FAC Explorer

Audit 350782

FY End
2024-06-30
Total Expended
$9.19M
Findings
12
Programs
4
Organization: Town of Easton (the Easton Utilities Commission) (MD)
Year: 2024 Accepted: 2025-03-31
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
541979 2024-001 Significant Deficiency - A
541980 2024-002 Significant Deficiency Yes I
541981 2024-003 Material Weakness - I
541982 2024-001 Significant Deficiency - A
541983 2024-002 Significant Deficiency Yes I
541984 2024-003 Material Weakness - I
1118421 2024-001 Significant Deficiency - A
1118422 2024-002 Significant Deficiency Yes I
1118423 2024-003 Material Weakness - I
1118424 2024-001 Significant Deficiency - A
1118425 2024-002 Significant Deficiency Yes I
1118426 2024-003 Material Weakness - I

Programs

ALN Program Spent Major Findings
10.752 Rural Econnectivity Pilot Program $4.89M - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $4.05M Yes 3
10.863 Community Connect Grant Program $107,108 - 0
32.002 Universal Service Fund - High Cost $18,905 - 0

Contacts

Name Title Type
RN4HQWTJMFZ8 Carrie Manuel Auditee
4107639429 Bill Early Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presenation 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, 2024. 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 2024-001
Federal Agency: U.S. Department of the 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: Per 2 CFR 200.305(b)8, a payment must not be made to a recipient or subrecipient for amounts that the recipient or subrecipient withholds from contractors to assure satisfactory completion of work. Payment must be made when the recipient or subrecipient disburses the withheld funds to the contractors or to escrow accounts established to ensure satisfactory completion of work. Questioned Costs: None Condition/Context: Four of sixty general disbursements tested were related to retainage payable. These expenditures were not paid during the fiscal year and therefore should not be reported on the SEFA. Cause: The Commission did not have proper policies and procedures in place to ensure the SEFA is prepared in accordance with Uniform Grant Guidance. Effect: The Commission could overstate federal expenditures on the SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission establish policies and procedures over internal controls to ensure review and approval of SEFA preparation. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-002
Federal Agency: U.S. Department of the 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 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: Three 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 a repeat finding. Recommendation: We recommend the Commission continue with the policies and procedures now established and 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 2024-003
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: Material Weakness in Internal Control Over Compliance, Material Non-Compliance Criteria or Specific Requirement: Per §200.319 and §200.320, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition. Per §200.320, there are specific circumstances in which noncompetitive procurement can be used. Per §200.320, formal procurement methods must be used on procurements exceeding $250,000. Questioned Costs: Unknown Condition/Context: Two of five vendors tested did not have the proper documentation maintained to support that the non-competitive procurement method used was appropriate under the circumstances. Three of five vendors tested did not follow the appropriate procurement method given the dollar value of expenditures paid to the vendor. Cause: At the time of grant inception, the non-compliance was primarily due to a lack of awareness and training among staff regarding the procurement policy requirements. Effect: The failure to follow proper procurement procedures increases the risk of favoritism, fraud, and inefficient use of resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission continue to follow the procurement policy and procedures now established and provide comprehensive training to all relevant staff on procurement policies and procedures. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
Federal Agency: U.S. Department of the 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: Per 2 CFR 200.305(b)8, a payment must not be made to a recipient or subrecipient for amounts that the recipient or subrecipient withholds from contractors to assure satisfactory completion of work. Payment must be made when the recipient or subrecipient disburses the withheld funds to the contractors or to escrow accounts established to ensure satisfactory completion of work. Questioned Costs: None Condition/Context: Four of sixty general disbursements tested were related to retainage payable. These expenditures were not paid during the fiscal year and therefore should not be reported on the SEFA. Cause: The Commission did not have proper policies and procedures in place to ensure the SEFA is prepared in accordance with Uniform Grant Guidance. Effect: The Commission could overstate federal expenditures on the SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission establish policies and procedures over internal controls to ensure review and approval of SEFA preparation. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-002
Federal Agency: U.S. Department of the 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 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: Three 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 a repeat finding. Recommendation: We recommend the Commission continue with the policies and procedures now established and 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 2024-003
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: Material Weakness in Internal Control Over Compliance, Material Non-Compliance Criteria or Specific Requirement: Per §200.319 and §200.320, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition. Per §200.320, there are specific circumstances in which noncompetitive procurement can be used. Per §200.320, formal procurement methods must be used on procurements exceeding $250,000. Questioned Costs: Unknown Condition/Context: Two of five vendors tested did not have the proper documentation maintained to support that the non-competitive procurement method used was appropriate under the circumstances. Three of five vendors tested did not follow the appropriate procurement method given the dollar value of expenditures paid to the vendor. Cause: At the time of grant inception, the non-compliance was primarily due to a lack of awareness and training among staff regarding the procurement policy requirements. Effect: The failure to follow proper procurement procedures increases the risk of favoritism, fraud, and inefficient use of resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission continue to follow the procurement policy and procedures now established and provide comprehensive training to all relevant staff on procurement policies and procedures. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
Federal Agency: U.S. Department of the 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: Per 2 CFR 200.305(b)8, a payment must not be made to a recipient or subrecipient for amounts that the recipient or subrecipient withholds from contractors to assure satisfactory completion of work. Payment must be made when the recipient or subrecipient disburses the withheld funds to the contractors or to escrow accounts established to ensure satisfactory completion of work. Questioned Costs: None Condition/Context: Four of sixty general disbursements tested were related to retainage payable. These expenditures were not paid during the fiscal year and therefore should not be reported on the SEFA. Cause: The Commission did not have proper policies and procedures in place to ensure the SEFA is prepared in accordance with Uniform Grant Guidance. Effect: The Commission could overstate federal expenditures on the SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission establish policies and procedures over internal controls to ensure review and approval of SEFA preparation. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-002
Federal Agency: U.S. Department of the 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 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: Three 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 a repeat finding. Recommendation: We recommend the Commission continue with the policies and procedures now established and 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 2024-003
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: Material Weakness in Internal Control Over Compliance, Material Non-Compliance Criteria or Specific Requirement: Per §200.319 and §200.320, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition. Per §200.320, there are specific circumstances in which noncompetitive procurement can be used. Per §200.320, formal procurement methods must be used on procurements exceeding $250,000. Questioned Costs: Unknown Condition/Context: Two of five vendors tested did not have the proper documentation maintained to support that the non-competitive procurement method used was appropriate under the circumstances. Three of five vendors tested did not follow the appropriate procurement method given the dollar value of expenditures paid to the vendor. Cause: At the time of grant inception, the non-compliance was primarily due to a lack of awareness and training among staff regarding the procurement policy requirements. Effect: The failure to follow proper procurement procedures increases the risk of favoritism, fraud, and inefficient use of resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission continue to follow the procurement policy and procedures now established and provide comprehensive training to all relevant staff on procurement policies and procedures. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
Federal Agency: U.S. Department of the 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: Per 2 CFR 200.305(b)8, a payment must not be made to a recipient or subrecipient for amounts that the recipient or subrecipient withholds from contractors to assure satisfactory completion of work. Payment must be made when the recipient or subrecipient disburses the withheld funds to the contractors or to escrow accounts established to ensure satisfactory completion of work. Questioned Costs: None Condition/Context: Four of sixty general disbursements tested were related to retainage payable. These expenditures were not paid during the fiscal year and therefore should not be reported on the SEFA. Cause: The Commission did not have proper policies and procedures in place to ensure the SEFA is prepared in accordance with Uniform Grant Guidance. Effect: The Commission could overstate federal expenditures on the SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission establish policies and procedures over internal controls to ensure review and approval of SEFA preparation. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-002
Federal Agency: U.S. Department of the 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 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: Three 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 a repeat finding. Recommendation: We recommend the Commission continue with the policies and procedures now established and 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 2024-003
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: Material Weakness in Internal Control Over Compliance, Material Non-Compliance Criteria or Specific Requirement: Per §200.319 and §200.320, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition. Per §200.320, there are specific circumstances in which noncompetitive procurement can be used. Per §200.320, formal procurement methods must be used on procurements exceeding $250,000. Questioned Costs: Unknown Condition/Context: Two of five vendors tested did not have the proper documentation maintained to support that the non-competitive procurement method used was appropriate under the circumstances. Three of five vendors tested did not follow the appropriate procurement method given the dollar value of expenditures paid to the vendor. Cause: At the time of grant inception, the non-compliance was primarily due to a lack of awareness and training among staff regarding the procurement policy requirements. Effect: The failure to follow proper procurement procedures increases the risk of favoritism, fraud, and inefficient use of resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission continue to follow the procurement policy and procedures now established and provide comprehensive training to all relevant staff on procurement policies and procedures. Views of Responsible Officials: Management agrees with the finding.