FAC Explorer

Audit 297379

FY End
2023-06-30
Total Expended
$7.73M
Findings
8
Programs
4
Organization: Town of Easton (the Easton Utilities Commission) (MD)
Year: 2023 Accepted: 2024-03-25
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
384236 2023-001 Significant Deficiency Yes A
384237 2023-002 Significant Deficiency - I
384238 2023-003 Significant Deficiency - I
384239 2023-003 Significant Deficiency - I
960678 2023-001 Significant Deficiency Yes A
960679 2023-002 Significant Deficiency - I
960680 2023-003 Significant Deficiency - I
960681 2023-003 Significant Deficiency - I

Programs

ALN Program Spent Major Findings
10.752 Rural Econnectivity Pilot Program (b, E) $6.39M Yes 2
21.027 Coronavirus State and Local Fiscal Recovery Funds $833,224 Yes 1
10.863 Community Connect Grant Program $313,417 - 0
32.002 Universal Service Fund - High Cost $18,905 - 0

Contacts

Name Title Type
RN4HQWTJMFZ8 Carrie Manuel Auditee
4107639429 Cheri Amoss Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - 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 for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. 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. De Minimis Rate Used: N Rate Explanation: The Commission has not elected to use the 10 percent de minimis indirect cost rate allowed under Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Easton Utilities Commission (the Commission), an enterprise fund of the Town of Easton, Maryland under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of 2 CFR 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 the Commission, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Commission.
Title: Note 2 - Summary of Significant Accounting Policies 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 for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. 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. De Minimis Rate Used: N Rate Explanation: The Commission has not elected to use the 10 percent de minimis indirect cost rate allowed under Uniform Guidance. 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 for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. 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.
Title: Note 3 - Indirect Cost Rate 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 for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. 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. De Minimis Rate Used: N Rate Explanation: The Commission has not elected to use the 10 percent de minimis indirect cost rate allowed under Uniform Guidance. The Commission has not elected to use the 10 percent de minimis indirect cost rate allowed under Uniform Guidance.

Finding Details

Finding 2023-001
2023 – 001 Federal Agency: U.S. Department of Agriculture Federal Program Name: Rural eConnectivity Pilot Program Assistance Listing Number: 10.752 Federal Award Identification Number and Year: MD 1701-A64, 2020 Award Period: July 1, 2020 – July 1, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Per 2CFR § 200.303(a), nonfederal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal 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 be in compliance 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). COSO/Internal Control Framework defines control activities as “policies and procedures that help ensure management’s directives are carried out.” Management review controls are defined as, “the activities of a person, different than the preparer, through analyzing and performing oversight of activities performed, and is an integral part of any internal control structure.” Questioned Costs: None Condition/Context: The Commission did not maintain evidence of the approval of inventory expenditures charged to the grant for the first eight months of fiscal year ended June 30, 2023. Cause: The Commission did not have sufficient policies and procedures over internal controls to maintain evidence of review and approval of inventory expenditures are properly documented until March 2023. Effect: Inventory expenditures may be charged to the grant that are not eligible. Repeat Finding: This is a repeat finding. Recommendation: We recommend the Commission continue with established policies and procedures implemented in March 2023 over internal controls to ensure review and approval of inventory expenditures are properly documented. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-002
2023 – 002 Federal Agency: U.S. Department of Agriculture Federal Program Name: Rural eConnectivity Pilot Program Assistance Listing Number: 10.752 Federal Award Identification Number and Year: MD 1701-A64, 2020 Award Period: July 1, 2020 – July 1, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: None Condition/Context: One of five vendors tested did not have proper documentation maintained to support suspension and debarment verification was performed prior to them being paid with federal funds. Per SAM.gov, there was no history of the vendor being suspended or debarred. Cause: The Commission’s policies and procedures did not require documentation be maintained to verify vendors are not suspended or debarred prior to paying with Federal grant funds. Effect: The Commission could make a disbursement to a vendor that is suspended or debarred. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission review its policies and procedures to require documentation be maintained to verify vendors are not suspended or debarred prior to being paid with federal funds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-003
2023 – 003 Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: MD-0044 and 2021 Award Period: March 11, 2021 through December 31, 2024, liquidated by December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: None Condition/Context: Four of five vendors tested did not have proper documentation maintained to support suspension and debarment verification was performed prior to them being paid with federal funds. Per SAM.gov, there was no history of the vendor being suspended or debarred. Cause: The Commission’s policies and procedures did not require documentation be maintained to verify vendors are not suspended or debarred prior to paying with Federal grant funds. Effect: The Commission could make a disbursement to a vendor that is suspended or debarred. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission review its policies and procedures to require documentation be maintained to verify vendors are not suspended or debarred prior to being paid with federal funds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-003
2023 – 003 Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: MD-0044 and 2021 Award Period: March 11, 2021 through December 31, 2024, liquidated by December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: None Condition/Context: Four of five vendors tested did not have proper documentation maintained to support suspension and debarment verification was performed prior to them being paid with federal funds. Per SAM.gov, there was no history of the vendor being suspended or debarred. Cause: The Commission’s policies and procedures did not require documentation be maintained to verify vendors are not suspended or debarred prior to paying with Federal grant funds. Effect: The Commission could make a disbursement to a vendor that is suspended or debarred. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission review its policies and procedures to require documentation be maintained to verify vendors are not suspended or debarred prior to being paid with federal funds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-001
2023 – 001 Federal Agency: U.S. Department of Agriculture Federal Program Name: Rural eConnectivity Pilot Program Assistance Listing Number: 10.752 Federal Award Identification Number and Year: MD 1701-A64, 2020 Award Period: July 1, 2020 – July 1, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Per 2CFR § 200.303(a), nonfederal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal 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 be in compliance 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). COSO/Internal Control Framework defines control activities as “policies and procedures that help ensure management’s directives are carried out.” Management review controls are defined as, “the activities of a person, different than the preparer, through analyzing and performing oversight of activities performed, and is an integral part of any internal control structure.” Questioned Costs: None Condition/Context: The Commission did not maintain evidence of the approval of inventory expenditures charged to the grant for the first eight months of fiscal year ended June 30, 2023. Cause: The Commission did not have sufficient policies and procedures over internal controls to maintain evidence of review and approval of inventory expenditures are properly documented until March 2023. Effect: Inventory expenditures may be charged to the grant that are not eligible. Repeat Finding: This is a repeat finding. Recommendation: We recommend the Commission continue with established policies and procedures implemented in March 2023 over internal controls to ensure review and approval of inventory expenditures are properly documented. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-002
2023 – 002 Federal Agency: U.S. Department of Agriculture Federal Program Name: Rural eConnectivity Pilot Program Assistance Listing Number: 10.752 Federal Award Identification Number and Year: MD 1701-A64, 2020 Award Period: July 1, 2020 – July 1, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: None Condition/Context: One of five vendors tested did not have proper documentation maintained to support suspension and debarment verification was performed prior to them being paid with federal funds. Per SAM.gov, there was no history of the vendor being suspended or debarred. Cause: The Commission’s policies and procedures did not require documentation be maintained to verify vendors are not suspended or debarred prior to paying with Federal grant funds. Effect: The Commission could make a disbursement to a vendor that is suspended or debarred. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission review its policies and procedures to require documentation be maintained to verify vendors are not suspended or debarred prior to being paid with federal funds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-003
2023 – 003 Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: MD-0044 and 2021 Award Period: March 11, 2021 through December 31, 2024, liquidated by December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: None Condition/Context: Four of five vendors tested did not have proper documentation maintained to support suspension and debarment verification was performed prior to them being paid with federal funds. Per SAM.gov, there was no history of the vendor being suspended or debarred. Cause: The Commission’s policies and procedures did not require documentation be maintained to verify vendors are not suspended or debarred prior to paying with Federal grant funds. Effect: The Commission could make a disbursement to a vendor that is suspended or debarred. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission review its policies and procedures to require documentation be maintained to verify vendors are not suspended or debarred prior to being paid with federal funds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-003
2023 – 003 Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: MD-0044 and 2021 Award Period: March 11, 2021 through December 31, 2024, liquidated by December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: None Condition/Context: Four of five vendors tested did not have proper documentation maintained to support suspension and debarment verification was performed prior to them being paid with federal funds. Per SAM.gov, there was no history of the vendor being suspended or debarred. Cause: The Commission’s policies and procedures did not require documentation be maintained to verify vendors are not suspended or debarred prior to paying with Federal grant funds. Effect: The Commission could make a disbursement to a vendor that is suspended or debarred. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission review its policies and procedures to require documentation be maintained to verify vendors are not suspended or debarred prior to being paid with federal funds. Views of Responsible Officials: Management agrees with the finding.