Finding 1206296 (2024-002)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2024
Accepted
2026-04-10
Audit: 398361
Organization: Town of Livermore Falls (ME)

AI Summary

  • Core Issue: The Town lacks proper internal controls for approving invoices and board warrants before issuing checks.
  • Impacted Requirements: This finding violates 2 CFR 200.303, risking unallowable expenses being charged to federal grants.
  • Recommended Follow-Up: The Town should create and enforce policies for a documented approval process to ensure only allowable costs are charged.

Finding Text

MATERIAL WEAKNESSES 2024-002 - Allowable Costs/Cost Principles Federal Program Information: ALN - 10.760 - Water and Waste Disposal Systems for Rural Communities ALN - 66.202 - Congressionally Mandated Projects Criteria: The following CFR(s) apply to this finding: 2 CRF 200.303 Condition: During audit procedures, it was identified that the Town does not have invoices and board warrants approved before issuing checks. Cause: The Town does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds Identification of Questioned Costs: None identified. Context: The sample selection consisted of 11 out of 34 transactions. Of the 11 samples, 2 did not have consistent documented approvals from the Town Manager to ensure that only allowable costs were being charged to the program and 4 out of 11 were lacking Select Board approvals. Repeat Finding: This is a repeat finding of 2022-003 and 2023-003 Recommendation: It is recommended that the Town develop and implement policies and procedures for documented approval process to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.

Corrective Action Plan

CORRECTIVE ACTION PLAN (Concerning Finding 2024-002) Contact Person Responsible for Corrective Action: Carrie Castonguay, Town Manager Corrective Action: The Treasurer and Town Manager will take the following actions to address finding 2023-002 The current Town Manager was appointed by the Select Board on August 14, 2023, and had no knowledge of this material weakness. She is an experienced Manager that has implemented training for clerks, the Treasurer, and the Select Board. She has corrected items such as abatements being posted to a revenue account and LRAP funds being posted to an expense account. The prior Town Manager processed pay requisitions herself and approved disbursements without select board approval or signatures. There was one instance of checks being distributed with only two select board signatures, but has been addressed between the treasurer and town manager. Additionally, Department Heads are required to turn in no later than Thursday by 9 am, invoices to be paid on that week’s warrant. The Treasurer has been given authority by the Town Manager to contact Department Heads and request that they come to the office weekly to turn in invoices. All invoices must have the appropriate expense code and be signed by the Department Head. RHR Smith has been contracted to provide training with the Town’s Treasurer on using TRIO for journal entries from RHR Smith personnel. Additionally, the Town has implemented on July 1, 2025, a new chart of accounts using the Maine Model Chart of Accounts for Municipal and County Budgets. RHE Smith facilitated the transition to the new chart of accounts. Anticipated Completion Date: On-going training on journal entries and adjustments through Fiscal Year 2027 as the town is reliant on the intermittent availability of RHR Smith staff for training purposes. The new chart of account is in use as of July 1, 2024.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 1206294 2024-002
    Material Weakness Repeat
  • 1206295 2024-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.760 WATER AND WASTE DISPOSAL SYSTEMS FOR RURAL COMMUNITIES $3.86M
66.202 CONGRESSIONALLY MANDATED PROJECTS $1.70M
66.458 CLEAN WATER STATE REVOLVING FUND $1,489