Audit 402590

2025-003 Improve Compliance and Controls Over Reporting Federal Program Information Federal Agency: U.S. Department of Commerce Award Name: Habitat Conservation Assistance Listing Number: 11.463 Award Year: 2025 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Uniform Guidance and the terms of the grant agreement require recipients to submit accurate financial and performance reports on a semi-annual basis, within 30 days after the end of the defined reporting period. Effective internal controls should ensure timely submission and proper segregation of duties in the preparation and review of required reports. Condition and Context Both the required financial and performance reports submitted during the year were not submitted by the due date. Additionally, we noted that the same individual was responsible for both preparing and reviewing these reports, resulting in a lack of segregation of duties and effective internal controls. Cause The Town did not implement adequate controls to monitor timely submission of required reports and did not ensure segregation of duties in the report preparation and review process. Effect or Potential Effect Untimely submission and lack of independent review of required reports increase the risk of incomplete or inaccurate reporting, reduce accountability, and constitute noncompliance with federal award requirements and the terms of the grant agreement. Questioned Costs No questioned costs are reported. Identification as a Repeat Finding This was not a finding in the prior year. Recommendation Management of the Town should strengthen internal controls to ensure all required reports are submitted by the due dates and implement procedures to ensure that the person responsible for the preparation of the required reports is not the same person responsible for the review and timely submissions. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Summary Schedule of Prior Year Findings.

2025-002 Document Policies and Procedures Over Federal Awards Federal Programs Information All federal programs Type of Finding Compliance – Other Matter Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Uniform Guidance (2 CFR Part 200) requires non-federal entities administering federal awards to establish and maintain written policies and procedures to address all requirements specified in the regulations, including but not limited to internal controls, determination of allowable costs, procurement, subrecipient monitoring, financial management, and reporting. Condition and Context During our audit, we noted that the Town did not have formal policies and procedures in place covering all requirements of Uniform Guidance as specified in 2 CFR Part 200. Certain elements, such as cash management, property and equipment management, internal control, and other compliance areas, were not addressed in written policies or documented procedures. Cause The Organization has not developed comprehensive written policies and procedures to address all compliance requirements under Uniform Guidance. Effect or Potential Effect The absence of complete written policies and procedures for all elements under Uniform Guidance increases the risk of noncompliance with federal requirements, reduces consistency in federal program administration, and limits transparency and accountability. Questioned Costs No questioned costs are reported. Identification as a Repeat Finding This was not a finding in the prior year. Recommendation Management of the Town should develop and implement comprehensive written policies and procedures that address all major compliance requirements under Uniform Guidance (2 CFR Part 200). Periodic review and updates should be performed to ensure ongoing compliance. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Summary Schedule of Prior Year Findings.