TOWN OF BILLERICALocal Government

2024-002 – Lack of Segregation of Duties—Grant Report Approval and Submission Federal Agency: Department of the Treasury Award Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2024 Compliance Requirement: Reporting Type of Finding - Compliance Internal Control over Compliance – Significant Deficiency Condition: During our audit of the Town’s federal grant programs, we noted that the Town Accountant is solely responsible for both completing, approving, and submitting certain reports, required under the State and Local Fiscal Recovery Fund grant, to the United States Treasury. A secondary independent review or approval process is not in place prior to submission. Criteria: Uniform Guidance (2 CFR 200.303) requires non-federal entities to establish and maintain effective internal controls over federal award reporting that provide reasonable assurance that records are accurate, complete, and in compliance with federal statutes, regulations, and the terms and conditions of the award. Effective internal control includes appropriate segregation of duties. Cause: This situation results primarily from the Town’s limited administrative staffing, which restricts the ability to segregate the reporting and approval functions among different individuals. Effect: The lack of segregation of duties increases the risk that errors or noncompliance with federal award requirements in grant reporting could occur and not be prevented or detected in a timely manner. Recommendation: We recommend the Town implement a secondary review of grant reports, for any type of grant that requires external reporting to the grantor entity, prior to submission. This review could be performed by another member of management, or another designated official, and should be documented as evidence of oversight. If staffing limitations make this impractical, consider periodic and documented retrospective reviews of submitted reports. Views of Responsible Officials: The Town acknowledges the finding and recognizes the importance of maintaining adequate internal controls over federal grant reporting, including appropriate segregation of duties. We will be implementing additional procedures to ensure adequate preparation and review procedures to ensure accurate reporting to oversight agencies.

2024-003 – Missing Federally Required Procurement Clauses in Vendor Contracts Federal Agency: Department of the Treasury Award Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2024 Compliance Requirement: Procurement Type of Finding - Compliance Internal Control over Compliance – Other Matter Condition: During our review of procurement documentation for federal grant expenditures, we noted that the Town did not include all required federal procurement contract clauses in its agreements with vendors procured with federal funds. Our review of a contract issued under the State and Local Fiscal Recovery Fund grant, lacked required clauses related to the Contract Work Hours and Safety Standards Act, the Clean Air and Federal Water Pollution Control Acts, Byrd Anti-Lobbying Amendment, domestic preferences for procurements, and the Davis-Bacon Act. Criteria: Per Uniform Guidance 2 CFR 200.317–200.327 and Appendix II to Part 200, all contracts made by non-federal entities under federal awards must contain the applicable provisions described in Appendix II, including but not limited to clauses for termination for cause and convenience, Equal Employment Opportunity, Davis-Bacon Act (if applicable), Clean Air Act, and Byrd Anti-Lobbying Amendment. Cause: The omission appears to have resulted from a lack of comprehensive procedures to ensure all required federal clauses are incorporated into applicable contracts. Effect: Failure to include federally required contract clauses exposes the Town to the risk of noncompliance with federal procurement requirements, which may result in questioned costs, repayment of federal funds, or jeopardized future funding. Recommendation: We recommend that the Town develop and implement procedures to ensure all required federal clauses are included in all vendor contracts funded in whole or in part with federal awards. Staff responsible for procurement should receive training on federal requirements, and contracts should be reviewed for compliance prior to execution. Views of Responsible Officials: The Town is committed to strengthening its procurement practices and ensuring compliance with Uniform Guidance requirements. To address this issue, the Town will develop and implement standardized contract templates, and a comprehensive checklist of required federal clauses applicable to federally funded procurements for any future federal dollars. The Town will formalize procedures to ensure that a secondary review is consistently performed and documented for all required federal reports prior to submission and will designate a member of management or another qualified official to perform and document this review