Finding 8444 (2022-001)

Assistance Listing No.: 14. 218 - Community Development Block Grant I Entitlement Grant, 21. 027 - Covid-19 - Coronavirus State and Local Fiscal Recovery Funds Direct Awards for the Year Ended December 31, 2022 Federal Agencies: U.S. Department of Housing and Urban Development and U.S. Department of Treasury Criteria: The Town's procurement policies and procedures must conform to regulations for federal award activity in accordance with Title 2 U.S. Code of Federal Regulations, Part 200, Sections 200.318 - 200.327. Under the Uniform Guidance requirements, federal award recipients should have these policies implemented. Condition: During the audit for the year ended December 31 , 2022, it was noted that the Town's policies and procedures for procurement did not include information necessary to comply with the Uniform Guidance. Cause: The Town has not incorporated elements of the Uniform Guidance in their existing policies and procedures. Effect or possible effect: The Town's policies and procedures are not in compliance with Uniform Guidance standards. This noncompliance could result in a lack of proper internal control over purchasing, an increased risk of overspending, and could have a negative impact on current and future federal awards. Questioned costs: There were no questioned costs identified as part of the single audit. Context: This finding was identified as part of the compliance audit for the year ended December 31, 2022, by means of conducting tests of compliance and inquiring of management. Recommendation: We recommend that the Town review their policies and procedures and make necessary updates to comply with the procurement standards required by the Uniform Guidance. We also recommend that the Town review and modernize their fiscal policies manual and follow a standard for procurement across all departments. View of responsible officials: The Town will review their policies and procedures and make the necessary updates identified above.