Audit 405975

Environmental Protection Agency Direct Program: Congressionally Mandated Projects - 66.202 Award Year: 2023 Criteria or Specific Requirement - Reporting Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) should establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Per the Environmental Protection Agency Congressionally Mandated Project's Programmatic Conditions, non-Federal entities that receive the federal award are required to submit semi-annual performance reports. Condition: During our test work over the Congressionally Mandated Projects grant, we noted the Board of Public Utilities did not timely file one of the required performance reports nor was there a review of the report prior to submission. Cause: The Board of Public Utilities' controls to ensure reports are filed timely and are reviewed prior to filing were not operating effectively. Effect or Potential Effect: Required reports are not being submitted timely. Questioned Costs - None Context: One out of the two semi-annual reports selected for testing was submitted on April 27, 2026, after the Environmental Protection Agency's due date of October 30, 2025. It was also noted through discussions with the Board of Public Utilities, no review of the report was completed prior to submission. The sample was not intended to be, and was not, a statistically valid sample. Identification of Prior Year Finding: 2024-001 Recommendation: We recommend the Board of Public Utilities implement a process that includes tracking the timely submission of reports and documenting who reviewed the report prior to submission. Views of Responsible Official and Planned Corrective Action: Management agrees with finding. See corrective action plan.

Environmental Protection Agency Direct Program: Congressionally Mandated Projects - 66.202 Award Year: 2023 Criteria or Specific Requirement - Davis-Bacon Act Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) should establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Per the Environmental Protection Agency Congressionally Mandated Project's Programmatic Conditions, non-Federal entities that receive the federal award are required to maintain adequate records to demonstrate compliance with compensation requirements. Condition: During our test work over the Congressionally Mandated Projects grant, we noted the Board of Public Utilities did not obtain Statements of Compliance/Certified Payrolls from the applicable vendors in timely manner. Cause: The Board of Public Utilities' controls to ensure that the Statements of Compliance/Certified Payrolls are submitted timely were not operating effectively. Effect or Potential Effect: The Board of Public Utilities was unable to demonstrate compliance with Davis-Bacon wage rate requirements. Questioned Costs - None Context: For all weeks selected for testing, the subcontractor did not submit the required Statements of Compliance within a timely manner. The sample was not intended to be, and was not, a statistically valid sample. Identification of Prior Year Finding: 2024-002 Recommendation: We recommend that the Board of Public Utilities implement a process that includes tracking the timely submission of Statements of Compliance and documenting review of the Statements once received. Views of Responsible Official and Planned Corrective Action: Management agrees with finding. See corrective action plan.

Environmental Protection Agency Direct Program: Congressionally Mandated Projects - 66.202 Award Year: 2023 Criteria or Specific Requirement - Suspension and Debarment In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. In accordance with 2 CFR Section 180.300, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Suspension and debarment checks were not completed for a vendor prior to entering into a contract. Cause: The BPU's controls to ensure suspension and debarment checks on vendors receiving federal funds did not operate effectively. Effect or Potential Effect: Federal funds could be paid to entities that are suspended or debarred. Questioned Costs - None Context: The BPU entered into a contract during the year ended December 31, 2025 that was considered a "covered transaction" and spent approximately $74,000 under this contract. This contract was selected for testing suspension and debarment and the BPU did not check the vendor's suspension and debarment status. Identification of Prior Year Finding: N/A Recommendation: Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors prior to making purchases with federal funds. Views of Responsible Official and Planned Corrective Action: Management agrees with finding. See corrective action plan.