City of Santa Barbara, Department of Public Works, Division of Engineering - FY 2017/18

P1594-0097
Indirect Cost Rate Proposal
Issued: 6/6/2019

At the request of the Independent Office of Audits and Investigations, the California State Department of Finance, Office of Audits and Evaluations (Finance) completed an audit of the City of Santa Barbara, Department of Public Works, Division of Engineering's (City) Indirect Cost Rate Proposal (ICRP) for fiscal year (FY) 2017/18. The purpose of the audit was to determine whether the FY 2017/18 ICRP was presented in accordance with Title 2 Code of Federal Regulations (CFR) Part 200 and Caltrans Local Assistance Procedures Manual (LAPM) Chapter 5. The complete audit report is attached.

Based on the audit, Finance determined the City's 2017/18 ICRP was not in compliance with 2 CFR 200 and the LAPM. Additionally, Finance identified weaknesses in the City's ability to adequately segregate allowable and allocable ICRP costs resulting in unallowable costs impacting the 2017/18 ICRP rate. The audited rate is as follows:

Applicable To

Engineering Division

2017/18

Proposed Rate

98.53%

Audited Rate*

55.56%

*Base: Total Direct Salaries and Wages plus Fringe Benefits

Please provide our office with a corrective action plan, including time lines, by August 6, 2019.