FAC Explorer

Finding 370147 (2022-003)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2024-02-22
Audit: 291679
Organization: Town of Livermore Falls (ME)
Auditor: Rhr Smith and Company

AI Summary

  • Core Issue: The Town lacks proper internal controls, leading to missing approvals for invoices and board warrants before issuing checks.
  • Impacted Requirements: This violates 2 CFR 200.303, risking improper allocation of expenses and potential reimbursement issues with federal funds.
  • Recommended Follow-Up: The Town should create and enforce policies for documented approvals to ensure only allowable costs are charged to the program.

Finding Text

2022-003 - Allowable Costs/Cost Principles Federal Program Information: ALN - 10.760 - Water and Waste Disposal Systems for Rural Communities Criteria: The following CFR(s) apply to this finding: 2 CRF 200.303 Condition: During audit procedures, it was identified that the Town does not have invoices and board warrants approved before issuing checks. Cause: The Town does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds Identification of Questioned Costs: None identified. Context: The sample selection consisted of 5 out of 9 transactions. Of the 5 samples, 5 did not have consistent documented approval of invoices and board warrants to ensure that only allowable costs were being charged to the program and 2 out of 5 invoices were paid over 30 days late. Repeat Finding: This is a repeat finding of 2021-003 Recommendation: It is recommended that the Town develop and implement policies and procedures for documented approval process to ensure that only allowable costs are charged to the program. 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 Treasurer, Town Manager and Select Board will take the following actions to address finding 2022-003: 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 that has implemented training for the Treasurer and the Select Board. She has implemented a process of having the Treasurer complete a warrant each week. The Select Board meets bi-monthly and the Town Manager has the Select Board review and approve all warrants as a regular action item in their meeting. Additionally, Department Heads are required to turn in no later than Thursday by noon, invoices to be paid on that week’s warrant. The Treasurer has been given authority by the Town Manager to contact Department Heads and request that they come to the office weekly to turn in invoices. All invoices must have the appropriate expense code and be signed by the Department Head.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 370148 2022-004
    Significant Deficiency Repeat
  • 370149 2022-005
    Material Weakness
  • 370150 2022-006
    Material Weakness Repeat
  • 370151 2022-007
    Significant Deficiency Repeat
  • 370152 2022-006
    Material Weakness Repeat
  • 370153 2022-007
    Significant Deficiency Repeat
  • 370154 2022-006
    Material Weakness Repeat
  • 370155 2022-007
    Significant Deficiency Repeat
  • 946589 2022-003
    Material Weakness Repeat
  • 946590 2022-004
    Significant Deficiency Repeat
  • 946591 2022-005
    Material Weakness
  • 946592 2022-006
    Material Weakness Repeat
  • 946593 2022-007
    Significant Deficiency Repeat
  • 946594 2022-006
    Material Weakness Repeat
  • 946595 2022-007
    Significant Deficiency Repeat
  • 946596 2022-006
    Material Weakness Repeat
  • 946597 2022-007
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
10.760 Water and Waste Disposal Systems for Rural Communities $1.37M
21.027 Coronavirus State and Local Fiscal Recovery Funds $974,271
66.458 Capitalization Grants for Clean Water State Revolving Funds $444,559