Audit 388110

2024-001 Document Policies and Procedures over Federal Awards (Significant Deficiency) Cluster/Program: All Federal Programs Type of Finding: Compliance – Other Matters Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) established significant requirements related to Federal awards. The requirements stipulate that federal award recipients must document their policies and procedures over certain aspects of financial program management. Specifically, written policies are required for the following: • Determination of allowable costs • Employee travel • Cash Management • Equipment and inventory • Procurement and Suspension and Debarment • Subrecipient monitoring and management. Condition: The Town has not formalized written policies and procedures related to Federal awards as required under Uniform Guidance. Cause: Weaknesses in the formal documentation of internal controls. Effect: There are no formal policies related to federal grant activity noted above. Questioned Costs: There are no questioned costs as a result of this finding as there are no costs directly associated with this compliance requirement. Identification as Repeat Finding: This is not a repeat finding. Recommendation: The Town should ensure that written policies and procedures are compiled and adopted as soon as practicable to ensure compliance with the Uniform Guidance. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.

2024-002 Verification of Suspension and Debarment (Material Weakness) Federal Agency: Department of Treasury Pass-through Agency: N/A Cluster/Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Passed-through Identification: N/A Compliance Requirement: Suspension and Debarment Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 180.300, recipients of federal funds are required to ensure that contractors, subcontractors, vendors, or persons are not suspended or debarred from participating in federal programs before awarding any contract or procurement that exceeds $25,000. This verification must be conducted through the System for Award Management (SAM) or equivalent records. Additionally, the grant award letter explicitly required compliance with non-procurement suspension and debarment requirements, reinforcing the Town’s obligation to verify the eligibility status of individuals and entities receiving federal funds. Condition: During our review of the Town’s suspension and debarment process, we noted that the Town contracted with two vendors related to a project in which each vendor exceeded $25,000 respectively. Upon review of each vendor, it was noted that none went through the suspension and debarment procedures noted above. Cause: Weaknesses in the formal documentation of internal controls. Effect: Failure to verify the suspension or debarment status of federally funded hires increases the risk of noncompliance with 2 CFR 180.300 and the terms of the grant agreement, potentially resulting in questioned costs, repayment of federal funds, or administrative findings during future audits or grant monitoring reviews. Questioned Costs: None identified. Although verification documentation was not available for two vendors, there is no evidence that the vendors were suspended or debarred; therefore, no questioned costs are being reported. Identification as Repeat Finding: This is not a repeat finding from the prior year. Recommendation: We recommend that the Town establish and formalize a process to verify and document the suspension and debarment status of all vendors, consultants, and contractors paid with federal funds. The process should include: • Performing verification through SAM.gov prior to contractor execution; • Obtaining a sign certification from the vendor; or • Including an appropriate clause within the contract addressing suspension and debarment status. Additionally, the Town should maintain documentation of verification in procurement files to demonstrate compliance during audits and monitoring visits. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.

2024-003 Verification of Suspension and Debarment (Material Weakness) Federal Agency: Department of Treasury Pass-through Agency: New Hampshire Department of Environmental Services Cluster/Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Passed-through Identification: SPL-ARPA-029 Compliance Requirement: Suspension and Debarment Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 180.300, recipients of federal funds are required to ensure that contractors, subcontractors, vendors, or persons are not suspended or debarred from participating in federal programs before awarding any contract or procurement that exceeds $25,000. This verification must be conducted through the System for Award Management (SAM) or equivalent records. Additionally, the grant award letter explicitly required compliance with non-procurement suspension and debarment requirements, reinforcing the Town’s obligation to verify the eligibility status of individuals and entities receiving federal funds. Condition: During our review of the Town’s suspension and debarment process, we noted that the Town contracted with a vendor related to a project in which the vendor contract exceeded $25,000. Upon review of the vendor, it was noted that the Town did not verify suspension and debarment status through the procedures noted above. Cause: Weaknesses in the formal documentation of internal controls. Effect: Failure to verify the suspension or debarment status of federally funded hires increases the risk of noncompliance with 2 CFR 180.300 and the terms of the grant agreement, potentially resulting in questioned costs, repayment of federal funds, or administrative findings during future audits or grant monitoring reviews. Questioned Costs: None identified. Although verification documentation was not available for the vendor, there is no evidence that the vendor was suspended or debarred; therefore, no questioned costs are being reported. Identification as Repeat Finding: This is not a repeat finding from the prior year. Recommendation: We recommend that the Town establish and formalize a process to verify and document the suspension and debarment status of all vendors, consultants, and contractors paid with federal funds. The process should include: • Performing verification through SAM.gov prior to contractor execution; • Obtaining a sign certification from the vendor; or • Including an appropriate clause within the contract addressing suspension and debarment status. Additionally, the Town should maintain documentation of verification in procurement files to demonstrate compliance during audits and monitoring visits. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.