Finding 962522 (2023-001)

2023-001: Reporting to the Federal Government Compliance Requirement: Reporting Type of Finding: Compliance and Internal Control over Compliance – Other MatterCriteria or Specific Requirement: Grantees must comply with reporting requirements established by the U.S. Treasury that includes reporting the total grant expenditures incurred for the reporting period. Since the Town is a Non-Entitlement Unit that was allocated less than $10.0 million in funding, the Town is required to submit, to the U.S. Department of Treasury, a project and expenditure report by April 30, 2022, and annually thereafter. Condition: The Town submitted the annual project and expenditure report timely, however the expenditures reported as of June 30, 2023, did not reconcile with the Town’s accounting ledger. Questioned Costs: None Reported. Context: The Town filed the required project and expenditure report in a timely manner; however the current period expenditures and cumulative expenditures were overstated by $7,215,950 and $6,453,661, respectively. The discrepancies were due to a misunderstanding about how expenditures should be recognized on the project and expenditure report. Effect: The expenditures reported on the Town’s project and expenditure report did not match the accounting ledger. Cause: The Town reported the total allotment of Coronavirus State and Local Fiscal Recovery Funds as expended and obligated on the project and expenditure report, instead of the expenditures incurred and obligated as of March 31, 2023. Recommendation: Management should implement procedures to ensure that current period and cumulative expenditures reported on the project all expenditure report are recorded in the corresponding period that they are reported on the Town’s general ledger. The Town should amend the previous submission so that the correct expenditures are reported. Views of Responsible Officials and Planned Corrective Actions: Management made a good faith effort to submit its reporting to the U.S. Treasury on a timely basis. This was a misunderstanding regarding how the expenditures should be recognized on the project and expenditure report. Management plans to amend the previous submission and to implement procedures to properly report expenditures going forward.