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4 To the Honorable Mayor and Members of the City Council City of Rialto, California
A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and question ed costs as items 2021-005 and 2021-006 to be significant deficiencies.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
Government Auditing Standards require s the auditor to perform limited procedures on City’s response to the internal control over compliance findings identified in our audit described in the accompanying schedule of findings and questioned costs. The City’s response was not s ubjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
Report on Schedule of 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, 2021, and the related notes to the financial statement s, which collectively comprise the City ’s basic financial statements. We issued our report thereon dated March 29, 2021, which contained unmodified opinions on those financial statements. Our audit wa s conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financia l statements. The information has been subjected to the auditing procedures applied in the audit of th e financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
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September 26, 2022 (Except for the Report on Schedule of Expend itures of Federal Awards Required by Uniform Guidance, which is dated March 29, 2021)
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0DQDJHPHQWDJUHHVZLWKWKHUHFRPPHQGDWLRQDQGUHFRJQL]HVWKHLP SRUWDQFHRIDFFXUDWHUHSRUWLQJ7KH ILQDQFHGHSDUWPHQWQRZKDVJUDQWIRFXVHGVWDIIDVVLJQHGWRZRUNZLWKWKH&LW\RI5LDOWR¶VJUDQWFRQVXOWDQWWR HQVXUHWKDWDFFXUDWHUHSRUWLQJLVGRQHLQWKH,',6V\VWHP 15 CITY
OF RIALTO
SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
150 South Palm Avenue . Ri
alto, California 92376
City of Rialto
California
SECTION II - FINANCIAL STATEMENT FINDINGS
Finding 2020-001 – Material Weakness: Bank Reconciliations Reason f
or Recurrence:
Finance Department did not complete the bank reconciliations in a timely manner due to lack of personnel.
Planned Corrective Action:
Bank statements will be reconciled on a monthly basis to the general ledger, and management will ensure that all unusual reconciling items be promptly identified and adjusted for with adequate explanations.
Current Year Reference Number : 2021-002
Fi
nding 2020-002 - Significant Deficiency: Accounting Procedures and Policies Manual Reason f
or Recurrence:
The Finance Department had not updated the Accounting Procedures and Policies Manual since the 1990s to conform to current practices and procedures. While the new manual was updated, it was not fully completed due to staffing limitations.
Planned Corrective Action:
Management agrees with the recommendation and recognizes the im portance of a consistent message across all City Departments. The finance Department has initiat ed updating its policies and procedures manual. A draft of the updated Policies Manual has been complet ed and is now in the review/revision process. Management intends to have a final draft available for Council Approval by the end of the current fiscal year. In addition, Finance will also host training sessions for affected staff in other City departments for all updated policies and procedures. Overall, the City will take these and related steps to improve the lines of communication between departments ensuring that consistent and appropriate control procedures are followed.
Current Year Reference Number: 2021-004.
16 CITY
OF RIALTO
SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS (CONTINUED) FOR THE FISCAL YEAR ENDED JUNE 30, 2020
150 South Palm Avenue . Ri
alto, California 92376
City of Rialto
California
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Finding 2020-001 – Material Weakness and Compliance: Bank Reconciliations Feder
al Agencies: U.S. Department of Housing and Urban Development Programs: Community Development Block Grants/Entitlement Grants Award Numbers: All grant awards under the above programs Award Years: 2019-2020
Repeat Finding: Yes
Reason for Recurrence:
Finance Department did not complete the bank reconciliations in a timely manner due to lack of personnel.
Planned Corrective Action:
Bank statements will be reconciled on a monthly basis to the general ledger, and management will ensure that all unusual reconciling items be promptly identified and adjusted for with adequate explanations.
Current Year Reference Number: 2021-002
Finding
2020-002 - Significant De ficiency and Compliance: Accounting Procedures and Policies Manual
Feder
al Agencies: U.S. Department of Housing and Urban Development and U.S. Depar tment of the Treasury
Programs: Community Development Block Grants/Entitlement and Grants Coronavirus Relief Fund Award Numbers: All grant awards under the above programs Award Years: 2019-2020
Repeat Finding: Yes
Reason for Recurrence:
The Finance Department had not updated the Accounting Procedures and Policies Manual since the 1990s to conform to current practices and procedures. While the new manual was updated, it was not fully completed due to staffing limitations.
Planned Corrective Action:
Management agrees with the recommendation and recognizes the im portance of a consistent message across all City Departments. The finance Department has initiat ed updating its policies and procedures manual. A draft of the updated Policies Manual has been complet ed and is now in the review/revision process. Management intends to have a final draft available for Council Approval by the end of the current fiscal year. In addition, Finance will also host training sessions for affected staff in other City departments for all updated policies and procedures. Overall, the City will take these and related steps to improve the lines of communication between departments ensuring that consistent and appropriate control procedures are followed.
Current Year Reference Number: 2021-004.
17