Audit 400731

MATERIAL WEAKNESSES 2022-003 - Allowable Costs/Cost Principles Federal Program Information: ALN - 10.760 - Water and Waste Disposal Systems for Rural Communities Criteria: The following CFR(s) apply to this finding: 2 CRF 200.303 Condition: During audit procedures, it was identified that the Town does not have invoices and board warrants approved before issuing checks. Cause: The Town does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds Identification of Questioned Costs: None identified. Context: The sample selection consisted of 5 out of 9 transactions. Of the 5 samples, 5 did not have consistent documented approval of invoices and board warrants to ensure that only allowable costs were being charged to the program and 2 out of 5 invoices were paid over 30 days late. Repeat Finding: This is a repeat finding of 2021-003 Recommendation: It is recommended that the Town develop and implement policies and procedures for documented approval process to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.

SIGNIFICANT DEFICIENCY 2022-004 - Procurement, Suspension & Debarment Federal Program Information: ALN - 10.760 - Water and Waste Disposal Systems for Rural Communities Criteria: The following CFR(s) apply to this finding: 2 CFR 200.317-200.326. Condition: During audit procedures, it was identified that the Town did not have a procurement policy in place. Cause: The Town needs to adopt a procurement policy to comply with Uniform Guidance. Effect: Procurements might not conform to applicable Federal laws. Identification of Questioned Costs: None identified. Context: The entire population. Repeat Finding: This is a repeat finding of 2021-004. Recommendation: It is recommended that the Town adopt a procurement policy that follows the Uniform Guidance and that the Town implement internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.

MATERIAL WEAKNESS 2022-006 - Allowable Costs/Cost Principles Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CRF 200.303 Condition: During audit procedures, it was identified that the Town does not have invoices and board warrants approved before issuing checks. Cause: The Town does not have the necessary internal controls over compliance. Lack of supervisory oversight. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: The population consisted of 13 out of 39 transactions. The Town did not have consistent documented approval of invoices and board warrants to ensure that only allowable costs were being charged to the program. 2 out of 13 invoices were paid over 30 days late. Repeat Finding: This is a repeat finding of 2021-005. Recommendation: It is recommended that the Town develop and implement policies and procedures for documented approval process to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.

SIGNIFICANT DEFICIENCY 2022-007 - Cash Management Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.302(b)(6)) & 2 CFR section 200.305(b) (3). Condition: During audit procedures, it was identified that the Town did not have a cash management policy in place. Cause: The Town has experienced turnover in the Treasurer’s position over the past few years, which has delayed the policy implementation. Effect: The Town may not have adequate policy and procedures in place to safeguard its most liquid assets. Identification of Questioned Costs: None identified. Context: The population consisted of 12 out of the 30 pay requisition deposit of reimbursements from the fiscal year were examined. Out of the 12 selections only 4 deposits had backup documentation and those 4 were not properly recorded. The other 8 were lacking proof that deposits were recorded properly. Repeat Finding: This is a repeat finding of 2021-006. Recommendation: It is recommended that the Town adopt a cash management policy that follows the Uniform Guidance and that the Town implement internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.

MATERIAL WEAKNESSES 2022-005 - Allowable Costs/Cost Principles Federal Program Information: ALN - 21.027 - Coronavirus State & Local Fiscal Recovery Funds Criteria: The following CFR(s) apply to this finding: 2 CRF 200.303 Condition: During audit procedures, it was identified that the Town does not have invoices and board warrants approved before issuing checks. Cause: The Town does not have the necessary internal controls over compliance. Lack of supervisory oversight. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds Identification of Questioned Costs: None identified. Context: The population consisted of 2 out of 2 transactions. The Town did not have consistent documented approval of invoices and board warrants to ensure that only allowable costs were being charged to the program. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Town develop and implement policies and procedures for documented approval process to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.