Federal Agency: U.S. Department of the Treasury Federal Program: American Rescue Plan Act/Coronavirus State and Local Fiscal Recovery Funds (ARPA) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: FAIN – SLFRP2608 and 2021 Pass-Through Agency: Pennsylvania Department of Community and Economic Development Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 to December 31, 2024 Finding Type: Significant Deficiency in Internal Control over Compliance and Noncompliance- Procurement, Conflict of Interest, Suspension and Debarment Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, requires recipients of federal awards to maintain written policies and procedures governing procurement activities, conflicts of interest, and suspension and debarment requirements. Internal controls should be designed and implemented to provide reasonable assurance that the entity complies with these requirements. Condition : During our audit, we noted the Organization had not established and documented written policies and procedures addressing procurement, conflicts of interest, suspension, and debarment in accordance with Uniform Guidance requirements. Context : Based on our testing of procurement, conflict of interest, and suspension and debarment compliance requirements, we determined that formal written policies and procedures covering these areas were not in place during the audit period. Cause : Management had not developed and formally adopted policies and procedures to address procurement, conflict of interest, suspension, and debarment requirements as prescribed by Uniform Guidance. Effect or Potential Effect : The absence of documented policies and procedures increases the risk that the Organization may not consistently comply with applicable federal procurement requirements, conflict of interest standards, and suspension and debarment provisions. This control deficiency creates an opportunity for noncompliance to occur and remain undetected in a timely manner. Questioned Costs: None identified. Repeat Finding: No. Recommendation : We recommend management formally develop, document, and implement written policies and procedures governing procurement, conflicts of interest, and suspension and debarment activities. Policies should include procedures for evaluating contractors and vendors, documenting conflict of interest considerations, and verifying suspension and debarment status in accordance with Uniform Guidance requirements. Views of Responsible Officials and Corrective Action Plan: There is no disagreement with the audit finding. Management understands the importance of written policies and procedures to ensure compliance with grants. The Township will develop and adopt the noted policies and procedures to ensure that the Township will comply going forward.
Federal Agency: U.S. Department of the Treasury Federal Program: American Rescue Plan Act/Coronavirus State and Local Fiscal Recovery Funds (ARPA) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: FAIN – SLFRP2608 and 2021 Pass-Through Agency: Pennsylvania Department of Community and Economic Development Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 to December 31, 2024 Finding Type: Significant Deficiency in Internal Control Over Compliance and Noncompliance - Reporting Criteria The U.S. Department of the Treasury's Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance requires certain recipients to prepare and submit an annual Recovery Plan Performance Report and make the report publicly available. Recipients are responsible for maintaining internal controls that provide reasonable assurance reports are prepared, reviewed, approved, and submitted in accordance with applicable federal requirements and deadlines. Condition : The Township did not submit the required annual Recovery Plan Performance Report for the SLFRF program during the reporting period. Additionally, the Township did not maintain adequate internal controls to ensure federal reporting requirements were identified, monitored, reviewed, and completed on a timely basis. Context : During our testing of reporting requirements for Assistance Listing 21.027, we reviewed the Township's compliance with Treasury reporting requirements and determined the required annual Recovery Plan Performance Report had not been submitted. Cause : The Township lacked formal procedures and monitoring controls to identify reporting obligations, track reporting deadlines, assign responsibility for report preparation, and perform supervisory review prior to submission. Effect or Potential Effect Failure to submit required reports results in noncompliance with federal award requirements and may reduce transparency regarding program performance. In addition, continued reporting deficiencies may increase oversight by the federal awarding agency and could result in additional administrative actions or restrictions on future federal funding. Questioned Costs : None identified. Repeat Finding : No. Recommendation : We recommend the Township strengthen its internal controls over federal grant reporting by assigning responsibility for monitoring grant requirements, maintaining a centralized calendar of reporting deadlines, implementing supervisory review procedures prior to report due dates, and retaining documentation evidencing the preparation, review, and submission of required reports. Views of Responsible Officials and Corrective Action Plan There is no disagreement with the audit finding. The Township will adopt written policies and procedures governing federal funds. These policies include review of the reporting requirements of the grant upon the grant award to ensure reporting compliance and maintaining a centralized calendar of reporting deadlines.
Federal Agency: U.S. Department of Homeland Security (DHS), Federal Emergency Management Agency. (FEMA) Federal Program: Hazard Mitigation Grant Program (HMGP) Assistance Listing Number: 97.039 Federal Award Identification Number and Year: FEMA-4506-DR-PA - 2021, FEMA-4618-DR-PA - 2021, FEMA-4618-DR-PA - 2021 Pass-Through Agency: Pennsylvania Emergency Management Agency (PEMA) Pass-Through Number(s): PEMA-2023-060, C950004170, C950004177 Award Period: August 5, 2021 to August 5, 2027, September 10, 2021 to September 10, 2025 and September 10, 2021 to January 8, 2026 Finding Type: Significant Deficiency in Internal Control Over Compliance - Allowable Activities and Allowable Costs/Cost Principles Criteria: 2 CFR § 200.303 requires non-Federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance the entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Internal controls should include documented review and approval procedures sufficient to demonstrate control performance. Condition : Testing of nine federal expenditures disclosed that the invoices contained electronic annotations and comments; however, the documentation did not include a clear indication of supervisory review and approval. Management explained that the annotations were part of its review process, but the records maintained did not clearly evidence that review and approval had been completed prior to payment. Consequently, management was unable to demonstrate the operation of the review and approval control through documentation maintained with the expenditure records. Context : During testing of federal expenditures selected from the HMGP expenditure population, nine out of nine invoices contained electronic annotations and comments but did not include a clear indication of management review and approval. Management explained that the annotations were part of its review process and subsequently demonstrated that review procedures had been performed prior to payment. However, the documentation maintained with the expenditure records did not clearly evidence completion of the review and approval control. Cause : The Township's procedures did not require the retention of documentation clearly evidencing supervisory review and approval of grant-related expenditures. As a result, evidence of control performance was not consistently documented in a manner readily available for verification. Effect or Potential Effect : Without maintaining clear documentation of supervisory review and approval, the Township cannot demonstrate that expenditures charged to federal programs were reviewed in accordance with established control procedures. This increases the risk that unallowable, inaccurate, or unauthorized expenditures could be processed and charged to federal awards without timely detection. Questioned Costs : None identified. Repeat Finding : No Recommendation: We recommend the Township should strengthen its documentation retention procedures to ensure evidence of supervisory review and approval is clearly documented and maintained with supporting expenditure records. Documentation should demonstrate who performed the review, when the review was completed, and that approval was granted prior to payment. Electronic review processes should include a formal approval notation or workflow that can be readily retained and provided for audit purposes. Views of Responsible Officials and Corrective Action Plan There is no disagreement with the audit finding. Management understands the importance of reviewing and approving invoices prior to payment. Management believes that the invoices were reviewed and approved as evidenced by the annotations and comments. However, management recognizes the importance of clearly noting the approval of the invoice. The Township implemented policies and procedures to ensure that the Township will comply going forward. These policies include review of invoices and clear documentation of approval.
Federal Agency: U.S. Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA) Federal Program: Hazard Mitigation Grant Program (HMGP) Assistance Listing Number: 97.039 Federal Award Identification Number and Year: Pass-Through Agency: Pennsylvania Emergency Management Agency (PEMA) Pass-Through Number(s): PEMA-2023-060, C950004170, C950004177 Award Period: August 5, 2021 to August 5, 2027, September 10, 2021 to September 10, 2025 and September 10, 2021 to January 8, 2026 Finding Type: Significant Deficiency in Internal Control Over Compliance – Reporting Criteria :Management is responsible for maintaining effective internal controls over federal program reporting activities, including oversight of reports prepared by third parties. Reports submitted on behalf of the Township should be reviewed and approved by management prior to submission to help ensure accuracy, completeness, and compliance with grant requirements. Condition :Audit testing of four quarterly HMGP progress reports determined that all required reports were submitted. However, one report submitted by an outside consultant did not contain evidence of management review and approval prior to submission. The remaining three reports were prepared, reviewed, and submitted by management. Context : A sample of four quarterly reports was tested. One of four reports tested (25%) lacked evidence of management review and approval prior to submission. The exception related to the only report submitted by an outside consultant. Cause : Management did not establish or consistently perform procedures requiring documented review and approval of reports prepared and submitted by third-party consultants before submission to the granting agency. Effect or Potential Effect : Without documented management review and approval, errors, omissions, or inaccuracies in consultant-prepared reports may not be identified prior to submission, increasing the risk of inaccurate reporting to the granting agency. Questioned Costs: None identified. Repeat Finding: No. Recommendation: We recommend management implement procedures requiring documented review and approval of all grant reports prepared by outside consultants prior to submission. Documentation should be retained to demonstrate management's oversight and review. Views of Responsible Officials and Corrective Action Plan There is no disagreement with the audit finding. Management understands the importance of reviewing the progress reports. Management believes that the one instance out of the four tested was an isolated instance. The Township will implement policies and procedures to ensure that the Township will comply going forward. These policies include management review of the statements and a clear notation of the approval.