Finding 370149 (2022-005)

Material Weakness

Requirement

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 for approving invoices and board warrants before issuing checks.
Impacted Requirements: Compliance with 2 CFR 200.303 is not met, risking improper allocation of expenses to the grant.
Recommended Follow-Up: The Town should create and enforce a documented approval process to ensure only allowable costs are charged to the program.

Finding Text

2022-005 - Allowable Costs/Cost Principles Federal Program Information: ALN - 21.027 - Coronavirus State & Local Fiscal Recovery Funds 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. Lack of supervisory oversight. 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 population consisted of 2 out of 2 transactions. The Town did not have consistent documented approval of invoices and board warrants to ensure that only allowable costs were being charged to the program. Repeat Finding: This is not a repeat finding. 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 2022-005: 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 has drafted a new Procurement Policy that addresses this deficiency. The Select Board will review this draft at their meeting in January 2024, edits will be made and then it will be sent to legal for final review before adoption. 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.

Other Findings in this Audit

370147 2022-003

Material Weakness Repeat
370148 2022-004

Significant Deficiency Repeat
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