REPORT TO COUNCIL
SUBJECT
Title
Action on the Single Audit Report for Fiscal Year 2021-22
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
The City’s annual financial statement audit also includes the federally mandated “Single Audit” which is designed to meet the special reporting requirements of federal granting agencies, specifically the Office of Management and Budget’s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2CFR Part 200), formerly OMB A-133.The standards governing Single Audit engagements require that agencies expending more than $750,000 of federal monies in a fiscal year have an independent audit not only on the fair presentation of the financial statements, but also on internal controls for compliance with the administrative requirements of federal awards. The Single Audit was performed by the City’s financial statement auditor, Maze & Associates. The Single Audit report is attached.
City staff and Maze & Associates met with the City Council Audit Committee on March 30, 2023. Present were Committee members Watanabe, Jain, and Park. During the Committee meeting, Maze & Associates gave a presentation about the audit process and scope of work, as well as the auditor’s opinion. City staff and Maze & Associates answered questions from Committee members.
The Audit Committee unanimously accepted the Single Audit Report presented at the Committee meeting and recommended that the City Council note and file the reports at the April 4, 2023 Council meeting. The Single Audit Report item was later moved to the April 18, 2023 Council meeting. After the Council meeting, the Single Audit Report will be published on the City’s website.
DISCUSSION
Based on their audit, Maze & Associates issued an unmodified opinion with regard to the fair presentation of the financial statements and that the City is in compliance with internal control over financial reporting. For Fiscal Year 2021-22, Maze & Associates identified two major programs to audit: Housing and Urban Development (HUD) - Home Investment Partnerships Program; and Department of Treasury - State of California pass-through - Covid 19 - Coronavirus State and Local Fiscal Recovery Funds (CSLFRF). The audit yielded one finding related to the Grant Deadlines reporting requirement for the California Arrearage Payment Programs under the CSLFRF program. The City provided documentation that showed the reports were filed and submitted to the responsible agency. As part of the Corrective Action Plan, Staff has developed a checklist review process to ensure that the City is in compliance with the Grant Deadlines reporting requirement.
Additionally, part of the annual requirements for the Single Audit is to report on the status of any audit findings that were identified during the previous year. The Single Audit for FY 2018-19 and FY 2020-21 resulted in a finding related to monitoring the CDBG program activities for compliance with program rules and Federal Funding Accounting and Transparency Act reporting. Staff’s actions and the status of findings are outlined in the attached Summary Schedule of Prior Audit Findings.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
The staff and the external auditor costs associated with the audit and financial reports production are included in the annual appropriations.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Note and file the City of Santa Clara Single Audit Report for the year ended June 30, 2022, as recommended by the Council Audit Committee.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Office of the City Manager
ATTACHMENTS
1. Single Audit Report June 30, 2022
2. Single Audit Current Year Finding - Corrective Action Plan
3. Summary Schedule of Prior Audit Findings