Audit 411445

2025-001 Improve Controls Over Food and Nutrition Services Reporting Federal Agency: U.S. Department of Education Program: Child Nutrition Cluster AL Number: 10.555 Award Year: 2025 Type of Finding Internal Control over Compliance - Reporting - Significant Deficiency Criteria or Specific Requirement In accordance with 2 CFR 200.303 management of the Town is responsible for establishing, documenting, and maintaining effective internal control over Federal award that provides reasonable assurance that the Town is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context Requests for reimbursement were not reviewed by anyone other than the preparer. Cause Weaknesses in the design of internal controls. Effect or Potential Effect Without proper documentation and adherence to the review and approval process, there is an increased risk of inaccurate reimbursement requests being submitted to the grantor. Questioned Costs There are no questioned costs as a result of this finding as there are no costs directly associated with the finding. Recommendation The Town should implement formal policies and procedures regarding separation of duties and the requirement of a second individual being involved in the reporting process. Views of Responsible Official and Planned Corrective Action Management’s views and Corrective Action Plan are included at the end of this report.

2025-002 Document Policies and Procedures Over Federal Awards Federal Agency: All Program: All AL Number: All Award Year: 2025 Type of Finding Compliance – Other Matter Internal Control over Compliance - Significant Deficiency Criteria or Specific Requirement Uniform Guidance (2 CFR Part 200) requires non-federal entities administering federal awards to establish and maintain written policies and procedures to address all requirements specified in the regulations, including but not limited internal controls, determination of allowable costs, procurement, subrecipient monitoring, financial management, and reporting. Condition and Context During our audit, we noted that the Town did have policies and procedures in place covering certain requirements of Uniform Guidance as specified in 2 CFR Part 200. Elements, such as internal controls, record retention, and compensation personal services, were not addressed in written policies or documented procedures. Cause The Town has not developed comprehensive written policies and procedures to address all compliance requirements under Uniform Guidance. Effect or Potential Effect The absence of complete written policies and procedures for all elements under Uniform Guidance increases the risk of noncompliance with federal requirements, and reduces consistency in federal program administration. Questioned Costs There are no questioned costs as a result of this finding as there are no costs directly associated with the finding. Recommendation The Town should develop and implement comprehensive written policies and procedures that address all major compliance requirements under Uniform Guidance (2 CFR Part 200). Periodic review and updates should be performed to ensure ongoing compliance. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report.

2025-003 Improve Controls Over Special Education Procurement Federal Agency: U.S. Department of Education Program: Special Education Grants to States AL Number: 84.027/84.173 Award Year: 2025 Type of Finding Compliance – Procurement Internal Control over Compliance – Procurement – Significant Deficiency Criteria or Specific Requirement Under 2 CFR 200.318 and 200.320, non-federal entities are required to maintain adequate documentation supporting procurement decisions, including the method of procurement used; and justify and document the use of noncompetitive (sole source) procurement, including the reasons why competition was not feasible. Specifically, 2 CFR 200.320(c) permits noncompetitive procurement only under limited circumstances and requires proper justification and documentation. Condition and Context During testing of procurement transactions charged to the Special Education Grants to States program, we identified one instance in which the School Department utilized a sole source procurement method; however, no documentation was maintained to support or justify the determination that the vendor qualified as a sole source provider, in accordance with 2 CFR 200.320(c). Cause The School Department does not have sufficient internal controls in place to ensure that sole source determinations are appropriately evaluated and documented against Uniform Guidance criteria. Effect or Potential Effect The lack of documentation supporting sole source procurement increases the risk that procurement may not comply with federal requirements, competitive procurement processes may be inappropriately bypassed; and federal funds may not be used in a manner that ensures full and open competition. Questioned Costs No evidence of improper payment or unallowable costs was identified; therefore, no questioned costs are reported. Recommendation We recommend that the School Department develop and implement formal procedures requiring written justification for all sole source procurements. Ensure documentation clearly addresses the criteria under 2 CFR 200.320(c). Implement a review process to verify that procurement files include all required documentation prior to payment, and provide training to relevant personnel on federal procurement requirements under Uniform Guidance. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report.