Audit 410784

Criteria: According to Uniform Guidance 2 CFR 200.303, the non-federal entity must establish and maintain effective internal controls over compliance for federal awards to provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the federal awards. The Town was required to submit an annual project and expenditure report for the period of April 1, 2024 to March 31, 2025 by April 30, 2025. Condition: The amount of actual expenditures for the period 4/1/2024 - 3/31/2025, was $2,512,252; however, when completing the Project & Expenditure Report for the period ended March 31, 2025, the Town only reported actual expenditures of $1,771,014. Also the cumulative amount of expenditures that should have been reported was $3,396,464; however the Town only reported $2,655,227. In both cases the difference is $741,238. Cause: The reason for the $741,238 is due to the Town not reporting expenditures for the period of 1/1/2025 - 3/31/2025. In other words, the Town only reported expenditures covering 9 months of the reporting period. The Town’s internal controls over compliance were not sufficient to identify that the Project and Expenditure Report was omitting expenditures for the period of 1/1/2025 through 3/31/2025. Effect: Incorrect reporting can effect the administration of the program by the grantor. Questioned Costs: None. Recommendation: We recommend that the Town enhance their internal controls over the requirements of this program to ensure those preparing and reviewing the reports have the appropriate understanding and information needed to ensure completeness and accuracy of information being reported.