Finding Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 ? Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2021 ? 6/30/2022) Compliance Requirement: Procurement Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or Specific Requirement: Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Compliance: Per 2 CFR section 200.318, a non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. Per 2 CFR section 200.319, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and ? 200.320. Per the Town?s purchasing policy, goods or services costing $10,000 or more must be purchased from the lowest responsive bidder meeting specifications after advertising for bids. Condition/Context: The Town was unable to provide documentation to support compliance with required procurement processes for goods or services over $10,000 for one vendor, including how the vendor was procured and whether there was full and open competition in the procurement process. Draft - March 29, 2023 Subject to Change TOWN OF ELKTON, MARYLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) JUNE 30, 2022 (14) Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Questioned Costs: None noted. Cause: The Town?s internal controls were not sufficient to ensure that procurement policies were followed for purchases made for the program. Effect: Failure to adhere to procurement polices and procedures may result in obtaining goods or services under terms that are not in the best interest of the federal program. Recommendation: The Town should review and enhance controls and procedures to ensure that it follows procurement policy for all goods and services charged to the program. Views of Responsible Officials: Management agrees with the finding
Finding Number: 2022-005 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 ? Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2021 ? 6/30/2022) Compliance Requirement: Suspension and Debarment Type of Finding Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Control ? Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: The Town did not determine the suspension and debarment status of a vendor with expenditures exceeding $25,000 as required by federal regulations. Questioned Costs: There are no questioned costs related to this finding as the vendor was not federally suspended or debarred. Cause: The Town?s internal controls were not sufficient to ensure federal suspension and debarment regulations were followed for purchases made for the program. Effect: Failure to adhere to suspension and debarment requirements may result in the Town entering into a contract or purchase with a vendor that is suspended or debarred and not authorized to provide goods and services to the program. Draft - March 29, 2023 Subject to Change TOWN OF ELKTON, MARYLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) JUNE 30, 2022 (16) Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Recommendation: We recommend that the Town enhance its procedures and internal controls to ensure that it verifies vendors are not suspended or debarred from business prior to all goods and services charged to the program. The Town should retain documentation of procurement suspension/debarment status verifications for its vendors audit purposes. Views of Responsible Officials: Management agrees with the finding.
Finding Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 ? Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2021 ? 6/30/2022) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Per the Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, non-entitlement units are required to submit a project and expenditure report for the period ending March 31, 2022 no later than April 30, 2022 and then quarterly thereafter. Condition/Context: The Town did not submit their March 31, 2022 project and expenditure report timely. The report was due no later than April 30, 2022; however, the Town submitted the report on May 3, 2022. Questioned Costs: None noted. Cause: The Town?s procedures and internal controls were not sufficient to ensure that reports were filed timely. Subject to Change TOWN OF ELKTON, MARYLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) JUNE 30, 2022 (18) Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Effect: The quarterly performance report was not filed timely which could impact the Federal agency?s ability to monitor the program. Recommendation: The Town should review and enhance its reporting procedures and controls to ensure that quarterly performance reports are submitted no later the last day of the month after the end of each quarter. Views of Responsible Officials: Management agrees with the finding.
Finding Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 ? Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2021 ? 6/30/2022) Compliance Requirement: Procurement Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or Specific Requirement: Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Compliance: Per 2 CFR section 200.318, a non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. Per 2 CFR section 200.319, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and ? 200.320. Per the Town?s purchasing policy, goods or services costing $10,000 or more must be purchased from the lowest responsive bidder meeting specifications after advertising for bids. Condition/Context: The Town was unable to provide documentation to support compliance with required procurement processes for goods or services over $10,000 for one vendor, including how the vendor was procured and whether there was full and open competition in the procurement process. Draft - March 29, 2023 Subject to Change TOWN OF ELKTON, MARYLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) JUNE 30, 2022 (14) Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Questioned Costs: None noted. Cause: The Town?s internal controls were not sufficient to ensure that procurement policies were followed for purchases made for the program. Effect: Failure to adhere to procurement polices and procedures may result in obtaining goods or services under terms that are not in the best interest of the federal program. Recommendation: The Town should review and enhance controls and procedures to ensure that it follows procurement policy for all goods and services charged to the program. Views of Responsible Officials: Management agrees with the finding
Finding Number: 2022-005 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 ? Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2021 ? 6/30/2022) Compliance Requirement: Suspension and Debarment Type of Finding Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Control ? Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: The Town did not determine the suspension and debarment status of a vendor with expenditures exceeding $25,000 as required by federal regulations. Questioned Costs: There are no questioned costs related to this finding as the vendor was not federally suspended or debarred. Cause: The Town?s internal controls were not sufficient to ensure federal suspension and debarment regulations were followed for purchases made for the program. Effect: Failure to adhere to suspension and debarment requirements may result in the Town entering into a contract or purchase with a vendor that is suspended or debarred and not authorized to provide goods and services to the program. Draft - March 29, 2023 Subject to Change TOWN OF ELKTON, MARYLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) JUNE 30, 2022 (16) Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Recommendation: We recommend that the Town enhance its procedures and internal controls to ensure that it verifies vendors are not suspended or debarred from business prior to all goods and services charged to the program. The Town should retain documentation of procurement suspension/debarment status verifications for its vendors audit purposes. Views of Responsible Officials: Management agrees with the finding.
Finding Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 ? Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2021 ? 6/30/2022) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Per the Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, non-entitlement units are required to submit a project and expenditure report for the period ending March 31, 2022 no later than April 30, 2022 and then quarterly thereafter. Condition/Context: The Town did not submit their March 31, 2022 project and expenditure report timely. The report was due no later than April 30, 2022; however, the Town submitted the report on May 3, 2022. Questioned Costs: None noted. Cause: The Town?s procedures and internal controls were not sufficient to ensure that reports were filed timely. Subject to Change TOWN OF ELKTON, MARYLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) JUNE 30, 2022 (18) Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Effect: The quarterly performance report was not filed timely which could impact the Federal agency?s ability to monitor the program. Recommendation: The Town should review and enhance its reporting procedures and controls to ensure that quarterly performance reports are submitted no later the last day of the month after the end of each quarter. Views of Responsible Officials: Management agrees with the finding.