Finding 1235745 (2025-001)

2025-001 Improve Controls over ARPA Reporting Federal Program Information Federal Agency: U.S. Department of Treasury Award Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2022 Compliance Requirement: Reporting Type of Finding Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Grantees are required to report financial information to the grantor agency in accordance with the requirements set forth by the Federal awarding agency. Management is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The annual report submitted to Treasury was not reviewed by a separate knowledgeable individual prior to submission to the Treasury Department. Cause Weakness in the operation of controls. Effect or Potential Effect Lack of sufficient controls in place could result in inaccurate expenditures being reported to the Treasury Department that do not agree to underlying accounting records. Questioned Costs No questioned costs are reported as this finding is a control deficiency only. Identification as a Repeat Finding This is repeat of finding 2024-001 as it relates to the control deficiency only. Recommendation The Town should implement a control to have the report formally reviewed by a separate knowledgeable individual prior to submission to the Treasury Department. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.