Audit 411157

Finding 2025-001 Preparation of Schedule of Expenditures of Federal Awards (SEFA) Name of Federal Agency: U. S. Department of the Treasury Pass-through Entity: South Carolina Rural Infrastructure Authority (RIA) COVID-19 Program: Yes Assistance Federal Listing Award Number Number Program Title 21.027 A-23-C185, R-13-C185 Covid-19 - Wastewater System Improvements Criteria or specific requirement: Management is required by various regulatory and funding agencies, as well as by due diligence responsibilities to the general public, to provide a single audit, or if separately, annual audited financial statements, and a program-specific audit (the SEFA). In general, it is management's responsibility to prepare the SEFA, and present it to the auditor. Condition: The Town's management does not internally prepare its own full-disclosure SEFA. Currently the auditor provides significant assistance when preparing the SEFA. Cause of condition: Similar to most small-to-medium sized organizations, the Town lacks the personnel with the accounting expertise and training such as that possessed by a certified public accountant or a chief financial officer of a large organization who customarily and regularly prepares appropriate reporting statements. Questioned Costs: None Potential effect of condition: The Town is dependent upon its external auditor to assist in preparing the SEFA, including footnotes, as part of the audit process. Repeat finding: No Recommendation: We are obligated by recently adopted auditing standards to bring this condition to the attention of management and the Board. Those charged with governance are obligated to consider the validity of these comments in light of the circumstances surrounding this condition and respond as they consider necessary. Your response may very well entail acceptance and continuance of this condition as the best perceived alternative under the circumstances. Response of responsible Town official: We relied on our auditor to produce the SEFA. Our accounting department is small, which makes it difficult. We will continue to evaluate our ability to produce our SEFA, with related footnotes, when audits are required. Auditor Response: Auditor concurs.

Finding 2025-002 Federal Audit Clearinghouse Reporting Name of Federal Agency: U. S. Department of the Treasury Pass-through Entity: South Carolina Rural Infrastructure Authority (RIA) COVID-19 Program: Yes Assistance Federal Listing Award Number Number Program Title 21.027 A-23-C185, R-13-C185 Covid-19 - Wastewater System Improvements Criteria or specific requirement: In accordance with the Uniform Guidance, the single audit reporting package and data collection form are to be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after these reports are received or nine months after the end of the audit period (June 30, 2026). Condition: The single audit reporting package and data collection form were not submitted to the Federal Audit Clearinghouse within the required time frame. Cause of condition: The previous accountant hired by the Town did not perform all activities required by the agreement, and was replaced. At the time the accountant was replaced, the time period had passed for submission to the Federal Audit Clearinghouse. Potential effect of condition: This condition results in a noncompliance finding for the period under audit. Questioned Costs: None Repeat finding: No Recommendation: We recommend the Town complete required audits and submit the single audit reporting package and data collection form in accordance with the Uniform Guidance requirements. Response of responsible Town official: Town Management has obtained a third-party Certified Public Accountant, who will monitor and assist with bookkeeping for Federal awards, and in complying with the required reporting submission dates to the Federal Audit Clearinghouse. Auditor Response: Auditor concurs.

Finding 2025-003 No Written Conflict of Interest Policy Name of Federal Agency: U. S. Department of the Treasury Pass-through Entity: South Carolina Rural Infrastructure Authority (RIA) COVID-19 Program: Yes Assistance Federal Listing Award Number Number Program Title 21.027 A-23-C185, R-13-C185 Covid-19 - Wastewater System Improvements Criteria or specific requirement: Federal regulations require non-federal entities receiving federal awards to maintain written standards of conduct governing the performance of employees engaged in the selection, award, and administration of contracts. Specifically, 2 CFR §200.318(c)(1) requires entities to maintain a written conflict of interest policy and disclose any potential conflicts that may affect the administration of federal awards. Condition: During our review of internal controls and compliance procedures related to the administration of the federal program, we noted that the Town did not have a formally adopted written conflict of interest policy. Management indicated that informal practices exist to address potential conflicts; however, these practices have not been documented or communicated through an approved Cause of condition: Management had not established formal policies and procedures to ensure compliance with federal conflict-of-interest requirements applicable to the administration of federal Potential effect of condition: Without a written conflict of interest policy, the Town is at increased risk of actual or perceived conflicts affecting procurement, contracting, and other program administration activities. Additionally, the absence of a documented policy could result in noncompliance with federal regulations and program requirements. Questioned Costs: None Repeat finding: No Recommendation: We recommend that management develop, formally adopt, and implement a written conflict of interest policy that complies with applicable federal requirements. The policy should define prohibited activities, establish procedures for disclosure of actual and potential conflicts, require periodic acknowledgments from employees and governing board members, and provide guidance for resolving identified conflicts. Response of responsible Town official: Auditor Response: Auditor concurs.