Finding: This is a new finding relating to a significant deficiency in internal control over compliance in relation to the reporting requirements of the above noted major federal program. Criteria: Annual reporting is required for metropolitan cities and counties with a population below 250,000 residents that are allocated less than $10 million in SLFRF funding and non-entitlement units of local governments (NEUs) that are allocated less than $10 million in SLFRF funding. The Town of Bolton falls within these guidelines for annual SLFRF reporting. For these recipients, the initial Project and Expenditure Report covered from March 3, 2021 to March 31, 2022 and was required to be submitted to Treasury by April 30, 2022. The subsequent annual reports cover one calendar year and must be submitted to Treasury by April 30 of each subsequent fiscal year. This annual project and expenditure report should provide information on all SLFRF funded projects. Projects are defined as a grouping of closely related activities that together are intended to achieve a specific goal or are directed toward a common purpose. These activities can include new or existing eligible government services or investments funded in whole or in part by SLFRF funding. For each project, the recipient is required to enter the project name, a project identification number which is created by the recipient, a project expenditure category and subcategory, the status of completion of the project and the obligations and expenditures related to each project. The obligations and expenditures are shown for both the current period and the total cumulative amounts. Condition: The annual report for the period ending March 31, 2025 was reviewed as part of the testing of the reporting requirements of the above noted major federal program. This annual report included information relating to seven individually defined projects. The current and cumulative expenditure and obligation amounts were tested in relation to the provided supporting documentation. The current and cumulative expenditure and obligation amounts for six of the seven projects matched the provided supporting documentation. For the seventh project, the total cumulative expenditures reported were $295,205 which did match the provided supporting documentation. However, the current period expenditures reported were only $264,767 which is $30,438 less than the total accumulated expenditures. This is an annual report covering the incurred expenditures fromApril 1, 2024 through March 31, 2025. The total cumulative expenditures reported of $295,205 were incurred during this period and as such it would seem that both the current period and total cumulative amounts should match. Questioned Costs: There are no questioned costs relating to this significant deficiency in internal control over compliance in relation to this reporting requirements finding. Context: Only one annual report was required to be filed by the Town for the current fiscal year given the population of the Town and given that the Town was allocated less than $10 million in SLFRF funding. Department of the Treasury was seemingly inaccurate and therefore did not comply with the federal reporting requirements of the above noted major federal program. Cause: We were unable to determine the reason that the total cumulative expenditures reported did not match the total current expenditures reported given that the report that was filed during the current fiscal year was for the annual period of April 1, 2024 through March 31, 2025 and given that all of the incurred expenditures under the reported programs were incurred during this period. Recommendation: We recommend that the Town more closely monitor the reporting requirements relating to all state and federal award programs to ensure that the reports that are being completed and submitted both match the applicable supporting documentation and meet the reporting requirements of each applicable program. In addition, we recommend that specific internal control policies and procedures be created, documented and implemented to ensure compliance in relation to all applicable reporting requirements. Views of Responsible Officials: We have discussed this finding with our auditor and we do understand the importance of an adequate system of internal control policies and procedures relating to state and federal award program reporting requirements.
Finding: This is a new finding relating to a significant deficiency in internal control over compliance in relation to the period of performance requirements of the above noted major federal program. Criteria: The 2025 UniformGuidance compliance supplement issued by the Office of Management and Budget inNovember of 2025 outlines the period of performance compliance guidelines and requirements of the above notedmajor federal program. It states, “The SLFRF Award Terms and Conditions provide that the period of performance for each award begins on the date the Award Terms and Conditions were entered into and ends on December 31, 2026. For eligible use categories described in the 2022 Final Rule, recipients may only use funds to cover costs incurred during the period beginning on March 3, 2021 and ending on December 31, 2024, pursuant to the 2022 Final Rule at 31 CFR section 35.5(a). A cost is considered incurred if a recipient has incurred an obligation with respect to such cost. Recipients must obligate program funds by December 31, 2024 and liquidate all obligations under the award no later thanDecember 31, 2026, which is the end of the period of performance. No newobligations or costs may be incurred during the period beginning January 1, 2025 and ending on December 31, 2026. During this two-year period from January 1, 2025, through December 31, 2026, recipients are only permitted to expend funds to satisfy obligations incurred by December 31, 2024.” Condition: The annual report for the period ending March 31, 2025 was reviewed as part of the testing of the reporting requirements of the above noted major federal program. This annual report included information relating to seven individually defined projects. The current and cumulative expenditure and obligation amounts were tested in relation to the provided supporting documentation. The total cumulative obligation amounts included on the annual report were $1,445,423 which matched the total amount of SLFRF funds received by the Town. The individual contracts or obligations for goods or services were reviewed in relation to these seven projects to determine that the funds were obligated in accordance with the above noted period of performance compliance requirements for the above noted major federal program. For two of these projects totaling $143,167 copies of the vendor quotes were provided as dated December 30, 2024. Both of these quotes included a place for the representative of the Town to sign and date and they were signed and dated as of December 31, 2024. Given that the signed acceptance of a quote is not a legally binding obligation until the signed and accepted contract is sent back to the vendor, we requested some form of documentation showing that the signed and accepted contract had in some way shape or form been provided to the vendor by the program obligation deadline of December 31, 2024. No information could be provided in relation to this request. For another of these projects totaling $43,895 a copy of a vendor quote was provided as dated December 24, 2024. This quote included a place for the representative of the Town to sign and date and it was signed and dated as of December 24, 2024. Given that the signed acceptance of a quote is not a legally binding obligation until the signed and accepted contract is sent back to the vendor, we requested some form of documentation showing that the signed and accepted contract had in some way shape or form been provided to the vendor by the program obligation deadline of December 31, 2024. No information could be provided in relation to this request. For another of these projects totaling $17,800 a copy of a vendor proposal was provided as dated December 27, 2024. This proposal included a place for the representative of the Town to sign and date and it was signed and dated as of December 30, 2024. Given that the signed acceptance of a proposal is not a legally binding obligation until the signed and accepted contract is sent back to the vendor, we requested some form of documentation showing that the signed and accepted contract had in some way shape or form been provided to the vendor by the program obligation deadline of December 31, 2024. No information could be provided in relation to this request. Questioned Costs: There are no questioned costs relating to this significant deficiency in internal control over compliance in relation to this period of performance requirements finding. Context: The period of performance compliance requirements relating to the above noted major federal program in general states that funds cannot be obligated after December 31, 2024. However, there are certain conditions under which additional obligations can be incurred after this date in relation to obligations that were in place as of December 31, 2024. We feel that not being able to provide some form of documentation showing that certain signed and accepted contracts had in some way shape or form been provided to the vendor by the program obligation deadline of December 31, 2024 indicates a significant deficiency in internal control over compliance in relation to the period of performance compliance requirement. Effect: Any SLFRF funds that were received by the Town needed to be obligated in accordance with the award compliance requirements as set forth by the U.S. Department of the Treasury. Any funds found not to have been obligated in accordance with these award compliance requirements could be required to be returned to the funding source. Cause: Given that these SLFRF funds were received by the Town during the 2021 and 2022 fiscal years, we were unable to determine why the contracts referred to within this finding were not entered into until the last week that the funds were eligible to be obligated. The Town may have had difficulty determining the projects to be funded or finding vendors to provide the goods or services. Recommendation: We recommend that the Townmore closelymonitor state and federal awarddeadlines relating to period of performance compliance requirements. In addition, we recommend that specific internal control policies and procedures be created, documented and implemented to ensure compliance in relation to all applicable period of performance requirements. Views of Responsible Officials: We have discussed this finding with our auditor and we do understand the importance of an adequate system of internal control policies and procedures relating to state and federal award program period of performance requirements. We do, however, feel that since the contracts that were noted within this finding were signed as being accepted by the Town prior to the obligation deadline that it did create a legally binding obligation regardless of when the signed contracts were provided to the vendors.
Finding: This is a new finding relating to a significant deficiency in internal control over compliance in relation to the procurement suspension and debarment requirements of the above noted major federal program. Criteria: The 2025 Uniform Guidance compliance supplement issued by the Office of Management and Budget in November of 2025 outlines the period of performance compliance guidelines and requirements of the above noted major federal program. It states, “Recipients may use award funds to enter into contracts to procure goods and services necessary to implement one or more of the eligible purposes outlined in 42 USC sections 802(c) and 803(c) and Treasury's 2021 Interim Final Rule, 2022 Final Rule, and 2023 Interim Final Rule. As such, except as noted in the next paragraph, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. In July 2022, Treasury released SLFRF FAQ 13.15, which explains that only a subset of the requirements in Subparts D and E of the Uniform Guidance apply to recipients' use of award funds under the revenue loss eligible use category. The requirements of 2 CFR sections 200.318 through 200.327 are not included in the list of requirements applicable to such funds.” However, Subpart C of the Uniform Guidance 2 CFR section 200.214 states, “Recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards.” Condition: As part of the current fiscal year audit, the Bid Ordinance and Charter of the Town were reviewed to determine if there were any documented internal control policies and procedures requiring the review and documentation of whether a vendor for goods and services which were being funded through federal award programs were either suspended or debarred from receiving or participating in federal awards. We were unable to find any documented internal control policies or procedures requiring a review for the suspension and debarment status of potential vendors for goods and services which were being funded through federal award programs. In addition, in relation to the project contracts entered into under the above noted major federal program a request was made for the backup documentation relating to the actual bid process that was followed such as copies of the request for bids, the bid specifications, the bids received and the actual approval of each bid. A request was also made relating to whether the bid process was waived for any of these project contracts and if such a waiver was made a copy of the meeting minutes of the Board of Selectmen of the Town approving such a waiver was requested. Part of the intent of requesting these bid related documents was to review the provided information to determine if any suspension and debarment review was made and documented. No information could be provided in relation to these requests. Questioned Costs: There are no questioned costs relating to this significant deficiency in internal control over compliance in relation to this procurement suspension and debarment finding. Context: The procurement suspension anddebarment compliance requirements relating to the above noted major federal programingeneral state that vendors who have been suspended or disbarred can not receive or participate in federal awards. We feel that not being able to provide some formof documentation showing that vendors for which goods or services were purchasedwith funds relating to the above noted major federal program were reviewed to determine if they were suspended or debarred from receiving or participating in federal awards indicates a significant deficiency in internal control over compliance in relation to the procurement suspension and debarment compliance requirement. Effect: During our review of the vendors being used in relation to the seven reported projects of the above noted major federal program, none were noted as being suspended or disbarred. However, the lack of adequate internal controls over these compliance requirements could provide an opportunity for noncompliance. Any funds found to have been paid to vendors who have been suspended or debarred from receiving or participating in federal awards could be required to be returned to the funding source. Cause: We were unable to determine why neither the provided bid ordinance or town charter included any internal controls relating to the review and documentation of the reviews of vendors in relation to their potential status of being suspended or disbarred from receiving or participating in federal awards. In addition, we did review certain contracts that were entered into in relation to the above noted major federal program and we were unable to find any references or clauses relating specifically to suspension and debarment. We were unable to determine why no references could be located within these reviewed contracts. Recommendation: We recommend that the Town more closely monitor vendors receiving and participating in federal award programs relating to procurement suspension anddebarment compliance requirements. In addition, we recommend that specific internal control policies and procedures be created, documented and implemented to ensure compliance in relation to all applicable procurement suspension and debarment requirements. Views of Responsible Officials: We have discussed this finding with our auditor and we do understand the importance of an adequate system of internal control policies and procedures relating to federal award program procurement suspension and debarment requirements. We do intend to review our bid ordinance and town charter, as time allows, to determine if any specific changes or modifications to these two documents should be made in relation to this compliance requirement.