REPORT TO COUNCIL
SUBJECT
Title
Action on the City of Santa Clara Federally Funded Grants’ Single Audit Report for Fiscal Year 2022-23
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
The City’s annual financial statement audit includes a federally mandated “Single Audit”, which is designed to meet the special reporting requirements of federal granting agencies. These include those requirements set forth in 2CFR Part 200 which establishes uniform administrative requirements, cost principles, and audit requirements for Federal awards to non-Federal entities. The Single Audit rules require that an independent audit on the fair presentation of the financial statements and internal controls for compliance with the administrative requirements of federal awards for agencies with more than $750,000 of federal grant expenditures in a fiscal year. Since the City met this $750,000 threshold, the City hired Maze & Associates to conduct the audit. The Single Audit report is attached.
On February 28, 2024, City staff and Maze & Associates met with the City Council Audit Committee (Committee), which included. Committee members Watanabe, Jain, and Park. During the Committee meeting, Maze & Associates gave a presentation about the audit process, scope of work, and their auditor’s opinion. City staff and Maze & Associates answered questions from Committee members.
The Committee unanimously accepted the Single Audit Report presented at the Committee meeting and recommended that the City Council note and file the report at the March 19, 2024 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 the City’s compliance with internal control requirements. For Fiscal Year 2022-23, Maze & Associates identified the Community Development Block Grant Program (CDBG) of the United States Department of Housing and Urban Development (HUD) - as the major program to audit. The audit contained one noncompliance finding relating to the CDBG’s timely expenditure requirements. This noncompliance finding partly arises from the above average monies received which approximately equal 1.5 times the most recent grant. To address this issue, staff developed a comprehensive plan (attached Corrective Action Plan) to expend the funds in a timely manner to ensure compliance with the next HUD Timeliness Test.
Additionally, the Single Audit rules also require the City to report on the status of any audit findings that were identified during the previous year. The Single Audit for FY 2021-22 resulted in a finding related to the grant deadline reporting requirements for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program. The City has corrected these issues as outlined in the attached Summary Schedule of Prior Audit Findings.
ENVIRONMENTAL REVIEW
This item does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15060(c)(1) as it does not involve the exercise of discretionary powers by the City Council.
FISCAL IMPACT
The staff and the external auditor costs associated with the audit and financial reports production are included in the annual budget.
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, 2023, as recommended by the City Council Audit Committee.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Single Audit Report June 30, 2023
2. Single Audit Current Year Finding - Corrective Action Plan
3. Summary Schedule of Prior Audit Findings