Finding 1206359 (2023-003)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2023

Accepted

2026-04-10

Audit: 398382

Organization: Town of Livermore Falls (ME)

Auditor: RHR SMITH & COMPANY

AI Summary

Core Issue: The Town lacks proper internal controls for approving invoices and board warrants before issuing checks, leading to potential misallocation of expenses.
Impacted Requirements: Compliance with 2 CFR 200.303 is at risk, as documented approvals are inconsistent, affecting allowable costs for the federal program.
Recommended Follow-Up: The Town should create and enforce policies for a documented approval process to ensure only allowable costs are charged to the program.

Finding Text

MATERIAL WEAKNESSES 2023-003 - Allowable Costs/Cost Principles Federal Program Information: ALN - 10.760 - Water and Waste Disposal Systems for Rural Communities 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 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 2023-003) Contact Person Responsible for Corrective Action: Carrie Castonguay, Town Manager Corrective Action: The Treasurer, Town Manager and Select Board will take the following actions to address finding 2023-003 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 the Treasurer and the Select Board. She has implemented a process of having the Treasurer complete a warrant each week. The Select Board meets bi-monthly and the Town Manager has the Select Board review and approve all warrants as a regular action item in their meeting. 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. Anticipated Completion Date: This corrective action has been implemented as of October 2023.

Other Findings in this Audit

1206358 2023-003

Material Weakness Repeat
1206360 2023-004

Material Weakness Repeat
1206361 2023-004

Material Weakness Repeat
1206362 2023-005

Material Weakness Repeat
1206363 2023-005

Material Weakness Repeat
1206364 2023-006

Material Weakness Repeat
1206365 2023-006

Material Weakness Repeat
1206366 2023-007

Material Weakness Repeat
1206367 2023-007

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
10.760	WATER AND WASTE DISPOSAL SYSTEMS FOR RURAL COMMUNITIES	$1.75M
21.027	CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS	$25,729
66.458	CLEAN WATER STATE REVOLVING FUND	$12,689