City of Bangor

2024-003 Allowable Costs – Time and Effort Documentation for the period July 1, 2023, to June 30, 2024, for the following grants: Agency COVID Assistance Listing Program Agreement Number SAMHSA 93.387 National and State Tobacco Control Program CD6 23-4425B SAMHSA 93.243 Substance Abuse and Mental Health Services Projects OSA 24-373A DHHS 93.243 Substance Abuse and Mental Health Services Projects CD6 23-4425B DHHS 93.788 Opioid STR CD6 23-4425B DHHS 93.959 Block Grants for Prevention and Treatment of Substance Abuse CD6 23-4425B DHHS COVID 93.959 Block Grants for Prevention and Treatment of Substance Abuse CD6 23-4425B DHHS 93.959 Block Grants for Prevention and Treatment of Substance Abuse OSA 24-373A USDA 10.561 Supplemental Nutrition Assistance Program OFI 22-351/ OFI 24-351 Criteria: Under the Uniform Guidance §200.430 Compensation - personal services, charges for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates alone do not qualify as support for charges to Federal awards, unless the entity’s system of internal controls includes processes to review after-the-fact interim charges and to make necessary adjustment such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: The City’s Health and Community Services Department charged personnel time to the grants listed above that was not based on actual work performed, but on budgeted amounts. Cause: Although the personnel time spent on the grant exceeded the amount charged to the grants listed above, the time was based on budgeted percentages and not actual time worked. Effect: Actual personnel time charged to the grant was not documented, was based on budgeted amounts, and therefore, unallowable. Known Questioned Costs: ALN Program Agreement Amount 93.387/93.243/93.788/93.959 National and State Tobacco Control Program/ Substance Abuse and Mental Health Services Projects/ Opioid STR/ Block Grants for Prevention and Treatment of Substance Abuse CD6 23-4425B 2,223.09 93.243/93.959 Substance Abuse and Mental Health Services Projects/ Block Grants for Prevention and Treatment of Substance Abuse OSA 24-373A 636.45 10.561 Supplemental Nutrition Assistance Program OFI 22-351/ OFI 24-351 752.22 Likely Questioned Costs: ALN Program Agreement Amount 93.387/93.243/93.788/93.959 National and State Tobacco Control Program/ Substance Abuse and Mental Health Services Projects/ Opioid STR/ Block Grants for Prevention and Treatment of Substance Abuse CD6 23-4425B 394,316.61 93.243/93.959 Substance Abuse and Mental Health Services Projects/ Block Grants for Prevention and Treatment of Substance Abuse OSA 24-373A 79,326.10 10.561 Supplemental Nutrition Assistance Program OFI 22-351/ OFI 24-351 252,382.22 Recommendations: The City should ensure that all grant payroll is allocated to grants based on time worked. If time is allocated on a budgeted amount, then there should be a true up or reconciliation of actual time at the end of each grant.

2024-004 Housing and Urban Development Assistance Listing #14.218 CDBG Entitlement Grants Cluster for the period July 1, 2023, to June 30, 2024 Criteria: The Uniform Guidance §200.303 requires that grant recipients establish and maintain internal controls over federal awards that provide reasonable assurance that the recipient is managing the Federal awards in compliance with the terms and conditions of the awards. The management of such awards includes overseeing allowable costs charged to the grant and ensuring expenditures fall within the period of performance for the grant, which requires knowledge of the grant. Condition: In FY 2024, the City had several expenditures that were charged to the CDBG program that were approved by City employees not directly involved with or familiar with the CDBG program. Cause: There are general expenditures the City sometimes charges to the CDBG program that are approved by the Department Managers and not by the CDBG program manager. Effect: The CDBG program manager is sometimes not aware of certain costs charged to the program until after they have been posted to its expenditures. In addition, the risk that a cost that is not allowable under the CDBG program is increased. Known Questioned Costs: None Likely Questioned Costs: None Recommendations: The City should ensure that all expenditures charged to the CDBG program are reviewed and approved by the program manager before they are posted to the program.

2024-005 Housing and Urban Development Assistance Listing #14.218 CDBG Entitlement Grants Cluster for the period July 1, 2023, to June 30, 2024 Criteria: Under the CDBG program, the City is required to submit quarterly Cash on Hand reports. In addition, as the City has subawards that exceed the Federal threshold of $30,000, the City would be required to submitted reports in accordance with the Federal Funding Accountability and Transparency Act (FFATA). Condition: The City had some Cash on Hand reports that were not filed by the filing deadline of thirty days after the quarter end. In addition, the City did not file any FFATA reports for FY 2024. Cause: Two of the quarterly Cash on Hand Reports were filed more than thirty days after the quarter’s end. In addition, in FY 2024, the City changed the determination of subawards from beneficiaries to subrecipients. However, the City did not take the steps to file the required FFATA reports for those subrecipients. Effect: Lack of timely reporting could result in delays or reductions of future funding. Known Questioned Costs: None Likely Questioned Costs: None Recommendations: The City should implement procedures to ensure that all required reports are filed as required by the reporting deadlines.

2024-006 Department of Transportation Assistance Listing #20.205 Highway Planning and Construction Cluster for the period July 1, 2023, to June 30, 2024 Criteria: The grant agreements with the Department of Transportation under the Bangor Area Comprehensive Transportation System (BACTS) program require the City to contribute a local portion to each approved project (matching). The City ensures it meets the matching requirements at the beginning of each project by transferring to the capital projects fund the local portion for that project. Condition: In FY 2024, the City did not complete transfers for all of the required local match. Cause: In FY 2024, the City approved an amendment to the project agreement, which required an increase in the total local contribution. However, an additional transfer to the capital projects fund to increase the local contribution. Effect: As of fiscal year end, the City had not met the matching requirements for that particular program. Known Questioned Costs: None Likely Questioned Costs: None Recommendations: City staff should ensure that amendments to existing agreements are incorporated into all existing compliance requirements for the grants, including matching requirements.

2024-007 Department of the Treasury Assistance Listing #21.027 Coronavirus State and Local Fiscal Recovery Funds for the period July 1, 2023, to June 30, 2024 Criteria: Under the CSLFRF grant, recipients are required to follow Federal procurement standards when grant expenditures exceed the required thresholds. In addition, the Bangor School Department has adopted a procurement policy that adheres to Uniform Guidance requirements for procurement, suspension and debarment. In addition, if the procurement is a sole source procurement, the procurement must meet additional requirements. Condition: The School Department had two significant grant expenditures for playground equipment and a leased modular, both of which exceeded the Federal Procurement thresholds. However, the School Department did not perform procurement procedures in accordance with Federal Procurement standards, such as obtaining quotes from a sufficient number of qualified vendors. In addition, the Suspension and Debarment check was not supported by documentation dated prior to the dates of the expenditures. Cause: The School Department relied on its historical knowledge and experience of the vendors and therefore did not adhere to the usual procurement procedures. In addition, the School Department did not document a check of the vendors’ Suspension and Debarment status on Sam.gov prior to entering into the transactions. Effect: The School Department runs the risk that certain costs under the grant will be disallowed or that the School Department will contract with a vendor that is suspended or debarred. Known Questioned Costs: None Likely Questioned Costs: None Recommendations: The School Department should have in place procedures to ensure that all grant purchases that exceed the procurement thresholds follow the required Federal Procurement standards and are sufficiently documented. That includes documentation of the vendors’ Suspension and Debarment status.

2024-008 Department of the Treasury Assistance Listing #21.027 Coronavirus State and Local Fiscal Recovery Funds for the period July 1, 2023, to June 30, 2024 Criteria: In order to promote transparency, 2nd tier communities, as ranked by the Treasury, are required to submit project and expenditure reports quarterly that include all projects funded by ARPA. The City is also required to implement controls that ensure the accuracy and completeness of the reports. Condition: The City had a disbursement to a beneficiary dated September 30, 2023 that should have been included on the report for the quarter ending September 30, 2023. However, the expenditure was not reported until the report for the quarter ending December 31, 2023. Cause: Although the report for the quarter ending September 30, 2023 was not submitted until the end of October 2023, a disbursement done before the end of the quarter was not included in the report. Effect: Information reported to Treasury and subsequently to the public was incomplete. Questioned Costs: None Likely Questioned Costs: None Recommendation: Management should review grant expenditures to ensure all uses of funds are included in the correct quarterly reports. In addition, the City should develop procedures, such as secondary review, to ensure the accuracy and completeness of reports.

2024-009 Department of Health and Human Services Assistance Listing #93.788, #93.959; #93.243 Opioid STR/ Block Grants for Prevention and Treatment of Substance Abuse/ Substance Abuse and Mental Health Services Projects for the period July 1, 2023, to June 30, 2024 Criteria: The grant agreement for the Opioid STR/Block Grants for Prevention and Treatment of Substance Abuse/ Substance Abuse and Mental Health Services Projects programs requires the City to submit monthly financial reports within fifteen days after that month’s end. In addition, the Uniform Guidance requires the City to establish internal controls to ensure compliance. Condition: The City had four monthly reports that were not submitted in a timely manner. Cause: Reports were not submitted to the State of Maine within the fifteen-day threshold. Effect: Late reports may impact future grant funding. Known Questioned Costs: None Likely Questioned Costs: None Recommendation: The City should implement procedures to ensure that all grant reports are submitted by required reporting deadlines.

2024-010 Department of Health and Human Services Assistance Listing #93.959, #93.788, #93.243, #93.387 Block Grants for Prevention and Treatment of Substance Abuse/ Opioid STR/ Substance Abuse and Mental Health Services Projects, and the National and State Tobacco Control Program for the period July 1, 2023, to June 30, 2024 Criteria: According to the Uniform Guidance, grant recipients that make subawards must monitor subrecipients to ensure the subaward is used for authorized purposes, which includes verifying funds are spent before reimbursement is requested and that expenditures are for allowable costs. In addition, the City is required to implement internal controls over subrecipient monitoring and subrecipient cash management to ensure compliance. Condition: The program had one subaward for which it did not gather information sufficient to ensure that expenditures were incurred prior to reimbursement, in accordance with cash management requirements. In addition, the City did not gather information to ensure that expenditures were for allowable costs. Cause: The Department of Health and Community Services, which administers the program, relied on prior experience and knowledge of the subrecipient. Therefore, the City did not require the subrecipient to submit monthly reports or expenditure detail other than payroll information. Effect: The City may be exposed to risk related to disallowed costs or the risk of noncompliance for cash management purposes. Questioned Costs: None Likely Questioned Costs: None Recommendations: The City should consider implementing policies and procedures for monitoring subrecipients for all grant requirements, including allowable costs and cash management.

2024-011 Department of Transportation #20.507-20.526 Federal Transit Cluster for the period July 1, 2023, to June 30, 2024 Criteria: The grant reimburses a percentage of total operating and capital costs incurred by the City’s Transit Department, dba Community Connector, not to exceed the grant award amount. Costs within the pool subject to reimbursement must meet the Uniform Guidance’s cost principle and procurement guidelines. Condition: The Transit Department included encumbrances in its calculation of expenditures eligible for Federal reimbursement. Encumbrances are commitments to purchase goods or services in the future, but do not represent accrual-based expenditures eligible for reimbursement. In addition, the Transit Department included the costs of its portion of the City’s property and liability insurance, which was not competitively procured in accordance with the Uniform Guidance. After the auditor identified these unallowable costs, they were removed from the expenditure population subject to Federal grant reimbursement. Cause: The Transit Department mistakenly included encumbrances in the pool of Federal expenditures for reimbursement. The insurance policy is an allocation of the City’s costs and is not directly procured by the Transit Department. The City’s policy covers Federal and non-Federal activities, and the City did not consider it subject to Uniform Guidance procurement guidelines. Effect: The City Transit Department could have requested reimbursement for ineligible costs. However, because the error was caught before the grant request was remitted, the Transit Department made the necessary corrections. Questioned Costs: None Likely Questioned Costs: None Recommendations: The Transit Department should revise their grant request template to remove or back out outstanding encumbrances. In addition, any costs not competitively procured should be charged to the Transit Department’s local share as an ineligible cost to avoid inclusion in the Federal expense pool. Management’s Response/Corrective Action Plan: The Transit Department will revise its reimbursement template to exclude encumbrances and unallowable costs and charge non-competitively procured shared costs to the local share.

2023-002 SAMHSA Assistance Listing #93.788 Opioid STR for the period July 1, 2022 to June 30, 2023 Criteria – The grant agreement for Opioid STR requires the City to file monthly financial reports with the State within a certain specified period of time and to accurately reflect amounts expended under the agreement. In addition, the City is required to establish internal controls and procedures to ensure compliance with requirements. Condition - The January 2023, March 2023, April 2023, May 2023, and June 2023 reports were not filed by the required deadlines. In addition, an expenditure dated September 1, 2022 was reported on the August 2022 report. Cause - Reports were filed more than fifteen days after the month end, which was outside of the required deadline. Effect - Lack of timely reporting could result in delays or reductions of future funding. Known Questioned Costs - None Likely Questioned Costs - None Recommendations - The City should implement a review process to ensure that reports are filed with accurate expenditure information. In addition, the City should use a reminder system for report deadlines to ensure they are filed by the required deadlines.

2023-004 Department of Education Assistance Listing #84.025D-W Elementary and Secondary School Emergency Relief Funds for the period July 1, 2022 to June 30, 2023 Criteria: The Uniform Guidance requires nonfederal entities to include in their construction contracts subject to Wage Rate Requirements (a.k.a. the Davis Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. Condition: The required Wage Rate Requirements language is currently not included in construction contracts. Cause: The Bangor School Department does not include the Wage Rate Requirement language in the construction contracts, but instead refers in those contracts to separate documents that contain the required language. Effect: Contractors and subcontractors may potentially not be informed of the Wage Rate Requirements, which may cause the Bangor School Department to be in noncompliance with such requirements. Known Questioned Costs: None Likely Questioned Costs: None Recommendations: Instead of including language in the construction contracts that refers to other documents, the Bangor School Department should instead include the required language directly in the construction contracts.

2023-005 Department of Transportation Assistance Listing #20.106 Airport Improvement Program for the period July 1, 2022 to June 30, 2023 Criteria – The FAA requires the SF-425 reports to be based on the costs already invoiced. In addition, the City should have internal controls and procedures to ensure the reports are filed with the required information. Condition – The airport submitted a SF-425 report that included additional expenses of $192K that had not been invoiced. Cause – The grant closeout for AIP #79 was being processed at the same time as the SF-425, which included the additional expenses and the airport included the same expenses in the SF-425. Effect – The SF-425 that was submitted for AIP #79 during FY 23 was not in agreement with the reporting requirements of the FAA. Known Questioned Costs - None Likely Questioned Costs - None Recommendations – Airport management should review the SF-425’s to ensure that they only include expenses that have been invoiced by the date of the report.

2023-006 Department of Transportation Assistance Listing #20.205 Federal Highway Planning and Construction for the period July 1, 2022 to June 30, 2023 Criteria – The Uniform Guidance requires contractors and subcontractors to submit to the nonfederal entity a weekly copy of the payroll and a statement of compliance with Wage Rate Requirements (certified payroll) for each week in which work was performed under the construction contract. Condition – The City had one project (Broadway Pedestrian Improvements) for which a weekly certified payroll was missing. Cause – Either the contractor or subcontractor did not submit the required certified payroll or the City did not retain a copy of the certified payroll. Effect – The City may not be able to perform the required monitoring under Wage Rate Requirements and ensure that contractors and subcontractors are paying their employees the prevailing federal wage rates. Known Questioned Costs - None Likely Questioned Costs - None Recommendations – City Management should ensure that the contractors and subcontractors are submitting to them the weekly certified payrolls as required.

2023-007 Housing and Urban Development Assistance Listing #14.218 Community Development Block Grant Entitlement Cluster for the period July 1, 2022 to June 30, 2023 Criteria – The Uniform Guidance requires nonfederal entities to include in their construction contracts subject to Wage Rate Requirements (a.k.a. the Davis Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. Condition – The Community Development Department has grant agreements with its subrecipients that include the Wage Rate Requirements language. However, the contracts between the subrecipients and the contractors were missing from the files, so we were unable to ascertain whether the required language was communicated to the contractors and subcontractors. Cause – The Community Development Department failed to either obtain or retain a copy of the contract between the subrecipient and the contractor for the grants. Effect – The City may not be able to ensure that contractors and subcontractors are aware of the Wage Rate Requirements for work performed under the grants. Known Questioned Costs - None Likely Questioned Costs - None Recommendations – City Management should ensure that the contractors and subcontractors are submitting to them the weekly certified payrolls as required.

2023-008 Housing and Urban Development Assistance Listing #14.218 Community Development Block Grant Entitlement Cluster for the period July 1, 2022 to June 30, 2023 Criteria – When CDBG funds are used for rehabilitation, the grantee must ensure that the work is properly completed. That responsibility includes verifying that pre-rehabilitation inspections were performed, and that deficiencies detected as part of the pre-rehabilitations were included in the rehabilitation contract. In addition, the grantee must have in place certain internal controls to ensure that disbursements under the rehabilitation projects are approved and contracts have the required signatures. Condition – The City had one rehabilitation loan file that was missing the pre-rehabilitation inspection. In addition, the City had another rehabilitation loan file that had a contract that was missing the signature of the contractor. There was a third rehabilitation loan file that had a disbursement with a missing approval. Cause – The Community Development Department experienced turnover in staff. As a result, some of the documentation in the rehabilitation files was incomplete. Effect – The Community Development Department may not be able to verify that all of the rehabilitation loans are in compliance with the requirements. Known Questioned Costs - None Likely Questioned Costs - None Recommendations – The Community Development Department should ensure that all loan files are complete and that all required documentation has the required specifications, approvals, and signatures.

2022-001 ? Uniform Guidance Written Policies Criteria: Under the Uniform Guidance ?200.302 Financial Management, the non-Federal entity must provide written procedures to implement the requirements of ?200.305 (Federal payment), and written procedures for determining the allowability of costs in accordance with subpart E of the Uniform Guidance and the terms and conditions of the Federal award. Condition: The City currently does not have written procedures as required by the Uniform Guidance as specified in the criteria. Cause: Although the City has adequate procedures in place to prevent non-compliance for most of its Federal grants, those procedures have not been documented. Effect: Without written procedures, the City runs the risk of non-compliance for Federal grants. Known Questioned Costs: None Likely Questioned Costs: None Recommendations: Although the City has implemented some written procedures and policies, it has not developed written procedures for all required areas or for all federal grants. We recommend that all departments that administer federal grants develop the required written procedures and policies.

2021-001 ? Department of Education, for the Period July 1, 2020 through June 30, 2021, Assistance Listing #84.027-84.173; Special Education Cluster Criteria: Under the Uniform Guidance ?200.430 Compensation - personal services, charges for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates alone do not qualify as support for charges to Federal awards, unless the non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges and to make necessary adjustment such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: The School Department charged personnel time to the Local Entitlement grant that was not based on actual work performed but on budgeted amounts. Cause: Although the personnel time spent on the grant exceeded the amount charged to the Local Entitlement grant, the time was based on budgeted percentages and not actual time worked. Effect: Actual personnel time charged to the grant was not documented, was based on budgeted amounts, and therefore, unallowable. Known Questioned Costs: None Likely Questioned Costs: None Recommendations: To avoid future non-compliance in this area, the School Department should not charge any personnel to grants if they work on more than one Federal grant or split their time between Federal and non-Federal work.

2021-002 ? Uniform Guidance Written Policies Criteria: Under the Uniform Guidance ?200.302 Financial Management, the non-Federal entity must provide written procedures to implement the requirements of ?200.305 (Federal payment), and written procedures for determining the allowability of costs in accordance with subpart E of the Uniform Guidance and the terms and conditions of the Federal award. Condition: The City currently does not have written procedures as required by the Uniform Guidance as specified in the criteria. Cause: Although the City has adequate procedures in place to prevent non-compliance for most of its Federal grants, those procedures have not been documented. Effect: Without written procedures, the City runs the risk of non-compliance for Federal grants. Known Questioned Costs: None Likely Questioned Costs: None Recommendations: The City should review its Federal grants and determine which grants need specific written procedures to meet the Uniform Guidance requirements. Management response/corrective action: The City has begun to develop the required written procedures by particular funding awards. These work will need to be expanded to ensure the appropriate procedures are in place for all federal expenditures.

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