Finding 2024-005 – Duplicate Reimbursement Request for Federal Award Expenditures (Material Weakness) Criteria: CFR §200.403 and related provisions, costs charged to federal awards must be accurate, allowable, and not charged or reimbursed more than once. Additionally, reimbursement requests must be supported by complete and accurate records to ensure compliance with federal requirements and prevent improper payments. Condition: During our testing of expenditures and reimbursement requests for the above-referenced federal program, we identified that certain expenditures were submitted for reimbursement twice across twoseparate fiscal years. While the underlying expenditures were incurred only once, and not paid twice by the entity, they were included in reimbursement requests in two different periods, resulting in The Town receiving duplicate reimbursements for the same costs Cause: The duplication likely occurred due to changes in financial staffing for The Town. Specifically: • Turnover in personnel resulted in a loss of institutional knowledge regarding prior reimbursement and submissions. • Inadequate review controls allowed previously reimbursed expenditures to be re-submitted in a subsequent period. • Initial reimbursement requests appear to have used an alternate methodology for reimbursement requests. Context: The Town administers multiple federal awards and is responsible for preparing and submitting reimbursement requests based on incurred allowable expenditures. During the audit period, The Town experienced staff turnover and changes in key financial and grant management roles. These changes affected the continuity of oversight and the tracking of cumulative expenditures and prior reimbursement requests. As a result, controls over the review and reconciliation of reimbursement submissions were not consistently applied, contributing to the resubmission of previously reimbursed expenditures in a subsequent year. Recommendation: We recommend that the entity: • Reconcile all reimbursement requests to the underlying expenditures and prior submissions to identify and quantify any additional duplication. • Re-pay any overpayments to the federal awarding agency in a timely manner. • Strengthen internal controls by: o Implementing a centralized tracking system for all reimbursement requests and cumulative expenditures. o Establishing a formal review and approval process to verify that costs have not been previously reimbursed. o Clearly document roles and responsibilities, especially during staffing transitions. • Provide training to staff involved in grant management to ensure compliance with federal requirements. Corrective Action Plan: The Town of Lakeview has taken significant organizational and procedural steps to strengthen its administration of federal awards and ensure future compliance with Uniform Guidance reporting requirements. Corrective actions implemented include: • The Town has hired a Finance Director with substantial experience in state and federal grant administration and financial reporting. The Finance Director is responsible for oversight of all federal financial reporting, including review of expenditures and preparation of disbursement requests. • The Town has hired a new Town Manager who has established improved financial oversight and accountability throughout the organization. The Town Manager will work closely with the Finance Director to monitor compliance with federal grant requirements and review expenditures and disbursement requests. • The Town Council has established a Citizen Finance Advisory Committee to provide independent oversight and review of the Town’s financial management practices. The committee will review financial reports, budget performance, and federal grant administration processes, providing recommendations to improve accountability and transparency. • The Town has developed and implemented formal policies and procedures governing the administration of federal awards including: o Identification and tracking of awards o Documentation of expenditures charged to federal programso Procedures for maintaining grant files o Reconciliation of grant expenditures to the general ledger o Annual preparation and supervisory review of the Schedule of Expenditures of Federal Awards • The Finance Director will prepare disbursement requests, and they will be reviewed and signed by Council members prior to submittal. A ll disbursement requests and associated expenditures will be maintained in an electronic file system. Hard copies of disbursement requests and expenditure documentation will also be maintained in a standardized fi le system. Planned Implementation Date: The corrective actions described above have been implemented. The Town will continue to monitor compliance throughout the fiscal year, and the revised procedures will be fully incorporated into the preparation of the next annual SEFA. Responsible Person: Town of Lakeview Mayor.