Audit 399623

2025-004 Written Policies Required by the Uniform Grant Guidance Program Title: Water Infrastructure Improvements for the Nation Small and Underserved Communities Emerging Contaminants Grant Program Assistance Listing Number: 66.442 Federal Agency: U.S. Environmental Protection Agency (EPA) Federal Award Number: N/A Federal Award Year: Fiscal year 2025 Pass-Through Entities: Michigan Department of Environment, Great Lakes, and Energy (EGLE) Type of Compliance: Immaterial noncompliance Criteria: The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant awarded to have written policies pertaining to allowability of costs, payments, and compensation charged to federal programs (§200.302(7)). Condition: A formal written policy covering allowable costs, conflict of interest and procurement has not been updated in accordance with the Uniform Guidance. Cause: This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance. Effect: The lack of written policies could result in costs or transactions that would be nonallowable for a federal program. Questioned Costs: None Perspective Information: The finding appears to be an isolated instance. No sampling was necessary to determine this finding. Identification of Repeat Findings: None Recommendations: The Township Board should, as soon as possible, adopt written policies, as required by Uniform Guidance, for allowable costs, conflict of interest, and procurement. Views of Responsible Officials: The Township does not believe that there were any actual nonallowable costs or transactions because of the lack of written policies as required by Uniform Guidance. However, corrective action will be done whereby the written policies will be prepared and adopted for the future.

2025-005 Suspension and Debarment Program Title: Water Infrastructure Improvements for the Nation Small and Underserved Communities Emerging Contaminants Grant Program Assistance Listing Number: 66.442 Federal Agency: U.S. Environmental Protection Agency (EPA) Federal Award Number: N/A Federal Award Year: Fiscal year 2025 Pass-Through Entities: Michigan Department of Environment, Great Lakes, and Energy (EGLE) Type of Compliance: Material weakness in Internal Controls over Compliance and material noncompliance Criteria: Per 2 CRF Section 180.300, recipients must have procedures in place for verifying that an entity with which they plan to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Township had no control procedures in place for ensuring contractors performing work on federal projects were not suspended or debarred. Cause: There were no controls in place to ensure vendors are not suspended, debarred, or otherwise excluded. Effect: The Township risks entering into contracts with excluded parties, which would be considered noncompliance with the Uniform Guidance Questioned Costs: None. Although there was no verification that the contractors were not suspended or debarred prior to the audit, a subsequent check was performed to verify the vendor was not suspended or debarred. Perspective Information: The finding appears to be an isolated instance. No sampling was necessary to determine this finding. Identification of Repeat Findings: None Recommendations: The Township Board should, as soon as possible, update its policies to include controls for verifying contractors are not suspended or debarred. Although this is a requirement only for contracts involving the use of federal funds, the Township may want to update its policies over all procurements, not just those related to federally funded projects. Views of Responsible Officials: The Township’s engineer has searched the state procurement office webpage to check if any vendor for a federal project is on the debarment list, which they are not. In the future, as part of Federal Grant Funding implementation, the Township will ensure that vendors are not debarred or suspended from federal funding awards, whether they check the list themselves or have the engineer do it as part of the bidding process and retain proper documentation.