City of Fresno
Fresno, California
Single Audit and
Independent Auditors’ Reports
For the Year Ended June 30, 2022
City of Fresno
Single Audit and Independent Auditors’ Reports
For the Year Ended June 30, 2022
Table of Contents
Page
Single Audit:
Independent Auditors’ Reports:
Report on Internal Control Over Financial Reporting and on Compliance and Other Matte
rs Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards .................................................................. 1 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 the Schedule of Expenditures of Federal Awards ...................................................................................... 11 Schedule of Findings and Questioned Costs ........................................................................................................... 14 Summary Schedule of Prior Audit Findings ............................................................................................................ 20 This
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200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
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
Independent Auditors’ Report
To the Honorable Mayor and Members of City Council
of the City of Fresno
Fresno, California
We have audited, in accordance with the auditing standa rds generally accepted in the United States of America and the standards applicable to fi nancial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Fresno, California (the “City”) as of and for the year ended June 30, 2022, a nd the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 15, 2023.
Our report includes a reference to other auditors who audite d the financial statements of the Successor Agency to the Fresno Redevelopment Agency Private-Purpose Trust Fund, the Low and Moderate Income Housing Asset Special Revenue Fund, the Fire and Police Retirement System Pe nsion Trust Fund, or the Employees Retirement System Pension Trust Fund, blended component units of the City, as described in our report on the City’s financial statements. This report does not include the results of the other auditors’ testing of in ternal control over financial reporting or compliance and other matters that are reported on separately by those auditors.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial stat ements, we considered the C ity’s internal control over financial rep orting (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 t he first paragraph of this section and was not designed to identify all defici encies 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 th at we consider to be material weaknesses. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as items 2022-001 and 2022-002 that we consider to be significant deficiencies.
To the Honorable Mayor and Members of City Council
of the City of Fresno
Fresno, California
2 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s basic 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 a nd 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.
The City’s Response to Findings
Government Auditing St
andards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the acco mpanying schedule of findings and questioned costs. The City’s response was not subjected to the other auditing pro cedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
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 entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Santa Ana, California
March 15, 2023
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
REPORT ON COMPLI
ANCE 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 Independent Auditors’ Report
To the Honorable Mayor and Members of City Council
of the City of Fresno
Fresno, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited City of Fresno, California’s (the “City ”) compliance with the typ es of compliance req uirements 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, 2022. 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.
In our opinion, the City complied, in all materi al re spects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2022.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with a uditing standards generally accepted in t he United States
of America; the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States; a nd the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Princi ples, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standard s 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 responsibiliti es, 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 co mpliance 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.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to abo ve and for the design,
implementation, and maintenance of e ffective internal control over complia nce with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.
To the Honorable Mayor and Members of City Council
of the City of Fresno
Fresno, California
4 Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurre d, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a hi gh level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally acc epted auditing standards, Government Auditing Standards , and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting ma terial noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional om issions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements re ferred 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.
In performing an audit in accordance w ith auditing standards generally accepted in the United States of America, 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. Su ch procedures include exam ining, on a test basis, evidence regarding the City’s compliance with th e 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 circumstan ces 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 deficienci es and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control Over Compliance
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 cour se of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of complian ce requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combinati on 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 pr evented, 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 requireme nt 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.
Our consideration of internal control over compliance was for the limited purpose d escribed in the Auditors’ Responsibilities for the Audit of Complia nce section above and was not designe d to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any de ficiencies in internal control over compliance that we consider to be material weakn esses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
To the Honorable Mayor and Members of City Council
of the City of Fresno
Fresno, California
5 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.
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 testi ng based on the requirements of the Uniform Guidance.
Accordingly, this report is not suitable for any other purpose.
Report on the Schedule o
f Expenditures of Federal Awards Required by the Uniform Guidance 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, as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively compri se the City’s basic financial statements. Other auditors audited the financial statements the Successor Agency to the Fresno Redevelopment Agency Private-Purpose Trust Fund, the Low and Moderate Income Housing Asset Special Revenue Fund, the Fire a nd Police Retirement System Pension Trust Fund, or the Employees Retirement System Pension Trust Fund, as described in our report on the City’s financial statements. We issued our report th ereon dated March 15, 2023, which contained unmodified opinions on those financial statements. Our audit was perfo rmed 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 anal ysis 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 an d other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures a pplied in the audit of the financial statements and certain additional procedures, including comparing and reconcili ng 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 add itional procedures in accordance with a uditing 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.
Santa Ana, California
March 15, 2023
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City of Fresno
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2022
See accompanying Notes to the Schedule of Expenditures of Federal Awards 7 Assistance Grant Amount
Lis ting Identification Federal Provided to
Number Number E xpenditures Subrecipients
U .S. Department of Commerce
E conomic Dev elopment Cluster:
Direct Programs:
Investments for Public Works and Economic Development Facilities 11.300 EDA 07-01-07362 369,640$ - $ COV ID-19 - Economic Adjustment Assistance 11.307 EDA 07-39-02434 280,250 280,250 Revolving Loan Fund - Econom ic Adjustm ent Assistance 11.307 EDA 07-39-02434 889,649 889,649 Subtotal - Program 11.311 1,169,899 1,169,899
Total Economic Development Cluster 1,539,539 1,169,899 Total U .S. Department of Commerce 1,539,539 1,169,899 U.S . Department of Hous i ng and Urban Devel opment
Community Development Block Grant (CDBG) - Entitlement Grants Cluster:
Direct Programs:
Com m unity Developm ent Block G rant 14.218 Loan Balance 130,000 - Com m unity Developm ent Block G rant 14.218 B-15-MC 06-0001 228,040 - Com m unity Developm ent Block G rant 14.218 B-17-MC-06-0001 18,417 2,545 Com m unity Developm ent Block G rant 14.218 B-18-MC-06-0001 471,504 47,837 Com m unity Developm ent Block G rant 14.218 B-19-MC-06-0001 707,057 61,969 Com m unity Developm ent Block G rant 14.218 B-20-MC-06-0001 3,106,199 219,871 COV ID-19 - Com m unity Developm ent Block G rant 14.218 B-20-MW-06-0001 43,738 1,495 Com m unity Developm ent Block G rant 14.218 B-21-MC-06-0001 1,978,880 95,040 Total CDBG - Entitlement Grants Cluster 6,683,835 428,757 COV ID-19 - Emergency Solutions G rant Program 14.231 E-20-MW-06-0001 6,488,801 5,708,435 Emergency Solutions G rant Program 14.231 E-20-MC-06-0001 578,541 566,453 Emergency Solutions G rant Program 14.231 E-21-MC-06-0001 146,841 131,930 Total E mergency Solutions Grant Program 7,214,183 6,406,818 HOME Investment Partnership 14.239 M-17-MC-06-0204 312,081 275,219 HOME Investment Partnership 14.239 M-18-MC-06-0204 57,609 57,609 HOME Investment Partnership 14.239 B-21-MC-06-0204 9,221 - HOME Investment Partnership 14.239 M-21-MC-06-0204 188,550 - Total HOME Inv estment Partnership 567,461 332,828
Housing Opportunities for Persons with AIDS (HOPWA) 14.241 CAH17F011 10,665 10,665 Housing Opportunities for Persons with AIDS (HOPWA) 14.241 CAH17F011 655 - Housing Opportunities for Persons with AIDS (HOPWA) 14.241 CAH18F011 31,615 31,615 Housing Opportunities for Persons with AIDS (HOPWA) 14.241 CAH19F011 196,375 195,247 Housing Opportunities for Persons with AIDS (HOPWA) 14.241 CAH20FW011 11,789 10,047 Housing Opportunities for Persons with AIDS (HOPWA) 14.241 CAH20F011 305,042 292,298 Housing Opportunities for Persons with AIDS (HOPWA) 14.241 CAH21F011 1,776 - Total Housing Opportunities for Persons with AIDS (HOPWA) 557,917 539,872 Total U.S . Hous i ng and Ur ban De ve l opme nt15,023,396 7,708,275 U.S . De par tme nt of J us ti c e
Direct Programs:
Edward Byrne Memorial Justice Assistance G rant 16.738 2019-DJ-BX-0686 132,347 - Edward Byrne Memorial Justice Assistance G rant 16.738 2020-DJ-BX-0227 181,199 - Total - Program 16.738 313,546 -
Federal Grantor/Pass - Through
Grantor/Program Title
City of Fresno
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended June 30, 2022
See accompanying Notes to the Schedule of Expenditures of Federal Awards
8 Assistance Grant Amount
Lis ting Identification Federal Prov ided to
Number Number Expenditures Sub recip ients
Direct Programs:
Sexual As sault Kit Initiative Grant 16.833 2018-AK-BX-0034 205,991 15,468 Sexual As sault Kit Initiative Grant 16.833 2019-AK-BX-0021 388,173 242,720 Sexual As sault Kit Initiative Grant 16.833 2020-AK-BX-0002 298,768 - Total - Program 16.883 892,932 258,188
COV ID-19 - Coronavirus Em ergency Supplem ental Funding Program 16.034 2020-V D-BX-0206 299,836 - Lay Enforcement Mental Health and Wellness Act (LEMHWA) 16.710 2020-MH-WX-K011 37,137 - Equitable Sharing Program 16.922 N/A 3 - Total U.S. Department of Justice 1,543,454 258,188 U.S. Department of Transportation
Airport Improv ement Program:
Direct Programs:
Airport Im provem ent Program 20.106 3-06-0087-082-2018 51,629 - Airport Im provem ent Program 20.106 3-06-0087-086-2020 292,881 - Airport Im provem ent Program 20.106 3-06-0087-087-2021 26,104 - COV ID-19 - Airport Im provem ent Program 20.106 3-06-0087-088-2021-CRRSA 4,353,104 - COV ID-19 - Airport Im provem ent Program 20.106
3-06-0087-089-2021-CRRSA
concessions 207,022 -
Airport Im provem ent Program 20.106 3-06-0087-090-2021 941,263 - Airport Im provem ent Program 20.106 3-06-0087-091-2021 38,840 - Airport Im provem ent Program 20.106 3-06-0087-092-2021 2,594,845 - COV ID-19 - Airport Im provem ent Program 20.106
3-06-0087-093-2021-ARPA
concessions 828,089 -
COV ID-19 - Airport Im provem ent Program 20.106 3-06-0088-026-2021-CRRSA 23,000 - Airport Im provem ent Program 20.106 70T04020T9CAP1093 645,778 - Total - Airport Improvement Program 10,002,555 - Highway Planning and Construction Cluster:
Passed through the California Department of Transportation:
Highway Planning and Construction Cluster 20.205 Master Agreement 06-5060 15,451,538 - Total Highway Planning and Construction Cluster 15,451,538 - Passed through the California High Speed Rail Authority:
ARRA - High Speed Rail (Engineering & Plan Review Contract) 20.319 HSR 11-29 53,046 - High Speed Rail (Engineering & Plan Review Contract) 20.319 HSR 16-57 6,241,238 - Total - Program 20.319 6,294,284 -
Passed through the Fresno Council of Governments:
Technical Assistance and Workforce Development Program 20.513 CA-2018-126 4,800 - Direct Program:
Clean Fuels - FY10 Electric Circulator [5308 - Clean Fuels ] 20.519 CA-58-0007 1,868,920 - U.S. Department of Transportation (Continued)
Highway Safety Cluster:
Passed through California Office of Traffic Safety:
Selective Traffic Enforcement Program (STEP) FFY 2021 20.600 PT21113 24,592 - Selective Traffic Enforcement Program (STEP) FFY 2022 20.600 PT22174 101,417 - Total Highway Safety Cluster 126,009 -
Minimum Penalties for Repeat Offenders for Driving While Intoxicated Program:
Passed through California Office of Traffic Safety:
Selective Traffic Enforcement Program (STEP) FFY 2021 20.608 PT21113 130,280 - Selective Traffic Enforcement Program (STEP) FFY 2022 20.608 PT22174 233,279 - Total - Program 20.608 363,559 -
Federal Grantor/Pass - Through
Grantor/Program Title
City of Fresno
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended June 30, 2022
See accompanying Notes to the Schedule of Expenditures of Federal Awards
9 Assistance Grant Amount
Lis ting Identification Federal Provided to
Number Number Expenditures Sub recip ients
Federal Transit Cluster:
Direct Program:
Federal Transit Capital Investm ent G rants 20.500 CA-03-0821 1,839,585 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-061 66,534 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-192 12,568 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-061 577,607 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-192 23,473 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-061 47,489 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-192 183,219 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-061 185,761 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-192 32,777,619 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-061 31,674 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-192 1,373,739 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-061 77,968 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-192 22,897 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-061 7,449 - Urban Mass Transportation Capital Planning, Operating Assistance 20.507 CA-2020-192 171,850 - Total - Program 20.507 35,559,847 -
Bus and Bus Facilities Form ula Program 20.526 CA-2016-106 177,432 177,432 Bus and Bus Facilities Form ula Program 20.526 CA-2019-045 515,553 462,067 Bus and Bus Facilities Form ula Program 20.526 CA-2022-079 1,144,294 - Total - Program 20.526 1,837,279 639,499
Total Federal Transit Cluster 39,236,711 639,499 Total U.S. Department of Transportation 73,348,376 639,499 U .S. Dep artment of Treasury
Direct Program:
Coronavirus Relief Fund 21.019 N/A 3,105,822 - State and Local Fiscal Recovery Fund 21.027 SLT-3272 19,597,099 - Emergency Rental Assistance Program:
Direct Program:
Em ergency Rental Assistance Program (ERAP) 21.023 ERA P 22,683,540 14,590,754 Passed through the State of California Department of Housing and Community Development:
Em ergency Rental Assistance Program (ERAP) 21.023 ERA P 12,239,896 - Total - Program 21.023 34,923,436 14,590,754 Total U.S. Department of Treasury 57,626,357 14,590,754 E nv ironmental Protection Agency
State and Local Fiscal Recov ery Fund :
Direct Program:
Brownfields Training, Research, and Technical Assistance G rants and Cooperative Agreem ents 66.814 99T91201 158,999 158,999 Direct Program:
Brownfields Multipurpose, Assessm ent, Revolving Loan Fund, and Cleanup Cooperative Agreem ents 66.818 BF98T08001 11,978 11,978 Total E nv ironmental Protection Agency 170,977 170,977 U.S. Department of Health and Human Services
Direct Program:
Equitable Com m unity Response to COV ID-19 93.137 1 CPIMP211263-01-00 945,201 - Total U .S. Department of Health and Human Serv ices 945,201 - Grantor/Program Title
Federal Grantor/Pass - Through
City of Fresno
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended June 30, 2022
See accompanying Notes to the Schedule of Expenditures of Federal Awards 10 Assistance Grant Amount
Lis ting Identification Federal Prov ided to
Number Number Expenditures Sub recip ients
U.S. Department of Homeland Security
Homeland S ecurity Grant Prog ram:
Passed through the California Department of Emergency Services:
Homeland Security Grant Program (HSGP) 97.067 2019-0054 133,773 - Homeland Security Grant Program (HSGP) 97.067 HSFP-2019-0035 77,202 - Homeland Security Grant Program (HSGP) 97.067 HSFP-2020-xxxx 25,793 - Homeland Security Grant Program (HSGP) 97.067 HSFP-2018-0054 826 - Direct Programs:
Homeland Security Grant Program (HSGP) 97.067 EMW-2020-FP-00206 6,720 - Total Homeland Security Grant Program 244,314 -
Direct Programs:
Staffing for Adequate Fire and Em ergency Response G rant Program 97.083 EMW-2020-FF-01300 2,324,806 - Total U .S. Dep artment of Homeland Security 2,569,120 - Total E xp end itures of Fed eral Aw ard s 152,766,420$ 8,776,939$ Federal Grantor/Pass - Through
Grantor/Program Title
City of Fresno
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2022
11 Note 1 – Reporting Entity
The financial reporting entity, as defined by the Government al Accounting Standard Boar d (“GASB”), consists of the primary government, which is the City of Fresno, Calif ornia (the “City”), organizations for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The City’s repor ting entity is defined further in Note 1a to the City’s basic financial statements.
Note 2 – Basis of Accounting
Funds received under the various grant programs have been r ecorded within the general fund, special revenue funds and proprietary funds of the City. The City utilizes the m odified accrual method of accounting for the General Fund and special revenue funds and accrual method of accoun ting for proprietary funds. The accompanying Schedule of Expenditures of Federal Awards (the “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 (the “Uniform Guidance”). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in, the preparation of the City’s basic financial statements.
Note 3 – Schedule of Expenditures of Federal Awards
The accompanying Schedule presents the activity of all fede ral financial assistance programs of the City. Federal financial assistance received directly from federal agenci es as well as federal financial assistance passed through the State of California and Fresno Council of Governments, is included in the Schedule. The Schedule was prepared from only the accounts of various grant programs and, theref ore, does not present the financial position, change in fund balance, or results of operations of the City.
Note 4 – Assistance Listing Numbers
The Assistance Listing Numbers (ALNs) included in th e accompanying Schedule were determined based on the federal program name, review of grant contract inform ation, and the U.S. General Services Administration’s SAM.gov website.
Note 5 – Indirect Cost Rate
The City has not elected to use the 10-percent de minimis indirect rate as allowed under the Uniform Guidance.
Note 6 – Section 108 Loans
The City has one (1) Section 108 loan outstanding at June 30, 2022. Semi-annual paymen ts on this Section 108 loan are made from interest earned on the restricted lo an investments and from Community Development Block Grants/Entitlement Grants Program and are included in the federal expenditures for the Community Development Block Grants on the Schedule. Total principal and in terest payments totaled $132,628 for the year ending June 30, 2022, of which $132,628 was paid from Community Development Block Grant funds.
City of Fresno
Notes to the Schedule of Expenditures of Federal Awards (Continued) For the Year Ended June 30, 2022
12 Note 6 – Section 108 Loans (Continued)
A summary of the Section 108 loan outstanding as of June 30, 2022, is as follows:
Assistance Unspent Loan Outstanding Loan
Listing Proceeds as of Balances as of
Project Name Numb er June 30, 2022 June 30, 2022
Section 108 Note - Neighborhood Streets/Parks 14.218 - $ 130,000$ -$ 130,000$
Note 7 – State Revolving Loan Funds
Beginning in fiscal year 2007, the City received Federal cross- cut revolving grant funds from the State in the form of loans from the U.S. Environmental Protection Agency, Offi ce of Water, passed through the California State Water Resources Control Board and the California Department of Public Health, under Capitalization Grants for Clean Water State Revolving Funds (Assistance Listing Number 66.458) and Capitalization Grants for Safe Drinking Water State Revolving Funds (Assistance Listing Number 66.468). Th e purpose of the grants/loans is to assist in financing the construction of projects that will enable the City to co mply with statutory clean and safe drinking standards. The City received funds under seven grants/loans. The term s of the grants/loans and the outstanding balances as of June 30, 2022, are as follows:
Grant Outstanding Loan
Fiscal Agreement Project Interest Rate Balances as of
Y ear Number Description Number Not to E xceed and Term June 30, 2022 2007 SRF06CX150 Wellsite Chlorination Project 10100007-004 2,210,000 $ 2.2923% / 20 yrs* 1,036,699 $ 2009 SRF08SWX101 Enterprise/Jefferson Canal Project 10100007-011 1,968,136 2.2923% / 20 yrs* 662,361 2011 SFR11CX104 Residential Water Meter Project 10100007-026C 51,405,432 0.0000% / 20 yrs* 30,843,259 2015 14-817-550 Wastewater Tertiary Plant C-067893-110 33,138,638 1.00-1.70% / 30 yrs* 27,333,300 2016 D15-01011 Recycled Water Distribution Southwest C-068061-110 52,475,049 1.00% / 30 yrs* 68,322,664 2016 D15-02012 Southeast Surface Water Treatment Facility 1010007-028C 195,489,000 1.663% / 30 yrs* 159,013,039 2016 D15-02040 Friant-Kern Canal Raw Water Pipeline 1010007-029C 26,520,000 1.6% / 30 yrs* 19,105,044 2016 D15-02042 Kings River Pipeline 1010007-031C 75,165,000 1.6% / 30 yrs* 51,607,187 2017 D16-02031 Regional Transmission Mains 1010007-030C 75,900,000 1.6% / 30 yrs* 62,976,858 2018 D18-02014 Northeast Surface Water Treatment Facility 1010007-032C 14,000,000 1.8% / 30 yrs* 4,440,873 425,341,284$
* Term begins at com pletion of project.
These loans are not considered to have continuing co mpliance requirements under Title 2 CFR Part 200, and, therefore, are only reported on the Schedule in the year in which funds are expended and drawn. The City expended $0 in federal funds under the loans during fiscal year ended June 30, 2022.
City of Fresno
Notes to the Schedule of Expenditures of Federal Awards (Continued) For the Year Ended June 30, 2022
13 Note 8 – Economic Development Assistance Revolving Loan Fund (RLF) Calculation
The amount reported on the Schedule for expenditures rela ted to the Economic Adjustment Assistance Revolving Loan Fund (RLF) Grant ALN 11.307 is calculated using va rious criteria as defined by Title 2 CFR Part 200. The calculation for the year ended June 30, 2022, is as follows:
EDA P r og r am
Rev olv ing
Loan Fund
Grant Award Number 07-39-02434
Balance of RLF loans outstanding at June 30, 2022 740,525 $ Cash and investment balance in the RLF at June 30, 2022 101,898 Adm inistrative ex penses paid out of RLF incom e
during the fiscal year ended June 30, 2022 32,228
Write offs during the fiscal year ended June 30, 2022 - Subtotal 874,651
Federal share (calculated grant rate) 100%
Economic Adjustment Assistance RLF G rant federal award expenditures for the fiscal year ended June 30, 2022 874,651 $
Note 9 – Prior Year Expenditures included in the Schedule of Expenditures of Federal Awards
The Schedule includes the following expenditures that were incurred in the prior year:
The City incurred costs totaling $228,289 under the Air port Improvement Program (AIP) during the year ended June 30, 2022, for which no funding was approved in fiscal year 2022.
The City incurred pre-award costs as follows: $317,863 under the FY19 Urban Mass Transportation Capital, Planning, Operating Assistance Grant, and $386,045 under the FY20 Urban Mass Transportation Capital, Planning, Operating Assistance Grant under the ALN 20.507 during th e year ended June 30, 2022, prior to receiving the official grant awards.
City of Fresno
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2022
14 Section I – Summary of Auditors’ Results
Financial Statements
Type of report the auditors issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financ
ial reporting:
Material weakness(es) identified? No
Significant
deficiency(ies) identified? 2022-
001
2022-002
Noncompliance material to financial statements noted? No Federal Awards
Internal control over major programs:
Material weakness(es) identified? No
Significant
deficiency(ies) identified? None
Reported
Type of auditors’ report issued on compliance for major programs Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? No
Identification of major programs:
Assistance
Listing Number(s) Name of Federal Program or Cluster E xpenditures
14.218 CDBG - Entitlement G rants Cluster 6,683,835$
14.231 Em ergency Solutions G rant Program 7,214,183
20.106 Airport Improvement Program 10,002,555
200.500/507/526 Federal Transit Cluster 39,236,711
21.019 Coronavirus Relief Fund 3,105,822
21.023 Em ergency Rental Assistance Program 34,923,436
21.027 State and Local Fiscal Recovery Fund 19,597,099
Total Ex penditures of All Major Federal Program s 120,763,641$ Total Ex penditures of Federal Awards 152,766,420$
Percentage of Total Ex penditures of Federal Awards 79.05% Dollar threshold used to
distinguish between type A and type B program $3,000,000 Auditee qualified as low-risk auditee in accordance with 2 CFR 200.520? No 15 City of Fresno
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2022
Section II – Financial Statement Findings
A. Current Year Findings – Financial Statement Audit
Finding 2022-001 Internal Co ntrol Over Financial Reporting
Criteria:
Management is responsible for designing , implementing, and maintaining approp riate internal control over financial reporting and compliance. Management is also responsible for the accuracy of the financial statements including disclosures.
The internal control should include establishing or enhancing guidance in the following areas:
Control environment sets the tone of an organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control, providing discipline and structure. Risk assessment is the entity’s identification and analysis of re levant risks to achievement of its objectives, forming a basis for developing appropriate risk responses. Control activities are the actions management establishes through policies and procedures to achieve objectives and respond to risks in the internal control system.
Information and communication systems support the identification, capture , and exchange of information in a form and time frame that enables people to carry out their responsibilities. Monitoring consists of activities management establishes a nd operates to assess the quality of performance over time.
Conditions:
During the audit, as discussed in Note 15 to the basic financial statements, the City restated its beginning net position/fund balance of the government-wide governmental activities, the governmental funds and the custodial funds, in order to correct the previously reported financia l statements to comply with the GASB Statement No. 84, Fiduciary Activities , that was required to be implemented as of the year ended June 30, 2021. The governmental activities beginning net position was restated by $3.9 million.
Cause:
The City did not properly implement the new Governme nt Accounting Standards Board (GASB) Statement 84, Fiduciary Activities, as required for the year ended June 30, 2021.
Repeat Finding:
No
Effect or Potential Effect:
Restatements of beginning balance as of July 1, 2021 for both the government-w ide financial statements and certain individual fund financial statements.
Recommendation:
The City should include in its year-end closing process th e review of the effective date of new and upcoming GASB statements to determine which statements are required to be implemented during each fiscal year.
16 City of Fresno
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2022
Section II – Financial Statement Findings (Continued)
A. Current Year Findings – Financial Statement Audit (Continued)
Finding 2022-001 Internal Control Over Financial Reporting (Continued)
Management View and Corrective Action Plan:
Management agrees with this recommendation and will take steps to ensure that futu re Government Accounting Standards Board (GASB) statements are implemented in the year in which they go into effect and will be proactive in identifying future GASB statement implementations movi ng forward so that management has sufficient time to incorporate these new GASB statements for financia l reporting purposes. Manageme nt will attend trainings pertaining to new GASB implementations, work with outside stakeholders, if needed, and work with the external auditors to ensure that GASB compli ance is met for all future GASB stat ement implementations and that the financial reporting captures all required GASB statements.
Finding 2022-002 Internal Control Over Preparatio n of Schedule of Expenditures of Federal Awards
Criteria:
2 CFR 200.302(b)(1) states that the nonfederal entity must identify in its accounts all fe deral awards received and expended, as well as the federal pr ograms under which they were rece ived. Federal program and award identification must include, as applic able, the assistance listing title and numbe r, the federal award identification number and year, the name of the federal agency, and the na me of the pass-through entity, if any. This information enables the auditee to reconcile amounts presented in the financial statements to related amounts in the schedule of expenditures of federal awards.
Pursuant to Code of Federal Regulation §200.510 Financial statements:
All auditees must:
(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's fina ncial statements which must include the total Federal awards expended as determined in accordance with §200 .502 Basis for determining Federal awards expended.
While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must:
(1) List individual Federal programs by Federal agency. Fo r a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of pr ograms, and provide the appli cable Federal agency name.
For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. For ex ample, the National Institutes of Health is a major subdivision in the Department of Health and Human Services.
(3) Provide total Federal awards expe nded for each individual Federal program and the assistance listing number or other identifying number when the assist ance listing number information is not available. For a cluster of programs also provide the total for the cluster.
Pursuant to Code of Federal Regulation §200.514 Scope of audit:
(b) Financial statements. The auditor mu st determine whether the financial st atements of the auditee are presented fairly in all material respects in accordance with gene rally accepted accounting principles. The auditor must also determine whether the schedule of expenditures of Federal awar ds is stated fairly in all material respects in relation to the auditee's financial statements as a whole.
17 City of Fresno
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2022
Section II – Financial Statement Findings (Continued)
A. Current Year Findings – Financial Statement Audit (Continued) 2022-
002 Internal Control over Preparation of Schedule of Expenditures of Federal Awards (Continued) Condition:
During our re
view of the Schedule of Expenditures of Fede ral Awards (“Schedule”) provided by the City, we noted the City federal expenditures for the Emergency Re
ntal Assistance Program, passed through the State of California in the amount of $12,239,896 were excluded in the schedule. We also noted federal expenditures in the schedule for the State and Local Fiscal Recovery Fund were understated by $14,391,754.
Cause:
There was ins
ufficient communication between the Finance Department and project manager overseeing the federal program and inadequate training to correctly identify funding sources.
Repeat Finding:
No
Effect or Pot
ential Effect:
The federal expenditure amounts, fundi ng agreements number and grantor info rmation provided to federal audit clearinghouse may be ina
ccurate, leading to potential noncompliance with reporting requi rements and incorrect identification
of major programs.
Recommendation:
We recommend frequent
communication between Finance Depa rtment and other departments in identifying federal programs. In addition, we
recommend the City provide mo re training to both grant management staff and finance staff to enhance the skill
in identifyi ng pass through programs and ensure th e accuracy and completeness of the Schedule.
Management View and Corre
ctive Action Plan:
The City agrees with this recommendat
ion and has created a Grants Management Unit in the Finance Department that is responsible for tracking fede ral expenditures to ensure compliance with Uniform Guidance. The Grants Management
Unit will be responsible with preparing an accurate Schedule of Expenditures of Federal Awards (SEFA). In addition, the Grants Ma nagement unit will work with all City departments in identifying eligib le expenditures that can be charged to federal programs and the Grants Man agement team will work with the
Accounting and Budget units to ensure these expenses are charged to the appropriate general ledger account.
B. Current
Year Findings and Questioned Costs – Major Federal Award Program Audit No findings or questioned costs were noted on the City’s major federal programs for the year ended June 30, 2022. 18 This page intentionally left blank.
19 PRIOR AUDIT FINDINGS STATUS
City of Fresno
Summary Schedule of Prior Audit Findings
For the Year Ended June 30, 2022
20 Reference Number: Financial Statement Finding 2021-001 (Significant Deficiency)
Audit Finding: The City’s current Internal Audit Department consists of three individuals. Due to continued budget cuts, the department h as not grown to allow for the hiring of additional staff to meet the demands of th e City. While internal audit developed a work plan during the year based on a risk assessment plan, several audits that were scheduled to occur in fiscal year 2020 were delayed. Additionall y, due to receiving significant funding under the CARES Act, a nd the need for additional staff to assist with ensuring compliance with the grant requi rements, the internal audit team shifted focus to assist with complian ce with the CARES Act, which contributed to additional delays in conducting follow-up audits during the year and audits that were scheduled to commence as part of the audit work plan.
Furthermore, the City’s Audit Committee c ontinues to be dormant as there have not been any meetings held on a regular basis. As such, the work plan developed during the year was not approved by the Audit Committee and audit reports issued recently were also not presented to the Audit Committee.
Status of Management’s
Corrective Action: Implemented.
Reference Number: Financial Statement Finding 2021-002 (Significant Deficiency)
Audit Finding: During our review of document ation provided and inquires made over various accounts receivable, we noted certain accru als in the General Fund were overlooked during the year end closing. This resulted in a material adjustments that were made after the trial balance was provided.
Status of Management’s
Corrective Action: Implemented.
Reference Number: Federal Award Finding 2021-003 (Significant Deficiency)
Audit Finding: During our testing of compliance wi th the subrecipient monitoring requirement, we noted the City did not have formal, written subrecipient monitoring policies or procedures in place during FY 2021. In a ddition, the preliminary SEFA provided by the City overstated the amounts passed th rough to subrecipients by $5,048,975.
Furthermore, the City did not clearly iden tify to the subrecipients the Federal award information required under §200.332(a).
Status of Management’s
Corrective Action: Not Implemented.
The City put in place a formal Subrecipient Monitoring policy (effective July 1, 2022). The City created this policy to identify and administer subawards consistent with the requirement s established by Office of Management and Budget (OMB) in the section federal regulation 2 CFR part 200 “Uniform Administrative Requirements, Cost Princi ples, and Audit Requirements for Federal Awards.”
City of Fresno
Summary Schedule of Prior Audit Findings (Continued)
For the Year Ended June 30, 2022
21 Reference Number: Financial Statement Finding 2021-004 (Significant Deficiency)
Audit Finding: During our testing of compliance with the subrecipient monitoring requirement, the City noted that this requirement was not applicable during FY 2021.
Status of Management’s
Corrective Action: Not Implemented. The City put in place a formal Subrecipient Monitoring policy (effective July 1, 2022). The City created this policy to identify and administer subawards consistent with the requirement s established by Office of Management and Budget (OMB) in the section federal regulation 2 CFR part 200 “Uniform Administrative Requirements, Cost Princi ples, and Audit Requirements for Federal Awards.”
22 This page intentionally left blank.