RA
ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948|
MS
735 E. Carnegie Dr. Suite 100
REPORT ON INTERNAL CONTROL OVER FINANCIAL
San Bernardino. CA 92408
909 889 0871 T REPORTING AND ON COMPLIANCE AND OTHER MATTERS 909 889 5361 F BASED ON AN AUDIT OF FINANCIAL STATEMENTS ramscpa.net PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
PARTNERS
Scott W. Manno, CPA, CGMA
Independent Auditor's Report
Leena Shanbhag, CPA. MST. CGMA
Bradferd A. Welebir. CPA, MBA. CGMA
To the Honorable Mayor and City Council Members
Jenny W. Liu, CPA, MST
Gardenya Duran, CPA, CGMA City of San Bernardino, California Brianna Schultz, CPA, CGMA
Brenda L. Odle, CPA. MST (Partner Emeritus)
We have audited, in accordance with the auditing standards generally Terry P. Shea, CPA (Partner Emeritus)
accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities, the
MANAGERS / STAFF
business-type activities, each major fund, and the aggregate Seong-Hyea Lee, CPA, MBA
remaining fund information of the City of San Bernardino, California Evelyn Morentin-Barcena, CPA
(the entity) as of and for the year ended June 30, 2024, and the related Veronica Hernandez, CPA
Laura Arvizu, CPA notes to the financial statements, which collectively comprise the John Maldonado, CPA, MSA entity's basic financial statements, and have issued our report thereon Julia Rodriguez Fuentes. PA, MA dated February 28, 2025.
Demi Hite, CPA
Jeffrey McKennan. CPA Report on Internal Control over Financial Reporting Monica Wysocki, CPA
Jacob Weatherbie. CPA, MSA
Bolim Han, CPA, MAcc In planning and performing our audit of the financial statements, we Anny Gonzalez, CPA considered the entity's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the
MEMBERS
financial statements, but not for the purpose of expressing an opinion American Institute of
Certified Public Accountants on the effectiveness of the entity's internal control. Accordingly, we do not express an opinion on the effectiveness of the entity's internal PCPS The AICPA Alliance
for CPA Firms
Governmental Audit
Quality Center deficiency in internal control exists when the design or operation control does not allow management or employees in the norm California Society of
Certified Public Accountants
that ciere is a reasonable pos deficiencies, interial miscatement ot corrected, on a timely basis. A significant deficiency is a deficiency, o Proud Member of a combination of deficiencies, in internal control that is less severe tha AlliottGlobalAlliance™ a material weakness, yet important enough to merit attention by those charged with governance.
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STABILITY. ACCURACY. TRUST.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the entity's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance that is required to be reported under Government Auditing Standards, and which is described in the accompanying Schedule of Findings and Responses as item 2024-001.
We noted certain matters that we have reported to management of the entity in a separate letter dated February 28, 2025.
Entity's Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the entity's response to the findings identified in our audit and described in the accompanying Schedule of Findings and Responses. The entity's response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
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.
Rogers, Andercon, Malody e leott, LeP.
San Bernardino, California
February 28, 2025
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City of San Bernardino
Schedule of Findings and Responses
Year Ended June 30, 2024
2024-001 - Credit Card Transaction Approvals
Noncompliance
Criteria:
Per section 3.2.6. of the City's administrative policy manual, credit card transactions should be reviewed and approved by cardholder's manager or designee.
Condition:
During our testing over credit card compliance, we were unable to obtain credit card purchase approvals for one employee across 3 months, and a second employee across 2 months.
Cause:
This occurred due to inadequate maintenance of documentation of approvals and due to employee turnover.
Effect:
Unauthorized transactions could occur without detection.
Recommendation:
We recommend that the entity ensure that all credit card reconciling, and approval documentation be maintained properly and implement controls to ensure that a designee reviewer is assigned for credit card users.
Management's Response:
The City acknowledges the audit finding regarding credit card transaction approvals and is committed to ensuring compliance with administrative policies. High turnovers, department reorganizations, and prolonged vacancies resulted in gaps in the approval process.
The City will implement the following corrective actions:
• Enhanced Oversight: Departments will conduct periodic reviews of reconciler and approver assignments to ensure accuracy and compliance. • Clear Accountability: Departments will promptly notify the City's P-Card Administrator when their assigned reconcilers or approvers change.
• Improved Documentation: Efforts will be made to standardize approval processes to ensure all transactions are documented in a retrievable format. • Training and Guidance: Staff will receive additional training on policy requirements to reinforce proper reconciliation and approval procedures. -3-