Audit 380902

Federal Agency: Department of the Treasury Federal Program Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: March 3, 2021 through December 31, 2026 Award Period: 2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Town is required to submit annual Project and Expenditure Reports as of March 31st, per Coronavirus State and Local Fiscal Recovery Fund Reporting Compliance Requirements. The Town internal control processes over reporting require review and approval of project expenditure reports for accuracy prior to submission to the granting agency. Condition: Testing of the March 31, 2025 report revealed cumulative expenditures did not match underlying accounting records, indicating no effective controls to ensure accuracy. Questioned Costs: Total cumulative expenditures were underreported by $271,749. Context: The Town submitted Project and Expenditure Reports that did not tie to underlying accounting records. Cause: Expenditures were underreported due to incorrect report parameters used to generate supporting documentation used in the report preparation and inadequate review controls. Effect: Inaccurate reporting could result in misrepresentation of progress in program/project status and eligible expenditures to date. Without proper controls in place over reporting, inaccurate project information could be reported and not detected by the Town. Repeat Finding: No Recommendation: We recommend the Town strengthen processes and internal controls over grant expenditure reporting to ensure accurate data and proper review before submission. Views of Responsible Officials: Management agrees with this finding.