Town of BoxfordLocal Government

Improve Controls and Documentation over Procurement Federal Agency: U.S. Department of the Treasury Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Fund AL Numbers: 21.027 Award Year: 2023 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding Compliance Internal Control over Compliance - Significant Deficiency Criteria or Specific Requirement Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. As governmental entities are also required to use the same state procurement policies and procedures for federal funds as for non-federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context There was no evidence to document support that disbursements properly followed the procurement process before payments for services were made to the vendor. Cause Weaknesses in the design and operation of controls. 2023-001 Improve Controls and Documentation over Procurement (Continued) Effect or Potential Effect Due to the weaknesses in internal controls noted above, there is a risk that procurements may be awarded to vendors in a manner that is not consistent with federal procurement requirements. Known questioned costs are reported below, calculated as all payments to the referenced vendor: AL Questioned Number(s) Name of Federal Program or Cluster Costs 21.027 COVID-19 - Coronavirus State and Local $237,888 Fiscal Recovery Funds Recommendation The Town should address the weaknesses in internal controls noted above in order to ensure that federal procurements are conducted in accordance with federal and state requirements. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

Document Policies and Procedures Over Federal Awards Cluster/Program: All federal programs Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) established significant new requirements related to federal Awards. The new requirements stipulate that federal award recipients must document their policies and procedures over certain aspects of financial and program management. Specifically, written policies are required for the following: • Cash management • Determination of allowable costs • Employee travel • Procurement • Subrecipient monitoring and management Condition and Context The Town’s written policies and procedures related to federal awards required under Uniform Guidance do not include various required policies such as period of performance, procurement, and reporting. Cause Weaknesses in the design of internal controls. Effect or Potential Effect There are no questioned costs as a result of this finding as there are no costs directly associated with this compliance requirement and this is a procedural requirement under the Uniform Guidance. Recommendation Written policies and procedures should be implemented in accordance with the Uniform Guidance. Views of Responsible Official Management agrees with the finding.

2022-001 Improve Controls and Documentation over Disbursements Process Federal Program(s) Information Federal Agency: U.S. Department of Education Cluster: Special Education Cluster Award Name: Special Education Grants to States Special Education Preschool Grants AL Number(s): 84.027 84.173 Pass-through Entity: Massachusetts Department of Elementary and Secondary Education Award Year: 2022 Compliance Requirement Activities Allowed/Allowable Costs Type of Finding Compliance Internal Control over Compliance - Significant Deficiency Criteria or Specific Requirement Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with Federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context Control deficiencies related to disbursements were noted as a result of the testing of internal controls. A sample of disbursements charged to the grants was tested for proper supporting documentation in order to determine if they were in accordance with Activities Allowed/Allowable Costs. As a result of the testing of payroll disbursements charged to the grants, certain costs were found that did not meet the time and effort documentation requirements. Specifically, time sheets and semi-annual certifications were not provided. Cause Weaknesses in the design and operation of controls. Effect or Potential Effect Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards are not allowable or in accordance with applicable cost principles. Known questioned costs are reported below, calculated as all payroll charges to the cluster: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $148,400 Recommendation Improvements in internal controls should be implemented in order to address the weaknesses in internal controls noted and to ensure compliance with the requirements of the Uniform Guidance. Specifically, the Town should require that all payroll charged to the special education cluster be supported by appropriate time and effort documentation, such as time sheets and semi-annual certifications. This will address the weaknesses in internal controls noted above and provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management?s corrective action plan is included at the end of this report after the summary schedule of prior year audit findings and status.

2021-001 Document Policies and Procedures Over Federal Awards Federal Program(s) Information Cluster/Program: All federal programs Type of Finding Compliance ? Other Matters Criteria or Specific Requirement OMB?s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) established significant new requirements related to Federal Awards. The new require?ments stipulate that federal award recipients must document their policies and procedures over cer?tain aspects of financial and program management. Specifically, written policies are required for the following: ? Cash management ? Determination of allowable costs ? Employee travel ? Procurement ? Subrecipient monitoring and management Condition and Context The Town has not formalized written policies and procedures related to federal awards required under Uniform Guidance. Cause Weaknesses in the design of internal controls. Effect There are no questioned costs as a result of this finding as there are no costs directly associated with this compliance requirement and this is a procedural requirement under the Uniform Guidance. Recommendation Written policies and procedures should be implemented in accordance with the Uniform Guidance. Views of Responsible Official and Planned Corrective Action Management?s views and corrective action plan is included at the end of this report after the schedule of prior year findings.