Audit 343111

Finding Reference: 2024-002 – 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. This is a repeat finding finding from the prior year. 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 Recommendation: The Authority should establish documented procedures related to federal procurement. Views of Responsible Officials: The federal project that has been in the works for multiple years, and, as a result, 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 Reference: 2024-003 – 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. This is a repeat finding from the prior year. 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: The Authority is working towards submitting appropriate reports.

Finding Reference: 2024-002 – 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. This is a repeat finding finding from the prior year. 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 Recommendation: The Authority should establish documented procedures related to federal procurement. Views of Responsible Officials: The federal project that has been in the works for multiple years, and, as a result, 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 Reference: 2024-003 – 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. This is a repeat finding from the prior year. 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: The Authority is working towards submitting appropriate reports.