Finding 374345 (2023-002)

Federal program: Water and Waste Disposal Systems for Rural Communities Assistance listing number: 10.760 Federal agency: U.S. Department of Agriculture Pass-through entity: n/a – direct award Pass-through entity identification number: n/a Type of Finding: Significant deficiency in internal control over compliance. Criteria: 2 CFR 200.302 “Financial Management” requires the Town’s accounting system to identify all Federal awards received and expended and the Federal program under which they were received. Condition: The Town’s accounting system did not separate Federal expenditures from non-federal expenditures. Cause: Due to change in personnel, different individuals were involved in the Treasury function of the Town during the fiscal year and therefore employees did not have sufficient time, attention, and knowledge to effectively record federal expenditures in the Town’s accounting system. Effect: Federal expenditures are combined with non-federal expenditures in the general ledger. Questioned costs: None Repeat finding: The Town of Bridgewater, Vermont was not required to have a Single Audit for its prior fiscal year. Accordingly, this is not a repeat finding. Perspective information: The Town normally spends less than $750,000 in federal expenditures and therefore usually is not required to have a Single Audit. For 2023, a Single Audit was required due to an emergency wastewater improvement project. Recommendation: The structure of Town’s accounting system should be modified to separate Federal and non-federal expenditures.