Audit 410210

2025-002 Improve Controls Over Preparation and Review of the Schedule of Expenditures of Federal Awards (SEFA) Federal Program Information All federal programs Type of Finding Compliance – Other Matters Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Internal control standards under the Uniform Guidance require that management establish controls to ensure that financial information is complete, accurate, and reviewed prior to issuance. This includes confirming assistance listing numbers and completeness and accuracy of expenditures amounts through a documented review of the SEFA. Condition and Context The Town did not have a documented control in place over the preparation and review of the SEFA prior to providing it to the auditors. Cause The Town has not established a formal internal control over the independent review of the SEFA by knowledgeable personnel including verification of completeness and accuracy of federal program information as a result of limited staffing and reliance on the audit process to identify errors. Effect or Potential Effect The absence of an effective control over SEFA preparation and review could increase the risk that the SEFA is materially misstated or result in inaccurate reporting to federal and pass-through agencies. Questioned Costs No questioned costs are reported as this requirement is administrative in nature. Identification as a Repeat Finding This is not a repeat of a prior finding. Recommendation The Town should implement a formal control over SEFA preparation and review. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

2025-003 Document Policies and Procedures Over Federal Awards Federal Program Information All federal programs Type of Finding Compliance – Other Matters Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requirements stipulate that federal award recipients must document their policies and procedures over certain aspects of financial and program management. Specifically, written policies are required for the following: • Determination of allowable costs • Employee travel • Cash management • Procurement • Conflicts of interest • Subrecipient monitoring and management Condition and Context The Town’s written policies and procedures related to federal awards required under Uniform Guidance do not include various required policies. Cause The Town has not developed written formal documentation of internal controls to encompass all required areas per the Uniform Guidance. Effect or Potential Effect The Town did not comply with the requirements of the Uniform Guidance over documented policies and procedures. Questioned Costs No questioned costs are reported as this requirement is procedural in nature. Identification as a Repeat Finding This is a repeat of finding 2023-002. Recommendation The Town should develop and implement policies and procedures related to federal awards in order to comply with the Uniform Guidance. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

2025-004 Improve Compliance and Controls Over Reporting Federal Program Information Federal Agency: U.S. Department of the Treasury Award Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Entity: Not applicable Award Year: 2021 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.303(a) requires the auditee to establish and maintain effective internal control over Federal awards to ensure compliance with Federal statutes, regulations, and terms and conditions. For SLFRF funds, the Treasury Compliance and Reporting Guidance requires recipients to submit accurate and complete Project and Expenditure Reports (P&E Reports), including both current period and cumulative expenditures. Condition and Context During our testing of SLFRF expenditures reported in the 2025 Project and Expenditure (P&E) Report, we noted that the Town’s underlying accounting records and supporting detail did not agree to the amounts reported to Treasury. Specifically, current period and cumulative expenditures per the general ledger and supporting schedules differed from the amounts reported in the P&E Report. No formal reconciliation was performed or documented between the Town’s accounting records and the submitted federal report prior to submission. Cause The discrepancy was caused by the Town’s lack of a formal control requiring reconciliation and detailed review of SLFRF report data to underlying accounting records before submission. In addition, reporting was prepared using manually compiled schedules outside of the general ledger, increasing the risk of error. Effect or Potential Effect Reporting discrepancies noted above increase the risk of noncompliance with federal reporting requirements. Questioned Costs No questioned costs are reported as this requirement is administrative in nature and costs were ultimately deemed allowable. Identification as a Repeat Finding This is not a repeat of a prior finding. Recommendation The Town should implement a formal reconciliation process requiring agreement of current period and cumulative expenditures to the general ledger prior to submission of reports and retain such documentation. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.