FAC Explorer

Audit 7418

FY End
2022-12-31
Total Expended
$6.86M
Findings
4
Programs
5
Organization: Township of Hamilton (NJ)
Year: 2022 Accepted: 2023-12-19
Auditor: Mercadien PC CPAS

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
5580 2022-001 Significant Deficiency - L
5581 2022-002 Significant Deficiency - L
582022 2022-001 Significant Deficiency - L
582023 2022-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $2.28M - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.08M Yes 0
14.218 Community Development Block Grants/entitlement Grants $632,180 Yes 2
21.019 Coronavirus Relief Fund $29,068 - 0
20.616 National Priority Safety Programs $7,500 - 0

Contacts

Name Title Type
MJENQ5G446U5 Eugenia Poulos Auditee
6098903510 Warren A. Broudy Auditor
No contacts on file

Notes to SEFA

Title: A. GENERAL Accounting Policies: The accompanying schedule of expenditures of federal awards is presented using the modified accrual basis of accounting in accordance with the “Requirements of Audit” as promulgated by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Township accounts for its financial transactions through separate funds, which differ from the funds required by accounting principles generally accepted in the United States of America (“GAAP”). Modifications to the accrual basis: a. Expenditures are recorded on the schedule of expenditures of federal awards when encumbered. b. Prepaid expenditures are not recorded. c. Obligations for employees’ vested vacation and sick leave are recorded when paid. d. Grant revenues are recorded when anticipated in the budget. e. Property and equipment purchased are recorded as expenditures at the time of purchase and are not capitalized. De Minimis Rate Used: N Rate Explanation: The Township does not have an indirect cost allocation plan nor does it use the de minimis indirect cost rate of 10%. The accompanying schedule of expenditures presents the activity of all federal programs of the Township of Hamilton, County of Mercer, State of New Jersey (the “Township”). The Township is defined in Note A to the Township’s financial statements – regulatory basis. The Township is the prime sponsor and recipient of various federal and state grant funds. The Township has delegated the administration of grant programs and the reporting function to various departments within the Township. Substantially all grant and program cash funds are commingled with the Township’s other funds, although each grant is accounted for separately within the Township’s financial records.
Title: B. BASIS OF ACCOUNTING Accounting Policies: The accompanying schedule of expenditures of federal awards is presented using the modified accrual basis of accounting in accordance with the “Requirements of Audit” as promulgated by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Township accounts for its financial transactions through separate funds, which differ from the funds required by accounting principles generally accepted in the United States of America (“GAAP”). Modifications to the accrual basis: a. Expenditures are recorded on the schedule of expenditures of federal awards when encumbered. b. Prepaid expenditures are not recorded. c. Obligations for employees’ vested vacation and sick leave are recorded when paid. d. Grant revenues are recorded when anticipated in the budget. e. Property and equipment purchased are recorded as expenditures at the time of purchase and are not capitalized. De Minimis Rate Used: N Rate Explanation: The Township does not have an indirect cost allocation plan nor does it use the de minimis indirect cost rate of 10%. The accompanying schedule of expenditures of federal awards is presented using the modified accrual basis of accounting in accordance with the “Requirements of Audit” as promulgated by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Township accounts for its financial transactions through separate funds, which differ from the funds required by accounting principles generally accepted in the United States of America (“GAAP”). Modifications to the accrual basis: a. Expenditures are recorded on the schedule of expenditures of federal awards when encumbered. b. Prepaid expenditures are not recorded. c. Obligations for employees’ vested vacation and sick leave are recorded when paid. d. Grant revenues are recorded when anticipated in the budget. e. Property and equipment purchased are recorded as expenditures at the time of purchase and are not capitalized.
Title: C. INDIRECT COST RATE Accounting Policies: The accompanying schedule of expenditures of federal awards is presented using the modified accrual basis of accounting in accordance with the “Requirements of Audit” as promulgated by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Township accounts for its financial transactions through separate funds, which differ from the funds required by accounting principles generally accepted in the United States of America (“GAAP”). Modifications to the accrual basis: a. Expenditures are recorded on the schedule of expenditures of federal awards when encumbered. b. Prepaid expenditures are not recorded. c. Obligations for employees’ vested vacation and sick leave are recorded when paid. d. Grant revenues are recorded when anticipated in the budget. e. Property and equipment purchased are recorded as expenditures at the time of purchase and are not capitalized. De Minimis Rate Used: N Rate Explanation: The Township does not have an indirect cost allocation plan nor does it use the de minimis indirect cost rate of 10%. The Township does not have an indirect cost allocation plan nor does it use the de minimis indirect cost rate of 10%.
Title: D. COMMITMENTS AND CONTINGENCIES Accounting Policies: The accompanying schedule of expenditures of federal awards is presented using the modified accrual basis of accounting in accordance with the “Requirements of Audit” as promulgated by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Township accounts for its financial transactions through separate funds, which differ from the funds required by accounting principles generally accepted in the United States of America (“GAAP”). Modifications to the accrual basis: a. Expenditures are recorded on the schedule of expenditures of federal awards when encumbered. b. Prepaid expenditures are not recorded. c. Obligations for employees’ vested vacation and sick leave are recorded when paid. d. Grant revenues are recorded when anticipated in the budget. e. Property and equipment purchased are recorded as expenditures at the time of purchase and are not capitalized. De Minimis Rate Used: N Rate Explanation: The Township does not have an indirect cost allocation plan nor does it use the de minimis indirect cost rate of 10%. Each of the grantor agencies reserves the right to conduct additional audits of the Township’s grant programs for economy, efficiency and program results. However, the Township management does not believe such audits would result in material amounts of disallowed costs.
Title: E. RELATIONSHIP TO GENERAL PURPOSE FINANCIAL STATEMENTS Accounting Policies: The accompanying schedule of expenditures of federal awards is presented using the modified accrual basis of accounting in accordance with the “Requirements of Audit” as promulgated by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Township accounts for its financial transactions through separate funds, which differ from the funds required by accounting principles generally accepted in the United States of America (“GAAP”). Modifications to the accrual basis: a. Expenditures are recorded on the schedule of expenditures of federal awards when encumbered. b. Prepaid expenditures are not recorded. c. Obligations for employees’ vested vacation and sick leave are recorded when paid. d. Grant revenues are recorded when anticipated in the budget. e. Property and equipment purchased are recorded as expenditures at the time of purchase and are not capitalized. De Minimis Rate Used: N Rate Explanation: The Township does not have an indirect cost allocation plan nor does it use the de minimis indirect cost rate of 10%. Amounts reported in the accompanying schedule agree with amounts reported in the Township’s basic financial statements – regulatory basis. Financial assistance revenues and expenditures are reported in the Township’s basic financial statements on the basis of accounting prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Grant Appropriations Paid or Charged $6,162,266 CDBG Trust Paid or Charged 632,180 HUD Housing Voucher Trust Paid or Charged 2,121,926 Capital Fund Paid or Charged 527,957 Less: Non-Federal/State Grants - $9,444,329 Reported On Schedule of Expenditures of Federal Expenditures $6,864,814 Schedule of Expenditures of State Financial Assistance 2,579,514 $9,444,329
Title: F. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Accounting Policies: The accompanying schedule of expenditures of federal awards is presented using the modified accrual basis of accounting in accordance with the “Requirements of Audit” as promulgated by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Township accounts for its financial transactions through separate funds, which differ from the funds required by accounting principles generally accepted in the United States of America (“GAAP”). Modifications to the accrual basis: a. Expenditures are recorded on the schedule of expenditures of federal awards when encumbered. b. Prepaid expenditures are not recorded. c. Obligations for employees’ vested vacation and sick leave are recorded when paid. d. Grant revenues are recorded when anticipated in the budget. e. Property and equipment purchased are recorded as expenditures at the time of purchase and are not capitalized. De Minimis Rate Used: N Rate Explanation: The Township does not have an indirect cost allocation plan nor does it use the de minimis indirect cost rate of 10%. Except for the exceptions noted in the schedule of findings and questioned costs, amounts reported in the accompanying schedules agree with the amounts reported to related federal financial reports.

Finding Details

Finding 2022-001
Finding 2022-001 Assistance Listing 14.218 Community Development Block Grants/Entitlement Grants Criteria Per Uniform Guidance, the required reports for federal awards should include all activity for the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Additionally, per HUD guidance, the Quarterly Cash on Hand report must be submitted to the respective field office within 30 days after the end of the reporting period. Condition For the seven Community Development Block Grants/Entitlement Grant reports sampled, disbursement and program income data reported on the report submissions did not directly tie to the general ledger. For four of seven reports sampled, the Quarterly Cash on Hand Reports were submitted after the federal report due dates. Cause Failure to reconcile report submissions to Township accounting records and complete the reports in a timely manner. Effect The Township could not provide accounting reports in direct support of the transactions submitted for reimbursement and thus reported in the respective required HUD report submission. The Township was not in compliance with HUD’s reporting compliance requirement. Perspective Information This finding represents an isolated problem. Recommendation The Township should ensure that its required federal report submissions use data that directly correlates to the data in the general ledger. The Township should also ensure that all required reports are submitted within HUD’s required time frame. View of Responsible Official The Township is in agreement with this finding and have implemented a corrective action plan including timely reconciliation of general ledger detail to federal IDIS reports.
Finding 2022-002
Finding 2022-002 Assistance Listing 14.218 Community Development Block Grants/Entitlement Grants Criteria Federal funds drawn down should be for activities incurred. Condition For two of nine drawdowns selected for testing, the amount of drawdown requested did not agree to the amount of expenses incurred. The funds requested in error were received and the funds were not returned to the U.S. Department of Housing and Urban Development during the accounting period. Cause Failure to review drawdown and supporting data prior to submission. Effect The Township received federal funds in error. The known error from the two draws totaled $84,951.58. Perspective Information This finding represents an isolated problem. Recommendation The Township should ensure that federal drawdowns are reviewed by program management prior to submission to HUD for reimbursement. View of Responsible Official The Township is in agreement with this finding and have created a payable for the overdrawn funds and implemented a corrective action plan.
Finding 2022-001
Finding 2022-001 Assistance Listing 14.218 Community Development Block Grants/Entitlement Grants Criteria Per Uniform Guidance, the required reports for federal awards should include all activity for the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Additionally, per HUD guidance, the Quarterly Cash on Hand report must be submitted to the respective field office within 30 days after the end of the reporting period. Condition For the seven Community Development Block Grants/Entitlement Grant reports sampled, disbursement and program income data reported on the report submissions did not directly tie to the general ledger. For four of seven reports sampled, the Quarterly Cash on Hand Reports were submitted after the federal report due dates. Cause Failure to reconcile report submissions to Township accounting records and complete the reports in a timely manner. Effect The Township could not provide accounting reports in direct support of the transactions submitted for reimbursement and thus reported in the respective required HUD report submission. The Township was not in compliance with HUD’s reporting compliance requirement. Perspective Information This finding represents an isolated problem. Recommendation The Township should ensure that its required federal report submissions use data that directly correlates to the data in the general ledger. The Township should also ensure that all required reports are submitted within HUD’s required time frame. View of Responsible Official The Township is in agreement with this finding and have implemented a corrective action plan including timely reconciliation of general ledger detail to federal IDIS reports.
Finding 2022-002
Finding 2022-002 Assistance Listing 14.218 Community Development Block Grants/Entitlement Grants Criteria Federal funds drawn down should be for activities incurred. Condition For two of nine drawdowns selected for testing, the amount of drawdown requested did not agree to the amount of expenses incurred. The funds requested in error were received and the funds were not returned to the U.S. Department of Housing and Urban Development during the accounting period. Cause Failure to review drawdown and supporting data prior to submission. Effect The Township received federal funds in error. The known error from the two draws totaled $84,951.58. Perspective Information This finding represents an isolated problem. Recommendation The Township should ensure that federal drawdowns are reviewed by program management prior to submission to HUD for reimbursement. View of Responsible Official The Township is in agreement with this finding and have created a payable for the overdrawn funds and implemented a corrective action plan.