CITY OF SANTA CLARA
SINGLE AUDIT REPORT
FOR THE YEAR ENDED JUNE 30, 2021
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CITY OF SANTA CLARA
SINGLE AUDIT REPORT
For The Year Ended June 30, 2021
TABLE OF CONTENTS
TABLE OF CONTENTS
Page
Schedule of Findings and Questioned Costs .............................................................................. 1
Section I – Summary of Auditor’s Results ......................................................................... 1
Section II – Financial Statement Findings .......................................................................... 2
Section III – Federal Award Fi ndings and Questioned Costs ............................................. 2
Schedule of Expenditure s of Federal Awards ............................................................................ 3
Notes to Schedule of Expend itures of Federal Awards ............................................................. 5
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .................. 7
Independent Auditor's Report on Compliance for Each Major Federal Program; and on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ...... 9
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CITY OF SANTA CLARA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For The Year Ended June 30, 2021
SECTION I – SUMMARY OF AUDITOR’S RESULTS
SECTION I—SUMMARY OF AUDITOR’S RESULTS
Financial Statements
Type of report the auditor issued on whether the financial statements audited were prep
ared in accordance with GAAP Unmodified
Internal control over financial reporting:
Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? Yes X
None
Reported
Noncompliance material to financial statements noted? Yes X No Federal Awards
Internal control over major federal programs:
Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? Yes X
None
Reported
Type of auditor’s report i
ssued on compliance for major
federal programs: Unmodified
Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? X Yes No
Identification of major program(s):
Assistance Listing
(AL) #(s) Name of Federal Program or Cluster
21.019 Coronavirus Relief Fund
20.205 Department of Transportation – Highway Planning and Construction Grant
14.218 Community Dev elopment Block – Entitlement Grants Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee?
X Yes No
1 SECTION II – FINANCIAL STATEMENT FINDINGS
SECTION II – FINANCIAL STATEMENT FINDINGS
Our audit did not disclose any significant deficiencies, material weaknesses or instances of noncompliance material to the basic financial statements. We have also issued a separate Memorandum on Internal Control dated November 30, 2021, which is an integral part of our audits and should be read in conjunction with this report.
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Our audit disclosed the following findings and questioned costs required to be reported in accordance with Uniform Guidance.
Finding Reference Number: SA2020-001 Federal Funding Accoun tability and Transparency Act (FFATA) Reporting
Assistance Listing Number: 14.218
Assistance Listing Title: Community Development Block Grant – Entitlement Grant
Name of Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-20-MC-06-0022
COVID-19 - B-20-MW-06-0022
Criteria: Under the requirements of the Federal Fundi ng Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252 that are codified in 2 CFR Part 170, direct recipients of grants are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subawards that are entered into the FSRS System shoul d be maintained so that any amendments to the su bawards are also reflected in the system.
Condition: We selected two of the City’s subawards fo r testing of the reporting on the FSRS. The two subawards tested were comprised of four contracts that were all more than $30,000. Although we noted that all four of the contracts tested were included in the FSRS, one of the contracts in the amount of $1,300,000 was reported in FSRS in the amount of $691,380.
Cause: We understand that program staff had initially input the contract in the FSRS in the amount of $691,380 based on the original funding estimate and did not update the FSR S to reflect the final contract amount of $1,300,000.
Effect: The City is not in compliance with the FFATA reporting requirements.
Recommendation: Although the City provided documentati on that the FSRS was updated on March 10, 2022 to reflect the final contract amount of $1,300,000, th e City should develop procedures to ensure that FFATA reporting is accurate at all times and reflects any contract amendments and final subaward funding amounts.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
2 CITY OF SANTA CLARA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2021
Federal
Assistance Pass-Throu gh Pass-Throu gh
Federal Grantor/ Listing Identifying To Federal
Pass-Through Grantor/Program or Cluster Title Number Number Subrecipients Ex penditures U.S. Department of Housing and Urban Development Direct Programs Community Development Block Grant - Entitlement Grants 14.218 Program expenditures $828,238 $1,580,814
COVID-19 - Emergency Rental Assistance Program and Administration 730,831 1,020,771 Program subtotal 1,559,069 2,601,585
Home Investment Partnerships Program 14.239 994,599 1,090,636 Total U.S. Department of Housing and Urban Development 2,553,668 3,692,221 U.S. Department of Justice Direct Programs
COVID 19 - Coronavirus Emergency Supplemental Funding 16.034 29,956 Bureau of Justice Statistics and Federal Bureau of Investigation National Incident Based Reporting System
Special Data Collections and Statistical Studies 16.734 2,988 Edward Byrne Memorial Justice Assistance Grant Program 16.738 3,791 Equitable Sharing Program 16.922 139,173
Total U.S. Department of Justice 175,908
U.S. Department of Transportation Pass-Through Programs From:
Highway Planning and Construction
State of California Department of Transportation
Safe Routes to School Education Program 20.205 CML-5019 (033) 84,993 Santa Clara Streets and Roads Preservation 20.205 STPL-5019 (034) 2,356,000 Metropolitan Transportation Commission
Priority Development Area Planning Grant 20.205 1812 137,583 Program subtotal 2,578,576
State of California Office of Traffic Safety
National Priority Safety Programs 20.616 TR21062 24,800 Total U.S. Department of Transportation 2,603,376
U.S. Department of Treasury Pass-Through Program From:
State of California Department of Finance
COVID-19 - Coronavirus Relief Fund 21.019 295 1,594,064 U.S. Department of Homeland Security
Direct Program:
Federal Emergency Management Agency
Assistance to Firefighters Grant 97.044 75,121
Pass-Through Programs From:
California Task Force 3 Urban Search and Rescue
National Urban Search and Rescue Response System 97.025 CA-TF3 11,734 County of Santa Clara Office of Emergency Services
2019 Emergency Management Performance Grants 97.042 2019-003 / 085-00000 15,208 County of Santa Clara Office of Emergency Services
Homeland Security Grant Program (HSGP) 97.067 SHSGP 171,148 City and County of San Francisco
2019 Bay Area Urban Areas Security Initiative Grant 97.067 2019-0035 / 075-95017 185,000 Program subtotal 356,148
Total U.S. Department of Homeland Security 458,211
Total Expenditures of Federal Awards $2,553,668 $8,523,780 See Accompanying Notes to Schedule of Expenditures of Federal Awards 3 This Page Left Intentionally Blank
CITY OF SANTA CLARA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended June 30, 2021
NOTES TO THE SCHEDULE
NOTE 1 – REPORTING ENTITY
The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for the City of Santa Clara, Californi a, and its component units as disc losed in the notes to the Basic Financial Statements, except for federal awards of the Santa Clara Stadium Authority (Stadium Authority). Federal awards expended by the Stadium Authority, if any, are excluded from the Schedule and are subject to a separate Single Audit performed by other auditors.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the measuremen t focus applied. All governmental funds and fiduciary funds are accounted for using the modified accrual basis of accounting. All proprietary funds are accounted for using the accrual basis of accounting. Expenditures of Federal Awards reported on the Schedule are recognized when incurred.
NOTE 3 – INDIRECT COST ELECTION
The City has not elected use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
NOTE 4 – CORONAVIRUS RELIEF PROGRAM (AL# 21.019)
The Schedule for the year ended June 30, 2021 include s expenditures for the Coronavirus Relief Program (AL# 21.019) for the period of March 1, 2020 to Dece mber 31, 2020. The period of performance for the grant was March 1, 2020 to December 31, 2020, but to rece ive the funding, the City was required to file a certification with the State Department of Finance by July 10, 2020 that the City would use the funds consistent with federal requirements, adhere to health orders and directives, return unspent funds, and repay any disallowed costs, among other compliance certifications. The City’s certification was filed on July 7, 2020.
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INDEPENDENT AUDITOR’S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH
GOVERNMENT AUDITING STANDARDS
To the Honorable Members of the City Council
City of Santa Clara, California
We have audited, in accordance w ith the auditing standards generall y 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 St ates, the financial statemen ts 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 statements, which collectively comprise the City’s basic financ ial statements, and have issued our report thereon dated November 30, 2021. Our repo rt includes a reference to other auditors who audited the financial statements of the City of Santa Clara Stadium Authority for the year ended March 31, 2021 and a reference to other auditors who audited the financial statements the Northern California Power Agency, Transmission Agency of Northern California and San Jose-Santa Clara Regional Wastewater Facility and Clean Water Financing Authority as of and for the year ended June 30, 2020, related to the calculation of the Investments in Joint Ventures, as described in our report on the C ity’s financial statements. This report includes our consideration of the results of th e other auditors’ testing of internal control over financial reporting and compliance and other matters that are reported on separately by those other auditors. However, this report, insofar as it relates to the results of the other auditors, is based solely on the reports of the other auditors.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal cont rol) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the fi nancial 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 opera tion 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 re asonable possibility that a material misstatement of the City’s financial statements will not be prevente d, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of defici encies, in internal control that is less severe than a material weakness, yet important en ough to merit attention by those charged with governance.
Our consideration of internal control was for the lim ited purpose described in the first paragraph of this section and was not designed to identify all deficien cies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we and other auditors did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 7 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its comp liance 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 opinio n on compliance with those provisions was not an objective of our audit, and accordingly , we do not express such an opini on. The results of our tests and those of the other auditors disclosed no instances of noncompliance or other ma tters that are required to be reported under Government Auditing Standards.
We have also issued a separate Me morandum on Internal Control date d November 30, 2021, which is an integral part of our audit and should be read in conjunction with this report.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testin g of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integr al part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Pleasant Hill, California
November 30, 2021
8 INDEPENDENT AUDITOR'S REPORT ON
COMPLIANCE FOR EACH MAJOR PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE;
AND REPORT ON THE SCHEDULE OF EXPENDITURES OF
FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE
To the Honorable Members of the City Council
City of Santa Clara, California
Report on Compliance for Each Major Federal Program
The City of Santa Clara’s basic financial statements include the operations of the Santa Clara Stadium Authority (Stadium Authority), which is not included in the Schedule during the year ended June 30, 2021. Our audit, described below, did not include the operations of the Stadium Authority, because the
Stadium Authority engaged other auditors.
We have audited City’s compliance with the type s of compliance requirements described in the OMB Compliance Supplement that could have a direct and material e ffect on each of the City’s major federal programs for the year ended June 30, 2021. 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.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on complia nce for each of the City’s major federal programs based on our audit of the types of compliance requirem ents referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the 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 Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assuran ce about whether noncompliance with the types of compliance requirements referred to above that could ha ve a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about City’s compliance with those requirements and performing such other proc edures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable ba sis for our opinion on co mpliance for each major federal program. However, our audit does not provide a legal determination of the City’s compliance. 9 Opinion on Each Major Federal Program
In our opinion, the City complied, in all material respects, with th e 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, 2021.
Other Matters
The results of our auditing proced ures disclosed instances of noncom pliance which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying Schedule of Findings and Questioned Costs as it em SA2020-001. Our opinion on each major federal program is not modified with respect to these matters.
The City’s response to the noncompliance findin gs identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. The City’s response was not subjected to the auditing procedures applied in the audit of compli ance and, accordingly, we express no opinion on the response.
Report on Internal Control Over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s in ternal control over compliance with the types of requirements that could have a direct and material effect on each major federa l program to determine the auditing procedures that are appropriate in the circum stances for the purpose of expressing an opinion on compliance for each major federal pr ogram and to test and report on in ternal control over compliance in accordance with the Uniform Guid ance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s s 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 course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a ty pe of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in inte rnal control over compliance, such that there is a reasonable possibility that material noncompliance w ith a type of compliance requirement of a federal program will not be prevented, or det ected 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 requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet im portant enough to merit attention by those charged with governance.
Our consideration of internal control over complian ce was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on intern al control over compliance is sole ly to describe the scope of our testing of internal control over comp liance and the results of that testin g based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. 10 Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the gover nmental activities, the business-type activities, each major fund, and the aggregate remainin g fund information of the City as of and for the year ended June 30, 2021, and the related notes to the fi nancial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated November 30, 2021, which contained an unmodified opinion on those basic financial statements. Our report incl udes a reference to other auditors who audited the financial statements of the City of Santa Clara Stad ium Authority for the year ended March 31, 2021 and a reference to other auditors who audited the financia l statements the Northern California Power Agency, Transmission Agency of Northern California and San Jose-Santa Clara Regional Wastewater Facility and Clean Water Financing Authority as of and for the year ended June 30, 2020, related to the calculation of the Investments in Joint Ventures, as described in our re port on the City’s financial statements. Our report, insofar as it relates to the results of the other auditors, is based solely on the reports of the other auditors.
Our audit was conducted for the purpose of forming an opinion on the financial stat ements that collectively comprise the basic financial statements. The accompa nying 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 financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing pr ocedures applied in the audit of the basic financial statements and certain additional procedures, includi ng comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial st atements or to the basic financial statements themselves, and other additiona l procedures in accordanc e 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.
Pleasant Hill, California
March 10, 2022
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