Federal Awards Reports in Accordance
with the Uniform Guidance
June 30, 2024
City of Fairfield, California
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City of Fairfield, California
Table of Contents
June 30, 2024
I
ndependent Auditor’s 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 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ............................................................................................................. 3 Schedule of Expenditures of Federal Awards ............................................................................................................ 7 Notes to Schedule of Expenditures of Federal Awards ............................................................................................. 9 Schedule of Findings and Questioned Costs
Section I – Summary of Auditor's Results ............................................................................................................ 10 Section II – Financial Statement Findings ............................................................................................................ 11 Section III – Federal Award Findings and Questioned Costs ................................................................................ 12 Summary Schedule of Prior Audit Findings .............................................................................................................. 16 1 I
ndependent Auditor’s 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
T
o the City Council
City of Fairfield, California
W
e have audited, in accordance with 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 (Government Auditing Standards), the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Fairfield, California (the City), as of and for the year ended June 30, 2024, 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 12, 2024.
R
eport on Internal Control over Financial Reporting
I
n 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 City’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.
O
ur 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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We identified certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs and as item 2024-001 that we consider to be a significant deficiency.
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eport on Compliance and Other Matters
A
s 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.
C
ity’s Response to Findings
G
overnment Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and 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 the financial statements and, accordingly, we express no opinion on the response.
P
urpose of this Report
T
he 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.
S
acramento, California
December 12, 2024
3 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
T
o the Honorable Mayor and Members of the City Council
City of Fairfield, California
R
eport on Compliance for Each Major Federal Program
Q
ualified and Unmodified Opinions
W
e have audited the City of Fairfield, California’s (the City) compliance with the types of compliance requirements identified as subject to audit 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, 2024. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
Q
ualified Opinion on the Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a Military Installation Program
I
n our opinion, except for the noncompliance described in the Basis for Qualified and Unmodified Opinions section of our report, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect the on Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a Military Installation Program for the year ended June 30, 2024.
U
nmodified Opinion on Each of the Other Major Federal Programs I
n our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its other major federal programs identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs for the year ended June 30, 2024.
B
asis for Qualified and Unmodified Opinions
W
e 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 (Government Auditing Standards); 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 Auditor’s Responsibilities for the Audit of Compliance section of our report.
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e 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 qualified and unmodified opinions on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
M
atter Giving Rise to a Qualified Opinion on the Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a Military Installation Program A
s described in the accompanying schedule of findings and questioned costs, the City did not comply with requirements regarding Assistance Listing No. 12.003, Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a Military Installation Program, as described finding 2024- 003 for Procurement, Suspension and Debarment.
C
ompliance with such requirements is necessary, in our opinion, for the City to comply with the requirements applicable to that program.
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esponsibilities of Management for Compliance
M
anagement 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.
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uditor’s Responsibilities for the Audit of Compliance
O
ur 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 omissions, misrepresentations, or the 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 the 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.
I
n 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.
5 • O
btain 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 c
ompliance. Accordingly, no such opinion is expressed.
W
e 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.
O
ther Matters
T
he results of our auditing procedures disclosed other instances of noncompliance, which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as item 2024-002. Our opinion on each major federal program is not modified with respect to this matter.
G
overnment Auditing Standards requires the auditor to perform limited procedures on the City’s response to the noncompliance findings identified in our compliance 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.
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eport on Internal Control over Compliance
O
ur consideration of internal control over compliance was for the limited purpose described in the Auditor’s 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. However, as discussed below, we did identify certain deficiencies in internal control over compliance that we consider to be material weaknesses and significant deficiencies.
A de
ficiency 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.
We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2024-003 to be a material weakness. 6 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 deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2024-002 to be a significant deficiency.
O
ur 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.
G
overnment Auditing Standards requires the auditor to perform limited procedures on the City’s response to the internal control over compliance findings identified in our compliance 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.
T
he 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.
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eport on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance W
e 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 as of and for the year ended June 30, 2024 and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated December 12, 2024, 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 is presented for purposes of additional analysis as required by the Uniform Guidance and is 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.
The information has been subjected to the auditing procedures applied in the audit of the basic 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 is fairly stated in all material respects in relation to the basic financial statements as a whole.
S
acramento, California
March 18, 2025
See Notes to Schedule of Expenditures of Federal Awards 7 City of Fairfield, California
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2024
Federal Program/Project
Financial or Pass-through Amounts
Assistance Identification Provided to
Listing Number Expenditures Subrecipients
U.S. Department of Defense
Direct Programs:
Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a Military Installation 12.003 MIR1973-22-01 868,591$ - $ Total U.S. Department of Defense 868,591 -
U.S. Department of Housing and Urban Development
Direct Programs:
CDBG-Entitlement/Special Purpose Grants Cluster:
Community Development Block Grant/Entitlement Grants 14.218 B22MC060027 380,265 33,074 Community Development Block Grant/Entitlement Grants 14.218 B23MC060027 810,769 79,326 Community Development Block Grant/Entitlement Grants 14.218 Program Income 196,106 - COVID-19 Community Development Block Grant 14.218 B20MW060027 116,126 116,126 Subtotal CDBG-Entitlement/Special Purpose Grant Cluster 1,503,266 228,526 Housing Voucher Cluster:
Section 8 Housing Choice Vouchers 14.871 N/A 10,942,491 - Subtotal Housing Voucher Cluster 10,942,491 -
Passed through the Community AcƟon Partnership Solano
Joint Powers Authority:
COVID-19 Emergency Solutions Grant Program 14.231 N/A 65,705 - Passed through the California Department of Housing and Community Development:
Home Investment Partnerships Program - Program Income 14.239 Program Income 54,288 - Total U.S. Department of Housing and Urban Development 12,565,750 228,526 U.S. Department of Justice
Direct Programs:
Edward Byrne Memorial Justice Assistance Grant Program 16.738 2019-DJ-BX-0627 12,966 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 2020-DJ-BX-0341 34,622 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 15PBJA-21-GG-
01261-JAGX 42,897 -
Edward Byrne Memorial Justice Assistance Grant Program 16.738 15PBJA-22-GG-
02136-JAGX 22,490 -
Edward Byrne Memorial Justice Assistance Grant Program 16.738 15PBJA-23-GG-
03174-JAGX 43,251 -
Subtotal Edward Byrne Memorial Justice Assistance Grant Program 156,226 - Total U.S. Department of Justice 156,226 -
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
S
ee Notes to Schedule of Expenditures of Federal Awards 8 City of Fairfield, California
Schedule of Expenditures of Federal Awards
Year Ended Ju ne 30, 2024
Federal Program/Project
Financial or Pass-through Amounts
Assistance Identification Provided to
Listing Number Expenditures Subrecipients
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
U.S. Department of Transportation
Direct Programs:
Federal Transit Cluster:
Federal Transit Formula Grant 20.507 CA-2021-019-00 1,206,518$ -$ Federal Transit Formula Grant 20.507 CA-2021-200-00 1,376,989 - Federal Transit Formula Grant 20.507 CA-2022-188-00 143,962 - Federal Transit Formula Grant 20.507 CA-2023-218-00 397,000 - Federal Transit Formula Grant 20.507 CA-2024-059-00 2,315,457 - COVID-19 ARPA Federal Transit Formula Grant 20.507 CA-2023-026-00 1,343,353 - Subtotal Federal Transit Cluster 6,783,279 -
Passed through the California Department of Transportation:
Highway Planning and Construction 20.205 STPCML-5132 (049) 1,065,634 - Highway Planning and Construction 20.205 HSIPL-5132 (50) 816,344 - Highway Planning and Construction 20.205 HSIPL-5132 (51) 999,741 - Highway Planning and Construction 20.205 HSIPL-5132 (52) 244,318 - Highway Planning and Construction 20.205 HSIPL-5132 (55) 1,040 - Subtotal Highway Planning and Construction 3,127,077 -
Passed through the California Office of Traffic Safety:
Highway Safety Cluster:
State and Community Highway Safety 20.600 PT23026 30,238 - State and Community Highway Safety 20.600 PT24068 104,874 - Subtotal Highway Safety Cluster 135,112 -
Total U.S. Department of Transportation 10,045,468 -
U.S. Department of the Treasury
Direct Programs:
COVID-19 Coronavirus State and Local Fiscal
Recovery Funds 21.027 N/A 3,100,000 -
Passed through the California State Water Resources Control Board:
COVID-19 Coronavirus State and Local Fiscal
Recovery Funds 21.027 CA4810003 238,106 -
Subtotal COVID-19 Coronavirus State and Local Fiscal Recovery Funds 3,338,106 - Total U.S. Department of the Treasury 3,338,106 -
U.S. Department of Homeland Security
Direct Programs:
Staffing for Adequate Fire & Emergency Response 97.083
EMW-2020-FF-
00816 1,142,331 -
Passed through the Solano County Emergency Food and Shelter Program Local Board:
Emergency Food and Shelter National Board Program 97.024 40-0902-00 10,000 - Total U.S. Department of Homeland Security 1,152,331 -
Total Federal Expenditures 28,126,472$ 228,526$
9 City of Fairfield, California
N
otes to Schedule of Expenditures of Federal Awards
Year Ended Ju ne 30, 2024
Note 1 - Basis of Presentation
T
he accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of the City under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the 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). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.
Note 2 - Summary of Significant Accounting Policies
E
xpenditures reported on the Schedule are reported on the modified accrual basis of accounting for governmental funds and the accrual basis of accounting for proprietary funds, except for subrecipient expenditures, which are reported on the cash basis. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Note 3 - Indirect Cost Rate
Th
e City has elected to use the 10% de minimis cost rate. 10 City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended Ju ne 30, 2024
Section I – Summary of Auditor’s Results
FINANCIAL STATEMENTS
Type of auditor's report issued Unmodified
Internal control over financial reporting:
Material weaknesses identified No
Significant deficiencies identified not considered
to be material weaknesses Yes
Noncompliance material to financial statements noted? No
FEDERAL AWARDS
Internal control over major program:
Material weaknesses identified Yes
Significant deficiencies identified not considered
to be material weaknesses Yes
Type of auditor's report issued on compliance
for major programs:
Unmodified for all major programs except
for the Community Economic Adjustment
Assistance for Responding to Threats to
the Resilience of a Military Installation
program, which is qualified.
Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance 2 CFR 200.516(a)? Yes
Identification of major programs:
Federal Financial Assistance Listing
Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a Military Installation 12.003 Community Development Block Grant/Entitlement Grants 14.218 Section 8 Housing Choice Vouchers/Housing Voucher Cluster 14.871 Coronavirus State and Local Fiscal Recovery Funds 21.027 Staffing for Adequate Fire & Emergency Response 97.083
Dollar threshold used to distinguish between type A
and type B programs: $843,794
Auditee qualified as low-risk auditee? No
Name of Major Federal Program or Cluster
City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2024
11 Section II – F inancial Statement Findings
2 024-001 Systems Access Reviews
Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria:
Management is responsible for establishing a system of internal controls to prevent individuals having inappropriate access to systems or records within their accounting system. This includes having controls in place to review the systems access granted to individuals to ensure that those individuals are only granted the access they require for their position and assigned responsibilities, removing access when those individuals no longer require it, and reviewing the assigned access for conflicts with segregation of duties.
Condition:
There was no documentation of the review of user access in Tyler to verify the appropriateness of permissions based on their role and job duties. We corroborated with City employees that a review was performed, but there was no documentation of the review and the results of the review.
Cause:
The City’s procedures do not include documenting the results of its periodic review of user access in Tyler.
Effect:
By not reviewing the user access in Tyler, there is an increased risk of individuals having inappropriate access and conflicting segregation of duties which increases the risk of fraud or error occurring within the accounting system and not being identified by management.
Recommendation:
We recommend that management formally document their periodic review of users and their access granted in Tyler to ensure that their current assigned access in appropriate for their position and responsibilities.
Views of Responsible Officials:
The City hired an expert to review all permissions and build a robust workflow model, this review and implementation was completed in November 2024, and while the City has consistently been reviewing permissions in the past there were too many changes made over the course of the first year of implementation to formally document. When the City conducts future periodic reviews, the process will be documented to reflect the outcome of the review.
See separate corrective action plan.
City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2024
12 Section III – F ederal Award Findings and Questioned Costs 20 24-002 Federal Agency: U.S. Department of Defense
Program/Cluster: Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a Military Installation
Federal Assistance Listing Number: 12.003
Award No.: MIR1973-22-01
Award Year: 2023
Compliance Requirement: Matching, Level of Effort and Earmarking Type of Finding: Significant Deficiency in Internal Control over Compliance, Instance of Noncompliance
C
riteria:
2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
2 CFR 200.430(g)(4) Salaries and wages of employees used in meeting cost sharing requirements on Federal awards must be supported in the same manner as salaries and wages claimed for reimbursement from Federal awards.
2 CFR 200.306(f) requires that if services furnished by a third-party organization are claimed as a cost-sharing match, these services must be valued at the employee’s regular rate of pay, plus an amount of fringe benefits that is reasonable, necessary, allocable, and otherwise allowable.
C
ondition:
We noted personnel services furnished by third-party organizations totaled $31,025 for the life of the grant, including $10,854 in fiscal year 2024. For the services furnished by third-party organizations as a local match of costs, the City valued the personnel time based on budgeted rates. The City could not provide documentation supporting the actual cost incurred by the third-party organization to support the in-kind services claimed.
Cause:
The City’s policies and procedures for in-kind services furnished by third-party organizations toward the grant did not include obtaining documentation to support the actual costs incurred and value of services claimed.
Effect:
The City did not comply with required local match of expenses for the grant.
City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2024
13 Questioned Costs:
W
e identified questioned costs totaling $2,435 for unsubstantiated costs furnished by third- party organizations claimed as local cost share expenditures.
C
ontext/Sampling:
A
nonstatistical sample of 13 out of 54 local cost share expenditures were tested. This represents $9,114 of local cost share expenditures out of a total of $46,809 incurred for fiscal year 2024. Upon further investigation, the questioned costs were isolated to contributed services furnished by third-party organizations which totaled $10,854 in the fiscal year 2024.
R
epeat Finding from Prior Year(s):
N
o.
R
ecommendation:
W
e recommend the City establish policies and procedures and documentation standards to comply with the Uniform Guidance standards for documentation of personnel expenses used to meet the local share of expenses.
V
iews of Responsible Officials:
M
anagement concurs with the finding. See separate corrective action plan. 20 24-003 Federal Agency: U.S. Department of Defense
Program/Cluster: Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a Military Installation
Federal Assistance Listing Number: 12.003
Award No.: MIR1973-22-01
Award Year: 2023
Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance
C
riteria:
2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2024
14 Title 2 CFR Section 200.214 of the Uniform Guidance states that the City must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.
P
er 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) ch
ecking the System for Award Management (SAM) Exclusions maintained by the General S
ervices Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a c
ertification from the entity, or (3) adding a clause or condition to the covered transaction with that entity.
2 CFR 200.318(i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price.
T
he City’s grant policy, chapter 100 of the City’s administrative policy, section 34 states that contracts valued between $3,500 to $150,000 allow for informal procurement methods but requires that price or rate quotes must be obtained (and kept on hand for audit purposes) from an adequate number of qualified sources.
2 CFR 200.327 requires that the recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II of 2 CFR 200.
C
ondition:
D
uring our testing of the City’s provisions for procurement requirements, we noted the following:
1) F
or two (2) of two (2) contracts selecting for testing there was no evidence that the City verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. Upon our search, none of the vendors were suspended or debarred.
2) F
or one (1) of two (2) contracts selected for testing with a contract value of $103,800, the C
ity did not document the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price.
3) F
or two (2) out of two (2) contracts selected for testing, the City did not include all a
pplicable provisions described in 2 CFR 200 Appendix II.
City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2024
15 Cause:
T
he City did not follow their policy to verify the information described in the condition prior to entering the transactions.
T
he City did not follow their policy documenting the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price.
T
he City’s policy does not include the requirement to include all applicable provisions identified in 2 CFR 200 Appendix II in its contracts.
E
ffect:
F
ailure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance.
Q
uestioned Costs:
N
o questioned costs were identified.
C
ontext/Sampling:
W
e tested 100% of the procurement transactions. This represented a total of $1,323,800 in contracted services under the grant. $862,375 was paid for contracted services in fiscal year 2024.
R
epeat Finding from Prior Year(s):
N
o.
R
ecommendation:
W
e recommend the City strengthen its policies and procedures to ensure that the verification of the debarment and suspension is documented and retained, the history of procurement transactions is documented and retained in its official records, and that contracts include all applicable provisions of 2 CFR 200 Appendix II.
V
iews of Responsible Officials:
M
anagement concurs with the finding. See separate corrective action plan. 16 City of Fairfield, California
S
ummary Schedule of Prior Audit Findings
Year Ended Ju ne 30, 2024
Finding
No.
Program/Cluster or
Finding Description
Federal Assistance
Listing No.
Compliance
Requirement Status
2023-001 Systems Access, Security and
Segregation of Duties
N/A N/A Partially implemented.
See current year finding
2024-001.
2023-002 Prior Period Adjustment, Manual
Adjustments and Chart of Accounts
for Financial Reporting
N/A N/A Implemented.
2023-003 Reconciliations N/A N/A Implemented.
2023-004 Staffing for Adequate Fire &
Emergency Response
97.083 Reporting Implemented.
2023-005 Highway Planning and Construction 20.205 Special Tests and Provisions – Wage Rate
Requirements
Implemented.
2023-006 Section 8 Housing Choice Vouchers
Cluster
14.871 Reporting Implemented.
2023-007 Section 8 Housing Choice Vouchers
Cluster
14.871 Special Tests and
Provisions – Housing
Quality Standards
Inspections
Implemented.