Finding 996 (2022-003)

In our single audit testing a misstatement was identified related to the accounting of the Town’s Coronavirus State and Local Fiscal Recovery Fund (American Rescue Plan Act) revenues. The Town should have adequate internal controls in place to ensure that grants are properly accounted for. The Town did not initially record a receivable for the replacement of lost revenue claimed on the report to the US Department of Treasury during FY 2022. This misstatement was due to oversight by Town personnel. The Town was impacted in FY 2020 and FY 2021 by the COVID-19 pandemic which played a part in the delays as staff were stretched in performance of their job duties as they were assisting with the job duties of others who were unavailable to work; as well as additional duties brought on by federal assistance programs. The Town was also working toward better understanding and utilization of the new financial software. In FY 2022 the Town was working toward getting caught up from these delays. This error was corrected when we brought it to the Town’s attention. When transactions are not recorded properly or to the appropriate accounting period, there is a higher risk that material misstatements (due to error or fraud) will go undetected. The Town should develop a process to ensure that grants are properly recorded. The Town agrees with this finding and will adhere to the corrective action plan on page 88 in this audit report.