Audit 367404

Criteria or Specific Requirement: Per 2 CFR § 200.303 (a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The required SF-271 report was not submitted timely and was submitted after being requested for the audit. The required SF-425 report was not accurately completed and not submitted. Questioned Costs: None. Context: The Town did not submit the required grant reporting in a timely manner. Cause: The Town does not have adequate policies in place to ensure accurate and timely financial reporting for federal awards. Effect: The Town was not in compliance with the financial reporting requirements. Repeat Finding: No. Recommendation: The Town should continue its efforts to strengthen internal controls to ensure continuous monitoring and review of project obligations resulting in reports that are submitted in compliance with the grant requirements. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding. The Town’s grants team will continue to work with departments and any outside consultants to ensure reporting is completed timely and accurately.

Criteria or Specific Requirement: Per 2 CFR § 200.303 (a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The required SF-271 report was not submitted timely and was submitted after being requested for the audit. The required SF-425 report was not accurately completed and not submitted. Questioned Costs: None. Context: The Town did not submit the required grant reporting in a timely manner. Cause: The Town does not have adequate policies in place to ensure accurate and timely financial reporting for federal awards. Effect: The Town was not in compliance with the financial reporting requirements. Repeat Finding: No. Recommendation: The Town should continue its efforts to strengthen internal controls to ensure continuous monitoring and review of project obligations resulting in reports that are submitted in compliance with the grant requirements. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding. The Town’s grants team will continue to work with departments and any outside consultants to ensure reporting is completed timely and accurately.

Criteria or Specific Requirement: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal 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. This verification may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://governmentcontractregistration.com/sam-registration-and-renewal/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: The Town does not have adequate internal control procedures in place to monitor compliance with suspension and debarment requirements for contracts. During compliance testing, we noted that two out of four vendors selected for testing had not been checked to verify they were not suspended or debarred prior to the start of the project and both vendors were inactive since at least 2021. Questioned Costs: $100,103. This is the total amounts procured from the two vendors. Context: The Town does have a policy and procedure to check a vendor’s suspension and debarment status either by checking the active record on SAM.gov, collecting a certification from the proposed entity, and/or adding a clause or condition to the covered transaction with that entity. However, the Town was not able to provide verification of the suspension and debarment status through review of SAM.gov, providing a certification from the vendor, or through a clause or condition within the signed contract to verify that the vendor was verified prior to the state of the projects. We did attempt to verify these vendors were not currently suspended or debarred through review of SAM.gov but noted that both vendors were inactive since at least 2021. Cause: The Town experienced turnover in the grants position and could not provide documentation to show it followed the appropriate suspension and debarment requirements. Effect: Payments of program funds to a contractor that has been suspended or debarred would be unallowable and subject to recovery by the grantor. We were unable to verify that that the contractors were not suspended or debarred, or otherwise not excluded from participating in the transaction as the vendors have been inactive for several years. Therefore, we are questioning the related costs. Repeat Finding: Yes, modified and repeated, finding 2023-002. Recommendation: The Town should update all contracts to include a suspension and debarment paragraph to verify status with every renewal or collecting certification from the proposed entity. Additionally, the Town should update procedures to ensure that a vendor’s status is checked in SAM.gov prior to contracting with a vendor. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding. After receiving finding 2023-002 in September 2024 the Finance department made updates to the Purchasing Policy which were approved by Town Council in April 2025. This included a provision in the policy for all requisitions to be routed to the Grants Manager or designee to check the vendor’s status in SAM.Gov prior to issuance of the purchase order.