Finding 963645 (2023-001)

2023-001 U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 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. Condition: Obligations were overstated by $144,923 on the March 31, 2023 Project and Expenditure report. Cause: The Town did not have a clear understanding of the reporting requirements for obligations. Effect: The Town did not properly report amounts obligated in the March 31, 2023 Project and Expenditure report. Questioned Costs: None Repeat Finding from Prior Year: Yes, finding 2022-001. Recommendation: The Town should implement procedures to only report obligations on the Project and Expenditure reporting for items that meet the federal criteria for reporting as an obligation. Views of Responsible Official: Management agrees with the finding.