Finding Text
Assistance Listing, Federal Agency, and Program Name 97.044, U.S. Department of Homeland Security, Assistance to Firefighters Grant Federal Award Identification Number and Year EMW 2023 FG 01225, 2023 Pass through Entity N/A Direct funded Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with the award agreement, the Township is required to submit financial reports to the federal awarding agency semiannually. The Township elected to report the grant expenditures using the cash basis of accounting, as permitted by the federal awarding agency. Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the comptroller general of the United States or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Township submitted the required reports, but one of the reports submitted did not properly identify the federal expenditures paid during the reporting period. Questioned Costs None If Questioned Costs are not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported N/A Identification of How Questioned Costs Were Computed N/A Context In the financial report submitted in January 2026 for the period July 1 through December 31, 2025, the Township reported zero expenditures. Contrary to this reporting, the Township incurred and paid $1,156,265 in federal expenditures during the period, which should have been included in the report. Cause and Effect Although the Township had an established control whereby one individual prepared the report and a second individual reviewed it, a misunderstanding of the applicable reporting requirements prevented the review from detecting the reporting error. The Township has subsequently corrected the report to include the appropriate expenditures. Recommendation We recommend that the Township enhance its review process by ensuring all reporting requirements are identified and considered to support an effective review of reported information. Views of Responsible Officials and Corrective Action Plan The Township will implement a reconciliation and review process requiring all reported federal expenditures to be verified against the general ledger and supporting documentation prior to submission. In addition, the Township will correct the identified errors and resubmit the report with accurate federal expenditure information.