Finding 370142 (2021-006)

Significant Deficiency

Requirement

Questioned Costs

Year

2021

Accepted

2024-02-22

Audit: 291678

Organization: Town of Livermore Falls (ME)

Auditor: Rhr Smith and Company

AI Summary

Core Issue: The Town lacks a cash management policy, which is essential for safeguarding liquid assets.
Impacted Requirements: This finding relates to compliance with 2 CFR sections 200.302(b)(6) and 200.305(b)(3).
Recommended Follow-Up: The Town should adopt a cash management policy and establish internal controls to ensure compliance.

Finding Text

2021-006 - Cash Management Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.302(b)(6)) & 2 CFR section 200.305(b) (3). Condition: During audit procedures, it was identified that the Town did not have a cash management policy in place. Cause: The Town has experienced turnover in the Treasurer’s position over the past few years, which has delayed the policy implementation. Effect: The Town may not have adequate policy and procedures in place to safeguard its most liquid assets. Identification of Questioned Costs: None identified. Context: The population consisted of 4 out of 10 pay requisites deposit of reimbursements from the fiscal year were examined. Out of the 4 selections only 1 deposit had backup documentation. The other 3 were lacking prove that deposits were recorded properly. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a cash management policy that follows the Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.

Corrective Action Plan

The Town Manager and Select Board will take the following actions to address finding 2021-006 The current Town Manager was appointed by the Select Board on August 14, 2023, and had no knowledge of this material weakness. She is an experienced Manager and is drafting a new Internal Controls Policy that will address this deficiency. The Select Board will review this draft at their meeting in February or March 2024, edits will be made and then it will be sent to legal for final review before adoption. This policy will include sections on risk assessment and management, annual audit, chart of account, general ledger, reconciliation and verification, reserve funds and reserve accounts, investments, financial reporting, fraud, accounting software, online transactions and banking, documentation daily cash-ups, grants and projects, AR process, AP process, and payroll.

Other Findings in this Audit

370139 2021-003

Material Weakness
370140 2021-004

Significant Deficiency
370141 2021-005

Material Weakness
370143 2021-007

Significant Deficiency
370144 2021-005

Material Weakness
370145 2021-006

Significant Deficiency
370146 2021-007

Significant Deficiency
946581 2021-003

Material Weakness
946582 2021-004

Significant Deficiency
946583 2021-005

Material Weakness
946584 2021-006

Significant Deficiency
946585 2021-007

Significant Deficiency
946586 2021-005

Material Weakness
946587 2021-006

Significant Deficiency
946588 2021-007

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
10.760	Water and Waste Disposal Systems for Rural Communities	$474,240
66.458	Capitalization Grants for Clean Water State Revolving Funds	$80,241