Audit 400096

Finding 2024-005: Inability to Perform Compliance Audit Procedures (Coronavirus State and Local Fiscal Recovery Funds ALN# 21.027) Criteria: The Uniform Guidance requires nonfederal entities to maintain adequate documentation and internal controls to support compliance with federal program requirements and to permit the auditor to perform required audit procedures. Condition: The Town did not provide sufficient documentation to support expenditures reported on the Schedule of Expenditures of Federal Awards. Specifically, the Town was unable to provide adequate supporting documentation for federal expenditures related to vendor payments, and reporting requirements. As a result, the auditor was unable to perform required compliance audit procedures for major federal programs. Cause: The Town lacked adequate internal controls over the retention and organization of documentation related to federal awards and did not have personnel with sufficient training in federal grant Compliance requirements. Effect: Because sufficient appropriate audit evidence was not available, the auditor was unable to determine whether the Town complied with applicable federal statutes, regulations, and the terms and conditions of its federal awards. Accordingly, the auditor disclaimed an opinion on compliance for major programs. Questioned Costs: Due to the lack of supporting documentation, the auditor was unable to determine whether questioned costs exist. Auditors’ Recommendation: The Town should implement policies and procedures to ensure that all federal expenditures are properly documented, retained, and readily accessible for audit. The Town should also provide training to staff responsible for administering federal programs to ensure compliance with Uniform Guidance requirements. Management’s Response: The Town agrees with the finding and plans to improve documentation practices and provide additional training to staff responsible for federal grants.