Audit 395857

2025-005—Significant Deficiency and Noncompliance, Completeness and Accuracy of Schedule of Expenditures of Federal and State Awards (Repeat Finding 2024-004. Severity downgraded from material weakness to significant deficiency due to corrective actions implemented) U.S. Department of Agriculture Passed through State of Connecticut Department of Education Assistance Listing Number: 10.185 Program Name: Local Foods for Schools Incentive Program Assistance Listing Number: 10.579 Program Name: Child Nutrition Discretionary Grants Department of Homeland Security Passed through the State of Connecticut Emergency Management and Homeland Security Assistance Listing Number: 97.042 Program Name: Emergency Management Performance Grant U.S. Department of Health and Human Services Passed through the State Department of Public Health Assistance Listing Number: 93.323 Program Name: COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases U.S. Department of Transportation Assistance Listing Number: 20.939 Program Name: Safe Streets and Roads for All Passed through the State Department of Transportation Assistance Listing Number: 20.205 Program Name: Highway Planning and Construction U.S. Department of Treasury Passed through the State of Connecticut Department of Education and the State Office of Early Childhood Assistance Listing Number: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery FundsCriteria: Committee of Sponsoring Organizations (COSO) Framework – control activities: Proper review of the schedule of expenditures of federal awards (SEFA) and schedule of expenditure of state financial assistance (SESFA) includes the accuracy and completeness of the schedules. The SEFA and SESFA balance should be reconciled to the basic financial statements which are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The Uniform Guidance 2 CFR 200.510 (b) requires the auditee (the Town) to prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements. The schedule must include the total federal and awards expended as determined in accordance with 2 CFR 200.502 and the Office of Policy and Management’s Compliance Supplement. Condition: We identified several required adjustments and corrections to the SEFA and SESFA as listed below: • Six federal programs were missing or had an incorrect assistance listing number. • One program improperly included on the SESFA that was moved to the SEFA. • One program improperly included under the incorrect oversight agency. • One program improperly reported as a direct grant. • One state program requiring adjustment to decrease the reported expenditures by $250,481. • Three programs improperly included as exempt programs. • One program had an incorrect state grant ID. Cause: Grant management and reporting is not centralized within the Town and are left to the individual departments. Grant agreements and the underlying information required to prepare the SEFA and SESFA are not maintained centrally. Effect or potential effect: This can result in an inaccurate amount reported in the SEFA, SESFA, or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting. Additionally, an inaccurate SEFA/SESFA can result in incorrect identification of major programs leading to further delays and inefficiencies in the audit. Recommendation: We recommend that Town management, in coordination with the departments, establish policy and procedures to help make certain all federal and state expended funds are captured timely and appropriately in the correct fiscal year in the SEFA and SESFA. Questioned costs: None Context: See condition above. Repeat finding: This is a repeat of finding 2024-001. View of responsible official: We agree with the finding. See corrective action plan.

2025-006—Material Weakness, Suspension and Debarment U.S. Department of Agriculture Passed through the State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program U.S. Department of Treasury Passed through the State of Connecticut Office of Policy and Management Assistance Listing Number: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds U.S. Department of Education Passed through the State of Connecticut Department of Education Special Education Cluster (IDEA) Assistance Listing Number: 84.027 Program Name: Special Education Grants to States Assistance Listing Number: 84.173 Program Name: Special Education Preschool Grants U.S. Department of Transportation Passed through the State Department of Transportation Assistance Listing Number: 20.205 Program Name: Highway Planning and Construction Criteria: 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires compliance with provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal 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. Condition: Procurement activities related to federal awards were performed by multiple departments and were not handled through a centralized procurement function. Management was unable to provide documentation demonstrating that vendors subject to suspension and debarment requirements were consistently reviewed against SAM.gov or that vendor certifications were obtained during the audit period. Cause: Procurement responsibilities were decentralized across departments, and management had not assigned responsibility, or implemented oversight procedures to ensure suspension and debarment requirements were addressed consistently for all federally funded procurements. Effect: Documentation of the requirement for suspension and debarment was not maintained. Contracts could be made with entities on the suspended and debarred list. Questioned costs: None. 2025-006—Material Weakness, Suspension and Debarment (Continued) Context: See condition above. There was no documentation for 14 selections tested. Identification as a repeat finding if applicable: 2024-005 Recommendation: We recommend the Town implement specific controls to ensure procurement files include suspension and debarment verification, where required. View of responsible officials: We agree with the finding. See corrective action plan.

2025-007—Material Weakness and Material Noncompliance, Equipment and Real Property Management U.S. Department of Education Passed through the State of Connecticut Department of Education Education Stabilization Fund Assistance Listing Number: 84.425U Program Name: COVID-19 American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) Assistance Listing Number: 84.425W Program Name: COVID-19 American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth Criteria: Non-federal entities other than states must follow 2 CFR sections 200.313 (c) through (e) which require that property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds the title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)) and a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition: The Town could not provide property records including all required information as indicated in 2 CFR section 200.313(d)(1). The Town did not perform a physical inventory of the property. Cause: The Town does not have processes and procedures in place related to equipment management, tracking and required physical inventories. Effect: The Town is not in compliance with federal grant requirements over the tracking and physical inventory of equipment. Improper equipment procedures could result in actions taken by oversight agencies which could impact future funding. Questioned costs: None. Context: See condition above. Identification as a repeat finding if applicable: 2024-007 Recommendation: We recommend the Town develop processes and procedures to tag and track equipment purchased with federal funding, and maintain support that physical inventories were performed as required. View of responsible officials: We agree with the finding. See corrective action plan.

2025-008 – Material Weakness and Noncompliance, Reporting U.S. Department of Treasury Passed through the State of Connecticut Office of Policy and Management Assistance Listing Number: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per terms and conditions of the award, quarterly project and expenditure reports (1505-0271). For purposes of reporting in the SLFRF portal, an expenditure is the amount that has been incurred as a liability of the entity (the service has been rendered or the good has been delivered to the entity). Condition: Three of four quarterly SLFRF project and expenditure reports tested included encumbrances in amounts reported as expenditures. Encumbrances represent committed but not yet incurred costs and do not meet the SLFRF definition of an expenditure. The fourth‑quarter report tested did not include encumbrances and reflected correction of this issue. Cause: The condition occurred because the application of SLFRF expenditure definitions was interpreted differently during preparation of the quarterly reports. At the time, the Town did not have documented procedures to guide reporting or a formal review process to confirm alignment with reporting requirements. Management subsequently clarified reporting expectations and corrected the issue in the fourth quarter. Effect: As a result, three quarterly SLFRF reports submitted to the U.S. Department of the Treasury were inaccurate and did not fully comply with federal reporting requirements. Questioned costs: None. Context: Of the four quarterly SLFRF reports tested, three included encumbrances in amounts reported as expenditures. The fourth‑quarter report tested reflected management’s corrective action and excluded encumbrances. Identification as a repeat finding if applicable: 2024-008 Recommendation: We recommend that the Town continue to apply the corrected reporting methodology and formalize procedures requiring reconciliation of reported expenditures to underlying general ledger detail to ensure that only incurred costs are reported in the SLFRF portal. View of responsible officials: We agree with the finding. See corrective action plan.