Finding Text
Finding: This is a new finding relating to a significant deficiency in internal control over compliance in relation to the reporting requirements of the above noted major federal program. Criteria: Annual reporting is required for metropolitan cities and counties with a population below 250,000 residents that are allocated less than $10 million in SLFRF funding and non-entitlement units of local governments (NEUs) that are allocated less than $10 million in SLFRF funding. The Town of Bolton falls within these guidelines for annual SLFRF reporting. For these recipients, the initial Project and Expenditure Report covered from March 3, 2021 to March 31, 2022 and was required to be submitted to Treasury by April 30, 2022. The subsequent annual reports cover one calendar year and must be submitted to Treasury by April 30 of each subsequent fiscal year. This annual project and expenditure report should provide information on all SLFRF funded projects. Projects are defined as a grouping of closely related activities that together are intended to achieve a specific goal or are directed toward a common purpose. These activities can include new or existing eligible government services or investments funded in whole or in part by SLFRF funding. For each project, the recipient is required to enter the project name, a project identification number which is created by the recipient, a project expenditure category and subcategory, the status of completion of the project and the obligations and expenditures related to each project. The obligations and expenditures are shown for both the current period and the total cumulative amounts. Condition: The annual report for the period ending March 31, 2025 was reviewed as part of the testing of the reporting requirements of the above noted major federal program. This annual report included information relating to seven individually defined projects. The current and cumulative expenditure and obligation amounts were tested in relation to the provided supporting documentation. The current and cumulative expenditure and obligation amounts for six of the seven projects matched the provided supporting documentation. For the seventh project, the total cumulative expenditures reported were $295,205 which did match the provided supporting documentation. However, the current period expenditures reported were only $264,767 which is $30,438 less than the total accumulated expenditures. This is an annual report covering the incurred expenditures fromApril 1, 2024 through March 31, 2025. The total cumulative expenditures reported of $295,205 were incurred during this period and as such it would seem that both the current period and total cumulative amounts should match. Questioned Costs: There are no questioned costs relating to this significant deficiency in internal control over compliance in relation to this reporting requirements finding. Context: Only one annual report was required to be filed by the Town for the current fiscal year given the population of the Town and given that the Town was allocated less than $10 million in SLFRF funding. Department of the Treasury was seemingly inaccurate and therefore did not comply with the federal reporting requirements of the above noted major federal program. Cause: We were unable to determine the reason that the total cumulative expenditures reported did not match the total current expenditures reported given that the report that was filed during the current fiscal year was for the annual period of April 1, 2024 through March 31, 2025 and given that all of the incurred expenditures under the reported programs were incurred during this period. Recommendation: We recommend that the Town more closely monitor the reporting requirements relating to all state and federal award programs to ensure that the reports that are being completed and submitted both match the applicable supporting documentation and meet the reporting requirements of each applicable program. In addition, we recommend that specific internal control policies and procedures be created, documented and implemented to ensure compliance in relation to all applicable reporting requirements. Views of Responsible Officials: We have discussed this finding with our auditor and we do understand the importance of an adequate system of internal control policies and procedures relating to state and federal award program reporting requirements.