Audit 345165

2022-002 (2021-005, 2020-006, 2019-004, 2018-005, 2017-006) Grant Compliance Criteria: For municipalities receiving funding from the Texas Water Development Board (TWDB), annual audited financial reports are required to be submitted within 180 days after year end. Condition: The Town did not submit its 2022 annual audit financial report within the allocated time frame. Cause: Due to turnover in personnel at the Town, the audit was not completed before the deadline. Effect: The Town is not in compliance with the grant agreement with TWDB. Recommendation: We recommend that the Town plan and coordinate an audit prior to deadline to ensure to ensure compliance with reporting deadlines. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plan.

2022-003 (2021-006, 2020-007) Data Collection Form: Timely Submission - Material Weakness Criteria: The 0MB Circular A-133 and Uniform Guidance require entities who spend $750,000 or more in federal awards to obtain a single audit and submit a data collection form either 30 days after receipt of the auditor's report or nine months after the end of the fiscal year, whichever comes first. Condition: The Town has not submitted the data collection form within the specified deadline of June 30, 2022. Cause: The Town has had significant difficulties in retaining both a Town Clerk and Accountant who have the capacity to prepare and analyze financial reports. This caused the audit to be delayed and therefore a late data collection form submission. Effect: The Town is not in compliance with the 0MB Circular A-133 and Uniform Guidance and therefore, the Town has the possibility of not being able to renew contracts in the future. Recommendation: We recommend that the Town plan and coordinate a single audit prior to deadline to ensure timely submission of the data collection form. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plan.

2022-004 Procurement - Material Weakness Criteria: The Town must follow the procurement standards et out at 2CFR section 200.318 through 200.326. This requires bids be placed for purchases ranging from $10,000-$250,000. The Town currently has policies in place utilizing the state library listing of approved vendors for potential purchases over $50,000. The CFR does allow an entity to increase the lower limit from $10,000 to $50,000 in certain circumstances. One of the conditions is that the entity qualifies as a low risk entity. The Town currently does not qualify as a low risk entity therefore the Town does not qualify for the increase of the lower limit. Sole source vendors are the exception to this rule. Condition: The Town did not obtained 3 bids for over $10,000 purchases. The Town did use the State's liability to identify eligible vendors but failed to get bids. Cause: The Town has had significant difficulties in retaining both a Town Clerk and Accountant who have the capacity to follow procurement policies. This caused purchases to be made without following required procurement procedures. Effect: The Town is not in compliance with the Uniform Guidance and therefore, the Town bas the possibility of not being able to renew contracts in the future. Recommendation: We recommend that the Town follow the procurement policy to comply with federal guidance. Views of Responsible Officias and Planned Corrective Actions: See Corrective Action Plan.

2022-002 (2021-005, 2020-006, 2019-004, 2018-005, 2017-006) Grant Compliance Criteria: For municipalities receiving funding from the Texas Water Development Board (TWDB), annual audited financial reports are required to be submitted within 180 days after year end. Condition: The Town did not submit its 2022 annual audit financial report within the allocated time frame. Cause: Due to turnover in personnel at the Town, the audit was not completed before the deadline. Effect: The Town is not in compliance with the grant agreement with TWDB. Recommendation: We recommend that the Town plan and coordinate an audit prior to deadline to ensure to ensure compliance with reporting deadlines. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plan.

2022-003 (2021-006, 2020-007) Data Collection Form: Timely Submission - Material Weakness Criteria: The 0MB Circular A-133 and Uniform Guidance require entities who spend $750,000 or more in federal awards to obtain a single audit and submit a data collection form either 30 days after receipt of the auditor's report or nine months after the end of the fiscal year, whichever comes first. Condition: The Town has not submitted the data collection form within the specified deadline of June 30, 2022. Cause: The Town has had significant difficulties in retaining both a Town Clerk and Accountant who have the capacity to prepare and analyze financial reports. This caused the audit to be delayed and therefore a late data collection form submission. Effect: The Town is not in compliance with the 0MB Circular A-133 and Uniform Guidance and therefore, the Town has the possibility of not being able to renew contracts in the future. Recommendation: We recommend that the Town plan and coordinate a single audit prior to deadline to ensure timely submission of the data collection form. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plan.

2022-004 Procurement - Material Weakness Criteria: The Town must follow the procurement standards et out at 2CFR section 200.318 through 200.326. This requires bids be placed for purchases ranging from $10,000-$250,000. The Town currently has policies in place utilizing the state library listing of approved vendors for potential purchases over $50,000. The CFR does allow an entity to increase the lower limit from $10,000 to $50,000 in certain circumstances. One of the conditions is that the entity qualifies as a low risk entity. The Town currently does not qualify as a low risk entity therefore the Town does not qualify for the increase of the lower limit. Sole source vendors are the exception to this rule. Condition: The Town did not obtained 3 bids for over $10,000 purchases. The Town did use the State's liability to identify eligible vendors but failed to get bids. Cause: The Town has had significant difficulties in retaining both a Town Clerk and Accountant who have the capacity to follow procurement policies. This caused purchases to be made without following required procurement procedures. Effect: The Town is not in compliance with the Uniform Guidance and therefore, the Town bas the possibility of not being able to renew contracts in the future. Recommendation: We recommend that the Town follow the procurement policy to comply with federal guidance. Views of Responsible Officias and Planned Corrective Actions: See Corrective Action Plan.