Assistance Listing Number, Federal Agency, and Program Name - ALN 66.202, U.S. Environmental Protection Agency - Congressionally Mandated Projects Federal Award Identification Number and Year - CG-00E03697-0, 2024 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.319(d), the recipient is required to maintain a written procurement policy that adheres to procurement standards and requirements specified in 2 CFR 200.317 through 2 CFR 200.327. Per 2 CFR 200.305, the recipient is required to maintain a written cash management policy that addresses the requirements of the aforementioned code section. Condition - The Village did not have written policies for cash management or procurement that adhered to the requirements of the Uniform Guidance. Questioned Costs - None If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - While the Village has written policies in place to address procurement and cash management, the policies do not address the requirements of 2 CFR 200.317 through 2 CFR 200.327 and of 2 CFR 200.305, respectively. Cause and Effect - The Village was not in compliance with grant requirements related to procurement and cash management, nor did it have proper controls in place to ensure these policies had the required elements. The absence of these requirements in the Village's policies increases the potential for further noncompliance because the Village's procedures may not adequately address relevant compliance requirements. Recommendation - We recommend that the Village create and put in place a procurement policy that addresses the requirements of 2 CFR 200.317 through 2 CFR 200.327 and a cash management policy that addresses the requirements of 2 CFR 200.305. Views of Responsible Officials and Planned Corrective Actions - The Village is currently reviewing existing policies to determine the best course of action and updating them for compliance. Some updates may require voter approval, as certain provisions are in the village charter.
Assistance Listing Number, Federal Agency, and Program Name - ALN 66.202, U.S. Environmental Protection Agency - Congressionally Mandated Projects Federal Award Identification Number and Year - CG-00E03697-0, 2024 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.510(b), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 2 CFR 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedule easier to use. Condition - Controls were not in place to ensure that the schedule of expenditures of federal awards (SEFA) was complete and accurate. Questioned Costs - None If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - In fiscal year 2025, the Village expended approximately $935,000 of federal funding from various federal agencies. The Village accumulates the financial data and other required information to complete the SEFA. Expenditures under grant ALN 66.202, Congressionally Mandated Projects, were originally overstated by $40,088 due to duplication of costs. No controls were in place to identify incompleteness or inaccuracy of the SEFA. Cause and Effect - No review or other control was in place to ensure the SEFA was complete and accurate. As a result, ALN 66.202, Congressionally Mandated Projects, expenditures were overstated by $40,088. This error has been corrected on the SEFA as of June 30, 2025. Recommendation - The Village should implement controls to ensure the SEFA is reviewed for completeness and accuracy. Views of Responsible Officials and Planned Corrective Actions - The Village has hired an outside contractor to assist with review of audit documents.
Assistance Listing Number, Federal Agency, and Program Name - ALN 66.202, U.S. Environmental Protection Agency - Congressionally Mandated Projects Federal Award Identification Number and Year - CG-00E03697-0, 2024 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303, the recipient 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 - The Village did not have adequate controls in place to exercise its oversight responsibility of adherence to wage rate requirements that were reviewed by a contractor for the program. The Village also did not have controls in place to exercise oversight over the same contractor's review of general and subcontractors for suspension and debarment. Questioned Costs - None If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - The Village entered into an agreement with a contractor to administer the grant. While the Village arranges for the contractor to obtain and review certified payroll registers from general and subcontractors in adherence with wage rate requirements, the Village is fully responsible for compliance with wage rate requirements. Similarly, the Village arranges for the contractor to review general and subcontractors for suspension and debarment prior to entering into contracts with them; however, the Village is fully responsible for compliance with suspension and debarment requirements. Testing revealed that the Village contractor reviewed the certified payroll registers obtained from general and subcontractors and reviewed the contractor for suspension and debarment prior to the Village entering into a contract with them. However, in both cases, no controls related to ensuring compliance with wage rate requirements and suspension and debarment were in place, as the Village was unable to provide evidence of the Village’s review of the contractor’s work. Cause and Effect - The Village did not implement controls to ensure reviews of certified payroll registers performed by the contractor were in compliance with the terms and conditions of the award. Without a review of the contractor’s procedures to assess general and subcontractors' adherence with wage rate requirements, construction work could be performed by workers paid at rates that do not adhere to requirements, resulting in material noncompliance. The Village did not implement controls to ensure reviews for suspension and debarment performed by the contractor were in compliance with the terms and conditions of the award. Without a review of the contractor’s procedures to ensure contractors were not suspended or debarred, activities charged to the grant could be performed by suspended or debarred contractors, resulting in material noncompliance. Recommendation - We recommend that the Village develop oversight procedures to perform a documented review of the work completed by contractors that pertains to compliance requirements and programmatic decisions; in this case, wage rate requirement review and suspension and debarment review. Views of Responsible Officials and Planned Corrective Actions - The Village has implemented updated procedures as recommended by the auditors.