dislocated Worker Formula Grants WIOA Dislocated Worker Formula Grants WIOA Dislocated Worker Formula Grants (Rapid Response) WIOA Dislocated Worker Formula Grants (Rapid Response) Subtotal WIOA Dislocated Worker Formula Grants WIOA Youth Activities WIOA Youth Activities Subtotal WIOA Youth Activities Passed through County of Orange Community Resources Agency: WIOA Adult Program Passed through County of Orange Community Resources Agency: WIOA Dislocated Worker Formula Grants Federal Assistance Pass -Through Listing Entity Identifying Number Number Passed Federal Through to Expenditures Subrecipients 17.258 AA111027 $ 139,671 $ 17.258 AA211027 488,937 628,608 17.278 AA111027 253,007 17.278 AA211027 332,430 17.278 AA111027 40,461 17.278 AA211027 176,622 17.259 AA111027 17.259 AA211027 17.258 MA-012-22010003 17.278 MA-012-20011850 Subtotal Workforce Innovation and Opportunity Act (WIOA) Cluster Passed through CA Employment Development Department: WIOA National Dislocated Worker Grants 17.277 AA011027 WIOA National Dislocated Worker Grants 17.277 AA111027 Subtotal WIOA National Dislocated Worker Grants Total U.S. Department of Labor U.S. Department of Transportation Highway Planning and Construction Cluster: Passed through CA Department of Transportation: National Highway Performance Program Bicycle Corridor Improvement Bicycle Corridor Improvement Bicycle Corridor Improvement Bicycle Corridor Improvement Highway Safety Improvement Program Highway Safety Improvement Program Highway Safety Improvement Program Highway Safety Improvement Program Highway Safety Improvement Program Highway Safety Improvement Program Subtotal Highway Planning and Construction Cluster 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 BRLS 5063(184) CMAQ 5063(181) BCI CMAQ 5063(182) BCI CMAQ 5063(183) BCI CMAQ 5063(200) BCI HSIPL 5063(171) HSIPL 5063(186) HSIPL 5063(187) HSIPL 5063(188) HSIPL 5063(190) HSIPL 5063(204) 115,997 58,775 720,322 384,379 836,319 443,154 5,697 15,000 - 2,288,144 443,154 883 - 14,940 15,823 2,303,967 443,154 314,601 19,481 1,310 1,188,229 6,526 102,061 374 202,838 1,871 3,831 6,643 1,847,765 (Continued) See accompanying Notes to the Schedules of Expenditures of Federal and State Awards. 8 CITY OF SANTA ANA, CALIFORNIA Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2022 (Continued) Federal Federal Grantor / Assistance Pass -Through Passed Pass -Through Grantor / Listing Entity Identifying Federal Through to Program / Cluster Title Number Number Expenditures Subrecipients Highway Safety Cluster: State and Community Highway Safety: Passed through CA Office of Traffic Safety: Selective Traffic Enforcement 20.600 Selective Traffic Enforcement 20.600 Public Education on Bicycle Safety 20.600 Public Education on Bicycle Safety 20.600 Subtotal State and Community Highway Safety Cluster Total U.S. Department of Transportation U.S. Department of Treasury Direct Programs: COVID-19 - Coronavirus State & Local Fiscal Recovery (ARPA) 21.027 Passed through the State Water Resource Control Board: COVID-19 - Coronavirus State & Local Fiscal Recovery (ARPA) 21.027 COVID-19 - Emergency Rental Assistance Program Direct Program: COVID-19 - Emergency Rental Assistance Program 1 21.023 COVID-19 - Emergency Rental Assistance Program 2 21.023 Passed through CA Department of Housing & Community Development: COVID-19 - Emergency Rental Assistance Program - State 21.023 Subtotal COVID-19 - Emergency Rental Assistance Program Total U.S. Department of Treasury U.S. Institute of Museum and Library Services Passed through CA State Library: 45.310 Grants to States (Library Services and Technology Act) U.S. Small Business Administration Direct Program: COVID-19 - Shuttered Venue Operators Grant Program 59.075 U.S. Department of Homeland Security Homeland Security Grant Program: Passed through CA Office of Emergency Services: Urban Area Security Initiative 2019 97.067 Passed through City of Anaheim: Urban Area Security Initiative 2018 97.067 Urban Area Security Initiative 2020 97.067 Subtotal Homeland Security Grant Program Passed through County of Orange Sheriffs Department: Emergency Management Performance Grants 97.042 Total U.S. Department of Homeland Security PT21189 $ 150,994 $ PT22130 403,697 PS20034 66,239 PS22025 35,300 656,230 2,503,995 - N/A 12,233,442 955,430 CA3010038 1,069,505 - N/A 6,414,753 6,388,587 N/A 13,378,357 13,157,659 21-ERAP-20081 1,871,804 1,857,615 21,664,914 21,403,861 34,967,861 22,3 59,291 40-9114 16,150 - N/A 689,120 2019-0035 059-95010 896,163 194,190 2018-0054 274,427 - 2020-0095 514,351 1,684,941 194,190 EMPG 2021-0015 48,338 1,733,279 194,190 (Continued) See accompanying Notes to the Schedules of Expenditures of Federal and State Awards. 9 CITY OF SANTA ANA, CALIFORNIA Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2022 (Continued) Federal Grantor / Pass -Through Grantor / Program / Cluster Title Federal Assistance Listing Number U.S. Department of Health and Human Services Direct Program: COVID-19 - Community Programs to Improve Minority Health Grant 93.137 Passed through County of Orange Social Services Agency: Temporary Assistance for Needy Families 93.558 Total U.S. Department of Health and Human Services Total Expenditures of Federal Awards See accompanying Notes to the Schedules of Expenditures of Federal and State Awards. Pass -Through Passed Entity Identifying Federal Through to Number Expenditures Subrecipients N/A $ 137,782 $ 82,525 WGM0319 624,147 - 761,929 82,525 $ 105,769,013 $ 29,985,646 10 CITY OF SANTA ANA, CALIFORNIA Schedule of Expenditures of State Awards For the Fiscal Year Ended June 30, 2022 Program State Identification Awards Grantor / Program Title Number Expenditures CA Business Consumer Services and Housing Agency Homeless Housing Assistance & Prevention 20-HHAP-00019 $ 5,043,068 Homeless Housing Assistance & Prevention 2 21-HHAP-00012 2,877,699 Homeless Housing Assistance & Prevention 3 22-HHAP-10004 637,260 8,558,027 CA Department of Housing and Community Development Affordable Housing Sustainable Communities Program 16-AHSC-11200 178,888 S132 Planning Grants Program 19-PGP-13895 241,962 Local Early Action Planning Program 20-LEAP-15676 95,099 Permanent Local Housing Allocation 20-PLHA-15193 2,665,322 3,181,271 CA Department of Justice Sexual Assault Evidence Grant 2019-2020-02 12,174 CA Department of Resources Recycling and Recovery Oil Payment Program OPP10 14,181 Beverage Container Payment Program FY 19/20 11,331 25,512 CA Department of Transportation Active Transportation Program ATPL-5063(170) 1,043,943 Active Transportation Program ATPL-5063(174) 255,000 Active Transportation Program ATPL-5063(177) 1,032,892 Active Transportation Program ATPL-5063(178) 271,063 Active Transportation Program - SB1 Augmentation ATPSBIL-5063(191) 85,000 Active Transportation Program - SB1 Augmentation ATPSBIL-5063(195) 9,342 Active Transportation Program - SB1 Augmentation ATPSBIL-5063(196) 802,103 Active Transportation Program - SB1 Augmentation ATPSBIL-5063(197) 281,637 Active Transportation Program - SB1 Augmentation ATPSBIL-5063(198) 564,587 Active Transportation Program - SB1 Augmentation ATPSBIL-5063(199) 92,576 4,438,143 CA Department of Water Resources Prop I IRWMP Disadvantaged Communities Involvement 4600011889 100,000 Prop 1 Integrated Regional Water Management Program 4600013842 66,259 166,259 CA Natural Resources Agency Statewide Park Development & Community Revitalization C9801033 138,189 Statewide Park Development & Community Revitalization C9801034 425,811 Advanced Metering Infrastructure GF1806-0 1,870,953 Proposition 68 Urban Flood Protection UF8807-0 157,991 2,592,944 CA State Coastal Conservancy Santa Ana River Conservancy Program 19-097, 19-098, 19-158 601,892 CA State Library Mobile Library Solutions Grant SVBT-026 12,353 CA Workforce Development Board Prison to Employment Program MO113404 422,464 Prison to Employment Program M0113521 594,961 1,017,425 Total Expenditures of State Awards $ 20,606,000 See accompanying Notes to the Schedules of Expenditures of Federal and State Awards. m CITY OF SANTAANA, CALIFORNIA NOTES TO THE SCHEDULES OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2022 1. BASIS OF PRESENTATION The accompanying Schedules of Expenditures of Federal and State Awards (the Schedules) include the federal and state award activities of the City of Santa Ana, California (the City), under programs of the federal government and the State of California, as well as federal and state financial assistance passed through other government agencies for the year ended June 30, 2022. The information in the Schedule of Expenditures of Federal Awards (SEFA) is presented in accordance with the requirements of Title 2 US Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedules present only a selected portion of the operations of the City, they are not intended to, and do not, present the financial statements of the City. The City's reporting entity is defined in Note 1 of the notes to the City's financial statements. 2. BASIS OF ACCOUNTING The accompanying Schedules are presented using the modified accrual basis of accounting for governmental funds and the accrual basis for proprietary funds, which is described in the Note 1 of the notes to the City's financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. The information in the SEFA is presented in accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in the SEFA may differ from amounts presented in, or used in the preparation of, the basic financial statements. Pass -through entity identifying numbers are identified where available. 3. INDIRECT COST RATE The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. 12 CITY OF SANTA ANA, CALIFORNIA Housing Authority of the City of Santa Ana Financial Data Schedule of Assets, Liabilities, and Equity June 30, 2022 Family Self Housing Choice Mainstream Emergency Line Item Sufficiency Housing Choice Mainstream Vouchers Vouchers Housing No. Account Description Program Vouchers Vouchers CARES ACT CARES ACT Voucher ARPA Total Assets Current Assets: ill Cash - Unrestricted $ - $ 2,396,325 $ 109,435 $ 428 $ - $ 29,111 $ 2,535,299 113 Cash - Other Restricted - 629,733 - - - 572,164 1,201,897 115 Cash - Restricted for Payment of Current Liabilities 209,911 209,911 100 Total Cash 3,235,969 109,435 428 601,275 3,947,107 Receivables: 122 Accounts Receivable - HUD Other Projects - 74,901 36,508 - - - 111,409 125 Accounts Receivable - Miscellaneous - - - - - - - 128 Fraud Recovery - 12,776 - - - - 12,776 128.1 Allowance for Doubtful Accounts - Fraud - (4,599) - - - - (4,599) 129 Accrued Interest Receivable 120 Total Receivables, Net of Allowances for Doubtful Accounts 83,078 36,508 119,586 142 Prepaid Expenses and Other Assets 150 Total Current Assets 3,319,047 145,943 428 601,275 4,066,693 Noncurrent Assets: Fixed Assets: 164 Furniture, Equipment & Machinery - Administration - - - - - - - 166 Accumulated Depreciation 160 Total Fixed Assets, Net of Accumulated Depreciation 174 Other Assets 180 Total Non -Current Assets 290 Total Assets and Deferred Outflows of Resources $ $ 3,319,047 $ 145,943 $ 428 $ $ 601,275 $ 4,066,693 Liabilities and Faulty Liabilities: 312 Accounts Payable - HUD PHA Programs <=90 days $ - $ 104,717 $ 110 $ - $ - $ - $ 104,827 322 Accrued Compensated Absences - Current Portion - 31,751 - - - - 31,751 331 Accounts Payable - HUD PHA Programs - - - 428 - - 428 342 Deferred Revenues - 8,177 - - - 155,750 163,927 345 Other Current Liabilities - 209,911 - - - - 209,911 346 Accrued Liabilities - Other 310 Total Current Liabilities 354,556 110 428 155,750 510,844 Noncurrent Liabilities: 353 Noncurrent Liabilities- Other - 629,733 - - - - 629,733 354 Accrued Compensated Absences - Non Current 95,251 95,251 350 Total Noncurrent Liabilities 724,984 724,984 300 Total Liabilities 1,079,540 110 428 155,750 1,235,828 Equity: 509.3 Restricted Fund Balance - - - - - 416,414 416,414 511.3 Assigned Fund Balance - 2,239,507 145,833 - - 29,111 2,414,451 Unassigned Fund Balance 513 Total Equity - Net Assets/Position 2,239,507 145,833 445,525 2,830,865 600 Total Liabilities, Deferred Inflows of Resources and Equity - NetAssets/Position $ $ 3,319,047 $ 145,943 $ 428 $ $ 601,275 $ 4,066,693 13 CITY OF SANTA ANA, CALIFORNIA Housing Authority of the City of Santa Ana Financial Data Schedule of Revenues, Expenses, and Changes in Equity For the Fiscal Year Ended June 30, 2022 Family Self Housing Choice Mainstream Emergency Line Item Sufficiency Housing Choice Mainstream Vouchers Vouchers Housing No. Account Description Program Vouchers Vouchers CARES ACT CARES ACT Voucher ARPA Total Revenues 70600 HUD PHA Operating Grants $ 87,858 $ 44,108,561 $ 2,190,609 $ - $ 4,852 $ 597,477 $ 46,989,357 71100 Investment Income - Unrestricted - ADMIN - - - - - - - 71400 Fraud Recovery - 1,200 - - - - 1,200 71500 Other Revenue - 209,307 - - - 27,991 237,298 72000 Investment Income - Restricted - HAP 70000 Total Revenue 87,858 44,319,068 2,190,609 4,852 625,468 47,227,855 Exaenses Administrative: 91100 Administrative Salaries - 1,105,122 87,754 - 2,992 41,387 1,237,255 91200 Auditing Fees - 12,486 305 - 116 - 12,907 91400 Advertising and Marketing - 35,093 - - - - 35,093 91500 Employee Benefit Contributions - Administrative - 739,243 38,735 - 1,430 12,454 791,862 91600 Other Operating - Administrative - 700,482 14,175 - - 130 714,787 91800 Travel, Training & Transportation - - - - - - - 91810 Allocated Overhead - 121,920 9,158 - 314 4,337 135,729 91900 Other 56,100 900 57,000 91000 Total Operating - Administrative Expenses 2,770,446 150,127 4,852 59,208 2,984,633 Tenant Services: 92100 Tenant Services - Salaries 62,936 - - - - - 62,936 92300 Employee Benefit Contributions - Tenant Services 24,922 24,922 92500 Total Tenant Services 87,858 87,858 General Expenses: 96140 All Other Insurance - - - - - - - 96200 Other General Expenses - 708,790 - - - - 708,790 96210 Compensated Absences 96000 Total Operating - General Expenses 708,790 708,790 96900 Total Operating Expenses 87,858 3,479,236 150,127 4,852 59,208 3,781,281 97000 Excess Operating Revenue over Operating Expenses - 40,839,832 2,040,482 - - 566,260 43,446,574 97300 Housing Assistance Payments - 40,505,981 2,122,477 - - 132,291 42,760,749 97350 HA Portability -In 24,882 3,747 24,044 52,673 90000 Total Expenses 87,858 44,010,099 2,276,351 4,852 215,543 46,594,703 10093 Transfers between Program & Project -In - - - - - - - 10094 Transfers between Program & Project -Out Excess (Deficiency) of Operating Revenues Over (Under) 10000 Expenses $ $ 308,969 $ (85,742) $ $ $ 409,925 $ 633,152 Memo Account Information: 11030 Beginning Equity - 1,930,538 231,575 - - 35,600 2,197,713 11040 Prior period Adjustments and Equity Transfers - - - - - - - 11050 Changes in Compensated Absence Balance - - - - - - - 11200 Unit Months Available - 36,140 2,085 - - - 38,225 11210 Number of Unit Months Leased - 32,223 1,394 - - - 33,617 11170 Administrative Fee Equity - 2,239,507 145,833 - - 29,111 2,414,451 11180 Housing Assistance Payments Equity 416,414 416,414 Line 11170 & 11180 - 2,239,507 145,833 - - 445,525 $ 2,830,865 Line 513 2,239,507 145,833 445,525 14 CITY OF SANTAANA, CALIFORNIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2022 Section I — Summary of Auditors' Results Financial Statements 1. Type of auditors' report issued: 2. Internal control over financial reporting: • Material weakness(es) identified? • Significant deficiency(ies) identified? 3. Noncompliance material to financial statements noted? Federal Awards 1. Internal control over major federal programs: • Material weakness(es) identified? • Significant deficiency(ies) identified? 2. Type of auditors' report issued on compliance for major federal programs: 3. Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Identification of Major Federal Programs Assistance Listings Number(s) 14.871, 14.879 14.239 21.027 21.023 Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low -risk auditee? Unmodified yes x no yes x none reported yes x no yes x no x yes none reported Unmodified yes x no Name of Federal Program or Cluster Housing Voucher Cluster HOME Investment Partnerships Program Corona Virus State & Local Fiscal Recovery Emergency Rental Assistance Program $ 3,000,000 x yes AN] 15 CITY OF SANTAANA, CALIFORNIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2022 Section 11 — Financial Statement Findings Our audit did not disclose any matters required to be reported in accordance with Government Auditing Standards. Section 111 — Findings and Questioned Costs — Major Federal Programs 2022-001 - Suspension and Debarment Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: March 3, 2021, through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of suspension and debarment. The City should have internal controls designed to ensure compliance with those provisions. Condition: The City was not able to provide supporting documentation that the City verified the vendor was not suspended or debarred prior to entering the transaction. Questioned Costs: None. Context: There were twenty-five vendors during FY 21-22 that were a covered transaction for this program. Cause: The City did not maintain supporting documentation that the verification of suspension or debarment was performed prior to entering into a contract for three of the seven samples tested. Effect: The auditor noted no instances of noncompliance with the provisions of suspension, and debarment; however, we were not able to verify that the City followed their internal controls to ensure the vendor was not suspended or debarred prior to entering the transaction. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City implement procedures to ensure that verification documentation for suspension and debarment is maintained to support the City's internal control over compliance. Views of Responsible Officials: There is no disagreement with the audit finding. The City's Purchasing Policies & Procedures require the grant managing departments to adhere to the Uniform Guidance requirements and maintain procurement documentation related to Federal grants including suspension and debarment. City staff assigned to manage or support federal grant -funded projects will check sam.gov to ensure their vendors are not excluded parties prior to selecting vendors and maintain supporting documentation. 16 CITY OF SANTAANA, CALIFORNIA SUMMARY SCHEDULE OF PRIOR -YEAR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2022 Section I — Financial Statement Findings None noted. Section 11 — Findings and Questioned Costs — Major Federal Programs Finding 2021-001 Federal Agency: U.S. Department of Labor (DOL) Federal Program Title: WIOA Youth Activities Federal Assistance Listing Number: 17.259 Award Period: April 10, 2020 through March 31, 2022 Type of Finding: Other Matter Criteria or Specific Requirement: In accordance with (Section 129(c)(4)), WIOA, 128 Stat. 1510), Not less than 20 percent of Youth Activity funds allocated to the local area, except for the local area expenditures for administration, must be used to provide paid and unpaid work experiences. Condition: Total WIOA Youth Activities expenditures used to provide paid and unpaid work experiences was less than 20% of total WIOA Youth Activities expenditures less administrative expenditures. Status: Corrected. 17 0 Global INDEPENDENT NETWORK MEMBER CLA (CliftonLarsonAllen LLP) is a network member of CLA Global. See CLAglobal.com/disclaimer. 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