Audit 396295

Written Policies and Procedures Related to Federal Awards - Condition: The Town does not have written policies and procedures to ensure compliance with federal award requirements. Specifically, written procedures are missing for: Allowability of Costs (2 CFR 200 Subpart E), Procurement Standards (2 CFR 200.318), Financial Management (2 CFR 200.302). Criteria: 2 CFR §200.303(a) requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the award in compliance with federal statutes, regulations, and the terms of the award. Cause of Condition: The organization lacked dedicated administrative staff or training to develop these documents, relying on informal processes.Effect: Without written policies, the Town cannot ensure that costs are consistently treated as allowable, reasonable, and allocable in accordance with federal requirements, potentially leading to questioned costs or disallowance. Recommendation: The Town should develop and formally adopt comprehensive, written, and up-to-date policies and procedures that explicitly address 2 CFR 200 requirements for procurement, allowable costs, and financial reporting. Views of Responsible Officials and Planned Corrective Actions: We will reach out to MTAS to help the Town write and implement a policy for the Federal Award Program.