Audit 378913

Reporting Federal Agency: United States Department of Housing and Urban Development Federal Program Name: Community Development Block Grants - Non-Entitlement Assistance Listing Number: 14.228 Federal Award Identification Number and Year: SC2110101A - 2022 Pass-Through Agency: State of Connecticut Department of Housing Pass-Through Number(s): 12060-DOH46930-20730 Award Period: 7/1/2022-6/30/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matter Criteria or Specific Requirement: The Town must adhere to the reporting submission deadlines established in its agreement with the State of Connecticut. The Town is required to submit the CT DOH Form S-730 for each six-month period during the project. Condition: The Town did not submit the required report for the period 7/1/2024-12/31/2024 on a timely basis. Questioned Costs: None noted. Context: The Town is required to submit CT DOH Form S-730 for each 6 month period during the project. Cause: The Town was unaware that the required report was never formally submitted. Effect: If required reports are not submitted on a timely basis, the Town is at risk for noncompliance as it relates to federal program requirements. Repeat Finding: No Recommendation: We recommend that the Town review its reporting processes and related controls to ensure that all grantor required forms are timely filed. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding. The Town will review its reporting processes and related controls to ensure that all grantor required forms are timely filed.

Procurement Federal Agency: United States Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027 / 84.173 Federal Award Identification Number and Year: HO27A230021 - 2023 (84.027) HO27A240021 - 2024 (84.027) H173A240024 - 2024 (84.173) H173A230024 - 2023 (84.173) Pass-Through Agency: Connecticut State Department of Education Pass-Through Number(s): 12060-SDE64370-20977-2024 12060-SDE64370-20983-2024 12060-SDE64370-20977-2025 12060-SDE64370-20983-2025 Award Period: 7/1/2023-6/30/2025 (2024 Grant) 7/1/2024-6/30/2026 (2025 Grant) Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: The Board of Education must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The Board of Education failed to solicit written quotations (in noncompliance with federal UG for procurements over $10,000) related to a contract paid under the grant. Under local policy, sealed bids should have been obtained for a competitive procurement over $25,000. Questioned costs: None noted. Context: The Board of Education is required to solicit competitive quotations for contracts over $10,000 paid with federal grant funds or document a non-competitive procurement justification. Cause: The contract was renewed without conducting any procurement procedures or maintaining documentation supporting a non-competitive procurement justification. Effect: Noncompliance with local procurement policy and federal procurement guidelines. Repeat Finding: No Recommendation: We recommend that the Board of Education review its procurement processes to ensure they comply with local policies and federal guidance. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding. The Board of Education will review its procurement processes to ensure they comply with local policies and federal guidance.

Allowable Costs Federal Agency: United States Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027 / 84.173 Federal Award Identification Number and Year: HO27A230021 - 2023 (84.027) HO27A240021 - 2024 (84.027) H173A240024 - 2024 (84.173) H173A230024 - 2023 (84.173) Pass-Through Agency: Connecticut State Department of Education Pass-Through Number(s): 12060-SDE64370-20977-2024 12060-SDE64370-20983-2024 12060-SDE64370-20977-2025 12060-SDE64370-20983-2025 Award Period: 7/1/2023-6/30/2025 (2024 Grant) 7/1/2024-6/30/2026 (2025 Grant) Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matter Criteria or Specific Requirement: Under 2 CFR 200.303, the Board of Education must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Out of a statistically valid sample of 60 payroll disbursements to individual employees, the Board of Education did not update the employee’s pay rate to reflect the amount approved in the new salary letter / union agreement for 2 payroll disbursements (both pertaining to the same employee). Questioned Costs: None noted. Context: The Town is required to make payroll disbursements in accordance with each employees approved salary letter / union agreement. Cause: 1 employee's pay rate was not updated to reflect the new fiscal year 2025 collective bargaining agreement for their specific union after its implementation in December 2024. Although retroactive pay for hours worked prior to ratification was correctly calculated and paid, the payroll system continued using the prior contract’s rate for all subsequent pay periods through the end of the school year. This occurred due to a failure in the payroll update process following contract implementation. Effect: The employee was underpaid for the remainder of the school year, resulting in non-compliance with the collective bargaining agreement. The absence of adequate internal controls increases the risk of payroll errors and potential fraud. Repeat Finding: No Recommendation: We recommend that the Board of Education implement additional controls over payroll updates and establish a documented process for updating pay rates immediately after contract ratification. Additionally, review and verification of rate changes, along with periodic reconciliation against approved salary schedules or union agreements, should be performed to ensure accuracy and compliance. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding. The Board of Education will implement additional controls over payroll updates and establish a documented process for updating pay rates immediately after contract ratification. Additionally, review and verification of rate changes, along with periodic reconciliation against approved salary schedules or union agreements, should be performed to ensure accuracy and compliance.