Attachment 2 - FY 2020-21 Corrective Action PlanFinance Department • 110 E. Main St., Los Gatos, CA 95030
408.354.6828 • www.losgatosca.gov • www.facebook.com/losgatosca
TOWN OF LOS GATOS
CORRECTIVE ACTION PLAN
SINGLE AUDIT
FOR THE YEAR ENDED JUNE 30, 2021
CORRECTIVE ACTION PLAN
FINANCIAL STATEMENT FINDINGS ‐ CURRENT YEAR
Finding Reference Number: 2021‐
001
General Fund Financial Position (Material Weakness)
Name(s) of the contact person: Stephen Conway, Director of Finance
Corrective Action Plan: Based on the Town’s understanding of the initial
guidance released April 22, 2020 regarding CARES act
eligible uses, rent forgiveness support was classified as
eligible under the Small business assistance category of
expenditures. As such, the Town Council opted to
assist certain Town lessees by forgiving their rent (a
voluntary write‐off of rents due to the Town) to
support these entities during the height of the
pandemic.
If the Federal government subsequently determines
that this cost were to be disallowed, the Town has
significant other qualifying expenditures in categories
such as payroll for public safety that could be
substituted for the small business rental assistance.
In response to the questioned finding on waivers of
rent, staff received approval from the State of
California Department of Finance to re‐allocate the
questioned costs amount of $94,988 from business
support (rent waivers) to public safety payroll. The
department reviewed the Town’s submittal and on
June 1, 2022 the Town received the department’s
approval of the re‐allocation as corrected in the State’s
Corona Virus Fund Reporting worksheet.
ATTACHMENT 2
Finance Department • 110 E. Main St., Los Gatos, CA 95030
408.354.6828 • www.losgatosca.gov • www.facebook.com/losgatosca
TOWN OF LOS GATOS
CORRECTIVE ACTION PLAN
Anticipated Completion Date:
Because of significant other CARES act qualifying
expenditures that can be substituted for the
questioned cost, effective immediately the Town of
Los Gatos will refrain from claiming the Town Council
approved expense write‐offs of rental revenues due to
the Town from lessees as an eligible use of Federal
funds. This decision was made under the advice from
the Town ’s independent auditor and staff’s review of
the updated discussion of eligible expenditures and
eligibility of lost revenues as was recently released in
the January 15, 2021 Federal Register Department of
the Treasury Corona Relief Fund for States, Tribal
Governments, and Certain Eligible Local Governments.