Audit 317055

2023-001 Document Policies and Procedures Over Federal Awards Federal Program(s) Information Cluster/Program: All federal programs Type of Finding Compliance – Other Matters Criteria or Specific Requirement OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) established significant requirements related to federal awards. The requirements stipulate that federal award recipients must document their policies and procedures over certain aspects of financial program management. Specifically, written policies are required for the following compliance requirements: • Cash management • Determination of allowable costs • Program income • Eligibility determination • Equipment and real property management • Period of performance • Procurement • Subrecipient monitoring and management Condition and Context The Town does not have written policies and procedures related to federal awards, as required under the Uniform Guidance. Specifically, there are no formalized written policies for cash management, allowable costs, program income/requesting reimbursement, eligibility determina¬tion, equipment and real property management, period of performance, procurement, or subrecipient monitoring. Cause Weakness in the design of internal controls. Effect or Potential Effect The Town is not in compliance with the Uniform Guidance requirements for written policies and procedures. 2023-001 Document Policies and Procedures Over Federal Awards (Continued) Questioned Costs There are no questioned costs as a result of this finding, as there are no costs directly associated with this compliance requirement and this is a procedural requirement under the Uniform Guidance. Recommendation The Town should develop and implement written procedures that are in compliance with the requirements of the Uniform Guidance. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

2023-002 Improve Oversight Over Reporting of Federal Awards (Significant Deficiency) Federal Agency: Department of the Treasury Cluster/Program: COVID-19 Coronavirus State and Local Fiscal Recovery Fund AL Number(s): 21.027 Award Year: 2023 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement A non-federal entity is required to submit a performance report annually using a form or format authorized by OMB (2 CFR section 200.329) based on expenditures reported in the Town’s general ledger. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal pro¬gram. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of per¬forming their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context In the March 2023 annual performance report, the Town reported expenditures of $239,098 for the MRHS switches project. These expenditures did not occur until fiscal year 2024 and should not have been reported.   2023-002 Improve Oversight Over Reporting of Federal Awards (Significant Deficiency) (Continued) Cause The Town has not established adequate procedures to ensure expenditures reported on the annual report agree with the Town’s general ledger. Effect or Potential Effect The Town is not in compliance with the Uniform Guidance requirements for reporting. Questioned Costs There are no questioned costs as a result of this finding, as these costs were allowable and did occur, but they were reported in the incorrect reporting period. Recommendation The Town should implement controls to ensure that reports are reconciled to the general ledger prior to submission. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

2023-001 Document Policies and Procedures Over Federal Awards Federal Program(s) Information Cluster/Program: All federal programs Type of Finding Compliance – Other Matters Criteria or Specific Requirement OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) established significant requirements related to federal awards. The requirements stipulate that federal award recipients must document their policies and procedures over certain aspects of financial program management. Specifically, written policies are required for the following compliance requirements: • Cash management • Determination of allowable costs • Program income • Eligibility determination • Equipment and real property management • Period of performance • Procurement • Subrecipient monitoring and management Condition and Context The Town does not have written policies and procedures related to federal awards, as required under the Uniform Guidance. Specifically, there are no formalized written policies for cash management, allowable costs, program income/requesting reimbursement, eligibility determina¬tion, equipment and real property management, period of performance, procurement, or subrecipient monitoring. Cause Weakness in the design of internal controls. Effect or Potential Effect The Town is not in compliance with the Uniform Guidance requirements for written policies and procedures. 2023-001 Document Policies and Procedures Over Federal Awards (Continued) Questioned Costs There are no questioned costs as a result of this finding, as there are no costs directly associated with this compliance requirement and this is a procedural requirement under the Uniform Guidance. Recommendation The Town should develop and implement written procedures that are in compliance with the requirements of the Uniform Guidance. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

2023-002 Improve Oversight Over Reporting of Federal Awards (Significant Deficiency) Federal Agency: Department of the Treasury Cluster/Program: COVID-19 Coronavirus State and Local Fiscal Recovery Fund AL Number(s): 21.027 Award Year: 2023 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement A non-federal entity is required to submit a performance report annually using a form or format authorized by OMB (2 CFR section 200.329) based on expenditures reported in the Town’s general ledger. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal pro¬gram. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of per¬forming their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context In the March 2023 annual performance report, the Town reported expenditures of $239,098 for the MRHS switches project. These expenditures did not occur until fiscal year 2024 and should not have been reported.   2023-002 Improve Oversight Over Reporting of Federal Awards (Significant Deficiency) (Continued) Cause The Town has not established adequate procedures to ensure expenditures reported on the annual report agree with the Town’s general ledger. Effect or Potential Effect The Town is not in compliance with the Uniform Guidance requirements for reporting. Questioned Costs There are no questioned costs as a result of this finding, as these costs were allowable and did occur, but they were reported in the incorrect reporting period. Recommendation The Town should implement controls to ensure that reports are reconciled to the general ledger prior to submission. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.