Finding Text
Finding 2023-002 – Material Weakness
Federal Grantor: Various
Passed-through: Various
Pass-through Grantor’s No.: Various
Compliance Requirement: Reporting
Condition: The Town submitted its Audited Financial Statements and Single Audit Report to the federal clearinghouse in September 2024, six months after it was due, mostly the result of delays in reconciling grant activity to revenue recorded.
Criteria: The Town was required to submit its Audited Financial Statements and Single Audit Report to the federal audit clearinghouse no later than March 31, 2023, nine months after the fiscal year-end (2 Code of Federal Regulations §200.512).
Effect: Federal awarding agencies may deny future federal awards or subject the Town to additional cash monitoring requirements.
Cause: The Town did not prepare its Audited Financial Statements and Schedule of Expenditures of Federal Awards in a timely manner due to the number of federal awards tested in the current year compared to prior years. In addition, the Town lost its finance director during the financial and single audit process.
Context: The Town has had complete turnover of finance department personnel and has found difficulty in replacing key personnel for its finance department.
Recommendation: The Town should consider contracting with an external accounting firm so that it can close its books and submit its audited financial statements and single audit to the federal audit clearinghouse no later than the statutory reporting deadline.
Views of Responsible Officials and Planned Corrective Action: We agree with the finding and have implemented a new process during fiscal year 2023/24.