Reference Number: Prior Year Finding: 2025-010 2024-005 Federal Agency: U.S. Department of Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Procurement Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Audit documentation must be made available upon request to the cognizant or oversight agency for audit or its designee, cognizant agency for indirect cost, a Federal agency, or GAO at the completion of the audit, as part of a quality review, to resolve audit findings, or to carry out oversight responsibilities consistent with the purposes of this part. Access to audit documentation includes the right of Federal agencies to obtain copies of audit documentation as is reasonable and necessary. (2 CFR 200.517(b)) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The City could not provide complete procurement and contract documentation timely for audit review. Context: For two of eight contracts selected for testing, the City did not provide contract files or related procurement documentation, including the executed contract, procurement method, vendor selection support, or other documentation evidencing compliance with applicable procurement requirements. Cause: The City’s policies and procedures were not sufficient to ensure procurement and contract documentation related to Federal awards was centrally retained, complete, and readily available for audit. In addition, the City’s document retention and monitoring controls did not ensure that contract files contained all required supporting documentation prior to or during the audit period. CITY OF MANCHESTER, NEW HAMPSHIRE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED JUNE 30, 2025 (25) Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Effect: Since the City was unable to provide complete procurement and contract documentation, auditors could not verify whether the selected procurements complied with applicable Federal procurement requirements or whether the City maintained sufficient documentation to support the allowability and compliance of the related expenditures. The lack of available documentation increases the risk that procurement transactions may not be properly supported, reviewed, or conducted in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Questioned costs: Unable to determine. Recommendation: We recommend that the City strengthen its internal controls over procurement and contract documentation for Federal awards. Such procedures should require that complete contract files, including executed agreements, procurement method documentation, vendor selection support, approvals, and other required supporting documentation, be retained in a centralized location and reviewed for completeness. The City should also establish monitoring procedures to ensure documentation is maintained in accordance with Federal requirements and is available timely for audit or other oversight review. Views of Responsible Officials: There is no disagreement with the finding.
Reference Number: Prior Year Finding: 2025-011 N/A Federal Agency: U.S. Department of Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Audit documentation must be made available upon request to the cognizant or oversight agency for audit or its designee, cognizant agency for indirect cost, a Federal agency, or GAO at the completion of the audit, as part of a quality review, to resolve audit findings, or to carry out oversight responsibilities consistent with the purposes of this part. Access to audit documentation includes the right of Federal agencies to obtain copies of audit documentation as is reasonable and necessary. (2 CFR 200.517(b)) Recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards (2 CFR 200.214). Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The City could not provide complete documentation to evidence the City ensured contractors were not suspended or debarred prior to entering into the contract. Context: Two of eight contracts selected for testing were not available for review. No contract information was provided for these agreements and therefore no support related to ensuring that a contractor was not suspended or debarred was available. In addition, for an additional three of eight contracts selected for testing, documentation did not contain the necessary suspension and debarment certifications or review checks. CITY OF MANCHESTER, NEW HAMPSHIRE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED JUNE 30, 2025 (27) Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The City’s policies, procedures, and internal controls were not sufficient to ensure that contract files included or retained documentation supporting suspension and debarment verification checks. Effect: Without complete contract files and documented suspension and debarment verification, the City could not demonstrate compliance with Federal requirements. This increases the risk that Federal funds could be used in transactions with contractors that are suspended, debarred, or otherwise excluded from participation in Federal awards. Questioned costs: None. Recommendation: We recommend that the City strengthen its written policies, procedures, and internal controls to require suspension and debarment verifications before entering into Federally funded contracts and that verification be readily available for audit. Views of Responsible Officials: There is no disagreement with the finding.
Criteria: In accordance with 2 CFR Section 200.517(c) the Organization must keep and make audit documentation available for review. Condition: The Organization does not have all supporting documentation requested as required by the Uniform Guidance. Context: During the audit it was noted that the Organization lacked supporting documentation. The Organization did not have documentation for the 23 out of 35 tested samples. Cause: The Organization did not have adequate supporting documentation. Questioned Costs: None Effect: The absence of required documentation may result in noncompliance with program requirements and expose the Organization to reputational risks. Repeat Finding: No Recommendation: We recommend that management reinforce training for all relevant documentation requirements. Procedures should be strengthened to ensure that all files include complete and accurate documentation. Views of Responsible Officials (unaudited): The Organization will develop a procurement and payment procedure to ensure all proper supporting documentation is obtained prior to the check disbursement.