BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Receive the Single Audit Report for Fiscal Year Ending June 30, 2024.
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RECOMMENDATION: Recommendation
Receive the Single Audit Report for Fiscal Year ending June 30, 2024.
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SUMMARY:
The Single Audit is a rigorous, organization-wide audit of an entity that expends $750,000 or more of federal assistance received for its operations. Usually performed annually, the Single Audit’s objective is to provide assurance to the US federal Government as to the management and use of such funds by recipients. The audit is performed by an independent certified public accountant and encompasses both financial and compliance components. Once completed, the Single Audit must be submitted to the Federal Clearinghouse.
Attached is the final report for the Single Audit for the year ended June 30, 2024, prepared by Vasquez and Company.
Staff is pleased to report that there were no findings in the Fiscal Year (FY) 24 Single Audit Report.
Follow Up on FY 23 Single Audit Report
The FY 23 Single Audit contained a finding noting a material weakness in internal control because Santa Clara Valley Water District (Valley Water) reported $3.3 million of federal expenditures in FY 23, when $980K of those expenditures were actually incurred in FY 22. Since a Single Audit must be performed when an agency’s federal expenditures exceed $750K, a Single Audit should have been performed for FY 22 and was not. For the sake of clarity, the finding was related to the timing of reporting, as opposed to a lack of reporting.
Staff was unaware of the FY 22 eligible expenditures because of a multiple year pause in project activity for the South Santa Clara County Recycled Water Project Phases 1B and 2A. More specifically, while the project was an active project in Valley Water’s Capital Improvement Program (CIP), construction had been delayed since 2015 primarily because of environmental issues, which took several years to resolve. Finance staff was unaware of the FY 22 eligible expenditures because it had stopped checking for eligible expenditures due to the pause in project activity since 2015. By the time staff became aware of these expenditures it was too late to report them to the financial auditors for FY 22, and so instead the expenditures were reported to the auditors as part of the FY 23 financial audit.
In response to the finding, staff updated its procedures to include quarterly tracking of all grants related expenditures as well as a year-end expenditure review with each project management team so that expenditures are tracked within the appropriate fiscal year, regardless of when construction activity has begun.
The FY 24 Single Audit Report includes a Summary Schedule of Prior Audit Findings which indicates in the Current Status column that the corrective action plan has been fully implemented.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
There are no environmental justice and equity impacts associated with Single Audit Report for Fiscal Year Ending June 30, 2024. This action is unlikely to or will not result in adverse impacts and is not associated with an equity opportunity.
FINANCIAL IMPACT:
Auditing services costs were included in the FY 2024-25 budget.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have the potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: Single Audit Report
UNCLASSIFIED MANAGER: Manager
Darin Taylor, 408-630-3068