Town of Northbridge, Massachusetts

Finding 2021-001 Material Weakness in Internal Control Over Compliance ? U.S. Department of Treasury ? Coronavirus Relief Fund ? (CFDA No. 21.019) ? Reporting Passed Through Commonwealth of Massachusetts Department of Revenue Criteria: The U. S. Department of Treasury Office of Inspector General requires recipients of the CARES Act Coronavirus Relief Fund dollars to file periodic reports that describe the uses of these funds. The Massachusetts Executive Office of Administration and Finance requires that subrecipient municipal governments (cities, towns, and regional school districts) submit quarterly reports on expenditures of the Coronavirus Relief Fund to the State administering agency. The reports should reflect the amounts expended on the municipal general ledger accounting records. Condition: The Town of Northbridge, Massachusetts, filed the required quarterly reports. However, the reports are not reconciled to the Town?s general ledger. As of the date of our audit testing there was approximately $352,242 more reported on the quarterly reports than was posted to the general ledger CARES account. Further review of the reports indicated that there were approximately $215,151 of expenses that were reported twice, on two separate reports. Also, approximately $22,898 of expenses that were reported as Coronavirus Relief Fund expenses were posted to the FEMA COVID-19 account on the general ledger. Also, $69,241 of expenses that were posted to the CARES Act account on the general ledger and were reported on the Coronavirus Relief Fund reports was reclassified to a school department ESSER grant, but the reclassification of expenses was not reflected on the reports. Cause: The guidance from the Federal and State governments changed several times during the period of performance for the grant as to what COVID-related costs were eligible for reimbursement from FEMA and which costs should be charged to the Coronavirus Relief Fund and the percentage of the costs that were eligible for reimbursement from FEMA. Also, some costs submitted for reimbursement from FEMA were later disallowed by FEMA and became eligible for Coronavirus Relief Fund expenses. Effect: The reports filed with the State do not properly reflect the activity of the Coronavirus Relief Fund. As of June 3, 2022, the general ledger showed a $352,287 balance in the CARES Act Coronavirus Relief Fund. A final report was filed on February 11, 2022, showing a balance of unexpended funds of $1,045 to be returned. Questioned Costs: The amount of $352,242, which was the amount of expenditures overstated on the reports filed with the state, is questioned. Recommendation: The Town Accountant?s office should reconcile the reports to the Town?s general ledger. Views of Responsible Officials and Planned Corrective Action: See response following on page 14. TOWN OF NORTHBRIDGE TOWN ACCOUNTANT Northbridge Town Hall 7 Main Street Whitinsville, MA 01588 Phone (508) 234 ? 2263 fax (508) 234 ? 9605 August 3rd, 2022 Finding 2021-001 Material Weakness in Internal Control Over Compliance ? U.S Department of Treasury ? Coronavirus Relief Fund ? (CFDA No. 21.019)-Reporting Views of Responsible Officials and Planned Corrective Action: We don?t deny there were some mistakes during the process of administering the CARES fund. One, the Town Accountant became ill during the first quarter of the fiscal year, making it difficult to ensure that everything was running smoothly. The Assistant Town Accountant gave her notice in November of 2021. By the time a new individual was hired, (Spring of 2021) several months had passed and so bringing everything up to speed took time. The point here was due to the fact that there were so many changes in how CARES evolved over time as to what was reimbursable and what was not in addition to various other rules that came out over the course of the year, it was inevitable a mistake would happen given the amount of volume that was recorded over that time. Additionally, the idea that we have not reconciled the Town?s G/L is inaccurate, its that we have overstated our reporting on CARES, again difficult due to how we had to continue to report the same expenses on multiple occasions and then make adjustments after we had reported them. The Town Accountant and Assistant Town Accountant will sit down and review all of the charges to CARES and to FEMA. After which, we will re-do the CARES expense reporting once all of the expenses have been classified into the appropriate accounts, including if fund belong to the School Departments ESSER Grants. We will notify the Town?s contact at DOR regarding our CARES finding, letting them know there are mistakes in the reporting of the Town?s CARES funds subsequent to our 2021 audit, after which we expect to take the appropriate steps to rectify our reporting to them and return any additional funds that they have deemed overdrawn if that is the case. We hope to have this wrapped up and closed out by the end of October. Sincerely, Neil A. Vaidya Town Accountant

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