FAC Explorer

Audit 291866

FY End
2023-07-31
Total Expended
$778,061
Findings
4
Programs
1
Organization: Loysville Village Municipal Authority (PA)
Year: 2023 Accepted: 2024-02-23
Auditor: Boyer & Ritter LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
370255 2023-002 - - I
370256 2023-003 - - L
946697 2023-002 - - I
946698 2023-003 - - L

Programs

ALN Program Spent Major Findings
10.760 Water and Waste Disposal Systems for Rural Communities $778,061 Yes 2

Contacts

Name Title Type
HNFSYMUL2YH7 Jennie L Weary Auditee
7177893854 Senahid Zahirovic Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Revenue is recognized when earned, and expenses are recognized when incurred. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10-percent de Minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of Loysville Village Municipal Authority under programs of the federal government for the year ended July 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Loysville Village Municipal Authority, it is not intended to and does not present the financial position, changes in net position, or cash flows of Loysville Village Municipal Authority.
Title: Loan Balance Related to Federal Awards Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Revenue is recognized when earned, and expenses are recognized when incurred. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10-percent de Minimis indirect cost rate as allowed under the Uniform Guidance. For the fiscal year ended July 31, 2023, the Authority entered into a loan agreement with the U.S. Department of Agriculture (USDA) for $1,306,000 to be used to partially finance the construction of a waste water treatment plant and combined sewer system modification project. The loan agreement specifies that interim financing must be used during the construction phase of the project. When the construction of the project is completed, this interim financing will be repaid with the USDA loan. The balance of this interim loan as of July 31, 2023 is $641,754. Additionally, the Authority has accrued for costs incurred prior to July 31, 2023 of $136,307 and will draw down on its interim loan subsequent to the end of the fiscal year. The combination of this activity results in the $778,061 reported as expenditures on the Schedule of Expenditures of Federal Awards.

Finding Details

Finding 2023-002
Finding Reference: 2023-002 – Procurement Policies and Procedures Federal Agency: U.S Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities - ALN# 10.760 Compliance Requirement: Procurement, suspension, and debarment Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Condition: The Authority does not have any documented procurement procedures. However, during our testing of compliance with procurement guidelines, no further deviations from federal guidelines were noted. Cause and Effect: The Authority was unacquainted with general procurement standards of the Uniform Grant Guidance. Without documented procurement procedures, it is difficult for the Authority to ensure compliance with relevant compliance requirements. Questioned Cost: None Identification of Repeat Finding: No Recommendation: The Authority should establish documented procedures related to federal procurement. Views of Responsible Officials: This was first brought to the Authority’s attention in the current year. At such a late date in the federal project that has been in the works for multiple years, the Authority determined established procurement procedures would not be written and approved. The Authority did not make this decision in haste. The Authority met compliance guidelines for the procedures of items during the project. What we lack is an approved written document, which at this time is something we do not have the resources to undertake.
Finding 2023-003
Finding Reference: 2023-003 – Reporting Federal Agency: U.S Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities - ALN# 10.760 Compliance Requirement: Reporting Criteria: The Uniform Guidance requires that non-federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR section 200.329). They also may be required to submit special reports as required by the terms and conditions of the federal award. The U.S Department of Agriculture requires the Authority to submit Quarterly Income and Expense Statements. The reports are to be signed by the appropriate borrower official and submitted within 30 days of each quarter’s end. Condition: The Authority has not submitted Quarterly Income and Expense Statements within 30 days of the fiscal quarter end. However, the Authority has submitted audited annual financial reports within 9 months of fiscal year end. Cause and Effect: The Authority was unacquainted with quarterly filing requirements as set forth by the U.S. Department of Agriculture per the loan agreement. Without filing quarterly Income and Expense Statements, USDA is unaware of how funding is spent throughout the year. Questioned Cost: None Identification of Repeat Finding: No Recommendation: The Authority should begin to submit quarterly reports in accordance with loan agreement. Views of Responsible Officials: This was first brought to the Authority’s attention in the current year. The Authority is working towards submitting appropriate reports.
Finding 2023-002
Finding Reference: 2023-002 – Procurement Policies and Procedures Federal Agency: U.S Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities - ALN# 10.760 Compliance Requirement: Procurement, suspension, and debarment Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Condition: The Authority does not have any documented procurement procedures. However, during our testing of compliance with procurement guidelines, no further deviations from federal guidelines were noted. Cause and Effect: The Authority was unacquainted with general procurement standards of the Uniform Grant Guidance. Without documented procurement procedures, it is difficult for the Authority to ensure compliance with relevant compliance requirements. Questioned Cost: None Identification of Repeat Finding: No Recommendation: The Authority should establish documented procedures related to federal procurement. Views of Responsible Officials: This was first brought to the Authority’s attention in the current year. At such a late date in the federal project that has been in the works for multiple years, the Authority determined established procurement procedures would not be written and approved. The Authority did not make this decision in haste. The Authority met compliance guidelines for the procedures of items during the project. What we lack is an approved written document, which at this time is something we do not have the resources to undertake.
Finding 2023-003
Finding Reference: 2023-003 – Reporting Federal Agency: U.S Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities - ALN# 10.760 Compliance Requirement: Reporting Criteria: The Uniform Guidance requires that non-federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR section 200.329). They also may be required to submit special reports as required by the terms and conditions of the federal award. The U.S Department of Agriculture requires the Authority to submit Quarterly Income and Expense Statements. The reports are to be signed by the appropriate borrower official and submitted within 30 days of each quarter’s end. Condition: The Authority has not submitted Quarterly Income and Expense Statements within 30 days of the fiscal quarter end. However, the Authority has submitted audited annual financial reports within 9 months of fiscal year end. Cause and Effect: The Authority was unacquainted with quarterly filing requirements as set forth by the U.S. Department of Agriculture per the loan agreement. Without filing quarterly Income and Expense Statements, USDA is unaware of how funding is spent throughout the year. Questioned Cost: None Identification of Repeat Finding: No Recommendation: The Authority should begin to submit quarterly reports in accordance with loan agreement. Views of Responsible Officials: This was first brought to the Authority’s attention in the current year. The Authority is working towards submitting appropriate reports.