Finding Text
2023-002 U.S. Department of the Treasury
COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – ALN 19.027
Criteria: 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. Per 2 CFR 200.1, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment.
Condition: The Town reported its entire award on the March 31, 2023 Project and Expenditure report as fully obligated and expended in error.
Cause: The Town did not have a clear understanding of the reporting requirements for obligations and expenditures.
Effect: The Town overstated amounts obligated by $1,084,963 and overstated expenditures by $1,728,100 on the March 31, 2023 Project and Expenditure report.
Questioned Costs: None
Repeat Finding from Prior Year: No
Recommendation: The Town should implement procedures reconcile reported expenditures to its general ledger and 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.