Finding Text
Criteria- Recipients of Coronavirus State and Local Fiscal Recovery Funds are subject to reporting requirements per OMB PRA number -OMB #1505-0271 and the Uniform Guidance. The recipient should maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. The recipient should also establish control procedures to ensure accurate and timely submission of reports. The Town is required to submit a Project and Expenditure Report to the U.S. Treasury on an annual basis for the period April 1 through March 31 and it is due on April 30. Condition- The Town’s Project and Expenditure Report for the period ended March 31, 2025, was not accurate and did not agree to the underlying accounting records maintained to compile and report the data reported on the Project and Expenditure report. The current period obligations and current period expenditures per the Project and Expenditure Report did not agree to the accounting records for the period April 1, 2024 – March 31, 2025. Cause- The accounting records maintained by the Town to compile and report the data on the Project and Expenditure Report were accurate and complete, but the current obligations and expenditures were not reported accurately to the Project and Expenditure Report. The Town contracts with a consultant for assistance with the administration of the Coronavirus State and Local Fiscal Recovery Funds. This assistance includes preparing and submitting the Project and Expenditure Report. The Town provides the consultant the accounting records to prepare the Project and Expenditure Report but does not approve and submit the final report to the U.S. Treasury. The Town does not have control procedures to ensure accurate and timely submissions of reports.Effect – The current period obligations and expenditures reported on the Project and Expenditure Report were not accurate and consistent with the underlying accounting records.Questioned Costs – None Recommendation – We recommend that the Town implement control procedures for preparing federal financial assistance reports to ensure the reports reconcile with the underlying accounting records and are properly reviewed and approved prior to submission.Auditee Views - The Town acknowledges the finding related to the Project and Expenditure Report submitted under the Coronavirus State and Local Fiscal Recovery Funds program for the reporting period ended March 31, 2025. While the Town’s underlying accounting records used to support the report were accurate and complete, the amounts reported for current period obligations and expenditures did not agree to the Town’s accounting records.The Town utilizes a third-party consultant to assist with the administration, preparation, and submission of the Project and Expenditure Report. Although the Town provided accurate accounting information to the consultant, adequate internal control procedures were not in place to ensure that the final report submitted to the U.S. Treasury was reviewed, approved, and reconciled to the Town’s accounting records prior to submission.The Town takes this matter seriously and is committed to strengthening internal controls over the reporting process to ensure future compliance with federal reporting requirements.Corrective Action:The Town will implement the following corrective actions to address this finding:1. The Town will establish formal written procedures for the preparation, review, reconciliation, and submission of all federal reports, including the Project and Expenditure Report required under the Coronavirus State and Local Fiscal Recovery Funds program.2. Prior to submission, the Town Treasurer/Finance Office will perform and document a reconciliation of all reported obligations and expenditures to the Town’s underlying accounting records for the applicable reporting period.3. The Town will require management review and approval of all federal reports before submission to ensure completeness, accuracy, and compliance with federal requirements.4. The Town will work with its third-party consultant to clearly define responsibilities related to report preparation and submission and require the consultant to provide a final draft report for Town review and approval prior to filing with the U.S. Treasury.5. The Town anticipates these corrective actions will be fully implemented for all future federal reporting submissions beginning with the next required reporting cycle.Responsible Official: Patrick Gormley, TreasurerAnticipated Completion Date: June 30, 2026