Finding 388517 (2023-001)

Significant Deficiency

Requirement

Questioned Costs

Year

2023

Accepted

2024-03-29

Audit: 300218

Organization: Town of Cape Elizabeth (ME)

Auditor: Runyon Kersteen Ouellette

AI Summary

Core Issue: The Town failed to include all ARPA-funded projects in its annual reports, impacting transparency.
Impacted Requirements: The Town did not meet the Treasury's criteria for reporting accuracy and completeness.
Recommended Follow-Up: Management should review expenditures and implement secondary review procedures to ensure all projects are accurately reported.

Finding Text

2023-001 U.S. Treasury, Assistance Listing #21.027 Coronavirus State and Local Fiscal Recovery Funds (ARPA) for the period July 1, 2022 through June 30, 2023 Criteria: In order to promote transparency, 5th Tier Communities, as Ranked by the Treasury, are required to submit Project and Expenditure Reports annually that include all projects funded by ARPA. The Town is also required to implement controls that ensure the accuracy and completeness of the reports. Condition: The Town did not include all projects that were funded by ARPA. Cause: Although the Town reported all of the ARPA expenditures in the aggregate, not all projects were included in the description of the projects. The Town lacked sufficient controls to ensure the accuracy and completeness of the reports. Effect: Information reported to Treasury and subsequently to the public was incomplete. Questioned Costs: None Recommendation: Management should review final grant expenditures to ensure all uses of funds are included in the final reports. In addition, the Town should develop procedures, such as secondary review, to ensure the accuracy and completeness of reports.

Corrective Action Plan

Management’s Response/Corrective Action Plan: Upon initially receiving assistance from the American Rescue Plan Act, the Town planned to allocate a portion of the funds towards providing bonus pay for first responders. However, prior to the deadline for the first report, the guidelines were revised to allow for a standard allowance of up to $10 million of the allocation to be designated for Revenue Replacement. This allowances enables funding for various general governmental services, including salaries and fringe benefits, with exceptions for debt service and pension contributions. At that time, management opted to utilize the standard allowance. Approval was obtained from the Town Council to allocate the funds towards premium pay, the Kettle Cove drainage project, the Surf Road Stormwater Management Project and IT infrastructure. However, the specific project name for IT infrastructure was not included on the April 2023 reporting. The numbers were all correct. Management will conduct a thorough review of the Uniform Guidance to prevent such oversights in the future.

Other Findings in this Audit

388518 2023-001

Significant Deficiency
964959 2023-001

Significant Deficiency
964960 2023-001

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
21.027	Covid - Coronavirus State and Local Fiscal Recovery Funds (arpa)	$476,876
84.027	Local Entitlement	$343,989
10.555	National School Lunch Program	$132,865
21.027	Covid - Pre-K Expansion	$72,700
84.425	Covid - Geer	$69,030
84.367	Title Iia Supporting Effective Instruction	$56,858
84.027	Covid - Local Entitlement - Arp	$55,968
10.555	State Administrative Expense Funds (supply Chain Assistance)	$46,400
10.555	Donated Commodities	$35,937
84.010	Title Ia Disadvantaged	$33,713
10.553	School Breakfast Program	$28,450
84.425	Covid - Elementary and Secondary Emergency Relief Funds #3	$11,221
20.616	Hv Distracted Driving Enforcement	$8,580
20.616	Click It Or Ticket	$5,452
10.649	Covid - Ebt Administrative Costs Grant (snap)	$1,884
16.738	Byrne Jag Grant	$218