CITY OF WATERVILLE, MELocal Government

2023-001 – U.S. Department of Education, for the Period July 1, 2022 through June 30, 2023, Assistance Listing #84.425C, #84.425D and #84.425U Education Stabilization Fund Statement of Condition: Documentation of wage rate requirements in construction contracts and verification of certified weekly payrolls was not performed on certain contracts entered into during the period July 1, 2021 through June 30, 2022 but not completed until the period July 1, 2022 through June 30, 2023, the current period under audit. Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor. Management needs to ensure that all contractors and subcontractors are submitting weekly certified payrolls and verify that they are being paid at least the prevailing wage rates. Effect: Contracted employees could potentially not be paid prevailing wage rates, which could jeopardize grant funding. Cause: For contracts entered into during the period July 1, 2021 through June 30, 2022 but not completed until the period July 1, 2022 through June 30, 2023, the current period under audit, the School Department did not include language in its construction contracts that included wage rate requirements and did not obtain certified payroll information from contractors. Recommendations: Management should carefully review all contracts related to grants to ensure they include the required language. In addition, management should ensure that contractors submit the required certified payrolls. Questioned Costs: None

2022-001 ? U.S. Department of Education, for the Period July 1, 2021 through June 30, 2022, Assistance Listing #84.425D, #84.425U Education Stabilization Fund

Procurement Policy (Significant Deficiency) Program Highway Planning and Construction - Assistance Listing #20.205 Criteria Procurement activity is required to be conducted in accordance with Uniform Guidance procurement standards. Condition We noted that the City?s procurement policy has not been reviewed, compared and updated as necessary to ensure full compliance with Uniform Guidance procurement standards. Context Expenditures incurred under the City?s Highway Planning and Construction grant required bid procedures. The City conducted the bid procedures as required and we noted that the bid procedures were performed and documented in accordance with the City?s current procurement policy. The City?s current procurement policy was last amended in 2010. Uniform Guidance procurement standards were required to be implemented effective July 1, 2018. Cause and Effect City management has determined that a lack of defined controls and procedures prevented the City from comparing its current procurement policy against the Uniform Guidance procurement standards and making necessary modifications. Recommendation We recommend that the City review and update its procurement policies and procedures to be compliant with Uniform Guidance procurement standards. We also recommend that any proposed changes to the procurement policy be formally reviewed and approved by the City Council.

Procurement Policy (Significant Deficiency) Program Assistance to Firefighters Grant CFDA #97.044 Criteria Procurement activity is required to be conducted in accordance with Uniform Guidance procurement standards. Condition We noted that the City?s procurement policy has not been reviewed, compared and updated as necessary to ensure full compliance with Uniform Guidance procurement standards. Context Expenditures incurred under the City?s Assistance to Firefighters Grant required bid procedures. The City conducted the bid procedures as required and we noted that the bid procedures were performed and documented in accordance with the City?s current procurement policy. The City?s current procurement policy was last amended in 2010. Uniform Guidance procurement standards were required to be implemented effective July 1, 2018. Cause and Effect City management has determined that a lack of defined controls and procedures prevented the City from comparing its current procurement policy against the Uniform Guidance procurement standards and making necessary modifications. Recommendation We recommend that the City review and update its procurement policies and procedures to be compliant with Uniform Guidance procurement standards. We also recommend that any proposed changes to the procurement policy be formally reviewed and approved by the City Council.