Audit 409253

2022-007 Improve Internal Controls and Compliance with Reporting Federal Program Information Federal Agency: U.S. Department of Treasury Award Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number: 21.027 Award Year: 2021 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Uniform Guidance and U.S. Department of the Treasury ARPA program requirements mandate recipients to submit accurate and complete Project and Expenditure (P&E) Reports reflecting the actual expenditures incurred during the reporting period. Effective internal controls should be in place to ensure reported amounts are reconciled to the general ledger and subjected to an appropriate level of review prior to submission. Condition and Context For the year ended June 30, 2022, the Town reported $0 expended on its annual P&E report submitted to the federal agency. However, review of the general ledger identified $69,445 in ARPA expenditures incurred during the reporting period that should have been reported. Cause The Town did not perform the report preparation and review at a detailed enough level to ensure that all ARPA expenditures were accurately captured and reported in the P&E report. Effect or Potential Effect Reporting $0 in expenditures when actual expenditures occurred results in inaccurate and incomplete reporting to the federal awarding agency, limiting transparency and oversight of federal funds. Questioned Costs No questioned costs are reported as the expenditures were ultimately allowable under the program and the finding is administrative in nature. Identification as a Repeat Finding No single audit required in prior year. Recommendation The Town should strengthen its internal controls over reporting by ensuring a thorough reconciliation of expenditures between the general ledger and the P&E report and implementing more detailed review procedures prior to report submission. Views of Responsible Officials Management’s views and corrective action plan is included at the end of this report.