Agenda packet — Oxnard City Council, July 5, 2022 (part 2 of 2)

HUD Proposed Corrective Action – Revise Section D of its Grants Management Policy and Procedures to include financial standards as specified in §200. 302 (b) Financial Management. These revised policies and procedures shall be approved and implemented by the City’s Council. A copy of the revised, approved, and implemented Grants Management Policy and Procedures shall be provided to HUD 30 days after receipt of this monitoring letter including certification of implementation from the certifying authority.

The City’s Response to Finding Number Ten
The City’s Finance Department and Housing Department will review the Grants Management Policies and Procedures development to include improved documentation in support of the City’s accounting codes, project codes, and references to CDBG and its current program year. It is requested that HUD allow the City up to 90 days to revise its policies and proce dure manual, and for Council to review and approve the revisions.

Finding Eleven – Source documentation did not support all expenditure costs of select vouchers reviewed

HUD Proposed Corrective Action – To address this deficiency, Oxnard is requested to take the following action(s):

1) Remit $5,137.16 from non-federal funds back to the 2019 CDBG line of credit for the ineligible expenses completed under the Community Camera activity.
2) For the unsupported costs of $238,385.41, provide the appropriate source documentation 3) From voucher 6474810, provide appropriate so urce documentation to support $423.06 in CDBG expended costs.
4) From voucher 6474810, provide appropriate source documentation to support $237,962.35 in CDBG expended costs.

The source documentation provided should show the origin of the expense. Remitted funds must come from a non-Federal funding source and be received by HUD within 30 days from receipt of this letter.

City’s Response to Finding Number Eleven
1) The City supports its expenditures for the Comm unity Camera activity. The Police staff attended training to support the strategic use and installation of the camera equipment. Refer to Exhibits 11-1, the NATIA Conference Registration Information, 11-2 the ai rplane invoices to the conference, and 11-3, the $50 invoice that was mistakenly taken as a Gang Task Force membership. It is asked that HUD close this section of Finding Number Eleven in light of the added documentation in support of the Community Camera activity.

2) See Exhibit 11-4 as the document provides $124,127.69 of expenses for the Community Center East Project, that exceeds the draw amount of $120,083.33 in eligible expenditures, and $126,706.02 of expenses for the Enhanced Medical Services project, that exceeds the draw amount of $117,879.02 in eligible expenditures.

3) See Exhibit 11-5 (last page), wire transfer docum entation with notes. The City drew less than the amount expended in the Pleasant Valley Restroom project.

4) See Exhibit 11-5 for the list of expenditures, and notes, regarding the entire list of activities in the draw for the $240,411.85.
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The City asks that you close this Finding, as there is sufficient documentation that supports the drawdowns for the vouchers reviewed.

Finding Number Twelve – The City’s record retention and access policy did not comply with 2 CFR part 200 requirements

The monitoring letter described that the HUD review identified a lack of records retention and access requirements within the current policies and procedure manual.

HUD Proposed Corrective Action
Update its record management policies and procedures to reflect compliance with CDBG record retention requirements and Part 200 requirements. These updated record management policies and procedures shall be submitted to HUD within 30 days after receipt of this letter including certification of implementation from the certifying authority.

City’s Response to Finding Number Twelve
The City’s Housing Department is in the process of updating its Policies and Procedure manuals and asks that HUD allow up to 90 days to provide the updated manual and receive Council approval of the revisions, to include the specific recordkeeping requirements in accordance with the Part 200 requirements, for HUD’s review and consideration of closing of this finding.

Finding Number Thirteen – The City did not provide written documentation to support an internal control self-assessment nor measures to safeguard protected personally identifiable (PII) information

City’s Response to Finding Number Thirteen
The City’s Housing Department is in the process of updating its Policies and Procedure manuals and asks that HUD allow up to 90 days to provide the updated manual and Council approval information for review, to include a section on Protected Personally Identifiabl e Information, and consideration of closing this finding.

Finding Fourteen – HUD is unable to determine if measures are in place to ensure HUD awards are charged no more than a reasonably proportionate share of costs

HUD Proposed Corrective Action
Oxnard shall submit to HUD a copy of the invoice submitted by its auditor, Eadie + Payne, LLP, for the Single Audit services for the period ending June 30, 2020. The copy of this invoice shall reflect the program account codes and appropriate calcula tions to show the amounts each program was charged for the audit services. The City shall provide this documentation within 30 days from receipt of this letter.

City’s Response to Finding Number Fourteen
The City does not charge HUD awards for services pr ovided by its auditor, Eadie + Payne, LLP. Audit services are charged to the General Fund, Finance Department, General Accounting Division. The City has 122
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attached (Exhibits 14-1, 14-2, and 14-3) a copy of the invoice submitted by its auditor, Eadie + Payne, LLP, for Single Audit services ending June 30, 2020 to exhi bit the account code charged for audit services was Fund 101 (General Fund), Department 16 (Finance Department), Division 01 (General Accounting) funding sources [101.1601.801.8203]. Please see 3 invoices from Eadie + Payne for Single Audit services ending June 30, 2020 showing that account 101.1601.801. 8203 was the source of payment and the screen shot from the City’s Accounting System showing the account information details.

It is requested that HUD close this finding that exhibits the account codes billed for the audit, and that the Housing department, specifically the CDBG, HOME, nor the ESG funds were billed, proportionately or otherwise during the past two years.

Finding Fifteen – The City’s equipment records do not comply with all requirements of part 200

HUD Proposed Corrective Action –
1) Submit an updated equipment log to include the following criteria: property description and location, serial number or identification number, funding so urce (including the Federal Award Identification Number, or FAIN), titleholder, acquisition date and cost , percentage of Federal pa rticipation in original acquisition cost, use and condition of equipment, if a pplicable, disposition data, such as date of disposal and sales price.

2) The policies and procedures pertaining to equipm ent shall ensure compliance to equipment use per §200.313(c) and management requirements found at §200.313. Compliance with these regulatory citations shall be documented along with its revised City’s equipment inventory report log.

City’s Response to Finding Number Fifteen, Corrective Action Number One – See the attached equipment log, Exhibit 15-1 to include the required criteria – property description and location, serial number or identification number , funding source (including the Federal Award Identification Number, or FAIN), titleholder, acquisition date and cost, percentage of Federal participation in original acquisition cost, use and condition of equipment, if applicable, disposition data, such as date of disposal and sales price. It is requested that HUD close this portion of finding number fifteen.

City’s Response to Finding Number Fifteen, Corrective Action Number Two – The City asks HUD to allow up to 90 days to revise the policies and procedures to the HUD field office as the City will need to revise and request Council adoption of these revisions.

Prior Findings That Remain Open

Finding Sixteen (2015 Finding Three: Rental Project Terry’s Place)

Original Condition: The City did not secure the appropriate written agreement with all the required HOME regulatory provisions including a budget, the scope of work, appropriate benchmarks for project completion, etc. The City provided HOME funds for acquisition without securing the appropriate appraisal to determine the value of the property. The bridge loan provided was a line of credit for the organization and not a specific loan for the HOME project. The supporting documentation for invoices included costs that may not be eligible. For example, line of credit fees that cannot be directly associated with the HOME project and staff costs for marketing activities that were not supported with time and activity sheets. Finally, the sellers of the project were not provided a voluntary acquisition letter as required.

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Current Condition: The City provided copies of all the documents signed for the project identified in the original condition excepted an amendment to implement the HOME requirements signed and dated by both parties.

Criteria: HOME regulation at 24 CFR Part 92.504(b) states that before committing funds to a project, the participating jurisdiction (PJ) must enter into a writte n agreement. In addition, 24 CFR Part 92.504(c) (5) (ii) establishes the provisions that are required in the HOME written agreement. 49 CFR Part 24.1(a) requires the PJ to notify the seller in writing prior to the start of negotiations that the property will neither be taken through eminent domain nor purchased without an amicable agreement, and to disclose the estimated market value of the property. HUD Info Bulletin CPD 2014-04 contains related requirements. In accordance with HOME regulations at 92.2, the defin ition of commitment requires that all signatures be dated.

HUD Proposed Corrective Action: The amendment provided was previously submitted and no signatures on the written amendment between the City and Many Mansions were dated. Please submit a signed and dated amendment that incorporates the HOME regulatory requirements to close this finding.

City’s Response to Finding Number Sixteen (Prior Monitoring Finding Number Three) Much of the City staff who executed these agreements are no longer here and current staff was able to retrieve the following in support of the required provisions descr ibed in this finding. As required by 24 CFR

92.504(c)(5)(ii), Exhibit 16-1 is a signed, dated, executed and updated agreement (7173-15-HO HPA for Terry’s Place) for HUD’s review.

Within the next HOME funding cycle of awards, the City will ensure all of these requirements and the most recent HOME requirements are included in future agreement templates. It is requested that HUD close this finding based upon the attachments and responses provided for this finding.

It is requested that HUD close this finding based upon the documentation provided.

Finding Seventeen (2015 Finding Five: Environmental Review Process)

Original Condition: The City completed the environmental review process for Terry’s Place but incurred costs before the request for release of funds was in hand.

Cause: The City does not have sufficient policies and procedures to ensure the environmental review process is completed timely.

Effect: The City's records do not sufficiently document compliance with the required environmental reviews.

HUD Proposed Corrective Action
The City must establish and implement policies and procedures to conduct environmental reviews for all projects prior to committing and expending HOME funds, in accordance with the rules and regulations, and keep the record in each project file. Please submit the established policies and procedures, including certification of implementation from the authorized official.

City’s Response to Finding Number Seventeen (Prior Monitoring Finding Number Five) The City will add this to the Housing Policies and Procedure Manuals in support of the regulatory requirement of completing a National Environmental Policy Act (NEPA) environmental review prior to expending any funds to a project or committing funds to a project.

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It is requested that HUD allow 90 days to revise the policies and procedures manual and obtain the proper approvals to make the manual an official document.

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U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of Community Planning and Development
Los Angeles Field Office
300 N. Los Angeles St., Ste. 4054
Los Angeles, CA 90012
1 May 2, 2022
Alexander Nguyen, City Manager
City of Oxnard
300 W. Third Street
Oxnard, CA 93030
Dear Mr. Nguyen:

SUBJECT: Fiscal Year 2021 Remote Monitoring
Community Development Block Grant (CDBG) Program
Grant Numbers: B-18-MC-06-0534 and B-19-MC-06-0534
The Department received the City of Oxnard’s February 8, 2022, response to the remote monitoring report dated November 26, 2021. The Department conducted a remote monitoring of the City’s Community Development Block Grant (CDBG) grants B-18-MC-06-0534 and B-19-MC-06- 0534 from the week ofJune 7, 2021, to June 14, 2021. Of the fifteen (15) Findings noted in the monitoring report, thirteen (13) remain open pending submission of supporting documentation, and two have been closed as described below. Of the two previous open Findings from 2015 incorporated into this year’s monitoring report, one has been closed while one remains open pending submission of supporting documentation as described below. Although the City is not required to respond to a Concern, we appreciate the responses provided to the two Concerns identified in our monitoring report.

Finding One: Fair Housing Eligibility. The City did not provide sufficient documentation to support compliance with eligibility and national objective requirements for Housing Rights Center’s (HRC’s) fair housing activity.

Condition: The City did not provide sufficient documentation to support compliance with eligibility and national objective requirements for Housing Rights Center’s (HRC’s) fair housing activity. In addition, since this project was identified as a public service (as reported in Oxnard’s Consolidated Plan and Annual Action Plan) instead of a planning and administration activity, there is a higher level of documentation required to support that a national objective was met. The following deficiencies were identified:
 HRC submitted contact lists documenting that Oxnard residents were provided affordable housing services from July 2017 through December 2019, however, the information did not provide specific Oxnard addresses or client income amounts but only listed the name of the city and income levels (i.e. Extremely Low, Low, Moderate, etc.) for clients on the list. The subrecipients determined that providing HUD with clients’ personal addresses and income information in an off-site and remote manner is of a sensitive nature and infringes on the confidentiality of its clients. Therefore, HUD was unable to determine that the national objective was met.
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2  HUD was unable to verify the time associated with the Oxnard clients served nor account codes assigned specifically to Oxnard CDBG funds in HRC’s accounting records. In addition, HRC is paid on a cost allocation basis for all related CDBG costs for the City of Oxnard as well as other jurisdictions served by HRC.
 The City provided HUD with copies of the subrecipient’s document consisting of case logs, outreach, and education Reports, program summary, and statistical reports as verification of case management and outreach activities to support the number of Oxnard clients served. In analyzing these documents, HUD was unable to verify the time associated with the Oxnard clients served nor account codes assigned specifically to Oxnard CDBG funds in relation to CDBG or other government funds provided by other participating jurisdictions within HRC’s accounting records. Without these financial standards, HUD was unable to verify the legitimacy of funds invoiced by the subrecipient and paid by the City.

Corrective Action: To address this deficiency, the City is requested to take the following actions:
1) The City must revise Section D of its Grants Management Policy and Procedures to include the financial standards as specified in 2 CFR 200.302 (b) Financial Management, including 2 CFR 200.302 (b) (3) and 2 CFR 200.430 (i) Compensation. Oxnard’s Responsibilities and Procedures section of its Grants Management Policy and Procedures shall include the standards that the Finance Department shall follow to ensure compliance with 2 CFR 200.302 Financial Management. These revised policies and procedures shall be approved and implemented by the City’s Council. A copy of the revised, approved, and implemented Grants Management Policy and Procedures shall be provided to HUD 30 days after receipt of this monitoring letter. 2) The City must reclassify the Fair Housing Program and the services provided by the Housing Rights Center as Planning and Administration beginning in PY 2021. The City can utilize either CDBG planning and administration or HOME planning and administration funds.

City’s Response:
1) The City indicated that it will amend its Housing policies and procedures to include the financial standards as specified in 2 CFR 200.302(b), Financial Management, including 2 CFR 200.302(b)(3), and 2 CFR 200.430(i) Compensation. These revised policies and procedures will be approved and implemented by the City’s Council. The City has requested that HUD allow 90 days to complete this requirement.
2) The City indicated that it will reclassify the Fair Housing Program to include services of the Housing Rights Center from public services to planning and administration for the 2021- 2022 program year. The City has requested that HUD allow 90 days to change the project from Public Services to Planning and Administration, as it will be included in the mid-year reallocation presented to City Council as a change in the budget.

HUD’s Response: HUD has made the following determination to each of the portions of this finding as detailed below:
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1) This part of the Finding remains OPEN. HUD has agreed to allow the City 90 calendar days from the date of the February 8, 2022, response letter or May 9, 2022, to revise and submit its policies and procedures. As noted in the Corrective Action, the City must include a certification of implementation from the certifying authority along with the revised policies and procedures for procurement. Once the City’s updated policies and procedures have been received, HUD will evaluate and determine if the submitted policies and procedures are revised per the requested corrective action.

Please note that while the City’s response indicated that it will amend its Housing policies and procedures, the Corrective Action detailed in HUD’s Monitoring Report is to revise Section D of its Grants Management Policy and Procedures based on our review of this document and the relevance of including financial standards as a grants management policy. Please ensure for continuity of the document reviewed and found to be deficient, that the revisions are made to the specific item that HUD has instructed the City to revise as detailed in the Monitoring Report rather than submitting a new or alternate document.
2) This part of the Finding remains OPEN. HUD has agreed to allow the City 90 calendar days from the date of the February 8, 2022, response letter or May 9, 2022, to reclassify the Fair Housing Program from Public Services to Planning and Administration.

Finding Two: Fire Station Equipment and Vehicles. The City purchased several equipment and vehicles which did not meet the definition of fire protection or life-saving equipment and are an ineligible use of CDBG funds.

Condition: The equipment and vehicles purchased by the City’s Fire Department used CDBG funds to offset the limited budget provided by other funding sources in order to replace an older command vehicle, increase the number of paramedic emergency response units, and equip the department with updated items and technology. Based on the documentation submitted, fire station generators (IDIS Activity 2253) are an ineligible use of CDBG funds.

Corrective Action: To address this deficiency, Oxnard is requested to take the following actions:
1) Remit costs associated with the purchase of the ineligible items noted above back to the 2018 and 2019 CDBG line of credit for the ineligible expenses completed under the following activities:
a) Operations Chief Mobile Command (IDIS Activity 2252) b) Fire Station Alerting (IDIS Activity 2312)
c) Fire Department (FD) - Mobile Data Equipment (IDIS Activity 2319) 2) For Advanced Life Support (ALS) Program Enhancement (IDIS Activity 2311), submit a breakdown of documented time of eligible as well as ineligible roles associated with the PSV.

Based on the information provided, the City is to remit to its CDBG line of credit, the costs associated with all service time spent on the ineligible roles. 128
4 3) While the PY 2020 Fire Department activities related to the purchase of equipment and vehicles were not part of the current monitoring, the City should use the eligibility standards described earlier to modify the implementation of current and future uses of CDBG and CDBG-CV funds such as PY 2020 IDIS Activity 2349, Emergency Operations to replace and upgrade computers, and for IDIS Activity 2354 CV-Paramedic. The City should track the time and use of CDBG- eligible uses of the purchased equipment.

City’s Response:
1) The City provided the following response to HUD’s request to remit costs:
a) For Operations Chief Mobile Command, the City indicated that it is prepared to remit costs. b) The City requested that HUD reconsider the eligibility of the Fire Station Alerting System (IDIS Activity 2312) as the stations are located in low-income census tracts and primarily serve the low-income communities of the City.
c) For FD-Mobile Data Equipment (IDIS Activity 2319), the City requested that HUD close this finding based upon the consideration that this is life-saving, fire equipment based on the information provided and in support of the low-income census tract areas that this equipment primarily serves.
2) The City requested that HUD reconsider ALS Program Enhancement and Paramedic Support Vehicle Operations as an eligible project and asks that HUD reconsider the Paramedic Support Vehicle as life-saving equipment based upon the fact that the entire city is over 60% low-income and the equipment is more frequently used within the low-income neighborhoods than non-low-income neighborhoods. The City provided descriptions of the various roles of the vehicle in meeting the emergency needs of its residents. 3) The City indicated that it will accept the advisement and will proceed per the eligibility standards noted in this letter and any additional updated information provided by HUD throughout this monitoring review until the final comments have been received.

HUD’s Response: HUD has made the following determination to each of the portions of this finding as detailed below:
1) Cost remittance
a) This part of the Finding remains OPEN. This finding will remain open until the City has completed the process of remitting costs associated with IDIS Activity 2252 and has notified HUD.

Please note that while the City responded that it will remit costs to HUD, the necessary corrective action as noted in the HUD Monitoring Report is to remit costs back to the 2018 and 2019 CDBG line of credit. To ensurethat the correct remittance is processed , please follow the guidance detailed in HUD Memorandum, dated April 15, 2021: Methods for Returning Community Development Block Grant (CDBG) Funds . This guidance can be found at
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https://www.hudexchange.info/resource/3089/instructions-for-returning-funds-to-the-line-of- credit-and-to-us-treasury/
b) This part of the Finding remains OPEN. The narrative response and supportive documentation were previously submitted by the City and reviewed by HUD during the monitoring period and before its determination of a finding for this activity. No new evidence was provided. Further, the location of the items in low-income census tracts and primarily serving the low-income communities of the City is not disputed by HUD since this was not the basis for ineligibility. The equipment purchased although supporting the services of the Fire Department did not meet the regulatory definition of fire protection or life-saving equipment and is ineligible.

To close this finding, the City is instructed to remit costs associated with the purchase of the ineligible items back to the 2018 and 2019 CDBG line of credit for the ineligible expenses. To ensure that the correct remittance is processed, please follow the guidance detailed in HUD Memorandum, dated April 15, 2021 (see hyperlink above).
c) This part of the Finding remains OPEN. The narrative response and supportive documentation were previously submitted by the City and reviewed by HUD during the monitoring period and before its determination of a finding for this activity. No new evidence was provided. Further, the support of the items provided to low-income census tracts of the City is not disputed by HUD since this was not the basis for ineligibility. The equipment purchased although supporting the services of the Fire Department did not meet the regulatory definition of fire protection or life-saving equipment and is ineligible.

The multiple roles detailed in the City’s response letter were previously provided to HUD as a submittable entitled HUD Monitoring-Oxnard Fire Activities-Response 6.23.21during the monitoring period and served to determine that the CQI/Education role is not an eligible expense. To close this finding, the City is required to submit a breakdown of documented times of eligible as well as ineligible roles associated with the PSV. Based on the information provided, the City is to remit to its CDBG line of credit the costs associated with all service time spent on the ineligible roles.
3) This part of the Finding is CLOSED. HUD has determined that the City’s response to 130
6 proceed per the eligibility standards and any additional updated information provided by HUD throughout this monitoring review is satisfactory. HUD reminds the City to make its determination of eligibility based on the life-saving definition and use or multiple uses of the equipment per regulations instead of the location of the equipment or service to low-income census tracts or individuals or the support to Fire Department response services Finding Three: Citywide Homebuyer Loan Program. The City did not report the correct IDIS matrix code for this program which per the corresponding regulations limits the amount of the loan to 50% of the Required Down Payment. In addition, the City combined both the Homebuyer Loan Program and its Rehabilitation Loan Program as one activity with the incorrect IDIS matrix code.

Condition: HUD examined three homebuyer loan participant files reported in 2018. We assessed the City’s overall program policies and procedures, eligibility documents, loan determination criteria, and agreements, as well as the national objective and IDIS matrix code reported for this activity codes 2241 and 2304 on the IDIS PR03 Report. It was determined that the City based its $30,000 loans on gap financing instead of limiting the amount of the loan to 50% of the Required Down Payment as specified in the CDBG regulations. As a result, the Homebuyer Loan Program provided all participants a standard loan amount of $30,000 despite the variances in each homeowner’s finances, purchase price, and gap financing calculation.

Corrective Action: To address this deficiency, the City is requested to take the following actions:
1) Classify the Homebuyer Loan Program under the correct IDIS matrix code separate from the correctly classified Rehabilitation Loan Program. 2) Revise the Affordable Housing & Rehabilitation Division HOME & CDBG Loan Program Policies to ensure that the amount of homebuyer loan assistance is limited to 50 percent of the required down payment. The City should also provide current policies and procedures for procurement including certification of implementation from the certifying authority. These revised policies and procedures shall be submitted to HUD within 30 days from receipt of this letter.

City’s Response:
1) The City has indicated that it will reclassify the Homebuyer Loan Program and its associated Loan Servicing activity separate from the Rehabilitation Loan Program and its associated Rehabilitation Administration activity with more appropriate matrix codes. The City has requested that HUD allow 90 days for the City to complete the reclassification. 2) The City has requested that HUD allow 90 days to revise its policies and procedures.

HUD’s Response: HUD has made the following determination to each of the portions of this finding as detailed below:
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1) This part of the Finding remains OPEN. HUD has agreed to allow the City 90 calendar days from the date of the February 8, 2022 response letter or May 9, 2022, to complete the reclassification process of its activities.
2) This part of the Finding remains OPEN. HUD has agreed to allow the City 90 calendar days from the date of the February 8, 2022, response letter or May 9, 2022, to revise and submit its policies and procedures. As noted in the Corrective Action, the City must include a certification of implementation from the certifying authority along with the revised policies and procedures for procurement. Once the City’s updated policies and procedures have been received, HUD will evaluate and determine if the submitted policies and procedures are revised per the requested corrective action.

Please ensure for continuity of the document reviewed and found to be deficient, that the revisions are made to the specific item that HUD has instructed the City to revise as detailed in the Monitoring Report rather than submitting a new or alternate document.

Finding Four: Conflict of Interest. The City did not provide evidence that it determined whether a conflict of interest existed in providing program benefits to a City employee.

Condition: Of the three PY 2018 homeowner loan participant files reviewed, it was determined participant #2218’s file was a City employee at the time of participation and loan assistance. There is no evidence that the City determined whether a conflict of interest existed.

There is no evidence in the program policies and procedures that addresses under what conditions to allow for City staff to apply for the program as well as the following:
a) Conditions and documentation to prevent the actual or perceived advantage of unfair advantage or preference given to City staff over non-City employed residents b) Policies should include that HUD be notified when a City employee has applied and is being considered for assistance
Corrective Action: To address this deficiency, the grantee is requested to take the following action:
1) Revise current policies and procedures for the Homebuyer Loan Program as well as all other programs that assist its residents and businesses to describe if and under which conditions and criteria a City employee (and immediate family and relatives) may apply for program services and assistance. These policies must contain procedures in which HUD or the applicable Federal agency is notified of the eligibility of City-employed applicants before receiving program benefits assistance. The City should provide current policies and procedures for Conflict of Interest including certification of implementation from the certifying authority. These revised policies and procedures shall be submitted to HUD within 30 days from receipt of this letter.
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8 City’s Response: The City indicated that it will revise its program policies and procedures to include employee disclosure and affidavit and has requested that HUD allow the City 90 days to complete this action.

HUD’s Response: This Finding remains OPEN. Please ensure that the revised policies and procedures include language that HUD is notified of the eligibility of City-employed applicants and for the City to wait for acknowledgment and approval from HUD before providing program assistance to the City-employed applicant.

HUD has agreed to allow the City 90 calendar days from the date of February 8, 2022 response letter or May 9, 2022, to revise and submit its policies and procedures. As noted in the Corrective Action, the City must include a certification of implementation from the certifying authority along with the revised policies and procedures for procurement. Once the City’s updated policies and procedures have been received, HUD will evaluate and determine if the revisions are satisfactory.

Please note that while the City’s response indicated that it will amend its policies and procedures manual, the Corrective Action detailed in HUD’s Monitoring Report is to revise its Home Buyer Loan Program Policies. Please ensure for continuity of the document reviewed and found to be deficient, that the revisions are made to the specific item that HUD has instructed the City to revise as detailed in the Monitoring Report rather than submitting a new or alternate document.

Finding Five: Time and Activity Sheets. The City did not utilize accounting codes assigned to specific CDBG activities.

Condition: The City provided HUD with copies of Housing Services staff timesheets, activity logs, and related documents in support of CDBG funds committed to the Affordable Housing & Rehabilitation Division’s administration and implementation of the Citywide Homebuyer Loan Program and the Citywide Single-Family and Mobile Home Rehabilitation Loan Programs. In analyzing these documents, HUD was unable to determine account codes assigned to specific CDBG activities, the CFDA title, and the grant number within its accounting records. The only code utilized in the time and activity sheets was accounting code “285-5115-804-8001” which, per the Finance Department’s Chart of Accounts, represented Personnel Services – Direct Labor- Regular for Community Development staff instead of Housing staff but, more importantly, is not project/activity specific to Housing Services Homebuyer or Rehabilitation Programs. To summarize, the City did not provide documentation that associated staff costs with the CDBG program housing activities. Without these financial standards, HUD was unable to identify the source and application of the CDBG award.

Corrective Action: To address this deficiency, the City is requested to take the following actions:
1) The City will need to utilize proper accounting codes which tie back to the eligible housing activities separately between the homebuyer loan and the rehabilitation program. 133
2) The City will need to revise Section D of its Grants Management Policy and Procedures to include financial standards as specified in 2 CFR 200.302 (b) Financial Management, including 2 CFR 200.302 (b) (3) and 2 CFR 200.430 (i) Compensation. Oxnard’s Responsibilities and Procedures section of its Grants Management Policy and Procedures shall include standards that the Finance Department shall follow to ensure compliance with 2 CFR 200.302 Financial Management. These revised policies and procedures shall be approved and implemented by the City’s Council. A copy of the revised, approved, and implemented Grants Management Policy and Procedures including certification of implementation from the certifying authority shall be provided to HUD 30 days after receipt of this monitoring letter.

City’s Response:
1) The City has indicated that it will split the Housing program into two separate programs: a) the Homebuyer Loan Program and b) the Rehabilitation Loan Program which will document the two programs distinctly with separate budgets and coding for billing. The City has requested that HUD allow 90 days for the City to bifurcate the Housing program into the two eligible housing programs (Homebuyer Assistance and Homeowner Rehabilitation) and enter them into the Project Budget Report, then submit the updated supporting documentation to the HUD field office.
2) The City has indicated this it will also revise its Grants Management Policy and Procedures to include financial standards as specified at 2 CFR 200.302 (b) Financial Management, including 2 CFR 200.302 (b) (3) and 2 CFR 200.430 (i) Compensation.

Oxnard’s Responsibilities and Procedures section of its Grants Management Policy and City of Oxnard Housing Department HUD PY 2021 Monitoring Responses Procedures shall include standards that the Finance Department shall follow to ensure compliance with 2 CFR 200.302 Financial Management. The City asks that HUD allow 90 days to revise the policies and procedures and allow time for the Council process including Council adopting the revisions.

HUD’s Response:
1) This part of the Finding remains OPEN. HUD has agreed to allow the City 90 calendar days from the date of the February 8, 2022 response letter or May 9, 2022, to utilize proper accounting codes which tie back to the eligible housing activities separately between the homebuyer loan and the rehabilitation program. Please note: The Corrective Action in the monitoring report and noted above does not require that the City submit supportive documentation to verify this correction. To close this part of the finding it is sufficient to respond that the City has completed the necessary process to utilize proper accounting codes which tie back to the eligible housing activities separately between the homebuyer loan and the rehabilitation program.
2) This part of the Finding remains OPEN. HUD has agreed to allow the City 90 calendar days from the date of the February 8, 2022, response letter or May 9, 2022, to revise and submit its policies and procedures. With regard to the City’s response 1) above, it is not 134
10 necessary to submit the updated supporting documentation since the Corrective Action in the Monitoring Report HUD did not request supporting documentation. The revised policies and procedures are the only requested submittals necessary to resolve this finding.

As noted in the Corrective Action, the City must include a certification of implementation from the certifying authority along with the revised policies and procedures for procurement. Once the City’s updated policies and procedures have been received, HUD will evaluate and determine if the submitted policies and procedures are revised per the requested corrective action.

Finding Six: Lead-Based Paint. The City did not require property documentation to determine the age of the property and provide participants with the Lead-Based Paint informational brochure.

Condition: For those homes built after 1978, the City’s rehabilitation program relies on a form signed by the City Inspector indicating that the home was built after 1978 to determine when a property requires lead-based paint inspection, assessment, and correction and that a program participant is provided with a copy of the current lead-based paint informational brochure.

Corrective Action: To address this deficiency, the City is requested to take the following action:
1) The City should revise its policies and procedures to include other source documentation such as appraisal reports or property details to confirm the age of the property. This documentation should be included in participant files to support the report provided by the City Inspector and to ensure that the City acknowledges providing a copy of the lead-based paint informational brochure to program participants. The City should provide current policies and procedures for lead-based paint including certification of implementation from the certifying authority. These revised policies and procedures shall be submitted to HUD within 30 days from receipt of this letter.

City’s Response: The City has indicated that it will revise its policies and procedures to include other source documentation to confirm the age of the property. The City has requested that HUD allow the City 90 days to complete this action.

Finding Seven: The City’s procurement policies and procedures did not conform to the applicable requirements in 2 CFR Part 200.324 Contract cost and price.

Condition: The City provided HUD with its purchasing policy manual which outlines its procurement standards. The Grants section within the City’s purchasing manual identified its compliance with 2 CFR 200.318 thru 2 CFR 200.326. However, the written policies and procedures did not address if cost plus a percentage of cost and percentage of construction cost methods of contracting were prohibited.

Corrective Action: To address this deficiency, the City is requested to take the following action:
1) The City shall submit to HUD revised written policies and procedures to contain its compliance with 2 CFR 200.324 Contract cost and price. The City should provide current policies and procedures for procurement including certification of implementation from the certifying authority. These revised policies and procedures shall be submitted to HUD within 30 days from receipt of this letter including certification of implementation from the certifying authority.

City’s Response: The City has indicated that at the time of the June 2021 remote monitoring, the most current version of the policies and procedures was not submitted to HUD for review. To resolve this finding, the City has submitted as Exhibit 7-1, the current City of Oxnard Purchasing Policy Manual and has specifically cited Chapter 11 section 11.3C on page 62.

HUD’s Response: This Finding remains OPEN. HUD evaluated the documentation submitted by the City. The regulatory citation cited within the City of Oxnard’s Purchasing Policy Manual for Contract and Price, page 62, section 11.3C reads as follows: “Cost/Price Analysis. For federally-funded procurements over the currently applicable Simplified Acquisition Threshold, including contract modifications, a cost or price analysis must be performed and must include making independent estimates before receiving bids or proposals. (See 2 CFR 200.323.) Costs or prices based on estimated costs for federally-funded contracts are allowable only as provided in 2 CFR 200.323 Therefore, based on the language noted in your most current policies 2 CFR 200.323 is incorrectly cited instead of the required 2 CFR 200.324. Within Part 200 this specific citation, 2 CFR 200.323, speaks to Procurement of Recovered Materials, the Solid Waste Disposal Act. The appropriate citation indicated for Contract cost and price should be 2 CFR 200.324. The City’s Purchasing Policy manual needs to reflect the accurate regulatory citations for each section. The City will need to revise its Purchasing Policy manual to ensure the appropriate/correct regulatory citation aligns with each specific identified topic. Please submit the revision to include recertification of implementation from the certifying authority 90 calendar days from the date of the February 8, 2022, response letter or May 9, 2022. 136
12 Finding Eight: Documentation provided to HUD was not sufficient to detail the procurement history of sampled procurement transactions. The City’s procurement transactions did not document all of the required procurement criteria.

Condition: The City provided HUD with a listing of procurement transactions. From this list, HUD selected five procurement transactions (Oil Field Electric Fire Generator, Physio- Control, IN LifePak Monitors and Access, Johnson Equipment Outfitting BC Vehicle, Office Depot, and Housing Authority Inspection Service) for review. From the review, Oxnard’s documentation was not sufficient to detail the procurement history to identify the rationale for the method of procurement, the selection of contract type, contract selection or rejection, or the basis for the cost or price of the contract.

In addition, HUD was unable to determine the following within its procurement history documents: description of the item or service requested, a completed sub-award versus contractor determination form, alignment with program/award/project/activity type to confirm the requested item(s) or service is consistent with the purpose of the program/award/project/ activity, that the City confirmed amount of sufficient funds in the budget plan, in accordance with the established budget work breakdown structure, for the procurement estimate amount, the signature of a budget official confirming the funding amount available for the request, the signature of an authorized program/project official confirming the requested items(s) or service is consistent with the purpose of the program/award/project/activity, and alignment of the proposed amount with an independent cost estimate.

Corrective Action: To address this deficiency, the City is requested to take the following action:
1) Create a procurement checklist to capture the following procurement criteria:
 identify the rationale for the method of procurement,  the selection of contract type,
 contract selection or rejection,
 the basis for the cost or price of the contract,
 description of the item or service requested,
 a completed sub-award versus contractor determination form,  alignment with program/award/project/activity type to confirm the requested item(s) or service is consistent with the purpose of the program/award/project/activity,  confirmation amount of sufficient funds in the budget plan, in accordance with the established budget work breakdown structure,
 for the procurement estimate amount, the signature of a budget official confirming the funding amount available for the request,
 signature of an authorized program/project official confirming the requested items(s) or service is consistent with the purpose of the program/award/project/activity, and  alignment of the proposed amount with an independent cost estimate.

This documentation shall be provided to HUD within 30 days from receipt of this letter.

City’s Response: The City has attached a procurement checklist as Exhibit 8-1 that 137
includes the required procurement criteria to meet both City and Federal requirements cited from 570.502(a) in addition to the CFR 200s as they pertain to Grant Procurement Standards.

HUD’s Response: This Finding is CLOSED. The requested Procurement checklist was provided to HUD for evaluation. From this review, the documentation addressed the requested corrective action. HUD advises the City to include this checklist with its procurement transactions.

Finding Nine: The City did not procure environmental consultant services or take affirmative steps to contract with small and minority businesses, women’s business enterprises, and labor surplus area firms. Procurement Procedures for both Housing Services Programs and the Fire Department Activities.

Condition: For the Down Payment and Rehabilitation Program, which utilized the professional services of an environmental consultant, Criterion, for lead-based paint-related assessment and inspection, the City did not have policies to guarantee that environmental consultants are procured for based on qualifications. For the rehabilitation program, the City has utilized the same shortlist of three construction companies of which the same contractor, Daniels Construction, was awarded the contract in all five files reviewed. In several of the files reviewed, Daniels Construction was the only bidder and there was no evidence of promotion and outreach efforts to Disadvantaged Business Enterprises (DBE) contractors Minority Business Enterprises/ Women’s Business Enterprises (MBE/WBE). There was no evidence provided for the procurement of select fire department equipment and vehicles.

Corrective Action: To address this deficiency, the City is requested to take the following action:
1) Oxnard shall submit to HUD revised written policies and procedures to contain its compliance to 2 CFR 200.324 Contract cost and price. These revised policies and procedures shall be submitted to HUD within 30 days from receipt of this letter including certification of implementation from the certifying authority.

HUD’s Response: The Finding remains OPEN. HUD evaluated the documentation submitted as Exhibit 7-1 by the City. The regulatory citation cited within the City of Oxnard’s Purchasing Policy Manual for Contract and Price, page 62, section 11.3C reads as follows:
“Cost/Price Analysis. For federally-funded procurements over the currently applicable Simplified Acquisition Threshold, including contract modifications, a cost or price analysis must be performed and must include making independent estimates before receiving bids or proposals. (See 2 CFR 200.323.) Costs or prices based on estimated costs for federally-funded contracts are allowable only as provided in 2 CFR 200.323.” Therefore, based on the language noted in the City’s most current policies 2 CFR 200.323 is incorrectly cited instead of 2 CFR 200.324. Within Part 200 this specific citation, 2 CFR 200.323, speaks to Procurement of Recovered Materials, the Solid Waste Disposal 138
14 Act. The appropriate citation indicated for Contract cost and price should be 200.324. The City’s Purchasing Policy manual needs to reflect the accurate regulatory citations for each section. The City will need to revise its Purchasing Policy manual to ensure the appropriate/correct regulatory citation aligns with each specific identified topic. Please submit the revision to include recertification of implementation from the certifying authority 90 calendar days from the date of the February 8, 2022, response letter or May 9, 2022.

In addition, HUD reviewed Exhibit 7-1 and determined that regulatory citations were missing to ensure that the City complies with open competition procedures and necessary affirmative steps to contract with Small and Minority Firms, Women’s Business Enterprises, and Labor Surplus Firms. The revised Purchasing Policy manual did not include or reference 2 CFR 200.319 (a) and (b)(1-5) to ensure the City provides full and open competition consistent with the standards of this section and 2 CFR 200.320. Further, while the revised Purchasing Policy manual included language referencing 2 CFR 200.321 (b) regarding Affirmative steps, the manual did not include 2 CFR 200.321(a). To close this finding, please revise the Purchasing Policy to correct the citations noted in the preceding paragraph and include all sections of 2 CFR 200.319, 2 CFR 200.320, and 2 CFR 200.321.

Finding Ten: The City’s Financial Management System does not comply with all criteria identified within the financial standards found within 2 CFR Part 200.

Condition: The City of Oxnard provided HUD with various accounting records including CDBG account balance reports, chart of accounts, budget variance reports, and sampled vouchers along with source documentation to support voucher expenditures. In analyzing these documents, HUD was unable to determine the account codes assigned to specific CDBG activities, the CFDA title, and the grant number within its accounting records. Without these, HUD was unable to identify the source and application of the CDBG award.

Corrective Action: To address this deficiency, the City is requested to take the following action:
1) Revise Section D of its Grants Management Policy and Procedures to include financial standards as specified in 2 CFR 200.302 (b) Financial Management. These revised policies and procedures shall be approved and implemented by the City’s Council. A copy of the revised, approved, and implemented Grants Management Policy and Procedures shall be provided to HUD 30 days after receipt of this monitoring letter including certification of implementation from the certifying authority.

City’s Response: The City’s Finance Department and Housing Department will review the Grants Management Policies and Procedures development to include improved documentation in support of the City’s accounting codes, project codes, and references to CDBG and its current program year. The City has requested that HUD allow the City up to 90 days to revise its policies and procedure manual, and for Council to review and approve the revisions.

Please note that the Corrective Action detailed in HUD’s Monitoring Report is to revise Section D of its Grants Management Policy and Procedures based on our review of this document and the relevance of including financial standards as a grants management policy. Please ensure for continuity of the document reviewed and found to be deficient, that the revisions are made to the specific item that HUD has instructed the City to revise as detailed in the Monitoring Report rather than submitting a new or alternate document
Finding Eleven: Source documentation did not support all expenditure costs of select vouchers reviewed
Condition: The City of Oxnard provided HUD with source documentation to support the following IDIS vouchers: 6410895, 6326046, 6355367, 6304219, 6396938, 6406880, 6406875, 6406937, and 6474810. Based on this review of the vouchers and source documentation, two vouchers contained ineligible costs and two vouchers did not have sufficient source documentation to support the voucher expenditure.

Voucher 6304219 showed $1,851.04 CDBG admin charges for professional organization memberships. CDBG regulatory citation 24 CFR 570.206 Program administrative costs identify specific eligible costs that are allowable under CDBG admin. Membership costs for professional organizations are not identified as an eligible CDBG admin expense.

In addition, voucher 6326046 showed a total of $5,137.16 in expenditures for the City’s Community Camera activity. The Community Camera activity is described as CDBG funds used to acquire and maintain neighborhood crime prevention cameras. Source Documentation provided to support these costs were the following: $50 for CA Gang Task Force, $3,545.24 for the National Technical Investigators’ Association (NATIA) Conference, and $1,541.92 for Southwest airfare. It is unclear how these expenditures correlate to acquiring and maintaining crime prevention cameras.

For voucher 6474810, source documents supported $35,355.87 of the $35,778.93. Source documentation was insufficient to support $423.06 in expenditures. A portion of the source documentation provided for voucher 6410895 supported an expense of $13,086. However, the remaining source documentation was not codified to tie to the specific activities of either the Community Center East Park Improvement or the Enhanced Medical Services Equipment. The City will need to tie source documents to the remaining voucher total of $237,962.35.

Corrective Action: To address this deficiency, Oxnard is requested to take the following actions:
1) Remit $5,137.16 from non-federal funds back to the 2019 CDBG line of credit for the ineligible expenses completed under the Community Camera activity. 140
16 2) For the unsupported costs of $238,385.41, provide the appropriate source documentation 3) From voucher 6474810, provide appropriate source documentation to support $423.06 in CDBG expended costs.
4) From voucher 6474810, provide appropriate source documentation to support $237,962.35 in CDBG expended costs.

The source documentation provided should show the origin of the expense. Remitted funds must come from a non-Federal funding source and be received by HUD within 30 days from receipt of this letter.

City’s Response:
1) The City supports its expenditures for the Community Camera activity. Exhibit 11-1, 11-2, and 11-3 were submitted as supporting documentation.
2) The City submitted Exhibit 11-4 which documents $124,127.69 of expenses for the Community Center East Project, which exceeds the draw amount of $120,083.33 in eligible expenditures, and $126,706.02 of expenses for the Enhanced Medical Services project, which exceeds the draw amount of $117,879.02 in eligible expenditures.
3) The City submitted Exhibit 11-5 (last page) which documents wire transfers with notes. The City drew less than the amount expended on the Pleasant Valley Restroom project. 4) The City submitted Exhibit 11-5 for the list of expenditures, and notes, regarding the entire list of activities in the draw for the $240,411.85.

HUD’s Response:
1) This part of the Finding remains OPEN. For voucher 6326046, under the neighborhood crime prevention activity, CDBG funds should be used for the acquisition and maintenance of the camera(s). Expenditures for a NATIA Conference, airfare to the NATIA Conference, and a CA Gang Task fee are not deemed eligible costs to acquire and maintain cameras. As a result, the City shall remit from non-Federal sources $5,137.16 back to the CDBG grant of origin.

To ensure that the correct remittance is processed , please follow the guidance detailed in HUD Memorandum, dated April 15, 2021: Methods for Returning Community Development Block Grant (CDBG) Funds . This guidance can be found at https://www.hudexchange.info/resource/3089/instructions-for-returning-funds-to-the-line- of-credit-and-to-us-treasury/
2) This part of the Finding remains OPEN. Under voucher 6304219, the $1,851.04 memberships are considered ineligible per 570.206 Program Administration. The City shall remit the $1,851.04 from non-Federal funds back to the CDBG grant of origin. To ensure that the correct remittance is processed, please follow the guidance detailed in HUD 141
Memorandum, dated April 15, 2021 (see hyperlink above). 3) This part of the Finding remains OPEN. The documentation provided for voucher 6410895 supported costs of $112,267.72; not the total expenditure of $120,083.33. HUD was unable to verify $7,815.61 in expended costs for the Community Center East Park Improvements activity.

The City will need to provide documentation to support the $7,815.61 costs for the Community Center East Park Improvements activity or remit from non-Federal funds back to the CDBG grant of origin. To ensure that the correct remittance is processed, please follow the guidance detailed in HUD Memorandum, dated April 15, 2021 (see hyperlink above). 4) This part of the Finding is CLOSED. From the review of documents provided for voucher 6474810, the City has supported the questioned costs.

Finding Twelve: The City’s record retention and access policy did not comply with 2 CFR Part 200 requirements
Condition: As part of the financial management review, the City provided its record management policies and procedures. Through evaluation of these policies and procedures, it was determined that the City is not in compliance with record retention and access requirements as outlined in Part 200 and within its policies and procedures. In addition, the City’s policies and procedures did not address each HUD award’s program-specific retention requirements, nor did they address access requirements.

Corrective Action: To address this deficiency, the City is requested to take the following action:
1) Update its record management policies and procedures to reflect compliance with CDBG record retention requirements and Part 200 requirements. These updated record management policies and procedures shall be submitted to HUD within 30 days after receipt of this letter including certification of implementation from the certifying authority.

City’s Response: The City indicated that its Housing Department is in the process of updating its Policies and Procedure manuals and has requested that HUD allow up to 90 days to provide the updated manual and receive Council approval of the revisions, including the specific recordkeeping requirements per the Part 200 requirements.

HUD’s Response: This Finding remains OPEN. HUD has agreed to allow the City 90 calendar days from the date of the February 8, 2022 response letter or May 9, 2022, to revise and submit its policies and procedures. As noted in the Corrective Action, the City must include a certification of implementation from the certifying authority along with the revised policies and procedures for procurement. Once the City’s updated policies and procedures have been received, HUD will evaluate and determine if the submitted policies and procedures are revised per the requested corrective action.

Please note that the Corrective Action in the monitoring report noted above was based on HUD’s review of the City’s record management policies and procedures manual and not the Housing Department's internal policies and procedures. While the City’s response has indicated 142
18 that the Housing Department is in the process of revising its policies and procedures manual, it is the City’s records management policies that were reviewed that require revisions. Please ensure for continuity of the document reviewed and found to be deficient, that the revisions are made to the specific item that HUD has instructed the City to revise as detailed in the Monitoring Report rather than submitting a new or alternate document.

Finding Thirteen: The City did not provide written documentation to support an internal control self-assessment nor measures to safeguard protected personally identifiable (PII) information.

Condition: The City did not provide documentation to support it conducted a self- assessment of its internal control system as well as how it safeguards PII.

Corrective Action: To address this deficiency, the City is requested to take the following action:
1) Revise its Grant Management policies and procedures to include updated internal control measures that align to 2 CFR 200.303 Internal Controls. The City shall also address pertinent internal control measures such as PII. These revised Grant Management policies and procedures shall be submitted to HUD 30 days after receipt of this letter including certification of implementation from the certifying authority.

City’s Response: The City indicated that its Housing Department is in the process of updating its Policies and Procedure manuals and has requested that HUD allow up to 90 days to provide the updated manual and receive Council approval of the revisions which will include a section on Protected Personally Identifiable Information.

Please note that while the City’s response indicated that it will amend its Housing policies and procedures, the Corrective Action detailed in HUD’s Monitoring Report is to revise its Grants Management Policy and Procedures based on our review of this document and the relevance of updating internal control measures that align to 2 CFR 200.303 Internal Controls as a grants management policy. Please ensure for continuity of the document reviewed and found to be deficient, that the revisions are made to the specific item that HUD has instructed the City to revise as detailed in the Monitoring Report rather than submitting a new or alternate document.

Finding Fourteen: HUD is unable to determine if measures are in place to ensure HUD awards are charged no more than a reasonably proportionate share of costs 143
Condition: HUD requested documentation regarding the invoicing for Single Audit services to support if HUD awards are charged no more than a reasonably proportionate share of the audit costs. HUD did not receive documentation or any additional feedback regarding this request.

Corrective Action: To address this deficiency, the City is requested to take the following action:
1) Oxnard shall submit to HUD a copy of the invoice submitted by its auditor, Eadie + Payne, LLP, for the Single Audit services for the period ending June 30, 2020. The copy of this invoice shall reflect the program account codes and appropriate calculations to show the amounts each program was charged for the audit services. The City shall provide this documentation within 30 days from receipt of this letter.

City’s Response: The City indicated that it does not charge HUD awards for services provided by its auditor, Eadie + Payne. Services are charged to the General Fund, Finance Department, and General Accounting Division. The City submitted as Exhibits 14-1, 14-2, and 14-3 copies of the invoice submitted by its auditor, Eadie + Payne, LLP, for Single Audit services ending June 30, 2020, to exhibit the account code charged for audit services was Fund 101 (General Fund), Department 16 (Finance Department), Division 01 (General Accounting) funding sources [101.1601.801.8203].

HUD’s Response: This Finding is CLOSED. HUD evaluated the requested documentation. From the review, the documentation provided supports that the audit services were not charged to HUD awards and were charged to the City’s General Fund account.

Finding Fifteen: The City’s equipment records do not comply with all requirements of Part 200
Condition: During the review, HUD determined that the City’s fire equipment log is not in compliance with 2 CFR Part 200 requirements concerning equipment use and management requirements.

Corrective Action: To address this deficiency, the City is requested to take the following actions:
1) Submit an updated equipment log to include the following criteria: property description and location, serial number or identification number, funding source (including the Federal Award Identification Number, or FAIN), titleholder, acquisition date and cost, percentage of Federal participation in original acquisition cost, use and condition of equipment, if applicable, disposition data, such as date of disposal and sales price. 2) The policies and procedures pertaining to the equipment shall ensure compliance to equipment use per 2 CFR 200.313(c) and management requirements found at 2 CFR 200.313. Compliance with these regulatory citations shall be documented along with its revised City’s equipment inventory report log.
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20 The City shall submit this documentation within 30 days from receipt of this letter including certification of implementation from the certifying authority.

City’s Response:
1) The City submitted an equipment log as Exhibit 15-1 to include the required criteria. 2) The City has requested that HUD allow the City up to 90 days to revise its policies and procedure and for Council to review and approve the revisions.

HUD’s Response:
1) This part of the Finding is CLOSED. The City submitted the updated fire equipment log with specified criteria as required.
2) This part of the Finding remains OPEN. HUD has agreed to allow the City 90 calendar days from the date of the February 8, 2022, response letter or May 9, 2022, to revise and submit its policies and procedures. As noted in the Corrective Action, the City must include a certification of implementation from the certifying authority along with the revised policies and procedures for procurement. Once the City’s updated policies and procedures have been received, HUD will evaluate and determine if the submitted policies and procedures are revised per the requested corrective action.

Please note that while the City’s response indicated that it will amend its policies and procedures, the Corrective Action detailed in HUD’s Monitoring Report is to revise the City’s Policies and Procedures pertaining to equipment based on our review of this document and the relevance of compliance to equipment use per 2 CFR 200.313(c). Please ensure for continuity of the document reviewed and found to be deficient, that the revisions are made to the specific item that HUD has instructed the City to revise as detailed in the Monitoring Report rather than submitting a new or alternate document
Prior Monitoring Findings
Finding Sixteen (2015 Finding Three: Rental Project - Terry’s Place,IDIS Activity #1888 ) Condition: The City did not secure the appropriate written agreement with all the required HOME regulatory provisions including a budget, the scope of work, appropriate benchmarks for project completion, etc. The City provided HOME funds for acquisition without securing the appropriate appraisal to determine the value of the property. The bridge loan provided was a line of credit for the organization and not a specific loan for the HOME project. The supporting documentation for invoices included costs that may not be eligible. For example, line of credit fees that cannot be directly associated with the HOME project and staff costs for marketing activities that were not supported with time and activity sheets. Finally, the sellers of the project were not provided a voluntary acquisition letter as required.
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Condition: The City provided copies of all the documents signed for the project identified in the original condition except an amendment to implement the HOME requirements signed and dated by both parties.

Corrective Action: The amendment provided was previously submitted and no signatures on the written amendment between the City and Many Mansions were dated. Please submit a signed and dated amendment that incorporates the HOME regulatory requirements to close this finding.

City’s Response: The City submitted as Exhibit 16-1 a copy of the signed, dated, and executed amendment between the City and Many Mansions.

HUD’s Response:This Finding is CLOSED. The signed and dated amendment is satisfactory to close this finding.

Finding Seventeen (2015 Finding Five: Environmental Review Process) Condition: The City completed the environmental review process for Rental Project Terry’s Place, IDIS Activity #1888) but incurred costs before the request for release of funds were available.

Corrective Action: The City must establish and implement policies and procedures to conduct environmental reviews for all projects before committing and expending HOME funds, per the rules and regulations, and keep the record in each project file. Please submit the established policies and procedures, including certification of implementation from the authorized official.

City’s Response: The City has indicated that it will add the regulatory requirement of completing an environmental review before expending funds to a project or committing funds to a project to its policies and procedures. The City has requested that HUD allow 90 days to revise its policies and procedures and obtain the proper approvals.

HUD’s Response: This Finding remains OPEN. HUD has agreed to allow the City 90 calendar days from the date of the February 8, 2022, response letter or May 9, 2022, to revise and submit its policies and procedures. As noted in the Corrective Action, the City must include a certification of implementation from the certifying authority along with the revised policies and procedures for procurement. Once the City’s updated policies and procedures have been received, HUD will evaluate and determine if the submitted policies and procedures are revised per the requested corrective action.
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22 We would like to thank you and your staff for your professionalism and cooperation during the review and subsequent response. Please respond to the open findings within 30 days of receipt of this communication. For those open findings in which HUD has approved your February 8, 2022, request for 90 days to allow for the revision of policies, please respond no later than May 9, 2022. Roy Mata, Community Planning and Development (CPD) Representative, is available to discuss the results of this monitoring response at (213) 534-25721 or via email at [email protected].

Sincerely,
Rufus Washington, Director
Office of Community Planning
and Development
for
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Oxnard City CouncilJuly 5, 2022

Oxnard City Council
July 5, 2022