Audit 415304

Federal Agency: U.S. Department of Treasury Award Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2021 Compliance Requirement: Reporting Criteria or Specific Requirement Recipients of State and Local Fiscal Recovery Funds are required to submit complete and accurate program Project and Expenditure Reports by the deadlines established by the U.S. Department of the Treasury. In addition, recipients should maintain effective internal controls over the preparation and review of reports to ensure information reported is accurate, supported, and submitted timely, as required by 2 CFR §200.303. Adequate accounting records should also be maintained to identify and support expenditures reported as direct and pass-through activities. Condition: The Town did not submit its required annual report by the established due date. In addition, the Town did not maintain documented segregation of duties over the preparation and review of the report, as there was no evidence provided to show that the report had been independently reviewed prior to submission. During audit testing, management provided a general ledger detail intended to support amounts reported under the ARPA program. However, the ledger detail incorrectly classified expenditures between direct expenditures and pass-through expenditures. Although the audit team was able to reconcile and validate total program expenditures incurred during the fiscal year and appropriately classify those expenditures into the correct reporting categories for SEFA presentation, management was unable to provide a detailed ledger identifying the appropriate direct expenditures along with transaction dates. As a result, the audit team was unable to trace the direct expenditures reported to supporting accounting records containing the dates necessary to verify the accuracy and completeness of information included in the annual report. Context: The Town was required to submit the annual project and expenditure report for the period of April 1, 2023 to March 31, 2024 by April 30, 2024. This report was submitted on December 23, 2024. Cause: The Town's internal controls over ARPA reporting were not sufficiently designed or implemented to ensure: 1. Required reports were completed and submitted by established deadlines. 2. Reports were subject to documented independent review prior to submission. 3. Accounting records captured and maintained sufficient detail to support expenditure classifications and reporting information required by the U.S. Department of the Treasury. Effect or Potential Effect: Failure to submit required reports timely may result in noncompliance with federal reporting requirements and may limit the ability of federal agencies to monitor program performance and expenditures. Additionally, inadequate supporting records and the lack of independent review increase the risk that inaccurate or incomplete information could be reported to the federal government and remain undetected. Questioned Costs - None reported. Identification as a Repeat Finding - Not a repeat finding. Recommendation: The Town should strengthen its internal controls over ARPA reporting by: • Establishing procedures to ensure all required reports are prepared and submitted by applicable deadlines. • Implementing documented supervisory review procedures to provide appropriate segregation of duties between report preparation and approval. • Enhancing its accounting processes to accurately distinguish direct expenditures from passthrough expenditures and maintain detailed supporting records, including transaction dates, sufficient to support all amounts reported to the U.S. Department of the Treasury. • Retaining documentation demonstrating both the preparation and review of all required program reports. Views of Responsible Official: Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

Award Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2021 Compliance Requirement: Procurement Pass Through Agency: Plymouth County Type of Finding: Compliance Internal Control Over Compliance – Material Weakness Criteria or Specific Requirement: In accordance with 2 CFR § 200.317 through 200.327, non-Federal entities must maintain and follow documented procurement procedures and conduct procurements in a manner providing full and open competition. Entities must also maintain documentation sufficient to demonstrate compliance with applicable procurement requirements, including the method of procurement used, contractor selection, and basis for contract award. Further, 2 CFR § 200.327 requires contracts funded with federal awards to contain the applicable contract provisions described in Appendix II to Part 200, as applicable to the nature and dollar amount of the procurement. Additionally, 2 CFR § 200.318(i) requires entities to maintain records sufficient to detail the history of procurement transactions, including rationale for the method of procurement, contractor selection, and the basis for the contract price. Condition and Context: The Town incurred $860,078 in ARPA expenditures during the fiscal year related to a renovation project. During testing, the Town was unable to provide documentation evidencing that procurement procedures were performed in accordance with Uniform Guidance or state requirements. Specifically, documentation supporting solicitation, competition, contractor selection, cost or price analysis, or other procurement procedures was not provided for audit. In addition, the Town was unable to provide an executed contract for the renovation project. As a result, the audit team was unable to determine whether the contract contained the federally required provisions outlined in Appendix II to Part 200, including any clauses applicable to the nature and amount of the award. Cause: Management did not establish or maintain adequate internal controls to ensure Federally funded procurements were conducted and documented in accordance with Uniform Guidance procurement requirements, procurement documentation was retained to support contractor selection and contract award decisions and executed contracts were maintained and reviewed to ensure inclusion of all applicable federal contract provisions. Effect or Potential Effect: Without documentation demonstrating compliance with federal procurement requirements, the Town cannot support that full and open competition was obtained or that the procurement was conducted in accordance with Uniform Guidance. Furthermore, because an executed contract was not available for review, the Town cannot demonstrate that required federal contract provisions were included. These deficiencies increase the risk of improper procurement practices, reduced transparency, and noncompliance with federal award requirements. Questioned Costs: Because the Town was unable to provide documentation supporting compliance with federal procurement requirements for the renovation project, the $860,078 in expenditures associated with the procurement are questioned. Identification as a Repeat Finding: Not a repeat finding. Recommendation: The Town should maintain documentation supporting all stages of the procurement process, including solicitation, evaluation, contractor selection, and cost or price analysis and ensure executed contracts are retained for all federally funded procurements. The Town should also implement a review process to verify that all applicable contract provisions required by Appendix II to Part 200 are included in federally funded contracts before execution. Views of Responsible Official: Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.