Finding 1136970 (2024-002)

2024-002 U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Significant Deficiency in Internal Controls Over Compliance and Other Matter Criteria: The compliance supplement identifies four Key Line Items required to be reported to the federal awarding agency which include (1) current period obligation, (2) cumulative obligation, (3) current period expenditure and (4) cumulative expenditure. Per 2 CFR 200.1, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. Condition: Obligations and expenditures were overstated by $93,955 on the March 31, 2024 Project and Expenditure report. Cause: The Town did not have a clear understanding of the reporting requirements and included amounts approved but not obligated as obligated and expended. Effect: The Town is not in compliance with grant reporting requirements. Questioned Costs: None Repeat Finding from Prior Year: No Recommendation: The Town should implement procedures to only report obligations and expenditures on the Project and Expenditure reporting for items that meet the federal criteria for reporting as an obligation and expenditure. Views of Responsible Official: Management agrees with the finding.