Finding 1157489 (2024-001)

2024-001 Improve Compliance with American Rescue Plan Reporting Federal Agency: U.S. Department of Treasury Cluster/Program: COVID-19 - State and Local Fiscal Recovery Fund Award Name: COVID-19 - State and Local Fiscal Recovery Fund AL Number(s): 21.027 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Grantees are required to report financial information to the grantor agency in accordance with the requirements set forth by the Federal awarding agency. Management is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context Life-to-date expenditures reported on the annual Project and Expenditures Report for the period ended March 31, 2024 were overstated by approximately $280 thousand. Further, the Report was not reviewed by a separate knowledgeable individual prior to submission to the Treasury Department. Cause Weaknesses in the operation of controls. Effect or Potential Effect The Town is not in compliance with grant requirements over reporting. No questioned costs are noted as the issue relates only to the amount reported to the Treasury Department. Recommendation The Town should accurately report life-to-date expenditures in annual Project and Expenditures Reports in order to comply with reporting guidelines. Additionally, the Report should be reviewed by a separate knowledgeable individual prior to submission to the Treasury Department. Views of Responsible Official and Planned Corrective Action Management’s views and corrective action plan is included at the end of this report.