Finding 1229919 (2025-003)

Finding 2025-003 No Written Conflict of Interest Policy Name of Federal Agency: U. S. Department of the Treasury Pass-through Entity: South Carolina Rural Infrastructure Authority (RIA) COVID-19 Program: Yes Assistance Federal Listing Award Number Number Program Title 21.027 A-23-C185, R-13-C185 Covid-19 - Wastewater System Improvements Criteria or specific requirement: Federal regulations require non-federal entities receiving federal awards to maintain written standards of conduct governing the performance of employees engaged in the selection, award, and administration of contracts. Specifically, 2 CFR §200.318(c)(1) requires entities to maintain a written conflict of interest policy and disclose any potential conflicts that may affect the administration of federal awards. Condition: During our review of internal controls and compliance procedures related to the administration of the federal program, we noted that the Town did not have a formally adopted written conflict of interest policy. Management indicated that informal practices exist to address potential conflicts; however, these practices have not been documented or communicated through an approved Cause of condition: Management had not established formal policies and procedures to ensure compliance with federal conflict-of-interest requirements applicable to the administration of federal Potential effect of condition: Without a written conflict of interest policy, the Town is at increased risk of actual or perceived conflicts affecting procurement, contracting, and other program administration activities. Additionally, the absence of a documented policy could result in noncompliance with federal regulations and program requirements. Questioned Costs: None Repeat finding: No Recommendation: We recommend that management develop, formally adopt, and implement a written conflict of interest policy that complies with applicable federal requirements. The policy should define prohibited activities, establish procedures for disclosure of actual and potential conflicts, require periodic acknowledgments from employees and governing board members, and provide guidance for resolving identified conflicts. Response of responsible Town official: Auditor Response: Auditor concurs.