Finding Text
2024-003 U.S. Department of the Treasury
COVID-19 – Coronavirus State and Local Fiscal Recovery
Funds - ALN 21.027
Significant Deficiency in Internal Controls Over Compliance
Criteria: Per 2 CFR section 200.328 of the Uniform Guidance, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the federal awarding agency.
The compliance supplement identifies four Key Line Items required to be reported to the federal awarding agency which include (1) current period obligation, (2) cumulative obligation, (3) current period expenditure and (4) cumulative expenditure. An obligation is an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment.
Condition: As of the March 31, 2024, reporting date, the Town reported project amounts voted by the Select Board as obligated rather than purchases, contracts and agreements that met the Federal criteria of an obligation.
Cause: The Town did not interpret the reporting requirements of the award properly.
Effect: The Town’s reporting for obligations were overstated by approximately $520,000.
Questioned Costs: None
Repeat Finding from Prior Year: No
Recommendation: The Town should implement procedures to reconcile the financial information in the Project and Expenditure reports to the Town’s contract and purchasing files before submission.
Views of Responsible Official: Management agrees with the finding.